Termination of an Agreement of Hotel Rooms Division - Coursework Example

Managing Room Division Name Institution Professor Course Date Introduction Room division is composed of a number of functions and departments and they play essential role in offering the service that guests expects during their stay in hotels. In this regard the front office department is seen as the most visible department in all hotels and it has the greater contact with the guests. Outsourcing is a concept that is very common in the hotel industry. This is mainly done with the aim of reducing costs associated with running the business, keep their companies thriving and also to hire companies that specialize in the delivery of certain services. But at the same time the concept of outsourcing is much tricky as many players in the hospitality industry are of the believe that outsourcing hurts the industry as opposed to helping it and this is mainly due to its impacts on the customer service. A great number of businesses in the hospitality industry tend to outsource concierge, gift shops, restaurants, IT departments, business centers and many more divisions. This is mainly as a result of lack of expertise in certain areas and thus the outsourced company tends to be the most effective answer to enhance the areas that the company lacks in. The main aim of this paper is to reflect on a number of reading and the outsourcing contract and based on these discuss two clauses that need to be incorporated in a Rooms Division outsourcing contract. This will be done by highlighting their influence in room division and other departments, an outsourcing company and the hotel success. This will also be done by including some industry examples as well as one government legislation. A major limitation that will be considered in this case is that the contents of the paper will only apply in this case only. Discussion Outsourcing contracts are mainly a complex affair but in essence good outsourcing contracts tend to examine and include the service level agreements, rewards, penalties, the measurements and time frames, regular reviews as well as the exit strategies (Blinder 2006). It at times becomes hard to over emphasize how essential the contact of the outsourcing contract is. When a company have an outsourcing contract in place, the clauses contained in the agreements tends to guide the move of the outsourcer and the contractors are unique in that they are tailored to a certain case and thus contains certain confidentially clauses which makes the contract a proprietary information. Clause on termination of an agreement There are a number of clauses that need to be incorporated in a Rooms Division outsourcing contract but this paper will focus on two of those clauses. One of such clauses is the termination of the agreement of the agreement by giving notice. Based on these, clause a party have a right to terminate the contract and this needs to be done by offering a written notice to the other involved party and this mainly occurs in instances when the other party have reached the contract. Thus, the party that is not in default needs to offer notice of the breach to the party that has defaulted. This will mainly entail the steps that will be taken so as to remedy the breach and the other party fails to remedy such as breach within a certain period of time, for example, 30 days from the receipt of the notice. The agreement can also be terminated in instances when the other party suffers an insolvency event. The influence of the clause on Rooms Division, other departments, an outsourcing company and the hotel success This clause is of great importance to the room division and other departments in that it will play an essential role in outlining when it is possible to terminate a contract without facing any legal issues (Simon 2010). When such a contract is involved the rooms division and other departments will benefit in that they will receive the required level of service from the contractors and in instances when they feel that these is not the case they have the right to terminate the contract. This ensures that the contracted party offers the best level of services in regard to the monetary compensation that they will receive from offering the service. The clause is also of great importance to the outsourcing company in that they can also terminate the contract if the other party fails in meeting the terms of the contract. For example, if the hotel fails to meet part of their deal in that they pay a lesser pay as the one that have been negotiated in the contract the contracted company can terminate the contract since they may deem that the other party have not kept their side of the deal. Thus, the company and those contracted to offer service services will always ensure that they adhere to the terms that have been outlined in the contract. Thus, both parties will have a good working relation and thus they will always aim at offering the best services to the customers at all times (Olive 2004). The clause will also play an essential role in the success of the hotel in that when all parties adheres to the contract the hotel will succeed since the service level offered based on the contract will be at par with the preferred level of services. This means that the customers will be satisfied and this will also benefit in that they may overtime become return customers and they may also refer the hotel to their friends and customers. This will eventually lead to greater level of customers and this will eventually turn it to increased level of services and profits in the long run. Government legislation on the clause Based on the government legislation in relation to contract in Australia every contract needs to have a termination clause. Based on the legislation the termination can occur due to delay, frustration, breach as well as the failure of the contingent condition. Thus, when one party feels the urge to terminate contract they need to ensure that they do so for the right reasons. This is based on the fact that there also exist restrictions in relation to termination and if the reasons for termination are void they may face legal action and they may be sued by the other involved party (Hughes & Lewinson 2011). Clause on handling dispute between the concerned parties Another important clause that needs to be included in a room division contract is the clause relating on how dispute between the concerned parties should be handled. Based on these, I believe that the clause needs to outline ho w dispute should be handled for the benefit of both parties. For example, to avoid ruining each other’s reputation the parties involved may state that there should be no court proceeding unless in instances when the outlined procedure have been followed and failed to yield the required results. This clause will play an essential role in improving the relationship between the outsourcing company and the hotel in that they will have an amicable way of resolving their differences (Jansen 2008). The influence of the clause on Rooms Division, other departments, an outsourcing company and the hotel success This clause will be of great importance to the room division and other departments in that it will act as a good example of the way people in the organization should resolve their differences. The clause will also ensure the success of the hotel in that they will solve their issues at the right time. This will ensure that the issues will not affect their busyness in an enormous way and thus the hotel will continue to achieve the set level of success and continue offer the required services to their customers. Government legislation on the clause There exist legislation that all parties involved need to adhere to the terms of the contract and in this regard the involved parties need to solve their difference in the stipulated way to ensure that they do not breach the contract (Paterson 2011). Conclusion In conclusion, outsourcing seems to be a concept that is prevalent in the hotel industry as the hotel seeks for services that they lack expertise in. In regard to these there seem to be a need of some binding contracts between the hotel and the outsourcing company to ensure each party achieves the best form the contract and that each of the party adheres to the contract. There are two major clauses that should be included in a Rooms Division outsourcing contract. This clause includes the termination of the contract since contract exists until eternity and at some point they need to be terminated. When this clause is included all the concerned parties will always aim at adhering to the contract and al the terms that have been outlined. The other section that needs to be included is the clause relating to how dispute between the concerned parties should be handled. Through this clause there will e minimal levels of disputes which will not be handled and the legal proceeding will be the last remedy. References Blinder, A 2006, ‘Off shoring: The Next Industrial Revolution?’, Foreign Affairs, vol.85, no. 2, pp.113-128. Hughes, D & Lewinson, J 2011, The Interpretation of contracts in Australia, Thomson Reuters, Australia. Jansen, A 2008, Room Division Management, Edu'Actief, United States. Olive, B 2004, ‘Outsourcing Growing, Despite Controversy’, Power vol. 148, no. 4, pp. 19–20. Paterson, J 2011, Unfair Contract Terms in Australia, Thomson Reuters, Australia. Simon, E 2010, Pros and Cons of Hospitality Outsourcing, Hotel News Now, viewed 24 August 2016, http://www.hotelnewsnow.com/Articles.aspx/3209/Pros-and-cons-of-hospitalityoutsourcing. Read More