Risk Management as Applied to

Safety, Security & Sanitation

Toby Tyler M. Jose, MBM-BA

Faculty, CHTM
Opening Prayer
 REMINDERS
Mute your microphone until you are
requested to speak

Listen while other classmates are

talking
Engage, Participate and Enjoy the
activity
 Learning Outcome
1. Risks identification
2. Determination or creation of a management
plan to address risks that could affect the
tourism business
3. Collaboration with the stakeholders
4 Provide training for the staff
5. Test the plan
6. Provide transparent and honest crisis
communication
7. The revival of the business after a crisis
8. Reposition of the business after a crisis
 Risk Management Applicable
to the Industry of Tourism
Guest and clientele must feel secured and protected
whenever they would like to pamper themselves
through the enjoyment of the beauty of nature and the
world of tourism.
 The following are some of the essential
guidelines to manage the risks confronting the
tourism sector
1. Risks identification
2. Determination or creation of a management plan to
address risks that could affect the tourism business
3. Collaboration with the stakeholders
4. Provide training for the staff
5. Test the plan
6. Provide transparent and honest crisis communication
7. The revival of the business after a crisis
8. Reposition of the business after a crisis
 1. Risk Identification
As discussed previously, the hazard is
something that could cause harm while
the risk is the tendency (whether high or
low) to cause somebody harm.

In most of the activities pertinent to

tourism, the susceptibility of the risk of
harming people and damaging property
varies, depending on the preparedness of
the management in their encounter with
the risks.
 The risk identification could concern any
of the following

a. Natural hazards
b. Civil or political hazards
c. Technological hazards
d. Biological hazards
 a. Natural hazard

A natural hazard is an extreme event that occurs naturally and causes

harm to humans- or to other things that we care about, though
usually, the focus is on humans. A natural hazard escalates into a
natural disaster when an extreme event caused harm in significant
amounts and overwhelms the capability of people to cope and
respond.
 b. Civil or Political Hazard

The hazards being confronted by

investors, corporations, and
governments brought about by
the political decisions may be
considered as political hazards.
Civil hazards, on the other hand,
are hazards caused by
circumstances in society that
could vastly affect society as a
whole.
 The following are some terminologies that hospitality
and tourism students need to know concerning political
risk:

1. Trade barriers are regulations

or policies that would restrict
international trade like customs,
tariffs, quotas, and others

2. Taxes are the bread and butter of the

government. Without taxes, the government
cannot survive. People must pay taxes so that the
government would have something for giving
quality services to the people, building of
government infrastructure, and the likes.
3. The legislation is the process of
giving effect to a proposal or policy
for everybody’s observance. It could
be national legislation that could affect
the entire country or local legislation
which applies only to specific
localities.

4. Administration. The ability to

manage plus the political will
essentials to the proper
administration of any agencies for
the effective and efficient service to
the people.
5. The political instability of a country
could vastly affect the tourism of a
country. There are instances wherein the
governments in the international
community would issue a travel advisory
in line with the political instability of a
country wherein their locals would most
likely like to go.
c. Technological Hazards

Although technology may be considered beneficial to the

tourism industry in most of its facets, this technology,
however, could produce a negative impact on the industry
as a whole if not utilized correctly and with necessary
discipline.
 d. Biological Hazards
Another special consideration in identifying risk is the biological
hazard which pertains to biological substances that stance a danger to
the health of the living organism, chiefly humans. Biological hazard is
also known as biohazards. It may include substances prejudicial to
other animals. It may also include samples of microorganisms, viruses,
or toxins that can affect the health of humans.
 Factors in the Identification of the
Nature of Impending Risks
The degree or veracity of the impending risks could be determined
by taking into consideration the following:
1)Reason for the happening of the risk;
2)The frequency of the occurrence of the risk;
3)Duration of the risk;
4)Speed of onset;
5)Scope and impact
6)Potentialities to destroy;
7)Criteria for determining the necessity of risk treatment;
8)Criteria which is acceptable and tolerable;
9)Whether the combinations of the negative and positive risks will
be considered;
10) How the combinations of risks will be considered.
 The following issues must be addressed
well in the risk identification.

1. The cause of the event;

2. Areas of impact;
3. Enablers;
4. Events;
5. Potential consequences
2. Determination and creation
of risk management plan
The risk management plan is necessary for the conduct of tourism to
lessen the possibility of the risk being accomplished or at least to
lessen the impact of the risk at hand.

