Environmental Scanning for Risk Assessment in Hospitality Organizations

Factors Impacting Organizational Success

The organisational environment consists of both internal and external factors. Scanning the environment is important for any organisation to assess the factors that will impact organisational success. Thorough environmental scanning will consider all possible factors affecting the business climate, which influences the company’s day-to-day business operation. These factors may be internal; personnel/human resources, company structure, specialist skills and available resource/infrastructure or external; political climate, the economy, trends and natural phenomena.

The process of environmental scanning does not only identify threats, it also identifies opportunities existing in the environment and it is a vital step in strategic planning for hospitality organisations. Risks can either present a threat or an opportunity; it’s a double-sided concept. Therefore, it is the responsibility of any organisations to manage risks by devising appropriate risk treatment strategies.

Note: Using Four Points Sheraton on Sydney hotel

You are employed as a corporate risk manager at a mid-sized hotel chain that predominantly operates in the Asia-Pacific region. As a part of the organisation’s expansion strategy, the board has decided to acquire a 150-250 room hotel in an Australian state capital city (students should select the state capital city closest to their location). One of the potential hotel properties for acquisition is a well-established hotel located in the CBD that caters to the business and leisure market segments. The board of  directors has asked you to conduct a comprehensive scan to identify risks associated with the potential acquisition of this hotel.

Students should select a 150-250 room hotel in their chosen state capital city and address the following:

• Provide a brief overview of the chosen hotel, outlining location, facilities, target market characteristics, competitors, etc.

• Using the concepts and theories of risk and crisis management, conduct a comprehensive environmental scan in which you assess the risks (both internal and external) related to the current operations of the chosen hotel.

• Identify three (3) high priority risks related to the acquisition of the chosen hotel and critically analyse the potential impact of these risks on the future operations of the mid-sized hotel chain.

• For each high priority risk identified propose at least one (1) risk response strategies to address the risk using the 4T framework (Transfer, Tolerate, Treat, and Terminate).