Unit 1: Risk Management in the Tourism

and Hospitality Industry

Lesson 1. Risk and its Concept

Introduction
The COVID 19 pandemic has led to a global
crisis with far greater effects on the hospitality
industry than those of 9/11, SARS, the https://image.shutter.com

Bali bombings, the Asian tsunami, and the

2008 financial crisis. Never before has the
hospitality industry experienced a sudden
downturn taking on a massive hit. The impact
on both the revenue and supply chains is
huge and not yet predictable.

The industry had to read about

corporate travel cuts, canceled conventions,
employee layoffs, weakening customer trust, cdn.images.express.co.uk

company reorganizations, and uncertainty in

insurance coverage. Decisions to shut down hotels,
restaurants, theme parks, cinemas, not to mention
the entire disruptive effect of the travel ecosystem,
all have a considerable impact on world tourism.

The latest global occurrence has business

leaders reevaluating to an even higher degree their
risk expectations. Hospitality companies are forced
to optimize business risks and manage costs
yalihnan.com
efficiently to stay competitive in the industry.

The importance of risk management is evident

in maintaining the company's success. It is crucial to
ensure businesses are adequately protected against any
risk related to the running of their hospitality business.

Risk management helps companies to try to

plan for the unexpected by mitigating risks and
additional costs before they arise. They weigh
opportunities against threats and act decisively. www.tourist-destination.com

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 Risk management may become a strategic competitive advantage to help
hospitality companies change their emphasis from crisis response and compliance
with risk assessment.

Learning Outcomes
1. discussed the meaning of risk;
2. identified risks confronting the hospitality industry;
3. determined the theoretical concepts of risk;
4. analyzed real risks or workplace hazards to employees; and
5. evaluated kinds of perceived risks and classified types of risks.

Activate Prior Knowledge

Activity:

1. What are other terms/words for risk which you know?

_________________ _________________ _________________
_________________ _________________ _________________
_________________ _________________ _________________
_________________ _________________ _________________

2. When you visit a resort for swimming and theme parks for various rides with
your friends what are the possible risks or hazards you might encounter?
_________________ _________________ _________________
_________________ _________________ _________________
_________________ _________________ _________________
_________________ _________________ _________________

3. What unpleasant incidents can you experience when dining in an eat-all-you-can

or buffet restaurant with your family?
_________________ _________________ _________________
_________________ _________________ _________________
_________________ _________________ _________________
_________________ _________________ _________________

You take calculated risks in your day to day life without even knowing.
There's a margin of risk to everything you decide to do. Examples of everyday risks
are what to eat, what mode of transportation to take, how to play a sport, go on a
hike, ride a bike without a helmet, or go for a swim. Some young people are taking
on more risky activities— drinking binge, smoking, not wearing a seat belt, drinking
while driving, staying out after the curfew time, etc. The more informed you are, the

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more thoughtful decisions that can become part of your thinking process, the more
effective risk analysis that you can integrate into your life.

Acquire New Knowledge

What is risk?

Risk represents the potential for loss or harm.

It is an event that adversely affects normal situations
within a given period leading to unwanted
consequences. Risk is a state in which there is a
possibility of an adverse deviation from the desired
results. This means that it undesirably affect the
achievement of the objectives. It is the likelihood of
the occurrence of a defined hazard and the
jameskaskade.com magnitude of its consequences. Risk could constitute
financial loss, property damage, or injury to workers
or guests.

The number of risks faced by hospitality companies is on the rise. Here are
some of the risks confronting the hospitality industry.

Cybersecurity. As more hospitality and travel

companies use digital systems to automate tasks and
manage their data, they need to be aware of the
potential risks. It was reported on 30 November 2018
that Marriott International Inc. was facing a breach that
exposed 500 million customers ' personal information. It
was assumed that the attack started in 2014, two years
before Marriott bought Starwood. The internal security
tool from Marriott detected the intrusion in September.
The company was unable to analyze the information
www.legaltechnews.com that had been breached until November 19. Through the
attack, the hackers gained access to customers' names,
phone numbers, emails, passport numbers, travel details,
and payment data.