Some sources classified the plan and

strategies into:

a. Preventive b. Contingency
Meanwhile, there are many references which
categorized the plan or strategies into four. Risk
managers may take any of the following either
as prevention or contingency to address the issue
of risks concerning his / her business:

1. Risk avoidance
2. Risk reduction
3. Risk transfer
4. Risk retention
Risk avoidance refers to the
complete elimination of risk by merely
avoiding the activities with attaching
potential risks.
Considering the two seasons in the tourism industry (the
lean season and peak season) the management would most
likely hire seasonal employees who could be with them only
during the time there are many would-be guests so to speak.
To have many regular employees in some industries
relevant to tourism would be suicidal on the part of the
management.
Risk Reduction
Since risk is inevitable, risk
managers would opt to choose this option
of risk reduction instead of avoiding it.
Observance of the safety
standards. The tourist
The exercise of risk reduction may consider
any of the following: accommodation providers
1.Observance of the safety standards are duty-bound to assure
2.Use of safety devices the health and safety of
3.Earthquake-proof building/proper the guests while they are
water management system; on their premises.
4.Qualification requirements (qualified
tour guides, adventure trek leaders, and
drivers)
Part of risk management is the anticipation that a particular
risk would come, although uncertain as to when it would
happen. In this connection, it would have been better if the
manager would engage in an insurance system to cover
future liabilities in connection with the insured covered.

There are different governments regulations that the

business owners of establishments related to tourism must
comply with as part of its initiative to assure health and
safety to guests. It includes but is not limited to the
following:
1. Fire Code of the Philippines
2. Sanitation Code
Some salient points that a student should
understand the code concerning risk
management is as follows:

1. Sprinkler systems in commercial buildings;

2. There must be a fire alarm system;
3. Firewalls to separate adjoining buildings;
4. Termination of all exits in all areas affording safe
passage to a public way or safe dispersal area;
5. Fire exit plan for every floor showing the routes
from each room to appropriate exits;
6. Self-enclosing fire doors are loading to corridors;
7. Roof vents;
8. Correctly marked and lighted exit signage.
 Use of Safety Devices

Considering the risks attaching to most of the activities pertinent to

tourism, it is proper that the students undertaking courses in tourism
and hospitality management must have a clear understanding of some
of the safety devices that they may be dealing with in the industry.
The University of Western Australia (nd) has enumerated
the different types of personal protective equipment that
may be used as a precautionary device against the risk.

1.Respiratory protection.
2.Eye protection.
3.Hearing protection.
4.Hand protection.
The University of Western Australia (nd) has enumerated
the different types of personal protective equipment that
may be used as a precautionary device against the risk.

5. Foot protection.
6. Head protection.
7. Working from heights
8. Skin protection
 Risk Transfer
Another way of dealing with
risks attending the different
activities pertinent to the
tourism industry is through a
risk transfer. There is a risk
transfer when the burden is
being shifted from one party to
another, from individuals to
another individual, from
individuals to an insurance
company, or from insurers to
reinsurers
Risk transfer may be accomplished
through any of the following:

1. Outsourcing
2. Derivatives
3. Contracts
4. Insurance
 Outsourcing

One strategy that managers may employ in the conduct of

business considering the convention, size of the
organization, or budgetary issues is outsourcing.
Outsourcing is a process that commonly transfers a variety
of risks to a partner. To give meaning to this, a contract is
necessary between the management and the provider.
 Derivatives

Malleswari Dr. B. (2013) defined derivatives as "financial

contracts whose value is derived from some underlying asset.
These assets can include equities and equity indices, bonds,
Joans, interest rates, exchange rates, commodities, residential
and commercial mortgages, and even catastrophes like
earthquake and hurricanes." The contracts come in many
forms, but the more common one includes options,
forwards/futures, and swaps.
Contractual risk transfer. Risk Transfer may
also be in the form of non-insurance agreements
like contracts.

The lower tier can finance the requirement of the

contract in one of two ways:
1. They can pay some or all costs out of their pocket, from savings or other
accounts;
2. They can purchase an insurance policy to finance that part of the contractually
agreed to risk.

