Tag Archives: Risk Management

by | January 13, 2011 · 6:30 am

Hospitality Industry Risks: Hotel And Restaurant Owners And Management Must Have Emergency Plans And Insurance In Place To Manage Crisis

Hotel owners and management must be able to deal with catastrophic events and know the answers to the following:

  1. How quickly could you restart?
  2. Would insurance provide money for next week’s rent and wages?
  3. What would the bank say?

Massive floods are one thing, but what if a neighbouring building caught fire or your kitchen burst into flames? Start your managers and staff thinking through the issues, while they’re still in the headlines…

  • Check Data Backup Systems: are they all onsite or are copies of data, systems and staff records kept elsewhere? Is the safe fireproof or just a box with a key? Online backup systems like Carbonite work well, and data storage is very cheap – but you need to start it happening!
  • Is the Insurance cover complete? Would it cover a situation like the current floods? Does it cover intangible items as well as equipment? What about loss of profits and staff wages while rebuilding happens?
  • Are Staff trained for fire and first-aid emergencies? This is the type of training that’s usually regarded as ‘nice to have’ rather than essential. Do they know how to handle a fat or an electrical fire? What about an elderly customer who faints or collapses? Or flood waters coming near electrical connections?
  • How will you keep Customers & Staff informed? It’s more effective if your email newsletter or SMS alerts are already part of their world, then you can really keep their loyalty active. Your Facebook Page and Twitter updates will also reach many others…
  • Have a Crisis Management Plan, designed to cover the many risky situations where you depend on only one alternative: eg only one staff member who’s qualified with first aid, one chef who knows how to cook the favourite dessert, one key for the liquor store, or one computer with all the staff records.
  • Crisis Management Downloads: ready to use (and edit) Safety Manual and Rules, Maintenance Logbook, Cleaning Rosters (greasy dirt is a big cause of kitchen fires) and a raft of other systems designed to keep your business organised and safe.

For more:   http://www.hotelnewsresource.com/article51387.html

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by | December 1, 2010 · 7:43 am

Hotel Industry Guest Relations: Hotel Owners Must Invest In Employee Training To Create A “Positive And Egaged” Environment To Retain Guest Satisfation

Make reputation management a priority. Whether your property is a five-star resort or a one-star motel, your guests are evaluating you on how well you communicate and deliver on your brand promise. Subscribe to a social media monitoring tool and start tracking your Market Share of Guest Satisfaction; in the age of social networking, it’s as important as your revPAR index. Formulate a strategy for optimizing your online reputation, set goals, and meet regularly with your social media team to review progress.

Speak up. We would never ignore a guest ranting in our lobby, so why do so few negative reviews receive a response? (7%, according to TripAdvisor). It’s our chance to show the world we care, to thank the guest for feedback, to apologize and explain, and to clear up any misconceptions. On TripAdvisor reviewers can’t reply to hotel responses, so effectively we get the last word. Use it.

Engage. Hotels used to hire mystery shoppers to tell us what we were doing wrong; now our guests do it and pay us for the privilege. User reviews keep us in touch with guests and allow us to reach a mass market we could never hope to reach through our own marketing efforts. Be grateful. Wherever possible, engage writers of negative reviews and try to make amends. With expert handling, our harshest critics can become our most powerful advocates.

Take the high road. If the review is petty or vindictive, there’s no need to stoop to that level; travelers are smart enough to read between the lines. If allegations are false and defamatory, dispute the review with the host site, post a diplomatic response to set the record straight, and let it go. If your property’s reputation is so fragile that one or two bad reviews will devastate your business, you’ve got more issues than bad reviews. Read on.

Create a cycle of positivity. Use guest feedback to justify investments in training, labor, capital upgrades and communications. Improvements will generate positive reviews, which will attract more travelers and in turn will generate incremental revenue, thereby funding more improvements, and so on. The alternative? Ignore feedback and create a cycle of negativity, with the opposite results.