Foodborne Illness Outbreak. 206 restaurant

patrons were confirmed as infected by an outbreak of
Cyclospora infections linked to Fresh Express bagged
salads sold by the grocery store on dates ranging from
May 11 to June 17, 2020. The microscopic organism is
often found on raw-eaten fresh produce, particularly www.georgia4th.org
lettuces and herbs such as cilantro. No fatalities were

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reported. Illnesses started in people between the ages of 16 and 92. Symptoms
included watery diarrhea, loss of appetite, loss of weight, cramping, bloating,
increased gas, nausea, tiredness, vomiting, and low-grade fever.

Security Breach. After gunshots were heard

and a fire broke out at Resorts World Manila, a lone
gunman triggered panic in Pasay City past midnight
on Friday, June 2, 2017. The gunman was later
found dead after he burned and shot himself. The
attack killed 38 people, including the gunman. The
House Committee on Public Order and Safety and
media.philstar.com
the House Committee on Games and Amusement
investigated the incident.

During the hearing, the Chief Operating

Officer of Resort World Manila admitted that
there were lapses in security. Resorts World paid
P1 million each to the victims’ families and P500,
000 to those injured during the attack.
Specials.sunstar.com.ph

What are the three theoretical concepts of risk?

1) Real risk is the actual statistical likelihood of the occurrence of an

accident. It is the actual risk of the practice, activity, or event. It is proven through
statistical analyses and other relevant data, and an empirical process and the use of
field expertise. There is little ambiguity or subjectivity in real risk.

In the hospitality industry, there are real risks or

workplace hazards to employees. Some of them are:

Manual handling. Fifty percent of all injuries are

incurred in the hotel sector while performing some kind of
task related to manual handling. They are usually injuries
of musculoskeletal type-trauma or back pain, knees,
elbows, muscle tears, contusions, etc. The repetitive work
in the industry, such as moving kegs or carrying cartons,
vacuuming, scrubbing, making beds or carrying luggage,
Safestart.com
can directly or for some time lead to strain even tear muscles
and tendons.

Burns, scalds, and cuts. Burn hazards in the kitchen represent an

undeniable threat. Direct flame, hot surfaces, and working with hot oils,
handling hot pots, pans, and trays all provide a chance to inflict serious injury.
Scalding results from direct contact with hot liquids like boiling water, steam and oils
used for cooking.

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 Injuries to the hands and fingers are most common
in commercial kitchens and occur while cutting, slicing, and
dicing vegetables and boning meat during the food
preparation process. The majority of injuries are often the
result of using the wrong knife or a dull blade for the job.

https://blog.survivalsupplyzone.com

Dangerous chemical compounds. The hospitality

industry uses many different types of hazardous chemicals
for cleaning up. They include liquids for washing up,
detergents for dishwashing and rinsing aids, products
for drain cleaning, oven cleaners, disinfectants, toilet
cleaners, bleach, sanitizers and descalers. https://www.forceofnatureclean.com

2) Perceived risk is the perception by an individual of the uncertainty

and negative consequences arising during the practice, activity, or event.
Becoming exposed to threats and dangers is a cognitive probability.

The perception of the level of risk varies greatly from person to person, based
on the level of apprehension, anxiety, or experience with the particular risk of the
individual. Although it may not be real, it becomes an influential determinant that
affects consumer behavior.

Perceived risk can also vary considerably from an activity's actual risk. It may
be greater or less than the actual risk. Successful management of perceived risk can
include operators promoting activity risk as high, even if the risk is minimal in reality.
Here are some kinds of perceived risks:

a. Perceived physical risk: personal safety-related risks, such as injury or

illness during use.
b. Perceived psychological risk: the risk of suffering disappointment, ego
loss, and personal image damage
c. Perceived social risk: the risk of loss of social status due to a
failed choice or being an embarrassment to other people
d. Perceived financial risk: the risk of losing money due largely to the
service purchased.

g4risk.com

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 3) Inherent risk is the risk that must exist in order for the activity to take
place. It is a risk that is integral to the activity and that cannot be removed.
Examples include the risk of drowning while swimming and snorkeling, the risk of
falling during skiing, and the risk of food poisoning in dining in an eat-all-you-can
restaurant.

These activities cannot eliminate the inherent risk because it would prevent
participation in them. The management should, however, take steps to minimize
inherent risks. This could include, for example, providing suitable safety gear for
guests, training staff, and informing participants of the risks of the activity.

What are the types of risk?

