In the travel, restaurant, and lodging industry, also known as “hospitality,” risk management involves keeping abreast of rapid and often dramatic change, especially as new technologies emerge.
Potential risks in the hospitality industry include innovation, safety issues, natural disasters, and reputational risk.
The fourth industrial revolution has brought about unprecedented digital connections. With them comes cybersecurity risk. The internet of things; the use of mobile applications to procure services, unlock hotel room doors and perform other tasks; artificial intelligence, and other technologies may give cybercriminals increased opportunities to access customers’ personal information, payment card information, and valuables.
These include food safety, slips and falls, and other physical hazards.
Natural disasters include volatile weather events and disease epidemics, both becoming more common as the global climate warms.
As consumers increasingly rely on online customer reviews, reputational risk is a key area to monitor for hospitality
Unlike in other industries, hospitality businesses have no single industry standard or regulatory framework to guide risk management strategies. Therefore, some choose to add a Chief Risk Officer to the C-suite who can oversee hospitality risk from risk assessment all the way through compliance.
CROs are becoming increasingly common in the hotel industry and among hospitality businesses in general—Hilton, for instance, has a CRO. A spate of cyberattacks on major hotel chains including Marriott in recent years may be fueling this trend.
But hoteliers aren’t the only hospitality companies grappling with risk. Data security, for instance, is a concern throughout the sector.
The tourism industry, including travel agencies and tour operators; restaurants, and others in the hospitality industry collect increasing amounts of customer data, tracking their habits and choices with an eye toward providing individualized, personalized service. Payment card data, too, is at risk. Managing the risks to data privacy and security is critical to these companies’ reputations and bottom lines.
If yours is a hospitality sector enterprise, take note: Quality GRC software can connect you with the risk management frameworks best suited to your business and automate many of your compliance tasks—leaving you free to focus on serving your customers and boosting your profits.