Some principles applying to insurance contracts

1. Principle of indemnity
5. Doctrine of adhesion
2. Rules of insurable interest
6. Personal contract
3. Limiting recovery to the actual cash value
7. The doctrine of utmost good
4. Subrogation in insurance
faith
 The Principle of Adhesion

In this principle, one of the parties is being left with no

choice except to adhere to the terms and conditions of the
insurance prepared by the other party.

Personal Contract. Insurance contracts are personal contracts, and

thus insurance contracts cannot be freely transferred to other parties.
When the parties to an insurance contract reach an agreement, one of
the points they agreed to is to do business with each other. Each has
considered the other's character and conduct.
Risk Retention
There are instances wherein the managers
instead of looking for somebody that could help
them attend to issues of risk would rather keep
them and resolve them for themselves.
 3. Collaboration with the
stakeholders
All the preventive and contingency plans of the management to
address risks would be considered as an exercise of futility if the
stakeholders affected will not be involved. The do's and don'ts, how the
plan is to be executed, and all the matters pertinent to the plan
necessitate the involvement of the stakeholders; otherwise, everything
would be useless.
Meanwhile, it would have been better if we define first what a
stakeholder is. A stakeholder may be defined as anybody who can
affect or be affected by the strategy or project of an organization.
Those who have the power to impact an organization or project may
also be considered as a stakeholder
 Classification of stakeholders
Stakeholders may be classified as

1. Internal stakeholders
2. External stakeholders
Stakeholder's Issues
It must be noted that the various stakeholders in the tourism
industry have their interests that are sometimes conflicting with each
other. The risk managers must reconcile those differences or consider
them in making the plan of action.
A private corporation that would like to build a theme park
must do a series of consultations with the people that might be
affected (positively and negatively) should the plan be executed in the
future.
It is important to note that there is a need to create a
committee that would address the significant aspect of
risk management which is safety and security. The
enumerations but not limited to the government agencies
and tourism sectors are expected to have participated in
the committee:

1. The administration of the tourism department

2. Police authority
3. Security agencies
4. Government bodies like disaster management,
foreign affairs, health, immigration, transportation
5. Transportation associations
6. Hotel associations
7. Tour operators
8. Tourism and travel representatives
9. Consumer groups
Readings related to stakeholders in
the tourism industry

The study proved the need for collaboration between stakeholders:

(1)) To develop a tourism product, and (2) To provide adequate
information about the existing tourism activities. The different types
of businesses must work together considering the nature of tourism. If
no information about the product will be provided, the desire to
develop tourism will not prosper.
They enumerated the stakeholders in
tourism destinations as follows:

1. Residents,
2. Local companies,
3. Media,
4. Employees,
5. Government,
6. Competitors,
7. Tourists,
8. Business associations,
9 Activists and
10. Tourism developers
 4. Provide training for the staff

It is also essential in the management of risks in the tourism

and hospitality industries to provide training for the staff for
they not to be caught unaware of the things that they have to
do should the event happens. They should be the pacifier
and not the inducer of panic in the event of uncertainty.
They should save lives and not abandon their posts in case
of unavoidable circumstances.
Safety drill in the tourism industry

Staff and employees in the tourism industry must necessarily be

equipped with skills and training in handling emergency cases. They
should have active participation in all the drills being initiated by their
management. A safety drill is a concept or practice of preparing
people for an emergency. 1t 1s do through Simulation of the actual
happening of uncertainty that may affect e-business like fire,
earthquake, theft, terrorism, food poisoning, among others.
Lockdown drill. This practice is done
in anticipation of an intruder or criminal act
within the vicinity of tourism-related
establishments or activities. To effectuate this
method, an announcement about the
immediate lockdown will be given to all.

Earthquake drill. This drill is used as

a way of preparing for the coming of an
earthquake.
First Aid
Knowledge about the way on how to give
first aid treatment is essential especially to
the people working in the tourism industry
given the kind of activities that their
clientele or guests would like to deal with.
Some readings pertinent to training for
the staff
Some safety guidelines for travel agencies and tour
operators as provided by the Icelandic Tourist Board
(2013) enumerated below may have so significantly to the
Philippine setting. (Note: Some omissions fit our setting).
The guidelines were issued to increase safety in the
variety of tours and excursions dealt by the authorized
tour operators and tour agencies, as well as assisting
operators.
The employee must have knowledge and skills of the following:
1. Mountaineering for survival in the mountain regions.
2. Course in tourism is also a welcome factor to improve the participants’ skills
in tourism and the ability to function in an outdoor environment.
3. Navigation to give the participants instruction in map reading the use of a
compass and primary use of GPS equipment.
4. Giving of first aid to be able to respond to accidents and illnesses when
specific help is at a distance or help cannot be summoned.
On tours and excursions by sea
or rivers and lakes

