Risk Management In Tourism, Events And Hospitality: Factors And Treatment Options Essay.

Factors that influence the level of risk at Tourism, Events and Hospitality Industry

Discuss about the Risk Management in Tourism, Events and Hospitality.

This study provides a detailed analysis and description of the factors that might influence the level of risks associated with service industries such as tourism, events or hospitality industry. The risk management team of such industries develop appropriate risk management strategies to cope with the emerging risks and situations that may cause the threat to the general, personal as well as public safety. These industries hold a major position in the social, political and economical growth of a particular area or country. Thus, it is important to identify critically and analyse the factors causing a crisis and disaster situations as well as those that influence the level of risk or danger in these situations. Further, this study will help to go through the risk management and treatment options that can help reduce the level of risks that might occur in fields of tourism, events or hospitality industries.

Tourism plays one of the major roles for social and economical development. It is considered as one of the many leading driving forces of universal trade (Auer and Stone, 2014). The World Tourism Organization (2003) measures threats based on the security and safety of travellers, hosting groups, visitors and employees working in tourism from these following different sources:

• Common breaking of law (theft, assault, burglary, fraud, theft, pick pocketing, deception)
• Violence that are targeted and indiscriminate (rape, eve-teasing, harassment, etc.)
• Common organized criminalities (extortion, coercion, forced labour or slave trading etc)
• Terrorist attacks and unlawful actions, kidnapping, hijacking etc
• Political unrest, civil conflicts etc
• The scarcity of protection service facilities (Berk, 2015).

Tourism Industry and other similar industries e.g. transport industry etc can endanger a visitors' personal safely and physical security or can harm them economically by:

• Inadequate standards for safety in tourism departments and establishments
• Lack of necessary defence against illicit actions, criminalities and negligency at tourism services.
• Fraud or deception in business transactions.
• Dissent with contractors.
• Disagreements among the employees in the industry (De Keukeleire, Descheemaeker and Reynders, 2015). 

According to Rashid and Robinson, Travellers might risk their personal safety in the following ways identified:

• Getting involved in dangerous activities or reckless driving etc
• Travelling with bad physical condition, and if health further deteriorates during travelling
• Creating conflict among neighbours with inappropriate behaviour and misconduct and violating state laws, engaging in unlawful activities.
• Performing unlawful activities (taking drugs etc)
• Travelling to unsafe places
• Missing personal belongings, money, important documents due to absent mindedness and carelessness.

The physical and environment oriented factors which influence risks of the travellers:

• The natural characteristics of the place or the general climate in the area does not suit the visitor
• They do not carry sufficient medical supplies for the trip.
• Carelessness in consuming eatables or drinkables while travelling thus violating personal hygiene.
• Travellers are exposed to various risky environments caused from physical and natural hazards and disasters. (Jangid et al. 2015).

The governments and businesses are getting lots of opportunities, challenges and revenues from the events industry (Morgan, 2015). But the risk involved in such events is in constant growth. It reflects a wide variety of present-day courses as well as introduces new dangers.

• Cyber attack and crimes related to terrorism
• Environment menace
• Disasters caused by nature
• Technological glitch or mishaps
• Fluctuation of global power
• Economic threats and pandemic breakouts.

It is possible to classify the risks involved in events industry into the following two categories

• Those which are ‘man made’ in some way
• Those which are outside the scope of instant controlling i.e. the factors which cannot be handled directly or indirectly but they can decide the fate of the event whether it will be successful or a failure.

Minor technical glitch, e.g. power failures, disruption of machine or instruments etc can be of serious threat to the safely and security of workforces, audience or even the participants.

Involvement of crimes such as fraud or theft can cause an event to be a major failure.

Another set of risks that can be seen in this industry is cost overrun. Mainly large scale events or mega events involving greater infrastructure are more prone to cost overrun (Sto?rmer, Schmeiser and Maas, 2015).

Tourism Industry Analysis

There also exist a number of risks or threats which are beyond the scope of immediate control and management:

The events industry has been a direct target for the terrorist attack in the past. There are a number of incidents in the history which supports the fact that there is chance terrorism might strike on the events planning or staging events industry.

Natural disasters can also be a potential threat for the events industry (Campos-Soria, Marchante-Mera and Ropero-García). Earthquake, heavy flood or storm can be the cause of disruption of an event and might prevent it from executing successfully. Natural disasters have caused damage in the event industry in the past (Yang et al. 2014).

Another factor that can influence the risk in event industry can be pandemic outbreaks or civil turmoil.

The hospitality industry is a sub division of the other broader category of industry which is the service industry. Within this industry there are a number of operations included. Few of them include hotel and restaurant industry, lodging, event planning and organising, theme parks, etc. A hospitality unit such as a restaurant, hotel, or an amusement park comprises of a number of units (Morgan, 2015).

Traditional risk factors:

• High costs of energy
• Threats of power failures or technical disruption
• Non-delivery or delayed delivery by outsourced partners or suppliers
• Theft, fraud, burglary or employee dishonesty
• Accidents and injuries of travellers due to illness, furthermore vandalism of personal property caused by carelessness of the customers
• Damage of property due to fire
• Breakdown of equipments

The hospitality industry is exposed to various newly emerging risks which are not included in the chain of traditional risks.

