A comprehensive and systematic approach is key to identifying and prioritizing risks in hotel management. Marcos Oliveira, director of lodging operations and task force at The Indigo Road Hospitality Group, said it involves team brainstorming sessions to uncover risks ranging from financial and operational to compliance-related issues.
“Organize your risks into various categories, such as safety and security, technology, human resources, legal, environmental and financial,” he said. “Historical data, including a review of past incidents, provides valuable insights into recurring issues. Staying current on regulatory requirements, collecting and analyzing guest and employee feedback, assessing IT security, and ensuring emergency preparedness contribute to an effective risk management strategy. Let's also not forget the most important: the training and re-training of our team members.”
Michael Nixon, chief development officer and president of Expotel Hospitality, suggested looking at challenges from a historical perspective and relating them to each property individually. He said operators need to ask the critical questions, such as:
- What are my constant battles? Is it seasonal labor? Mid-week profitability?
- Is nearby construction hampering repeat bookings?
“Once they identify consistent challenges, they need to prioritize tackling those based on their impact on a hotel’s bottom line. Typically, identifying these problems is the easier part of the process,” Nixon said.
It's a Team Effort
Another critical step in mitigating operational risks at hotels is to make sure all team members are involved, sources said.
Oliveira believes in fostering a culture of open communication, allowing “all employees to share their observations, concerns and suggestions without fear of reprisal.” Regular training programs and recognition for valuable insights are crucial to this strategy.
Echoing this sentiment, Nixon emphasized the importance of team awareness of hotel challenges. “If they are unaware or are led to believe there are no issues at hand, hotels are unlikely to receive that level of internal support.”
Responding to Incidents
To be sure, proactivity is key in risk management. But what happens if there is an incident?
“The most critical aspect is not to panic,” Oliveira said. “Activate your emergency response plan, which should include clear protocols for different types of incidents, such as fires, natural disasters, security breaches or medical emergencies.”
Again, communication reigns. Operators need to quickly notify all relevant personnel, including emergency services. They also need to ensure the safety of guests and employees by initiating evacuation procedures or implementing lockdown protocols as appropriate, he added.
“Designate a command center to centralize communication and decision making. Employees must be well-trained and empowered to execute their assigned roles in emergencies,” Oliveira said.
Nixon said that incidents should not surprise leadership. “They should take any steps they can to mitigate risks in advance, and that includes training. The spillover effect from when operators are unprepared can be significant,” he said.
It all comes back to proper training. Oliveira recommends “realistic scenario-based training exercises to replicate emergencies,” while Nixon highlights the need for staff to “keep a cool head and lean on the experience of senior leaders.”
Lastly, technology plays a pivotal role, according to Oliveira. “Security systems, including cameras and access control systems, enhance the overall safety of the premises, deterring potential threats,” he said. “Integrated property management systems also help organize operational processes, reducing the likelihood of errors and ensuring compliance.”
82%
Eighty-two percent of hoteliers report staffing shortages. High turnover can lead to higher operational risks. Source: American Hotel & Lodging Association
50%
The number of low-wage workers who report that their managers have not discussed what skills they should develop to improve their performance. Source: Harvard Business Review
22%
The amount insurance costs have risen on a per available room basis for hotels year to date. Source: CoStar
90%
The percentage of hospitality industry executives who said they have already made or are considering making investments in cloud technology to improve data security. Source: Skift