Explain the risks of outsourcing cleaning and food services for the “HomeInn Comfort" luxury resort properties.

Risks of outsourcing cleaning and food service under the luxury resort model: In the luxury resort business under the brand “HomeInn Comfort", the target guests are travellers on leisure. The primary feature of this model would be "good quality of service". Maintaining cleanliness of premises and food service are critical activities in the operation of luxury hotels. Therefore, customer satisfaction on these metrics is paramount to sustain and grow business. With the ability to post reviews online on booking portals, any negative review (whether justified or not) can reach very easily to a large number of potential guests. This can negatively impact future business. Hence, “HomeInn Comfort” brand has to deliver the quality of service that it provides in terms of cleanliness and food that should meet and beat the guests' expectation. Outsourcing these services to well established vendors is advantageous since the focus can remain on improving guest experience. It may also be cost advantageous in many cases. However, there a number of risks in this model. (1) The required quality of service for “HomeInn Comfort” resort properties should be delivered by these vendors. Detailed service level agreements need to drawn up to ensure this. HomeInn Limited should be able to monitor the performance of these vendors. In cases of non-delivery of the required level of service, the agreement should provide for means of redressal. This could vary from compensation for any loss in business to immediate termination of service. (2) HomeInn Limited should ensure that it can easily and economically switch service providers if required. For this it has to identify alternate vendors who can provide the same level of service as the current ones. At the same time, since the resorts are in locations where the number of vendors providing these services is limited, it increases the risk of outsourcing these services. The other risk in outsourcing could be of instances where well performing vendors could go bankrupt and shut shop. In such cases, resort operations could be immediately impacted since such services can no longer be availed from these vendors. Again, list of alternate service providers is a necessary back-up that the hotel should have.