HOTELIER: Coming back to daily operations, the conversation around outsourcing is growing louder. Any comments to share?

STEFAN: Outsourcing is very interesting. Traditionally in this part of the world we carry a lot of fixed costs. Business demand is not so lavish anymore so we have to look at how to convert fixed cost to variable cost, and give this to outsource companies. People say the quality is not there, but that’s not true.

ANDREW: Yes, that’s changing rapidly.

STEFAN: All of Europe is doing it and I think it’s a hot topic because we’re very resistant to doing it. But in order to improve performance, this will be the next thing.

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ABDELLAH: We’ve never really had to resort to outsourcing because of the high level of occupancies in the UAE in general. Once you start running occupancies below 50% then it would make sense to outsource most of the departments. Right now, it’s not worth it. Now we do security and cleaning the public areas.

ANDREW: Which are semi-variable anyway. There are players coming into the market which are able to offer high quality housekeeping service.

ABDELLAH: Do the costs add up? It would cost you less to have a permanent employee, than an outsourced one.

ANDREW: Not necessarily.

MARIA: It depends on the variance in occupancy. When you have fluctuations, that’s when it makes a difference. Too much fluctuation, I’d rather outsource than have it myself.

KAI: On the flip side, we have to also look at alternative revenue streams. We are all seeing the impact of Airbnb, but then you have some of those hotel operators capitalising by being the preferred spa partner for the Airbnb. Yes it’s bad for us, but it’s happening. So how do we capitalise on that?

MARKUS: Going back to third-party and outsourced contractors, we also have the responsibility for the people working for us, whether in-house or outsource. We do the utmost to see that the staff is happy. You want them to be part of the hotel or brand spirit, and how do you achieve that? We should look deeper than just the cost per hour. At the end of the day, you integrate them like your own team but that’s tricky.

MARIA: The issue I’ve had with outsourcing companieswhen I used them previously, is that customer satisfaction was higher when I had my own staff rather than outsourced. That is hard because they will clean the room and so on but their heart and soul is not with the company. You never have that sense with belonging with outsourced staff and guests feel that. That’s the risk, not the quality itself.

ABDELLAH: You need to insist with the outsourcing company that they give you the same people because you have to train them to your standards.