Abstract:
Outsourcing is a company strategy which in used to reduce costs and increase business
performance of hotels. The objectives of this research were: investigates the causal relationships
and the structural equation model of outsourcing strategy by hotels in Thailand. Data collection
by questionnaires sent to managers of hotels which were members of the Thai Hotel Association.
The five latent variables consist of the expectation of benefits, selection of outsourcing providers,
management of outsourcing, realization of benefits from outsourcing and business performance of
hotels. Empirical data were obtained from management of hotels which are members of the Thai
Hotel Association. The analysis was performed by using LISREL software medicating that the
suggested model satisfies the goodness-of-fit test criteria.
The research findings found that:
1. Hotels outsource many functions with security, maintenance and information
technology are most popular. Cost and non-cost benefits are drivers of outsourcing decisions but
cost reduction is not the major expectation. Results indicate that there are significant gaps
between expectations and realizations. Perceived risks and problems received moderate scores
and were statistically analyzed.
2. Results from the analysis showed that outsourcing is important in managing hotels.
By using Factor Analysis it was found that there were five factors ranked according to their
loadings. They are: 1) Management of outsourcing 2) Selection of providers 3) Problems and
obstacles in outsourcing 4) Realization of benefits from outsourcing 5) Expectation of benefits
and 6) Improvement of business performance. It was concluded that hotels must pay important
attention to the strategy and operations in outsourcing. The factors which influence hotel
outsourcing will be useful for practical purposes and to the future study and research.
3. Results also indicate that hotel performance in directly influenced by the selection
of outsourcing providers, management of outsourcing and realization of benefits. Meanwhile, the
expectation of benefits has direct influences on selection of outsourcing providers, realization of
benefits and management of outsourcing.