Imagine that you have been appointed as a consultant for a global hotel chain and have been asked to develop a proposal for outsourcing some of the services within the hotel to reduce costs, and consider the use of external expertise. You are to develop this proposal for the board of senior management:
1. Select a department within the hotel and investigate it in depth.
2. Identify the roles, tasks and functions of the department, within the context of Accommodation Management and how these are managed.
3. Consider the role of the customer and the customer’s needs related to this department and the steps the Accommodation Manager (of the department) takes to ensure the Hotel is meeting the customers’ needs and creating a positive experience
4. Finally, discuss whether outsourcing is a viable solution for this department. What are the benefits and the drawbacks of moving to an outsourced organisation/solution for this department?
5. Offer recommendations for moving forward.
History and Reputation of The Ritz-Carlton Hotel
The Ritz-Carlton is one of world’s top rated hotels. In the accommodation industry, this hotel holds a reputed position. Accommodation is one of the most sought after services by people traveling to far off lands and looking for comfort. The Ritz-Carlton ensures a comfort that is unmatched in its class. Formed initially in the 1940s, the Ritz-Carlton was fully established in 1983 as The Ritz-Carlton Hotel Company by Colgate Holmes and Horst Schulze alongside others (Ritzcarlton.com 2018). The company has not looked back since. State-of-the-art technology abound the hotel along with superior natural beauty. One of the premier objectives of the hotel is to provide never felt before luxury to its customers notwithstanding their ethnicity, religion or class. The hotel takes pride in claiming more than twenty franchises around the globe.
A hotel comprises numerous departments that are managed by the staff every day around the clock to ensure quality service. The front office department is probably the most crucial part of a hotel as it is responsible for a customer’s first impression and further satisfaction. Apart from that, other includes the human resource department, the banquet department, laundry, grocery and food department and so on. As one of the best hotels in the world, it is undoubted that the Ritz-Carlton would have the best front office department. A hotel’s most crucial tasks are performed by its front office department that include reservations for guests, making registrations, replying to queries, and receiving payments amongst others (Benavides-Velasco, Quintana-García and Marchante-Lara 2014). Mainly, the front office department manages three very significant areas that are, the Property Management System or PMS, accounting and data management for guests and guest services (Bertan et al. 2016).
The Property Management System can be explained as the function that involves looking after other departments of the hotel (Chibili 2017). In recent years, the PMS has evolved greatly integrating other departments like food and beverages, housekeeping, maintenance and sales and catering, providing customers with complete and unmatched experience. This integration includes the computerized program called Central reservations system or CRS records reservations for guest rooms. (Koo et al. 2015), state that the inclusion of this state-of-the-art system has revolutionized the way hotel industry is run. It has eased the pressure on staff greatly and enhanced quality of service, they add further.
The Ritz-Carlton is renowned for the services it provides to its guests. Serving the guests commences at the front desk with staff welcoming the guests warmly and attending to all their queries. Guest services also include providing transportation facilities to the guests, helping them with the luggage, playing the role of a tour guide, delivering newspapers and so on.
Importance of Front Office Department at a Hotel
Under this process, the front office staff is responsible for carrying out night audit work that involves examining for correctness and totality of transactions in a day. The process is undertaken to end or close the sales information for the day (Kimes 2016). Data management also involves the work of the PMS that keeps records of the guests’ name, their arrival date, address, phone number and so on. In addition, the PMS also keeps record of the guests’ affiliation to the company and room types references.
Apart from the technological assistance that the front office provides to its customers, it must also look after their basic needs. These include, showing care for customers, attending to all their queries without worrying about the time and so on. Along with these, some technical needs also have to be met by the front office department (Manhas and Tukamushaba 2015).
First, the staff needs to make sure that the customers are allotted registration cards at the time of their arrival. The registration or ‘reg’ card includes details such as customer’s name, date of arrival, rate, and date of departure and so on. The registration process involves five steps that are,
- Greeting the customers
- Confirming details mentioned on the registration record
- Securing and receiving payment
- Assigning room
- Issuing room keys
Second is the communication need of the customer. The front office has to make sure that they are available for all kinds of communication that is demanded by the customer. In addition, the front office must take extreme care while communicating and make sure that they do not sound rude or inattentive. Listening carefully is a key to good communication. Customers communicate with front office staff to ask for varied services while their stay at the hotel. Communication needs of the customers include,
- Queries regarding reservation and registration
- Pick up arrangements, requirements related to housekeeping
- Arrangements for specific orders in case of special occasions
- In situations of emergency
- Queries regarding nearest tourist spots and so on
Apart from the above-mentioned needs, customers also have other basic needs that must be addressed by the front office department. To be precise, most of the duties and responsibilities that the front office has to perform, are all linked to the needs of the customers. Making arrangements for safety deposit boxes, receiving messages on behalf of the customers, arranging wake-up calls, delivering newspaper and other sources of entertainment are some of the needs of the customers related to front office department. These needs come under the guest services duty that the front office has to perform (Turner et al. 2017). Thus, it is correct to state that customers’ needs are the responsibilities of the front office.
