Non-Core Sector and its Outsourcing

Maintaining a healthy balance between core and non-core ancillary products is imperative for a sustained generation of desired revenue levels. Creating the internal processes and systems which facilitate the sale of ancillary services is just as necessary. The opportunity for non-core sectors of revenue is immense. Tickets to museums, insurance services, sporting events, and concerts, in addition to the already existing core services, add to the dynamism of the living space offered to the guests.

It isn’t that non-core services weren’t being provided earlier. From late check-outs to convenient parking, fast internet and spa treatments, hotels have been providing these services for a long time to enhance their customer’s experience. However, a re-evaluation of the circumstances and the modus operandi of these services needs to be done in the wake of changing situations worldwide due to the pandemic.

One can draw inspiration from the aviation industry, which derives a considerable part of its earnings from ancillary services. Some American airlines generate nearly 40% of their revenue from these ancillary services. This comes from a wide array of services, including bigger seats, pre-landing taxi and hotel booking, shopping for different products and even discounts on upcoming flights. Such an approach helps to widen the income source for a particular business. However, an effective MO for executing such non-core activities should be undertaken. This leaves hotel owners mainly two choices: either to perform the non-core activities in-house or to outsource them. Taking either option depends on the hotel’s circumstances and some considerations.

Outsourcing of non-core sectors can have its share of advantages and disadvantages. Hotels outsourcing their non-core sectors typically do it to focus more on the core sector and also to maintain a competitive edge. However, such an outsourcing exercise should be backed up by sustainable goals and not for short-term goals of cost saving. Though saving resources is one of the aims of this exercise, an unsupervised decision can often result in unexpected costs to the hotel itself.

Outsourcing helps hotel customers receive a better quality of service at a cheaper rate. The supplier’s specialization level in the particular field can also help raise the hotel’s standard in that field. Outsourcing also instils a sense of market discipline in the organization, which in turn induces the business to add powerful incentives to raise productivity, innovate and constantly keep improving the quality of the product. Moreover, in the case of a change in consumer preferences, finding a new supplier with better and cheaper resources is much more economical than scrapping and constitutes a whole department within a hotel. All of this can help concentrate on the hotel’s functions which are carried out strictly by the staff.

However, one should be wary of specific points where being careful can help expedite the development process of the hotel. Firstly, confidential information should be handled carefully with outsiders as its loss can lead to the loss of the hotel’s competitive advantage. In the extreme case scenario, the transfer of excessive amounts of services to outsourcing companies lead to complete dependence on external factors for its survival. Hence a balanced approach should be adopted, keeping the hotel’s integrity and revenue intake on an equitable basis. 

Discuss such topics at the Hospitality Management College at Amrapali Institute, Haldwani. Amrapali Educational Institute is a top-ranked institute in Uttarakhand.

History of Bakery

Bread has been the essential food for most people for a more significant part of history. However, the original bread differed from the bread that we see today. People ate sprouted bread which was rather rough-looking than the modern white bread. In the fertile crescent, one of the earliest cradles of civilization, bread and beer was seen as the staple diet of the people. Even in ancient Egyptian culture, this diet is supposed to have supported many people. Since this was their staple diet, it had to be quite nutritious owing to all the manual labour that the people of those times were subjected to.

By 10,000BC, many people had transitioned to a settled life from their hunting predecessors. Breaking bread became more common than cracking skulls as people started sowing and experimenting with different seeds, a whole new variety of food products propped up. Wheat gave way to bread, and barley gave way to beer. The preparation of bread at this time was unique. A slurry of seed water was baked on rocks in the sun.

Ancient Egypt was considered the granary of the world. A fine quality of wheat was cultivated there for the first time. A direct consequence of this production was the birth of bread in Egypt. It was the staple food of the Egyptians. Herodotus exclaims that bread first acquired economic and social status in Egypt since it was also used as currency. A kneaded dough was baked on a hot plate and became a type of pie. Later on, the dough was placed into a clay pot and cooked on embers. Excavation of various grave sites has revealed that the heavy goods contained different bread sizes to accompany their afterlives.

