Assessing hotel outsourcing activities in Arya hotel chains

University essay from Luleå/Department of Business Administration, Technology and Social Sciences

Author: Amir Aslanzade; Arshia Mahmoodkhan Shirazi; [2012]

Keywords: ;

Abstract: This master thesis attempted to assess hotel outsourcing in the context of Iranian hotel industry. Outsourcing was not a new concept as it had been used as a tactic in various industries such as hospitality and tourism industry worldwide. The outsourcing had been developed on the basis of a very simple logic which employs the other products as these are cheaper, faster and better. These days outsourcing was a very common hotel management style as hotels employ external expertise being cheaper, faster and more skilled than hotels by themselves. Outsourcing was not confined to one application or two whereas it means different things for hotels. Generally hotels applied outsourcing applications as a method for surviving in the present competitive marketplace. The notion provided hotel with an opportunity to pay greater attention to core activities by freeing up hotels with resources from peripheral and supporting activities. This research focused on Arya hotel group which is one of the well-known and admired Iranian hotel chains and studies the application of outsourcing on this hotel chain. This research used qualitative approach attempting to collect descriptive data from personal interviews with some of the Arya hotel general managers in different cities such as Mashhad, Kerman, Tehran and other major cities where the hotel group has branches. Additionally this research reviewed several articles and books related to hotel outsourcing and denotes their findings as well. This research attempted to present ideas related to outsourcing of hotel activities aiming at refining Iranian hotels especially in case study of Arya hotel group. The finding of this research showed that from various applications of hotel outsourcing the main reasons and drives of outsourcing in the hotel group is only cost cutting and increasing service level of the hotels. Even just half of the participants (general managers) in the research believed that outsourcing can lead to cost cutting. It is clear that the hotel group yet has not had any predefined outline for planning and implementation of outsourcing, however, the review of the previous relevant case studies showed that outsourcing can improve hotel core competencies in various ways such as strategic repositioning, core competency enhancement, greater service integration, high value creation, access to advanced technology and outside expertise and dramatic cost reduction. This research signified a theory that entitles as “outsourcing of Arya hotels’ support functions to outside suppliers can achieve better, faster and cheaper outcome”. Hotel outsourcing occurred in variety of hotel functions within different hotel departments. This research showed that Arya hotels in various cities have outsourced their different hotel functions.