Asset Light Strategies Are the Only Way Ahead for...

Topic 6: â€Å"Asset light strategies are the only way ahead for international hospitality companies.† In the topic asset light strategies refers to international hospitality companies owning less assets. Assets are â€Å"items of economic value owned by an individual or corporation, especially that which could be converted to cash† (www.investorwords.com). The various different strategies international hospitality companies use in order to ‘lighten’ their assets could be by franchising, management contracts and offshoring (also known as outsourcing). Each of these strategies will be explained in depth throughout the essay. The reason why businesses would want to have fewer assets is because they want to get out of having asset-heavy balance†¦show more content†¦The operator runs the hotel for a fee according to specified terms negotiated with the owner; the most common of these terms are described below in more detail† (www.hospitalitynet.org). However by hospitality companies using management contracts to run companies then they can gain from econo mies of scale, gain brand recognition and obtain a global reservation system. Alternatively there are some downfalls to management contracts such as conflict of interest (Outcome and behaviour control). â€Å"Outsourcing is a business process term for what has literally become known as hiring a consultant, independent contractor, or freelancer to do a specific task or tasks for an organization in which the organization either does not have the time or the expertise to do on their own† (www.internetbasedmoms.com). Outsourcing is commonly said to be the same as offshoring but with the increase in globalisation the distinction between the two has and will become less overtime. Outsourcing is commonly used in business segments such as real estate management, human resources, facilities, accounting, information technology and in this case in the hospitality industry. In the hospitality industry, more specifically in hotels functions such as â€Å"Reservation/ Loyalty Contact Centres; Distribution; Fulfilment;Show MoreRelatedThe Impact Of Customer Satisfaction On Brand Loyalty2409 Words   |  10 Pagessatisfaction is arising as a big challenge in the hospitality industry. Brands are introducing and accepting in every good economy, which give an indication that customers are not only giving importance to tangible products and services but they also look for the self-esteem behind the scene.(Sutton, 2003). 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