The tourism and hospitality industry encounter several types of risks in its day
to day operations. Among those are the following:

1. Food Safety Risk – Food safety is one of the biggest

risks for hospitality businesses. It might be a microbiological,
chemical, and physical in nature. Food safety hazards can be
introduced at any stage of the food chain, from producers
supplying ingredient supplies, through food manufacturers,
transportation and storage operators, to retail and food service
outlets. Common infections include salmonella, campylobacter
en.wikipedia.org
from contaminated chicken, vibrio from raw shellfish, and E. coli.

2. Occupational Health & Safety - safeguard

that the working condition and environment is safe and
healthy so that employees can and can to do their
work effectively. Occupational health and safety
promote the prevention of workplace injury, illness,
and disease. It rehabilitates those injured and
provides timely return to work. It also provides fair
compensation to replace the loss of wages for
workers while they recover from injuries.
It ensures sound financial management for worker
thermalincompany.com compensation system that is workable.

3. Security Risk - keeping guests safe is a high

priority for the hospitality industry. While balancing greenbitz.com
the business needs of a safe and welcoming hotel
environment, the industry must ensure that its guests
and employees are not placed at undue risk.

Examples of breaches in security within the

hospitality industry include: theft of money, inventory,
or personal belongings of employees, guests, and

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employers; burglaries that may involve breaking into the establishment when it is
closed or breaking into guests’ rooms to steal valuables; armed robbery for stealing
cash and other valuables; and other threats, such as bomb threats and hazardous
substances sent by post.

4. Ergonomic Risk – or ergonomic hazards are environmental physical

factors which may cause injuries to the musculoskeletal system. These are injuries
caused by strain placed on the body, and are not always immediately apparent,
making it difficult to detect these hazards.

Often, ergonomic risks are the result of the way

space is designed, which means that it is crucial to plan
and think about how employees interact with their
work space. Anything that could lead to long- or short-
term strain experienced by employees should be
hospitalitylawyer.com
evaluated and alterations to procedures and
workspaces should be considered.

5. Uncertainty Risk - are environmental risks and man-made risks.

Environmental hazards include natural disasters such as, typhoons, floods, storm
surge, hurricanes, landslides, earthquakes, tsunamis, eruptions of volcanoes, severe
haze, drought, epidemics, and plagues. Man-made hazards, on the other hand,
include transport accidents, crime, terrorism, political conflict, structural failures, oil
spills, hazardous waste leaks, fire structure.

Apply Your Knowledge

As the Food & Beverage of Mandala Resort, you are tasked to be one of the
resource persons for the Quarterly Training Seminar of your hotel. Risk and Risk
Concepts is the topic assigned to you. You are to prepare a tri-fold brochure to be
distributed to your participants.

Brochure’s Rubrics

Criteria Excellent Good Satisfactory Needs

(20-17 pts.) (16-12 pts.) (11-6 pts.) Improvement
(5-0 pts.)
Graphics go well Graphics go well Graphics go well Graphics do not
with the text. There with the text, but with the text, but go with the
Graphics/ is a good mix of there are so many there are too few accompanying
Pictures text and graphics. that they distract and the brochure text or appear
from the text. seems "text- to be randomly
heavy." chosen.
The brochure has The brochure has The brochure has The brochure's
Attractiveness exceptionally attractive well-organized formatting and
& attractive formatting and information. organization of
Organization formatting and well-organized material are
well-organized information. confusing to the

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 information. reader.
Excellent Good Satisfactory Needs
(20-17 pts.) (16-12 pts.) (11-6 pts.) Improvement
(5-0 pts.)

Content – All facts in the 99-90% of the 89-80% of the Fewer than 80%
Accuracy and brochure are facts in the facts in the of the facts in
Information accurate. brochure are brochure are the brochure are
Validity accurate. accurate. accurate.
Careful and Careful and Careful and Sources are not
accurate records accurate records accurate records documented
are kept to are kept to are kept to accurately or
document the document the document the are not kept on
Sources
source of 95-100% source of 94-85% source of 84-75% many facts and
of the facts and of the facts and of the facts and graphics.
graphics in the graphics in the graphics in the
brochure. brochure. brochure.
No spelling errors No more than 1 No more than 3 More than 3
Spelling & and all sections of spelling and/or spelling and/or spelling and/or
Proofreading brochure are free writing errors are writing errors are writing errors
of writing errors. present. present. are present.

http://rubistar.4teachers.org

Assess Your Knowledge

Part 1: Short Quiz

Write the word TRUE if the statement is true or write the word FALSE if it is false.