Prevent escalation. If you listen closely, bad reviews are often less about the issue itself than how staff responded when it was brought to their attention. Train employees to prevent on-property issues from escalating to online complaints by listening, empathizing, offering solutions and following up to ensure guests are satisfied. Some issues take time and money to fix; in the meantime, ensure staff are minimizing fallout by expertly managing complaints.

For more:  http://www.hotelnewsresource.com/article50511.html

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by | November 27, 2010 · 6:53 pm

Hotel Industry Liability Issues: “Bed Bug” Court Verdicts Have Recently Found Hotel Owners Liable When “Conscious And Deliberate Behavior” Allowed Infestations To Proliferate

The recent surge in bed bugs has created an uptick in litigation against motel owners and landlords alike.  duLac’s article focuses on a Maryland attorney who is filing a series

Bed Beg infestations at hotels can result in guilty verdicts against hotel owners if conscious and deliberate behavior led to infestations going untreated.

of bed bug liability suits.  The typical compensatory damages claim is $200,000, and many of the suits claim punies.  Bed bug suits, in Maryland and elsewhere, generally face three major issues.

First, plaintiff will have to prove notice on the part of the motel owner or landlord.  Actual notice is best, but constructive notice should suffice.  For constructive notice, the focus will be the length of time the condition (bed bugs) has been in place.  The Maryland suits contain mostly conclusory allegations, so discovery will be important.

Second, plaintiff will have to establish compensatory damages.  Bed bugs are nasty creatures, and I have a lot of sympathy for people impacted by them.  Plaintiffs in Mathias got a jury verdict for compensatory damages of $5,000.  A Florida attorney quoted in duLac’s article is leaving the bed bug liability field because the damages are too small.  He noted that he settled one case for $4,000 and another for $10,000.

Finally, a fairly standard punies regime requires a plaintiff to prove some type of conscious and deliberate behavior on the part of the defendant.  In Mathias, the hotel owners were informed about the bed bugs.  Instead of paying for a $500 extermination, the owners allowed the bed bug situation to fester for nearly two years.  It was widely known the hotel had bed bugs.  There were certain rooms that employees were not supposed to rent out because of the bugs, yet the rooms were rented if there were not enough other rooms available.  Guests were informed the bugs were ticks (as if that’s better!).  Under these circumstances, the court upheld a punies verdict of $186,000.  If proving notice in the Maryland cases will require the discovery of significant facts, for punies the bar is even higher.

For more:  http://lawprofessors.typepad.com/tortsprof/2010/11/bed-bug-liability.html

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by | October 11, 2010 · 2:08 pm

Hospitality Industry Health Risk Management: Hotel Owners Must Establish Formal “Bed Bug Infestation Risk Management” Protocols For Preventing And Then Eradicating Infestations

In certain cases, courts can even levy large judgments against hotel operators who rent rooms infested with bed bugs. In 2003, a federal appellate court awarded $372,000 in

State inspectors have the authority to shut down an establishment that poses an "imminent health hazard" involving fire, flood, sewage backup, rodent infestation, bed bug infestation or "any other condition that could endanger the health and safety of guests, employees and the general public."

punitive damages, roughly 37 times the compensatory award in the case, to a couple bitten by bed bugs while staying at a chronically infested Motel 6 in Chicago.

Hotel owners and operators have faced periodic reports of bed bugs for decades, but a newfound public fascination with the problem, combined with the proliferation of websites dedicated to documenting bed bug outbreaks, has created a frenzy of media activity never before seen. Indeed, bed bug stories have been reported in the New York Times, Washington Post, Wall Street Journal, and many other local television and print outlets across the country. Stoking the traditional media’s interest in bed bugs is a rash of new online forums where travelers post the unsettling details of encounters with the pests.