Traditional type of risks has direct impact on the customer service, food and beverage quality. But there are other slightly uncommon risks which are often overlooked in the industry (Jackson and Kwansa). Hotel managers and hospitality risk management teams but be aware of these types of threats by constant evaluation of their risk management strategies (Sto?rmer, Schmeiser and Maas, 2015).

The hospitality industry risk managers have the threat of pandemic at the top of their minds.

Aside from pandemics, the other risks that can threaten the hospitality industry are:

• Risks of property damage
• Risk in reputation
• Brand management risks
• Terrorism attack and political risk. 

Crisis can be defined as a situation that has a long term negative effect on the operation of a business or products. Risk management can be referred to as a process which act as a guide to prepare the organization to recover from disasters. (Mathew et al. 2012)

Crisis can be occurred in a tourism industry due to following facts-

• Poor establishment of a safety standard.
• Poor asepsis and disregard for environmental viability.
• Absence of defence against the activity which is unlawful activities and crime.
• Trickery in commercial transaction.
• Disagreement of contractor.
• Industrial conflict amongst the staff of the organization (Card, Ward and Clarkson, 2015).The process of crisis management in a tourism industry can be defined as identifying and assessing the disaster or risk to the organization and taking decision to recover from that crisis which should be logical as well as systematic (Frevert and Potter, 2011)

The risk management treatment of a tourism industry should include the following-

• The management should care for the safety of visitors and also for employees of their organizations.
• They should develop a secure system which would be helpful in communicating with persons.
• The tourism industry should establish a security system for securing travellers and employees from disaster (Frevert and Potter, 2011).
• The management should train their employees to work efficiently during the recovery operations.
• They should supply sufficient resources to manage recovery operation.
• The industry should have procedure to get back to the normal business operation after disasters have happened. (Dionne, 2013)

The process of crisis management of a tourism industry is described below- 

This process is fundamental to the risk management. Appropriate communication ensures that the stakeholders are focussed and committed towards the process of tourism risk management.

Factors that influence the level of risks at Events industry

Establishment of context- In this step a framework is established for activities of risk management. In this some criteria are also developed in order to compare them to the risk.

Identifying risk- It is defined as a systematic process where all the risks are identified which will be needed to manage.

Analysing the risk- In this step the risks are analysed in order to find consequence of those risks. According to this analysis the criteria to recover from the risks are also developed.

Evaluation of risk- In this process the risk is arranged according to their degree. Previous criteria for risk management will provide necessary information and depending on this current criteria have to be developed.

Treatment of risk- In this step the industry assesses them to find out whether they have all the resources to implement the risk management criteria. After this process the risk management process is implemented (Frevert and Potter, 2011).

Event industries are responsible developing and creating large events like ceremonies, festivals, concerts etc (Gjerald and Lyngstad, 2015).

The steps to be involved in the risk management of an event industry are described below-

• Identification of activities due to which risk can be occurred- In this step the activities in an event management industry which can cause risk is identified.
• Identification of risks which are associated with every activity- This step is to check whether or not any risk is associated with any activity which the event industry handles.
• Determining the chances of occurrence of disaster and the consequence of those disasters- This step determines the degree of severity of any risk. And also determines how they will affect the operation of the business
• Giving priority to the risks- In this step the management gives priority to the risks according to their degree of severity.
• Formulation and implementation of strategy for management of risk- There are some common strategy to manage risk like- avoidance of risk, retention of risk, transfer of risk, reduction of risk.
• Periodically reviewing and monitoring the risk- This is the last step in which the strategies which are adopted to recover from risk are reviewed and monitored periodically (Frevert and Potter, 2011).

Risk management in any hospital industry is a complex process. It involves identification, assessment, and resolving risk in each area of the hospital industry. The role of risk management is a difficult process because it involves implementing new act to protect the patients and employee from risks and this process should be affordable for the industry (Mathew et al. 2012). The practices for managing risk in a hospital industry are described below-

The manager in the risk management department should assess the risk to identify the risk before it causes damages. The manager should also identify the risks that might be encountered in the operation of the business. Assessing risks help managers to make score upon the risks. They can also detect the frequency with which the risks can result from damages. Based on this assessment the managers can establish practices that would be beneficial to protect the industry from damages.

In order to be able to maintain an environment with low risk the manager needs to ensure that the practices which are adopted for risk mitigation are according to the standard policy. For better implementation of these practices the staffs and providers of the industry need to be educated and trained. They should provide alert in the health record to remind the staffs about the practices of the of risk management.

Factors that influence the level of risks in Hospitality industry

The manager of risk management department needs to prioritize the risk according to their degree of damage and frequency. It is a difficult task because it needs to assess and prioritize all actual risk and as well as risk which might be encountered in the business operation.

If all the responsibility belongs to only the manager of the industry, then this would be too much difficult for the manager to detect each and every risk associated with operation of the business. So the other staffs and providers also cooperate with the manager to find out the risk. People would feel comfortable if they can speak up about their problem which would be beneficial for the industry to detect the risk. For this the environment of the hospital industry need to be comfortable to all the members. Safety of patient is the main responsibility any hospital industry. So for this the members of the hospital industry need to make the patients and their family members feel easy so that they can easily speak up about their problem they are facing in the service provided by the hospital (Zhang, Morse and Li, 2015). 

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