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The video tutorial discusses outsourcing in the housekeeping department, also known as contract services. Housekeeping often contracts expert external agencies for specialized services like flower arrangements, pest control, window cleaning, carpet shampooing, chandelier cleaning, laundry, horticulture, and linen services. By outsourcing these tasks, the hotel can benefit from professional expertise without the burden of managing these services in-house. For instance, a hotel may pay a set fee, such as five lakh rupees annually, to an agency that handles everything necessary for the service, allowing the housekeeping department to focus on other priorities while ensuring quality and efficiency in their operations.