RISK

MANAGEMENT
FOR HOSPITALITY
INDUSTRY Cabral, Jeremy
Padilla, Kristine
Pagsalingan, Mary Joyce
Paraan, Allycia Mae
Patterson (2015) had identified four
risk which the hospitality industry
usually faces. It includes data
privacy, guestbehaivior, staff and
branding.
Data security is a primary concern of most industries
primarily in the hospitality sector considering the
thrust that the guest have been giving to the hotel
management from the time of check-in up to check-
out.
Personal information of the Guest is being given to the
front desk officer up to the extent of giving their debit
or credit cared for the transaction of their payment for
whatever consumptions they will be having during the
entire duration of their stay in the hotel.
Hotels and similar industry are prone to
hackers and cyber criminals considering the
bulk of information that they have been
getting from the guest before the
accommodation to assure the payment for
damages and sometimes a means to
introduce their own rewards programs.
There are many transactions in the hospitality
industry that would require the storage of personal
and financial information of the guest to process the
billing and payment, reservations and the reward
system.
The online reservation and payments as well as
transactions processed on-site which necessitates
collecting credit card or other personal financial
information from the customers are example of the
transactions.
Hotel management is expected to make sure that all the
information gathered from all the guest are protected
because breach of security could produce damages to
them. It should be the responsibility of the management
to inform the present and previous guest if the data have
been compromised even if it would mean expense on the
part of the management. The liability would still attach
to the management despite the fact that another person
not connected to the business had utilized the stolen
data.
The management of the hospitality
industry should have more understanding
of the fundamental right of the guest for
privacy and security of information
especially nowadays that the automation
system is the name of the industry.
Guest Behavior
Guests may be considered as the lifeblood of the hotel industry. Without
the happy and contented guests who have been patronizing the services of
the hotel, survival of the industry would be up to the lowest extent. There
are however some instances wherein the guests are becoming the source
of threat to the profitability of the hotel, instead of them being the source
of profit. The deadly incident at the Resorts World Manila is a classic
example. The Resorts World Manila management has decided to lock
down the hotel following the reports of gunfire from unidentified men.
The CCTV footage would show that lone gunman entered the
establishment up to the time he torched the gaming tables, fired warning
shots, and locked himself up in a room. Losses and damages in this case,
however, cannot be attributed alone to the behavior of the guests
considering security lapses in the hotel based on the investigation.
Suits arising from people who are injured or prejudiced
in the guestrooms can also be considered as a risk to the
hotel management, both with regards to their
profitability and branding. In the case of Nikko Hotel
Manila Garden, the manager Ms. Ruby Lim cannot be
faulted for asking Roberto Reyes or Amay Bisaya to
leave the party in which he is entirely a gate-crasher. It
must be noted that Ms. Ruby Lim. handled the situation
in the most professional way as possible being in the
hotel industry for more than twenty years. Below is the
case digest of the case.
Best Practice for
Hotel Customer
Service
Recovery
In the FSC website, the following best practices for hotel
customer service recovery were enumerated:
1. Deal with guest's complaints the very moment they
arise;
2. Ensure the complaints can reach the right person;
3. Build a full picture on guest preferences;
4. Keep tabs on recovery service costs;
5. In-depth analysis of service recovery efficiency
The guests in a hotel must be treated with utmost
hospitality to the extent that they would feel that they are
at home. Guest complaints must be attended with the
soonest possible to ensure their total customer
satisfaction. There should be no waiting time. The use of
friendly dashboards could be beneficial for the hotel
staff to access the details of the information that needs
urgent attention. The hotel management can save time,
analyze current hotel performance, and can make data-
driven decisions.
It is also vital in the hotel management that the
guest's complaint must reach the proper person to
assure that complaints are correctly attended. It
would be a waste of time if the complaint of guests
would travel to multiple departments before reaching
the right person for appropriate action. In this
connection, the use of the software is advisable as it
could automatically be viewed by the higher
management levels to make sure that no grievance is
left unsettled.
The hotel management must take a full picture on
guest preferences to provide them the necessary
services for their satisfaction. To realize this, the
management must get the profile of the guests
which may include their stay history in the hotel.
The said information could serve as a basis for
them to correct the previous dissatisfaction of the
guests.
The hotel management should bear in mind that handling guest's
complaints would sometimes entail costs on their part. It has been
a practice in the industry to provide compensation or some
complimentary service to the guests to pacify their feeling of
dissatisfaction in the services of the hotel. Well, considering that
handling guest's complaints is equivalent to an expense, it should
have been better for the hotel management to have a proper
record of the incidences of the complaint about evaluation
purposes and as a basis for a plan of action to mitigate costs. This
may be considered an excellent platform for service recovery.
Staff
•Staffing is another risk that the hospitality industry usually faces with as the
quality service that the client desire may only be give to them through the
proper dealing of staff at any given situation, place, and time.
•Considering the vitality of the role of hotel staff in achieving the goal of the
industry to give quality service to yhe guests and clientele.
•In one article (Caterer & Hotelkeeper, 2019), it was said that it is vital to
encourage the team spirit among employees by planning social activities or
through social networking websites.
•Another issue in which the hotel management is confronting with its hotel
staff is honesty towards the management , guests , and other staff.
LIABILITY OF
HOTEL IN A
PERSONAL
INJURY
CLAIM
DESCRIPTION:

The hotel may be held liable in a

lawsuit due the negligence or
carelessness of hotel employee. The
liability may arise if it can be proved
that the hotel management acted
negligently.
 DUTIES OF THE HOTEL TO THE
GUEST
Hotel is expected to exercise reasonable care in its
business operation to protect its guests.
SPECIFICALLY, THE HOTEL IS EXPECTED TO DO
BUT NOT LIMITED TO THE FOLLOWING:
1. Inspect the hotel grounds and maintain the property in
a reasonably safe condition. It includes the reparation of
dangerous condition and taking affirmative steps to
protect guests from known or reasonably discoverable
conditions.
2. Maintain adequate lighting, a duty to keep steps
dry and unobstructed, and a duty to repair hotel
defects.
3. Control insect infestation “bed bugs”
4. Maintain proper security to avoid theft assaults on
guests.
5. Exercise reasonable care in hiring hotel staff.
6. Train hotel pool staff to prevent injuries to guests.
7. Maintain stairs and elevators.
8. Maintain locks on hotel rooms
Branding
Branding is essential to the decision of the prospective
guest to avail of the services of a hotel. it is safe to say
the hotels with the perfect image could capture the
market notwithstanding the degree of the effort of the
management to market their industry. On the one hand,
the brand was defined as "a product enriched with the s
unique identity to create a meaningful point of
differentiation from competing for products that are
designed to satisfy the same need.
“The bottom line is that hospitality companies are cyber-
attacked every day. From an enterprise perspective, all
companies can do is properly plan for the potential
outcomes through an effective risk management program
and ensure that executive management and the board of
directors are properly informed and engaged.” Pertinent
to branding is the buying decisions of the customers that
may also be considered as risks with various types, to
wit (Keller, D.L. (2003), p.10).
 Functional risk: product performance does not fulfill customer
expectations. Physical risk: product affections of the physical
well-being of the user or others.
 Financial risk: poor price/quality ratio
 Social risk: others do not accept the product.
 Psychological risk: product affections of the user’s mental
well-being
 Time risk: the opportunity cost of alternative seeking due to
product failure