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Restaurant outsourcing is a growing trend within the hotel sector. Discuss the drivers behind this trend and the strategic intent. Using industry examples critically compare the benefits and challenges for both the organisation and the customers in such a partnership.

Number of Words : 2900

Number of References : 27


 Drivers of Restaurant Outsourcing
 Benefits and Challenges for the organisation
 Benefits and Challenges for the customers


Faced with increasing competition, the hotel industry is forced to focus on their core service of providing lodging to customer while outsourcing other parts of their business processes - restaurants being one such area. The trends in outsourcing of food and beverages, or in other words hotel restaurant services, to other more specialized parties are gaining momentum. One of the key drivers of this decision is the achievement of cost efficiencies and hence improved performance of the firm. However, outsourcing decisions based primarily on cost considerations are likely to be strategically unwise for a firm, as this may result in long term negative impact on the brand of the hotel. Brand extension and co-branding literature evaluates this aspect of the branding process, where it has been emphasized that in a co-branding situation, both the brands must fit strategically. Any mismatch may result in the erosion of brand equity of the more significant of the two brands, a situation which the hotel industry would better try to avoid. <br />

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