Risks and Benefits of Outsourcing Hotel Operations: A Comparison between Scotland and Taiwan

Abstract

This paper examines the use of outsourcing in the activities comprising hotel operations in Scotland and Taiwan. Outsourcing is a key process integrated into the design of the supply chain management. The research also focuses on empirically identifying the role of the outsourcing strategy in hotels. To this end, the authors propose two hypotheses to study the relationship between the benefits and risks of outsourcing and the tendency to use third-party organizations. These hypotheses are analysed and tested in the two regions. The study was conducted on a representative sample of 118 hotels in Scotland and Taiwan. A questionnaire was used to obtain the findings. The results indicate that the principal candidates for outsourcing are the activities requiring technical skills and those services not involving direct contact with guests. No significant differences were found between the current levels of outsourcing in Scottish and Taiwanese hotels. The findings indicate that a stronger perception of the risks and benefits of outsourcing has a greater influence on outsourcing strategy. Furthermore, in the case of Scottish hotels, it is the benefits that determine the level of outsourcing, while it is the risks that do so in Taiwanese hotels. This work contributes to the literature on outsourcing from a services perspective.