______1. Perceived hazard is the potential for loss or harm. It could be a financial
loss, damage to property, or injury to workers or guests.

______2. Foodborne disease outbreak is an incident in which two or more

consumers experienced the same illness after eating the same food.

______3. Successful management of perceived risk may include operators

promoting the risk of activity as high, even if in reality the risk is minimal.

______4. Inherent risk is the actual statistical likelihood of an incident occurring.

This is established through reviews of statistics and other relevant data.

______5. The real risk is the risk that must exist for the activity to occur. Examples
include the risk of drowning when swimming and the risk of falling during
skiing.

______6. Occupational health and safety promote the prevention of workplace

injury, illness, and disease. They safeguard that the working condition
and environment is unsafe and healthy.

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______7. Hackers gaining access to hotel guest’s names, phone numbers, emails,
passport numbers, travel details, and payment data is an example of
security risk.

______8. Ergonomic risk is the result of the way space is designed. It is an

environmental physical factor that may cause injuries to the
musculoskeletal system.

______9. The repetitive work in the industry like vacuuming, making beds or
carrying luggage can directly lead to strain even tear muscles and it is an
issue of uncertainty risk.

______10. The perceived risk may vary greatly based on their level of apprehension,
anxiety, or experience with the specific risk. It is the perception of risk by
those undertaking or evaluating something.

Part 2: Journal Writing

Relate a risk situation you have experienced like super typhoon, floods, COVID 19 or
the like? How were you able to survive it? What are the coping strategies that help
you in dealing with the harm or the loss it brought you and your family. (Please see
Journal Rubrics below. You may use additional paper for your reflection.)

_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________

Rubrics in Journal Writing

Criteria Excellent Good Satisfactory Needs
(20-17 pts.) (16-12 pts.) (11-6 pts.) Improvement
(5-0 pts.)
Reflection Reflection Reflection Reflection lacks
demonstrates a high demonstrates demonstrates critical thinking.
degree of critical some degree of limited critical Superficial
thinking. Insightful critical thinking. thinking. Minimal connections are
Content and relevant Connections made connections made made through
Reflection connections made through through explanations,
through contextual explanations, explanations, inferences, and/or
explanations, inferences, and/or inferences, and/or examples.
inferences, and examples. examples.
examples.
Conveys strong Conveys evidence Conveys limited Conveys
evidence of of reflection on evidence of inadequate
Personal reflection on own own work. reflection. evidence of
Growth work. Demonstrates Demonstrates Demonstrates less reflection on own
significant personal satisfactory than adequate work. Personal
awareness of deeper personal personal awareness awareness are not
meaning through awareness through few or evident. Lacks
inferences made, through some simplistic inferences enough
examples, well inferences made, made, examples, inferences,
developed insights, examples, and insights that are examples, and
and substantial insights, and not well developed. personal insights.
depth in perceptions. substantial depth
in perceptions.

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 Criteria Excellent Good Satisfactory Needs
(20-17 pts.) (16-12 pts.) (11-6 pts.) Improvement
(5-0 pts.)
Well written and Above average Average and/or Poor writing style
clearly organized, writing style and casual writing style lacking in clarity,
characterized by logically organized that is sometimes language used,
Writing elements of a strong with minor errors unclear and/or with and/or frequent
Quality writing style and in grammar, some errors in errors in
basically free from punctuation, grammar, grammar,
grammar, usage, and punctuation, usage, punctuation,
punctuation, usage, spelling. and spelling. usage, and
and spelling errors. spelling. Needs
work.
Kreiger, D. (2014). Instructional Design/Technology Services, SC&I, Rutgers.

Part 3: Research
Find out recent reports in the web on Hospitality Industry hazards. Search
for risk incidents within the last 10 years. It may be a risk occurrence in hotel,
restaurants, resorts and related hospitality establishments.

Based on the description of the incident, answer the following questions to

the best of your ability:
1. What are the situation and the problem all about?
2. Who are the persons involved?
3. What has been done to address the risk-situation or problem?
4. What is your personal feeling about who is responsible for the harm in
this situation?

