Outsourcing and Cost Reduction in Hotel Chains: Customer Care Analysis

This report analyzes the potential for outsourcing the customer care department of the Four Seasons Hotels and Resorts to achieve cost reduction and efficiency gains. It begins by introducing the customer care department, outlining its roles, tasks, and functions within accommodation management. The report emphasizes the importance of customer needs and the steps accommodation managers take to ensure customer satisfaction. It then explores the viability of outsourcing, detailing its advantages (reduced expenditure, reduced talent acquisition costs) and disadvantages (interference of third-party consultants, lack of control). The report concludes with recommendations, suggesting outsourcing lower-level customer care employees while retaining management roles within the hotel group to maintain control. The analysis highlights the customer care department's reliance on other departments and its limited scope, making it a suitable candidate for outsourcing to third-party consultancies, which would be responsible for sourcing and paying customer care employees.

Running head: OUTSOURCING AND COST REDUCTION IN HOTEL CHAINS
Outsourcing and Cost Reduction in Hotel Chains
Name of the Student:
Name of the University:
Author Note:

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OUTSOURCING AND COST REDUCTION IN HOTEL CHAINS
Table of Contents
Introduction:...........................................................................................................................1
1. Selected department:..........................................................................................................1
2. Identification of roles, tasks and functions of customer care department:.............................2
Roles:......................................................................................................................................2
Tasks:.....................................................................................................................................2
Functions:...............................................................................................................................3
3. Role of the customer and customer needs and steps of accommodation management:.........3
3.1 Role if customers:............................................................................................................3
Customer needs pertaining to the customer care department:...............................................4
Steps the accommodation manager takes to ensure that hotel meets customer needs:..........5
Set the target customer satisfaction level:..........................................................................5
Measure the actual performance level:..............................................................................5
Training of the employees:.................................................................................................6
4. Viability of the outsourcing, benefits and drawbacks of an outsourced organisation:..........6
Advantages:............................................................................................................................6
Disadvantages:.......................................................................................................................7
5. Recommendations:.................................................................................................................8
Conclusion:................................................................................................................................8
References:.................................................................................................................................9

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OUTSOURCING AND COST REDUCTION IN HOTEL CHAINS
Introduction:
The global hotel chains are outsourcing some of their operations as a part of the cost
cutting and efficiency boosting strategies. The author has selected the customer care
department of the Canadian international hotel chain, the Four Seasons Hotels and Resorts
for the study (fourseasons.com 2017). The assignment would first introduce the department
and then proceed to prove why the outsourcing of the department would be profitable for the
hotel chain. The last section would study the positive and negative effects of outsourcing the
department and provide recommendations to deal with the negative effects of the
outsourcing.
1. Selected department:
The customer care departments of the Four Seasons located all round the world
handle quarries from customers over the phone regarding matters like room bookings and
facilities available. They transfer the calls to the relevant departments if the queries of
customers are pertaining to more intricate matters like payment issues. Customer care
departments of Four Seasons all over the world employ thousands of employees. The
department requires minimum training due to its limited scope of job and in large number of
cases, depends on other departments to answer customer questions successfully (Saeidi et al.,
2015 p. 345). However, employing this vast number of customer care employees adds to the
salary expenditure of the international hotel chains, which cannot be justified against the
minimum job responsibilities of these customer care employees compared to other
departments like accounts and food and beverage. Hence, in the light of the discussion, the
Canada based international hotel chain can propose to outsource its customer departments
globally to local third party consultancies, which would be responsible for sourcing and
paying the customer care employees (Kang & Park 2014, p. 1047). This would reduce the

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cost of the international hotel chain to acquire and maintain the customer care department
employees in all its global branches.
2. Identification of roles, tasks and functions of customer care department:
The following are the roles, tasks and functions of the customer care department with
reference to the accommodation management:
Roles:
1. The customer care department receives and answers the queries of the customers pertaining
to booking and accommodation related matters.
2. The customer care department communicates important information like change of
accommodation arrangements.
3. It transfer the calls to the concerned departments where the customers want to gain
information in matters pertaining to other departments like, in case the customers want to
gain information about payment status, the customer care transfer the call to the front office
department (Nguyen et al., 2014 p. 1100).
Tasks:
The following are the tasks conducted by the customer care department:
1. Receiving calls from the customers.
2. Inquiring them about their queries.
3. Answering their questions and queries.
4. Transferring their calls to other departments if the customers want.

