Risk Management

Risk Management

(as defined in ISO3100), is the identification, evaluation, and prioritization of risks. It is followed by coordinated and economical application of resources to minimize, monitor, and control the probability of unfortunate events to achieve the desired output.

Risk Management in tourism and hospitality industry is a two-way process:

-The safety of the guests and employees, which includes avoidance to emotional and physical harm is a moral and ethical responsibility of the operators; -Protection to business operations which includes protection against damage to property persons and property and future litigation.

Sources of risks

-Uncertainty in financial markets; -Threats from project failures (at any phase in design, development, production, or sustainment life-cycles); -Legal liabilities; -Credit risk; -Accidents; -Natural causes and disasters; -Deliberate attack from an adversary; or -Events of uncertain or unpredictable root cause

Strategies to manage threats

1. Avoid the threat; 2. Reduction of the adverse effect or probability of the threat; 3. Transfer of all part of the threat to another party; 4. Retaining some or all part of the potential or actual consequences of a particular threat, and the opposites for opportunities.

Events of uncertain or unpredictable root-cause:

1. Negative events or risks; 2. Positive events opportunities

common injuries in the hospitality industries

1. Slip-and-fall injuries; 2. Musculoskeletal injuries; 3. Skin reactions. 4. Respiratory illnesses 5. Security-related accidents 6. Food Poisoning 7. Elevator and escalator accidents

The different strategies of managing uncertainties can be dealt with using the following elements in order:

1. Threat identification or characterization; 2. Assessment of the vulnerability of critical assets to specific threats; 3. Risk determination; 4. Identification of the techniques to reduce those risks; 5. Prioritization of the measures Risk management principles

Risk

According to workSMARK, a hazard is something that can cause harm while____ is a chance that any hazard will cause harm to somebody.

hazard

According to workSMARK, a________ is something that can cause harm while risk is a chance that any hazard will cause harm to somebody.

Risk

From the moment a person engages himself in the business of tourism and hospitality, whether a sole proprietorship, partnership, or corporation, the risk immediately attaches.

Risk Management

Identifiy Risks Risk assess & analyze Plan action Implement Measure, control and monitor

Risk Mangement principles

It should be an integral part of the organizational processes;

Risk Mangement principles

It should be placed in a systematic and structured process;

Risk Mangement principles

It should be transparent and inclusive;

Risk Mangement principles

It should explicitly address uncertainty and assumptions;

Risk Mangement principles

It should take human factors into account;

Deliberate attack from an adversary

Terrorism has become one of the more and more active and threatening calamities that affect the international community. ▪ It is the use of violence or threat of violence in the pursuit of political, religious, ideological or social objectives. ▪ It can be committed by governments, non-state actors, or undercover personnel serving on the behalf of their respective governments. ▪ It reaches more than the immediate target victims and is also directed at targets consisting of a larger spectrum of society. Events of uncertain or unpredictable root-cause

Risk Mangement principles

The best available information should be the bases of risk management;

Risk

according to UNWTO, is a situation that exposes someone or something to danger or loss.

Accidents

are reactive while risks are preventive.

Risks and accidents

are sometimes being used interchangeably, but they are different, though they complement each other.

Risk

can be a physical safety matter , a risk of property loss or a financial business risk.

Credit

is another source of risk that could impact the tourism and hospitality industries.

Accident management

is necessary to reduce costs pertinent to the accident, to wit: damage to property, costs of rental, maximization of subrogation recovery.

Risk assessment

is the determination of a quantitative or quaitative estimate of risk related to a clear situation and recognized threat (also called as hazard).

Credit Risk

is the potential that a bank borrower or counterparty will fail to meet its obligation following agreed terms. (As defined in Principles for the Management of Credit Risk)

Risk assessment

is the stage wherein the severity of the impact of the said risk is being weighed to make the most intelligent decisions for the full implementation of the risk management plan.

Goal of credit risk management

is to maximize a bank's risk-adjusted rate of return by maintaining credit risk exposure within acceptable parameters.

Hazard

pertains to any source of potential damage, harm or adverse health effects on something or someone, while risk is the chance or probability that a person will be harmed or experience an adverse health effect if exposed to a hazard.

Risk Mangement principles

should be capable of continual improvement and enhancement

Risk Mangement principles

should be tailorable;

Risk Mangement principles

should become part of the decision-making process;

Risk Mangement principles

should create a value wherein the resources expended to mitigate risk should be less than the consequences of inaction;

Risk

the business dictionary has defined risk as the probability of threat of damage, injury, liability, or any other adverse occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action.

Risk Mangement principles

the dynamism, interactivity, and responsiveness to change must be evident on the risk management;

Risk Mangement principles

there is a need for continuous and periodic re-assessment of the risk management.

Transportation accidents

​- Air; ​- Water; ​- Land

Accidents due to fortuitous events or acts of God

​- Earthquakes ​- Volcanic eruption ​- Flood ​- Landslides ​- Erosion ​- Fire ​- Storm ​- Typhoon

Accidents due to Activities

​- Pool accident ​- Animal bites or attack ​- Drowning ​- Electrocution

The natural disasters maybe categorized into three broad groups;

• Caused by movements of the Earth • Disasters related to weather • Floods, mudslides, landslides, and famine

Steps on Risk management process

• Context establishment; • Identification of the potential risk; • Risk assessment; • Creation of risk options; • Identification of potential risk management treatments; • Make a risk management plan; • Execute the plan