Rubrics for Research Paper

Exemplary Accomplished Developing Beginning
Criteria (18-20 points) (14-17 points) (13-9 points) (8-0 points)
Paper is effectively Paper is adequately Paper is Paper lacks
organized. Ideas are organized. Ideas somewhat logical
arranged logically, are arranged organized, organization
flow smoothly, with a reasonably with a although and impedes
strong progression of progression of occasionally ideas readers’
thought from thought from from paragraph to comprehension
paragraph to paragraph to paragraph may of ideas. The
Organization
paragraph. Includes paragraph. not flow well. paper is missing
all required Includes required May be missing a multiple
components components required required
(introduction, body, (introduction, body, component and/or components.
conclusion, Reference conclusion, components may
List, etc.). Reference List, be less than
etc.) for the most complete.
part.
Demonstrates a Demonstrates an Demonstrates Demonstrates a
sophisticated understanding and general lack of
understanding and some critical understanding understanding
careful, critical analysis of the with limited critical and inadequate
analysis of the research topic. analysis of the analysis of the
Analysis research topic. Adequately research topic. research topic
Compares/contrasts compares/contrasts Analysis is
perspectives, and perspectives and superficial
draws original and broader rather than
thoughtful connections critical analysis.
conclusions.

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 Exemplary Accomplished Developing Beginning
Criteria (18-20 points) (14-17 points) (13-9 points) (8-0 points)
Research sources are Sources are mostly Some sources may Sources
highly relevant, relevant, accurate, not be relevant, included, are
accurate, and reliable and reliable and add accurate, and generally not
Sources
and add to the to the strength of reliable. relevant,
strength of the paper. the paper. accurate, or
reliable.
Paper is well written Paper shows above Paper shows an Paper shows
characterized by average writing style average and/or a below
elements of a strong and clarity in casual writing style. average/poor
writing style. Basically writing. Minor errors Some errors in writing style.
free from grammar, in grammar, spelling, grammar, Frequent
Writing punctuation, spelling, punctuation, punctuation, usage, errors in
Quality usage, or formatting spelling, usage, or and/or formatting. spelling,
errors. formatting. grammar,
punctuation,
spelling,
usage, and/or
formatting.
Kreiger, D. (2014). Instructional Design/Technology Services, SC&I, Rutgers.

References

Bao, B. C. (2009). Air travel in the U.S.: An investigation of the influence of perceived risk in
service quality. Retrieved from ProQuest Dissertations & Theses (PQDT).

Beach, C. (26 June 2020). Walmart salad served by restaurant linked to parasitic infections;
grocery store bagged salads still involved. Retrieved from
https://www.foodsafetynews.com

Carroll, M. S. (2009). Development of a scale to measure perceived risk in collegiate

spectator sport and assess its impact on sport consumption intentions. Retrieved from
ProQuest Dissertations & Theses (PQDT).

Djeebet, H. (2020). What is the impact of COVID 19 on the global hospitality industry?
Retrieved from https://www.hospitalitynet.org

Francisco, K. (02 June 2017). Timeline: Resorts World Manila attack. Retrieved from
ttps://www.rappler.com

How to spot the ergonomic safety hazards in your workplace before they harm your
employees. Retrieved from https://safetylineloneworker.com

Managing risk : Management a checklist for restaurant owners. Retrieved from

https://www.lightspeedhq.com

Prabhakaran, S., Nair, V., & Ramachandran, S. (2013). Marine waste management indicators
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Worldwide Hospitality and Tourism Themes, 5(4), 365-376.

PSC Direct. (2016). 5 risks facing businesses in the hospitality sector. Retrieved from
https://www.pscdirect.com.au

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Reichel, A., Fuchs, G., & Uriely, N. (2007). Perceived risk and the non-institutionalized tourist
role: The case of Israeli student ex-backpackers. Journal of Travel Research, 46(2),
217-226.

Resolver. (17 April, 2020). Top 4 risks facing the hospitality industry. Retrieved from
https://www.resolver.com

Safe use of cleaning chemicals in the hospitality industry. Retrieved from

http://www.britishcleaningcouncil.org

Tims, R. (2016). Six common safety hazards in the hospitality industry. Retrieved from
https://www.linkedin.com

Uslu, A., & Karabulut, A. N. (2018). Touristic destinations’ perceived risk and perceived value
as indicators of E-WOM and revisit intentions. International Journal of Contemporary
Economics and Administrative Sciences, 8(2), 37-63.

Webster, D. (2012). Risk Management and Legal Liability in Introduction to Tourism and
Hospitality in B.C.. Retrieved from https://opentextbc.ca

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