Outsourcing housekeeping departments in hotels: advantages and disadvantages

¶ … Outsourcing' -- What is it?

'Outsourcing' in a hospitality context means hiring outside contractors to do the work ordinarily done by departments in your own hotel. According to Vitasek, 'Early outsourcing helped companies realize balance sheet improvements, access lower-cost labor and often improve productivity'. Because of these advantages, outsourcing continues to be practiced in hotels today, and newer and better models for outsourcing have been introduced as well. Clearly, outsourcing is here to stay: the practice has been steadily increasing in the industry every year (Yetzer 2010).

Impact of Outsourcing within Hotels

Outsourcing is an issue of great debate in the hotel industry. Some hotel employees feel a sense of loyalty to their hotel and may see outsourcing as a sort of intrusion on their turf for the benefit of saving money. This can lower morale in the workplace. Others can understand the value of outsourcing and accept it as the wave of the future. According to the Hotel Management Network, the most important issue is the ultimate goal, which is the best possible state of the rooms offered to guests: 'Ask any executive housekeeper and they will say that standards of cleanliness in the guestrooms is top of their list of priorities'.

Why Hotels Outsource their Housekeeping Department: Advantages and Disadvantages

One reason hotels outsource their Housekeeping department is to ensure consistency. Also, knowing exactly what the fixed cost will be helps immensely with the budget. In fact, a major advantage of outsourcing the Housekeeping department is related to the budget. According to one service provider of outsourcing, 'Knowing the exact fixed cost to service or clean a room is highly advantageous when setting budgets compared to the variable cost of paying staff an hourly rate. The time in-house staff take to clean a room wildly differs as the day progresses and the staff tire' (Christian 2012).

Another advantage is, again, cost-related. This has to do with the advanced technology that is now used in laundry processing; staying up-to-date with technology can be cost-prohibitive and time-consuming for hotels, and outsourcing can be advantageous here. According to Rebecca Still, manager of London Hilton on Park Lane, 'There is so much technology involved in laundry processing that it would be very difficult and expensive to keep up with these, and the maintenance of such equipment can be a financial drain,' (Jenkins). It is difficult for individual hotels to continually update their facilities with new, state-of-the-art equipment; not only is the equipment costly, the time and effort of the transition is an issue, and the training of staff members to use the new equipment will also take time and money. In this light, it makes sense to take advantage of the modern facilities that are provided by outsourcing at least part of the Housekeeping department.

As stated above, cost again enters the picture when considering how much time and money it costs to train staff to use laundry equipment. With new technology, time must be taken to train staff members. In addition, there are many language barriers to be overcome in the training process. These obstacles may seem overwhelming. Finally, the space that is used for on-site laundry could be put to better use. In the Jenkins article, Chris Hancock, a manager at Sunlight, is quoted as saying that 'The space an on-site laundry takes up could be better used as a selling area for increased profits'. This is a very strong selling point on the side of outsourcing at least part of one's Housekeeping department.

One disadvantage of outsourcing the Housekeeping department may be that this service is such a vitally important aspect of the hotel business; it is crucial to its success. Many managers are hesitant to put control of this department in the hands of outsiders. They may feel that they can trust and rely on their own Housekeeping staff. This is an argument Christian mentions in his article: 'And because housekeeping is so important, many of you want to control the department yourself, by employing your own housekeeping staff'. Some managers feel that the quality of linen is better when it is in-house. Furthermore, some believe that the staff will take better care of in-house linen.

What I Would Do as a Hotel Manager

Based on the research I have read for this paper, I would use a combination of both in-house and outsourcing services if I were to become a hotel manager. The arguments in favor of outsourcing are very strong. First of all, it is economically sound. Knowing what my costs will be will help me better plan my budget, and the money saved in outsourcing a portion of the Housekeeping department could be put to good use to improve other areas of the hotel and to promote new business.

I also have concerns about technology and about the environment. Keeping up with the rapid pace of change in technology would be time-consuming and costly; outsourcing to a company that is better equipped to stay up-to-date with the latest technology would be advantageous in that respect. Environmental issues are also important to me, and I think they will become a key issue in coming years. Some forward-thinking companies already have measure in place to preserve our resources. One of these is London Linen Supply. They have environmentally friendly laundry facilities, and they use environmentally safe cleaning products. They have begun to implement measure that will reduce the amount of refuse generated, and they have minimized their packaging as well.

I would be careful before making any major changes, though. I would take Amy Bair's advice and carefully check the credentials of any outsourcing company I might be considering. 'You don't know the people coming in', she cautions. 'How stringently does the staffing company check the background of those they hire?' (Bair 2012). I would also make sure that the small, personal touches that make visitors to my hotel feel at home are not forgotten. This would also mean showing appreciation to the in-house staff for the efforts they make, which will not go unnoticed.

As Vitasek points out, 'For many this outsourcing system will seem like heresy to tried and true procurement methods. For others it will seem like a fresh approach to help achieve better success with outsourcing.' In my opinion, a combination approach would be the most advantageous to my hotel. That way I could maintain a sense of staff loyalty and pride in our hotel, and at the same time run a prospering business that will encourage repeat visits for years to come.