Demand-wise Coach Services for Hotel Industry: A Structured Approach to Outsourcing and Sharing Decisions

Abstract

Purpose ‐ Hotel industry in Hong Kong is under keen competition and is facing fluctuating demand. Some hotel services which are conventionally provided in-house are under pressure of cost reduction. This paper investigates coach services of hotel industry. What is the background underlying the emergence and potential growth of demand-wise coach services for hotel industry? Would demand-wise hotel coach services be feasible? This paper intends to answer these questions. Design/methodology/approach ‐ A hotel coach service network in Hong Kong was analysed. A new network with shared coach services is proposed and it can be restructured to simulate sharing of hotel coach passenger capacity among a group of hotels, or to assign a fixed number of coaches to more hotels. A demand-wise coach services provision decision diagram is developed. Findings ‐To determine an optimal coach services provision, it is necessary to integrate all the three types of provision strategy: outsourcing to third parties, providing the services in-house and sharing of coaches with other hotels. Research limitations – On-site traffic data surveys should be carried out to confirm the simplified scenario analysis. The study only considered the trips among hotels in the urban area of Hong Kong. Originality/value ‐Given the vehicle size and frequency of service, the traffic impact of hotel coaches on the city transport system is significant. The results of the study can be valuable references to hotel managers and transport policy makers in Hong Kong and other countries.