Hotel outsourcing and its strategic benefits and risks: the case of Egypt

Abstract

The paper analyses outsourcing in the hotel sector in Egypt. It presents the main levels of outsourcing of the main hotel services or activities. Moreover, it also analyses the main benefits and risks perceived by the surveyed managers of this outsourcing strategy. Data have been collected from 114 hotels in two sun and sand resort cities in Egypt (Sharm el Sheikh and Hurgada). The results indicate that the most outsourced activities are entertainment, transport services, information systems and maintenance with the least outsourced activities as reception, room cleaning, laundry and food and beverage. In terms of perceived benefits, the main benefits relate to the focus on core competencies and helping to cover the urgent needs of the hotel; while the main risks of outsourcing relate to the detrimental impact of outsourcing on the hotel's resources and capabilities and on the hotel's performance.