Managers have the most important job to manage, control, direct and plan the activities that take place in a hotel. A hotel has managers for different departments who ensure smooth functioning and superior customer service (Kao, Tsaur and Wu 2016). Front office managers in particular have the most difficult job to look after the operations of the front office department. The manager needs to take certain steps to guarantee full satisfaction of the customer.
- First, the manager must check for any loopholes in the front desk and rectify those prior to the guests’ arrival
- Second, the manager must have all the information regarding the arriving guests to ensure quality service
- Third, the manager must attend to any complaints made by the customers and resolve those politely
- Fourth, he should make sure that the customers’ security is up to the mark and there are no issues regarding it
- Fifth, the manager must carefully monitor each section of the front office to check whether those are adept in meeting all kinds of customer needs (Mathe, Scott-Halsell and Roseman 2016)
- Sixth and the most important, the manager should communicate with the customer in a way that impresses them and in addition, conveys the culture of the hotel
The Role of Property Management System (PMS)
The manager is entrusted with the task to achieve full customer satisfaction through proper monitoring and controlling of other staff members and departments.
Outsourcing has come to be recognized as the most viable and easy option for businesses to run smoothly. In the sphere of hotel industry, outsourcing is rapidly occupying a crucial place. In order to understand whether outsourcing is a feasible option for Ritz-Carlton hotel, one must first have knowledge about the term. Outsourcing, as defined by Gerbl, McIvor and Humphreys (2016), refer to the process of contracting out any section of the business to a third party for better functioning. The process is largely used by hotel industry to manage budget and cut costs while maintaining superior quality.
The front office, as already mentioned is the most important department of any hotel and outsourcing it would require proper planning and strategizing. It is important to note that while many emerging hotels prefer outsourcing of the front office, some still prefer managing the department with in-house staff (Sharma 2015). However, outsourcing is an effective method as proven by its increasing popularity. In case of Ritz-Carlton Hotel, outsourcing of the front office department can be a good option to manage its overall expenditure (Ibisworld.com 2018). The pros and cons of outsourcing the front office must be elaborated clearly in order to understand whether the hotel shall go ahead with it or not.
- The first major advantage of outsourcing is the reduction in costs. Outsourcing the front office would enable the hotel management to cut extra costs of paying employees. In addition, the hotel can concentrate on increasing budget dedicated to improved customer service.
- Hiring professionals with expertise in handling front office responsibilities would ensure better functioning of the department. Moreover, the company where front office would be outsourced will be equipped with state-of-the-art technology that assists works more easily and produces excellent outcomes.
- Outsourcing the department would reduce the burden on the hotel of managing numerous departments and complying with customer needs simultaneously. When the management does not have to worry about a department, it provides great relief and customers are satisfied as well.
- (Gunasekaran et al. 2015),believe that outsourcing destroys the very essence of a hotel that is meant to treat customers as part of the establishment. When the hotel outsources its front office, it loses control over that department and may have to compromise on quality.
- Alignment with the outsourced department is another issue that may arise for the hotel management. A visible lack of communication with the outsourced department might come as a disadvantage for the hotel.
It is clear from the pros and cons of outsourcing listed above that the hotel has to be extra careful while taking the decision. However, it is recommended for Ritz-Carlton not to opt for outsourcing as it has an established reputation already. Outsourcing one of the most important departments of the hotel might prove a wrong step for Ritz-Carlton. Having a status of one of world’s top hotel chains, Ritz-Carlton has already outsourced its housekeeping service. Further outsourcing of the front office would devalue the hotel’s long held reputation.
It is recommended that the hotel focuses largely on the front office department a=since it does not have to worry about its outsourced housekeeping department. Further, the hotel can look for innovative techniques to lure customers like going out of the way and doing something not inherent of the brand. In addition, the hotel management must concentrate on other important services like providing tour guides to customers, arranging for added entertainment like holding in-house parties or events.
Benavides-Velasco, C. A., Quintana-García, C., and Marchante-Lara, M. 2014. Total quality management, corporate social responsibility and performance in the hotel industry. International Journal of Hospitality Management, 41, 77-87.
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Chibili, M.N., 2017. Modern Hotel Operations Management.
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Mathe, K., Scott-Halsell, S. and Roseman, M., 2016. The role of customer orientation in the relationship between manager communications and customer satisfaction. Journal of Hospitality & Tourism Research, 40(2), pp.198-209.
Ritzcarlton.com 2018. Luxury Hotels & Resorts | The Ritz-Carlton. [online] The Ritz-Carlton. Available at: https://www.ritzcarlton.com/ [Accessed 25 Jan. 2018].
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