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Functions:
The customer care department of Four Seasons functions as a component of the
accommodation management of international hotels. The customer care department gains
necessary information about the needs of the customers and communicates the information to
relevant departments (Kamaruddin, Osman & Pei 2017, p. 34).
Accommodation management is a very important function that is managed very
strategically in the international hotels like the Four Seasons. The accommodation managers
look after smooth management of accommodation facilities like safety, guest management
and finances. The customer care gains information from customers about their needs. For
example, the customers inquire about the types of rooms available and payment modes. The
customer care department communicates the information to the accommodation department
(Islam, Ahmed & Razak 2015, p. 245). The accommodation managers gain information about
the preferences of the customers through the customer care department. They can use this
information to arrange the rooms and suits as per the requirements of the customers. Thus,
this management of the international properties of the Four Seasons according to the
preferences of the high profile customers result in ensuring customer satisfaction, which
earns the hotel chain more revenue (Hussain, Al Nasser & Hussain 2015, p.169). This
analysis shows that the customer care functions as a link between the customers and
accommodation management department.
3. Role of the customer and customer needs and steps of accommodation management:
3.1 Role if customers:
The customers play the following roles, which contribute to the importance of the
customer care departments in the international chains of hotels like the Four Seasons:

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1. The customers are the bases of the job responsibilities, career growth and all other
career related aspects of the customer care department. The job responsibilities of the
customer care employees consist of receiving and responding to the calls from the customers.
Thus, the customers serve as the essence of the job of the customer care department (Chow,
Lai & Loi 2015, p.364).
2. The customers contribute to the career growth of the customer care department of the
employees of the international hotel chains like the Four Seasons Hotels and Resorts. The job
role of customer care employees consists of not only receiving calls from customers but also
providing them with appropriate solutions. The customers give ratings according to their
experiences and level of customer satisfaction after speaking to the customer service
executives. These ratings and reviews indicate the efficiency of the customer service
department employees in meeting customer requirements and prove their efficiency. The
senior managers use these ratings by customers as measurement of the performance of the
customer care department employees (Mitchell, Palacios & Leachman 2014, p.14). The HR
department and the senior management take into consideration these ratings while appraising
the employees. This analysis shows that customers play the very important in career growth
of the employees of the customer care department.
Customer needs pertaining to the customer care department:
The following are the needs of the customers pertaining to the customer care
departments of the Four Seasons Hotels and Resorts:
1. The customers expect prompt over-the-telephone services of the customer care
departments of the Four Seasons. The Four Seasons Hotels and Resorts is an international
chain of hotels offering luxurious accommodations all over the world. The consumers would
expect the employees of the customer care departments of the hotel chain to be more efficient

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and resourceful to give appropriate answers to their questions (Johnson, Leenders & McCue
2017, p.60).
2. The customers booking accommodation facilities of the Four Seasons expect the customer
care department to convey their concerns efficiently and promptly to the concerned
departments. For example, if they want any specific food, the customer care department
should convey the information to the food and beverage department.
Steps the accommodation manager takes to ensure that hotel meets customer needs:
The accommodation manager at the Four Seasons apply the following steps to ensure
that the services at the international hotel chain meet customer needs and create positive
experience among the customers:
Set the target customer satisfaction level:
The accommodation managers in different locations of the Four Seasons first set the
benchmark of customer satisfaction, which the staff members working in the different
departments like food and beverage and room service departments have to achieve. The
performance of the staffs can be judged based on the feedback from the high-end customers
of the properties all round the world (Brown & Matsa 2016, p.510).
Measure the actual performance level:
The accommodation manager would measure that actual performance level of the
staffs based on the ratings and reviews received from the customers. If the employees receive
high rating from the customers, it means that the international hotel chain is able to meet the
needs of the premium customers who stay or visit the different properties of Four Seasons all
over the world (Graf et al., 2013 p.70).

