Outsourcing in the hospitality industry: A new wave of business operation

Hospitality is one of the most powerful industries in the global market today. It encompasses diverse business sectors because of its broad category of services offered.

The hospitality industry connects and unites all travel-related services, including accommodation, food, and transportation. It makes the sector one of the main contributors to economic stability in many countries. 

Per Statista, the global hospitality market spiked at around 4.7 trillion US dollars in 2023 and is expected to grow continuously in 2027.

Since hospitality has a driving force to attract investments and create income-generating activities, industry services are always measured based on the overall customer experience.

Like other industry verticals, the hospitality industry also adapts to the ever-changing trends on how to deliver services to its customers. One of the notable progressions is the integration of technology.

From booking flights and accommodation to customizing travel itineraries, travelers and tourists who wish to visit a destination can settle and process everything in just a few clicks. 

Many businesses turn to outsourcing as an innovative response to continuously promote service excellence, given that most of their products and services today are accessed online.

How outsourcing in the hospitality industry works

The focus of integrating outsourcing in the hospitality industry is to deliver exceptional customer service experience to all its clients in this digital era. 

One good example is the traditional brick-and-mortar travel agency, which provides in-person assistance to customers who want to customize their vacations.

Through tech innovations, online booking platforms can now cater to almost all services in the hospitality industry, including:

• Hotels
• Transportation
• Dining
• Tourist attractions 

Customers can settle all these transactions in just a few clicks. 

Outsourced customer service agents, on the other hand, are hired to process and attend to any concerns related to the bookings made on websites or mobile applications.

It is one of the contributing factors why outsourcing now plays a vital role in the hospitality industry. For one, customer service-related functions are made more convenient through offshore outsourcing.

Outsourcing in the hospitality industry: Common services offered

Various outsourcing services are utilized in the hospitality industry to ensure service efficiency, reduce operational costs, and access technical skills and specialized expertise.

Here are some of the commonly acquired outsourcing services in the hospitality industry:

Process automation 

As technology revolutionizes the ways and processes of hospitality services, many businesses opt to outsource to IT and software development companies.

These third-party service companies provide Software-as-a-Service (SaaS) and create online platforms where businesses can connect with customers worldwide and generate more leads.

Support services

Support service is one of the most popular outsourcing services in the hospitality industry.  From customer service agents to hiring support staff in various areas of operations, service delivery, and executions are comprehensively attained.

Organizations outsource back-office support staff to transfer some functions and let other in-house staff focus on more critical tasks like customer service-related functions.

Aside from IT and software development, hospitality businesses outsource other support services like accounting and bookkeeping, marketing, sales, and human resources.

Digital marketing and content creation 

Creativity and up-to-date digital content materials are also crucial in attracting customers, considering the highly competitive setup in the digital world. 

Many companies in the hospitality industry also invest in outsourcing creative staff with fresh ideas to compete and adapt to the trends in online marketing and advertising.

Some of the popular interventions today are search engine optimization (SEO), influencer, and pay-per-click marketing, to name a few.

Lead generation

Outsourcing lead generation lets businesses create top-notch content, leading to higher customer engagement online.

Hospitality firms turn to outsourced telemarketing with the help of remote or offshore telemarketing agents. These well-experienced and knowledgeable professionals help encourage prospective leads to avail of their clients’ services.

B2B cold calling is another outsourcing service under lead generation. Since it’s B2B, the conversation focuses on targeting decision-makers of a business over the phone to sell and offer partnerships.

Partnership services 

Outsourcing also paved the way for many hospitality businesses to easily collaborate with other enterprises to make the services more accessible and marketable to target customers.

One good example is hotel booking platforms. With the establishment of a single platform that houses thousands of accommodation offers from various hotel chains, selling and transacting with customers are more convenient.

Advantages of outsourcing in the hospitality industry

It’s always crucial to understand how outsourcing will benefit your company. Below, we have outlined three primary advantages of outsourcing in the hospitality industry:

Cost-effectiveness 

Since everything is done remotely, outsourcing can significantly reduce costs in hiring full-time staff, particularly for highly specialized tasks or deliverables with variable demand. 

Another is in line with the benefits of process automation. Businesses can significantly decrease their expenses by integrating some of their processes into a single platform using unique and customizable service software.Improved customer service experience

Technology allows the hospitality industry to have global access, allowing organizations to introduce their products and services internationally through online servicing platforms. 

With outsourcing, businesses can ensure quality and excellent customer service by hiring remote staff who can assist and attend to all hospitality service-related concerns.

Whether offshore and onshore outsourcing, hiring additional support staff became more flexible, given that talent can work effectively outside the physical office.

Higher return of investment 

Unlike the traditional way, outsourcing also plays a vital role in ensuring higher returns on investments for many companies. 

Outsourcing support staff who will take charge of generating prospect leads or do email and telemarketing services worldwide will definitely increase a company’s visibility and reach online.

Overall, outsourcing in the hospitality industry makes automating processes possible, improves customer service, and boosts marketing strategies. These all lead towards higher return on investment.

Examples of businesses outsourcing in the hospitality industry 

Here are some of the businesses that utilize outsourcing in the hospitality industry:

1. Hotel accommodations 

Hotel accommodation businesses today usually partner with online booking platforms like Agoda, trivago, and booking.com. 

These platforms are backed by outsourced customer service agents assigned to their back office operations, ensuring that booking transactions are processed successfully. 

Aside from partnerships, most hotels also have in-house hotel management software (HMS) to help them in monitoring sales, room availability, and other hotel services. 

Outsourced software providers often customize HMS based on the requirements of the establishments.2. Airline companies

In business process outsourcing, one of the services that agents usually handle is travel accounts. It involves travel-related concerns like booking and billing inquiries.

Customer service agents, usually offshore, will communicate with three main parties: the customers or travelers, travel agencies, and direct vendors or service providers. 

3. Dining and restaurant businesses 

Hotels, dining, and restaurants are also some of the hospitality industries that integrate outsourcing into their operations. It usually has point-of-sale (POS) systems for billing and payment purposes.

Many software developers offer customizable POS systems services that owners can choose from. The maintenance and updating of systems are usually part of outsourcing software development providers.

4. Events management companies

Even before the pandemic, some event management companies already practice virtual and hybrid events to conduct streaming and international conferences. 

It led to the creation of various events management software that aims to organize and track updates on logistics, procurement, and attendee engagements. 

5. Online travel booking companies 

As discussed, online travel booking companies are one of the main benefactors of integrating outsourcing in the hospitality industry, given that their services are mostly done online.

From software and website development to outsourcing staff for back office operations, online travel booking companies recorded a significant increase in sales by acquiring higher customer reach and improved customer service.

Revolutionizing CX through outsourcing in the hospitality industry

Customer experience (CX) reflects the overall interaction of the customer with your services or product offered throughout their entire journey in transacting with the company. 

Hospitality is one of the most in-demand and fastest-growing sectors in the global market. No doubt, the competition and expectations of the customers are significantly high, given that most services are catering at an international scale. 

Revolutionizing CX in the hospitality industry through outsourcing is an emerging trend that helps many businesses ensure all their services and products are done exceptionally. 

The work of outsourcing has transformed the hospitality industry over the years and contributes to ensuring that businesses can cater to its growing service demands.

Today, more and more investors are becoming more interested in the industry. Existing businesses in hospitality are now opting to expand operations and satellite offices across the globe.