Soon enough, yeast was discovered, and this greatly improved upon the quality of the bread. The first organized bakeries started propping up, which earned profit from bread. Other cereals and seeds began to be used along with wheat to bake bread—even fruits and herbs such as dates and coriander. The Egyptians handed down this bakery technique to the Jews, Greeks and Romans. Cultivation of the common wheat was introduced by trading to these various other cultures. The quality of the bread was gradually enriched, and the development of bread was very rapid. The construction of ovens as we know them today with a door and the capacity for preheating has been attributed to the Greeks. Hippocrates refers to different types of bread, sweets and biscuits. The first mention of a baked pizza is also found in Greek society, where it was called ‘Plakounta’, which was made by placing vegetables, cheese, and oil on dough before baking it.

When the Romans completely routed Greece, they began the art of baking themselves. Emperor Trajan’s reign saw the emergence of more than 300 organized bakeries in Rome. It even had a baker’s guild. This bread industry was relatively simple and had five parts: the grinding mill, the oven, the storeroom, the sales area and the baker’s home. Romans also discovered the use of beer yeast in breadmaking which they found during conquering countries that produced beer. The Byzantines took over this art and introduced the making of pastries.

Breadmaking remained quite the same for many years until 1881, when electricity decisively changed bread’s whole production and distribution ambit, making it a much more commercial product.

Discuss such topics at the Hospitality Management College at Amrapali Institute, Haldwani. Amrapali Educational Institute is a top-ranked institute in Uttarakhand.

HOTEL REVENUE MANAGEMENT

Maximising hotel profits by adding to the customer base is a powerful way to increase income. But simply adding to the customer base and making the hotel jam-packed isn’t always the best method for a long-term growth and development plan. There is a need to qualitatively and quantitatively assess the customer’s behaviour to predict their spending pattern. This will, in turn, help to set up the saleable product(s) at the right place at the right time for the right buyer. As per the definition of the hospitality industry, hotel revenue management must mean selling the fitting room to the right customer at the right time on the right distribution channel with the best commission efficiency.

The components which comprise revenue management are customer segmentation, demand forecasting, inventory management, yield management and pricing. These components are pretty interconnected and significantly impact the ultimate financial memo of the hotel.

 Customer segmentation helps identify a group of customers in your hotel and address them differently. Someone travelling on business will have different needs than someone travelling with their family. Knowing the database of one’s customers can significantly help them prepare the company accordingly. These segmentations can vary greatly, ranging from stay duration, booking channel, and demographic factors.

Moreover, this customer demand is seldom static. It fluctuates highly and depends upon various factors like season, events etc. This is where demand forecasting comes in. Analysing information about past demand and keeping track of future events across all customer segments can enable one to predict when or if the market will increase or decrease. Finally, this will allow one to develop the proper pricing, marketing and distribution mechanisms.

However, all of the above depends upon defining customer behaviour and setting the best price to sell the rooms with maximum profit. This is precisely the goal of yield management. Yield management focuses on the cost and volume of sales. Before proceeding further, one should be aware of a term used quite frequently-‘inventory’. Revenue management refers to the product sold, in our case, rooms. Hence space is considered a perishable product. It doesn’t signify the traditional meaning of perishable. Instead, it indicates that the hotel loses money if a room isn’t sold for a night.

Lastly, pricing is the penultimate factor that can make your business stand apart from others. By analysing the market and understanding the customer and booking trends, one can set optimal rates for their inventory, thereby maximising revenue. Different methods are adopted for this, including dynamic pricing, available pricing, packages and value-added pricing. A robust cancellation policy can also impact the pricing strategy. Active pricing strategies based on supply and demand ratio can allow hotels to keep at par with the market while maximising the occupancy rate.

Hence, a hotel revenue manager has a long list of duties to achieve optimum results by cooperating with all hotel departments and focusing on sales and marketing. The objective of a marketing strategy is to increase the volume of sales. Promotions, discounts and loyalty programs are among the marketing activities that allow the business to sell its inventory by keeping customer flow steady and attracting new guests.

Discuss such topics at the Hospitality Management College at Amrapali Institute, Haldwani. Amrapali Educational Institute is a top-ranked institute in Uttarakhand.