What is the meaning / definition of Representation Company, in the hospitality industry?
Representation Company is a company that manages either the entire hotel or an outlet at the hotel on behalf of the property. As part of outsourcing, a representation company can be on-site or off-site, depending on the needs of the hotel.
There are several reasons why a hotel may decide to hire a representation company. It might be lack of knowledge in a specific area, financial reasons (to lower costs), increasing quality or other reasons.
Examples might be: Hiring a PR agency, a Sales Representative or a Revenue Manager. It can also be an organization that provides reservation services, including processing of voice reservation requests and/ or GDS connectivity for hotels (as its distribution partner).
Advantages of representation companies are expertise, terminable contracts, space and cost savings, as well as no training or retraining involved. One disadvantage is a certain loss of control over the outsourced department.