Operators who are dealing with tourist excursions by the sea like
whale watching, sea angling, speedboat trips, adventure tours, and
others must assure that they have competitive people like a
lifeguard who could attend to the safety and security of the guests
in the event of peril. This is aside from assuring the seaworthiness
and license of the vessel to operate and navigate.
1. Caving which involves
underground exploration of natural caves
mines or quarries that are no longer
worked (other than such passages
principally used as showplaces open to the
public).

2. Climbing which includes all

climbing, traversing, abseiling, and
scrambling activities except on purpose-
built walls and towers.

3. Trekking includes walking, running,

pony trekking, mountain biking off-piste skiing,
and related activities when done in moorland or
mountain more country which is remote, i.e., the
land above 600 meters or open land more than
30 minutes' traveling time from the nearest road
or refuge.
4. Water sports include canoeing, rafting, sailing, and
related activities when done on the sea, tidal waters, or larger placid
inland waters. Boats propelled by oars (rowing), motor propelled or
towed rafts are excluded Water sports do not cover any activity
involving a powered craft. Added ta these exemptions, water sports
are only included if they are undertaken on specified waters.
 Activity 3
Instructions
Read the following situations then answer as briefly and
concisely the questions asked in relation in.
Situation 1
Your best friend received an amount of PHP 10,000,000 from her
mother as a form of inheritance. She would like to invest a portion of the
said amount in medical tourism considering its promising future in the heart
of Metro Manila. Your friend consulted you about the following:
a. Kind of medical tourism fit for an investment of Php 1,000,000.
b. Considerations that she has to take into in the establishment of medical
tourism business
c. Hazard and risks attached to the proposed business.
d. Preventive and contingency measure appropriate to the risks.
A.Kind of medical tourism fit for an investment of Php 1,000
(15pts)
B.Consideration that she has to take into in the establishment
of medical tourism business. (15pts)
 Potential hazard (15pts)
 Potential risks (15pts)
 Preventive measure (15pts)
 Contingency measure (15pts)
Situation 2
You were hired as a consultant to improve the safety and security of a
beach resort located in Calatagan Batangas. The owner of the said
business would like you to know the following:
a. Which is better to adopt in the business, risk avoidance or risk
reduction?
b. Risk transfer or retention?
c. Potential hazards and risk attending the business of beach resort.
d. Preventive and contingency measure appropriate to the risks
attached in the business of beach resort
Risk avoidance vs. Risk deduction (20pts)
Risk transfer vs. Risk retention (20pts)
Potential hazards attending the business of the beach
resort(20pts)
Potential risks attending the business of beach resort (20pts)

Preventive measure (10pts)

Contigency measure (10pts)
 Activity 4

Instructions:
Do an extensive reading about the following significant cases:
a. Close-up forever summer concert tragedy
b. Cancellation of the ASEAN Music Festival held at Ayala
Triangle Gardens in Makati City
c. Quirino Grand Stand hostage taking drama
Make a summary of the above-mentioned cases. What should have
been done by the management to mitigate if not avoid the losses and
damages
1. Close-up forever summer concert
tragedy (summary) (20pts)
What should have been done to mitigate if not
avoid the losses and damages (15pts)
2. Cancellation of the ASEAN Music Festival held at Ayala Triangle
Gardens in Makati City (summary) (20pts)
What should have been done to mitigate if not avoid the losses and damages
(15pts)

3. Quirino Grand Stand hostage taking drama (summary) (20pts)

What should have been done to mitigate if not avoid the losses and damages
(15pts)
 Activity 5

Instructions:
Risk mitigation in risk-based testing is the
process of finding solutions in anticipation of the
problem that may arise in every situation. The plan
may vary based on circumstances. Conduct a virtual
inspection (Youtube, Facebook, or any form of social
media) of any tourism-related that you preferred the
most taking into consideration the convenience and
practicality. Make a risk mitigation plan based on
your inspection.
Risk Probability Impact Mitigation Plan