The global travel and hospitality sector has an enormous combined direct, indirect and induced annual economic impact of about 6.5 trillion US dollars. The global hotel sector alone generates about 500 billion US dollars each year. JLL reports upbeat sentiment for many regions of the world, including the United States, which saw 2014 demand for lodging accommodation at an all-time high.

The increase in demand for travel, tours, hotels and entertainment indicates that consumer spending and confidence has picked up. As consumer spending rises, so does competition among travel and hospitality companies. Process and cost efficiency, as well as innovation and the use of the latest technologies are more important than ever to improve competitiveness and increase customer loyalty.

Analyst firm Information Services Group states that despite fluctuating oil prices and other challenges, major and regional airlines have successfully reined in escalating overhead and operating costs through outsourcing (Have the Airlines Outsourced All That They Can, ISG 2013). In an industry with huge amounts of capital expenditures, business process outsourcing can provide much-needed scalability, help reduce costs and drive innovation to increase competitive advantage.

Companies in the travel and tourism sector have traditionally outsourced back office BPO services, but the economic climate in North America and Western Europe is pushing providers to diversify their offerings to capture market share in the higher end of the service value chain. Three key business processes that travel and hospitality companies can outsource are customer service, finance and accounting, and research and analytics. These support functions are best managed as outsourced business processes, allowing organizations to achieve economies of scale and significant cost and process efficiency.

Challenges

Fierce competition, shrinking margins, tight investment restrictions, and uncertain customer loyalties are just some of the issues that beset the travel and hospital industry. Companies are under pressure to provide excellent customer service while keeping costs down.

Changing loyalty requirements. Customers are the heart of the travel and hospitality industry. Customer loyalty is an encompassing metric that permeates all industry services, from call center operations to market-facing functions. Firms perpetually struggle to improve customer satisfaction and customer-client engagement to ensure that customers recommend their business to family and friends.

Technological demands. Factors such as customers booking flights, rooms, tours or concert tickets using multiple devices and the influence that social media players exert on purchasing decisions are driving the need for increased IT support. Big data, social business, mobility and cloud services are changing the way travel companies do business, but the infrastructure, labor and capital investment required to support efficient digital transformation may overwhelm small and medium-sized enterprises.

Fierce competition. Technology and strategy prove the differentiator between companies offering the same services. It can be difficult to balance the focus on business critical operations and management of administrative and supply chain functions.

Outsourced Travel and Hospitality Solutions

By working with an outsourcing services provider specializing in the travel and hospitality industry, companies gain access to low cost, best-in-class customer-centric solutions. While travel companies must focus on their core offerings, an outside specialist with resources and technology can provide better value and position the company ahead of the competition.

Increased competitiveness. An outsourcing specialist helps companies capture more wallet share through various methods: appropriate up-selling and cross-selling initiatives in contact center operations (airline travel booking, information requests, car reservations, hotel and entertainment booking, etc.), streamlined and integrated finance and accounting methodologies, and sophisticated data and analytics to develop improved strategic decision making. One example is global hotelier Marriot, which partnered with a third party on ten successful outsourcing projects. These included change management and business case planning and design. Marriot gained business and technical skills that helped the organization gain better value.

Exceptional customer service. According to Morrison & Foerster’s Global Sourcing Trends Report, the hospitality industry should improve customer-facing functions and focus on customer retention. Besides customer support, outsourced non-voice services and data management help companies attain seamless and high-quality processes that in turn secure customer loyalty.

Improved focus. An outsourcing partner performs non-core, back office activities (account maintenance, order processing, data analytics, market research, etc.) so the company can focus on strategic business functions like developing new products and improving customer engagement and loyalty.

Brand protection. A third party provider can protect a brand by exceeding the service levels that customers expect through the provisioning of highly-trained, friendly and efficient contact center professionals, state-of- the-art infrastructure and best-in- class methodologies.

Cost containment. By working with offshore vendors, the potential cost savings can further multiply due to cost arbitrage. Offshore providers can often help companies reduce costs by 40-70% while also introducing advanced technology and operational methodologies that improve efficiency and quality.

Travel & Hospitality Outsourcing in the Philippines

It’s best to consider travel outsourcing in the Philippines with a service provider such as Sourcefit that aims to provide custom solutions, sophisticated infrastructure and best-in-class processes to ensure client success. Besides the provisioning of low-cost, highly skilled personnel to global travel and hospitality firms, industry expertise and excellence metrics can help an outsourcing company become a seamless extension of the business.

Please contact us to find out about Sourcefit’s custom travel & hospitality outsourcing solutions.