Welcome back to our series: 5 Reasons to Outsource Your Property Operations. Today we look at reason 2.
Reason Two: Focus on your core business
The second biggest reason companies choose to outsource is to allow them to focus on their core business. Not having to manage housekeeping, check ins and maintenance on a daily basis allows operators to focus on the real drivers of value in their business.
Guests have no idea how much work is going on behind the scenes and it only takes one small error to result in a negative review which can undo all the hard work that has been put in. So it begs the question, why don’t more hospitality leaders outsource operations when it appears to be quite clear that return is minimal for the risk involved?
The complexity of coordinating cleaners, linen deliveries, guest arrivals and handymen across a large portfolio in a dense urban area such as London is incredibly time consuming. The marginal value achieved by executing these tasks, effectively 365 days a year, comes at the cost of 1000s of staff hours. These are spent scrutinizing schedules, adapting to delays and recovering failed services when cleaners call in sick or drivers get stuck in traffic.
Once operations have been outsourced, the business can afford to hire more team members in roles that deliver real value for the business and enable it to grow. An additional Sales Manager can support the growth of the portfolio, whilst a skilled Reservations Manager can boost bookings and develop partnerships with travel agencies.
The 80/20 rule applies well to operations as it can consume 80% of a company’s time while delivering 20% (max) return. Unless operations is your core business, a company is likely to be losing money in this department. If we consider a standard set of KPIs, these would include Total Booking Value, Occupancy, RevPar, Portfolio Size and Guest satisfaction. Of these 5, only Guest Satisfaction is directly affected by operations in terms of cleaning standards and check in experience. This is the only impact that operations can have on these KPIs.
Of course it is essential to a guest’s satisfaction that an apartment is clean but this is standard now and in fact is taken for granted. The more that apartments compete with hotels, the more cleaning standards are assumed to be excellent. Research has found that 80% of guests would leave a hotel room if it didn’t meet the cleaning and hygiene standards. This means that unless running a housekeeping operation is your core business, outsourcing is your best solution.
So if you still have your operations in-house give us a call and we’ll be happy to talk through how we can help you to deliver the service you’re proud of whilst you focus on scaling your business.