How is this risk different from outsourcing cleaning and food services for the "HomeInn Budget” hotel properties with that for “HomeInn Comfort"…

The difference between the risk of outsourcing for "HomeInn Comfort" and "HomeInn Budget" driven by the difference in the focus and target customer segment of their respective business models. “HomeInn Budget” focuses on providing value for money to the cost conscious short stay guests while “HomeInn Comfort" focuses on customer experience through quality of service provided to the guests staying on longer vacations. As regards "HomeInn Budget" due to high real estate cost, both for ownership and rental, the cleaning and food service has been outsourced. This enables HomeInn Hotels to keep the costs of operation low, which is very critical for the business model of “HomeInn Budget". Hence, instances of dis-satisfaction among guests as regards quality of cleaning and food service, within certain limits will not negatively impact business. These activities are non-core and hence can be considered for outsourcing. For “HomeInn Budget”, the critical success factor (CSF) is low cost of operations in order to be able to offer guests rooms at reasonable rates. As regards "HomeInn Comfort” where CSF is guests experience, which is primarily influenced by cleanliness of facilities and food service, these activities become core activities, hence the risks of outsourcing are higher. Therefore, there may need to be a consideration whether to outsource these activities at all. Pricing for rooms at these resorts can factor any additional costs to be incurred to ensure the delivery of the required quality of service in these resorts.