The big question: outsource or keep it in-house?

Running a small to medium hotel, motel or boutique property isn’t just about filling rooms – it is a constant balancing act. You are managing day-to-day operations, staff rosters, supplier relationships, guest expectations and sometimes even renovations.

For many independent operators, this challenge is amplified because they do not necessarily come from a tourism and hospitality background. You might be a first-time investor, a family-run ‘mum and dad’ operator or  someone who has acquired a property as part of their long-term retirement plan. Suddenly, you are faced with complex decisions about revenue management, distribution, technology systems, sales and marketing - on top of everything else.

Deciding whether to outsource or keep responsibilities in-house can have a significant impact on profitability, operational efficiency and guest satisfaction.

Why Is Outsourcing So Challenging?

Many small to medium businesses already outsource critical services such as accounting, OH&S compliance and IT - because these aspects of running a business are widely recognised as requiring specialist knowledge and skills, and they are not roles that typically justify a full-time position.

So why is the outsourcing of revenue management, distribution, sales or marketing considered differently?

If you already outsource accounts, OH&S and IT because they require specialist knowledge, why   consider revenue management and distribution, sales and marketing any differently? By recognising that these areas of expertise are not just secondary functions and directly influence your property’s financial outcomes and how guests distinguish your property from your competitor, it becomes clear that outsourcing these functions can be just as essential as outsourcing accounting, compliance or IT.

It is important to acknowledge that revenue management, distribution and marketing demand a high degree of specialised knowledge; while productive sales activity relies heavily on established corporate and trade relationships, together with an understanding of how rate contracting takes place in today’s environment. Neglecting these areas or managing them in-house without sufficient expertise can have significant consequences for profitability and guest satisfaction.

Areas for Consideration – The Pros and Cons

Revenue Management
Outsourcing brings advanced forecasting tools and expertise, helping you optimise rates and maximise occupancy.

• In-house teams are often time poor due to working multiple roles, require ongoing training and an ability to accurately interpret the analytical data.

Distribution & Technology Systems
Revenue management consultants have an extensive knowledge of channel managers, PMS and booking engines, ensuring speedier turnarounds and minimising the risk of costly errors.

• In-house staff have often not had the same level of exposure, and their understanding of what system is best suited to the needs of your business could be compromised.

Sales & Marketing
Outsourcing can provide fresh strategies, a greater understanding of the specialised tools, broader market insights and established relationships.

• Just because your staff are Gen Z does not mean they understand social media strategy, SEO or how to write a blog.

• Your team may excel in delivering exceptional guest experiences, but they may not be as comfortable with telemarketing and contracting a corporate client.

The Risks of Going it Alone.

Sometimes, making the decision to do it yourself may seem like the cheaper option - but the hidden costs can be significant as we demonstrate in the below ‘real life’ examples.

Revenue Management Missteps

• An owner decides to manage pricing manually without dynamic tools or market analysis.

  • Static rates are set for the peak school holiday period, missing higher demand pricing – resulting in thousands in lost revenue and rooms sold at rates below their competitor set.

DIY Digital Marketing Gone Wrong

• A motel owner spends weeks creating a paid social media campaign without correctly understanding audience and geographical targeting: resulting in ads reaching the wrong audience and generating no bookings.

  • Meanwhile, their competitor using a specialist, fills rooms quickly.

Tech System Set-up Errors

• A boutique hotel installs a new channel manager themselves but misconfigures rate parity.

  • The OTAs display incorrect rates, leading to cancellations and poor reviews - costing both time and business reputation.

 Distribution Oversights

• An operator tries to manage multiple OTAs manually, forgetting to update availability during a major event weekend.

  • Double bookings occur; guests are relocated at an additional cost to the business and Google review scores decline.

These examples highlight that a lack of expertise can cost far more than the consultant fees - in lost revenue, time wasted and potentially, long-term success.

The decision to outsource or maintain skills-based responsibilities in-house differs from business to business – it can depend on your property’s size, available resources and long-term goals. But is always worth taking into consideration: what looks like a saving today can become a costly mistake tomorrow if the expertise is not there.

For those operators we have not worked with before, we offer a complimentary 30-minute business review to discover how RevenYou can partner with you to save time, drive revenue and grow your brand awareness.