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Training of the employees:
The accommodation manager should train the employees he manages to ensure that
their knowledge and competencies are always at par with the expectations of the customers.
This would ensure that the hotel staff members are able to serve the customers to the highest
degree of efficiently to ensure customer satisfaction. This would ensure that the hotel chain as
a whole is able to meet the needs of the customers and create positive response among them
(Rhodes et al., 2016 p.63).
4. Viability of the outsourcing, benefits and drawbacks of an outsourced organisation:
The above discussion shows that outsourcing is a viable solution for the customer care
department of the Four Seasons in all their properties. First, the customer care department
does not serve the customers directly and secondly, it is dependent on other departments to
offer solutions to customers. Thirdly, the scope of the customer care department is not as
broad as the finance or the HR department. Moreover, the department employs large number
of employees and paying them salary adds to the cost of the hotel company (Tseng 2016,
p.210). This shows that it viable to outsource the customer care employees to third party
consultancies. However, the following would the benefits and drawbacks, which the Four
Seasons would experience on outsourcing its customer case department.
Advantages:
1. Outsourcing would reduce the expenditure of the company: Outsourcing the customer
care employees would enable the international hotel chain to reduce its salary expenditure.
The customer care department does not serve customer directly and is dependent on other
departments. Moreover, their scope of work is limited compared to the crucial departments
like finance and marketing. Thus outsourcing the customer care department would reduce the

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expenditure the company bears on the strategically less important department (Chuang & Lin
2017, p.25).
2. Reduced cost of talent acquisition: Outsourcing the customer care employees to third
party consultants would result in reduced cost of talent acquisition for the international hotel
chain. The consultancies dealing with the customer care employees would take the
responsibility of acquiring employees according to the requirements of the hotel chain. Thus,
the hotel chain would able to reduce the cost of acquiring and staffing customer care
employees.
Disadvantages:
1. Interference of the third party consultants: The third party consultants because of
outsourcing of customer care employees would gain indirect control over the hotel
company’s operations. The customer care employees would be under the payroll of the third
party consultancies and as they would be more responsible to the consultancies than to the
hotel chain for their performance. Thus, the consultancies would indirectly control the
customer care department on the hotel (Rhodes et al., 2016 p.64).
2. Lack of control: The third party employees would be under the control of the consultancy
firms and not under direct control of the hotel company. As a result the management
practically would have minimum control over them or say over their performances. The hotel
group will not be able to take any actions if these third party employees are caught adopting
unethical or fraudulent means because they are not on roll employees of the hotel company
(Chuang & Lin 2017, p.25).

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OUTSOURCING AND COST REDUCTION IN HOTEL CHAINS
5. Recommendations:
The following are the recommendations, which can be offered to the management of
the Four Seasons regarding outsourcing of the customer care department employees:
1. The hotel group must outsource the lower and entry-level customer care employees. The
managers should be under the payroll of the hotel group. This will allow the hotel to control
the outsource employees through higher level on roll employees.
2. The hotel group must offer promotion and absorb these outsource employees on the
grounds of their performances. This will have two outcomes. First, the outsource employee
will perform more efficiently to come under the pay roll of the hotel and second, it will allow
the hotel group keep the efficient employees under its payroll. Thus, it would be curb the
control of the third party consultancies over the customer care department.
Conclusion:
The above study shows that though the customer care department of the Four Seasons
plays the crucial role of dealing with customer questions, its scope of activity is limited
compared to departments like finance and marketing. This makes the customer care
department liable for outsourcing to third party companies. However, as recommended
above, the management of the international hotel chain should form strategies to control these
outsource employees and reduce the interference of the consultancies in its operations.

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