Much of the coverage seems sensational and overblown, but property owners and third party operators in the hospitality industry have to face the reality that the process of eliminating bed bugs from hotel rooms can be quite expensive and can lead to litigation and costly settlements. Additionally, reports of infestation on online travel sites like TripAdvisor and bed bug reporting sites like bedbugregistry.com and bedbugreports.com can cause significant reputational harm and loss of business.

The good news for hospitality companies is that robust risk management practices, and the appropriate insurance and risk financing programs, can significantly mitigate the financial impact bed bugs can have on a hotel organization.

Establishing formal risk management protocols around bed bugs is an important first step in minimizing the cost of infestation. Proactive steps for hotel organizations include creating a formal program to train housekeeping staff on spotting bed bugs, creating a policy on how to handle outbreaks or complaints and implementing regular pest control inspections.

“Bed bugs are on our list of emerging issues facing the insurance industry, not only for hotels, but in the retail, apartment, and residential healthcare sectors,” noted Brian Gerritsen, Senior Director of Hospitality Business at Fireman’s Fund Insurance Company. “The recent increase in bed bug related claims has prompted us to become more proactive about the issue with our insurance customers.” Mr. Gerritsen’s team recently released an industry alert recommending that hotel operators take several actions to prevent potential infestations in guest rooms including:

• Chemically treating mattresses and sealing them in plastic

• Washing/drying bedding and towels regularly and daily if possible

• Vacuuming cracks, crevices and other hiding places and sealing openings permanently so the bugs don’t have a place to hide

• Having regular inspections and extermination services done by a qualified pest control contractor

• Training and educating housekeeping employees to recognize the presence of bed bugs and immediately report any activity to the appropriate personnel

For more:  http://www.pressreleasepoint.com/don039t-let-bed-bugs-bite-insurance-and-risk-management-perspective

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by | October 4, 2010 · 6:24 am

Hotel Theft Risks: Florida Law Protects Hotel Ownership From “Most Liability” But Continued Guest Loyalty Demands A Secure Premises

“…A… Naples, FL couple’s plans were shattered…when their motel room was burglarized shortly after they checked in and went to dinner. Everything of value — including electronics, cash, a designer purse and sunglasses, theme-park tickets, a passport, checks and Social Security cards — was gone when they returned…”

They… filed a police report and demanded reimbursement from the motel for the $5,200 loss, but it was denied. A Florida law protects operators of public lodgings from most liability. Even when a hotel is negligent, a guest cannot recover more than $500 in most cases and $1,000 for jewelry or cash left with the hotel for safekeeping.

In Orlando, where tourism is the engine that drives the economy, hoteliers are well aware of the need to protect their guests as much as possible, said Rich Maladecki, president of the Central Florida Hotel & Lodging Association.

Most hotels have full-time security staff and work with law enforcement to root out problems, he said. Look for hotels with good lighting in hallways, at entrances and in parking lots, experts caution.

For more:  http://www.orlandosentinel.com/features/law/os-law-and-you-hotels-tourist-rights-20100923,0,6507664.story

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by | September 29, 2010 · 6:51 am

Hotel Industry Employee Issues: Study Finds That “Front-Line” Employees That Are Envious Of Co-Workers Represent Potential Risk To Guest Relations

“Limiting envy is crucial not just to the success of the employee in his or her career, but it’s crucial to the success of the hotel itself,” said O’Neill. “The success of a hotel lies in how it treats its guests.”

Guest relationships can become collateral damage when hotel employees envy the relationships co-workers have with their bosses, according to an international team of researchers.

In the study of front-line hotel employees — desk staff, food and beverage workers, housekeepers — workers who have poor relationships with their bosses were more likely to envy co-workers with better relationships with supervisors, said John O’Neill, associate professor, School of Hospitality Management, Penn State. The study showed that the envious workers also were less likely to help co-workers or to volunteer for additional duties. The researchers report their findings in the current issue of International Journal of Hospitality Management.

“People who are less envious often go above and beyond their normal job duties to do things like cover for an employee who has gone home to help a sick family member,” said O’Neill. “Conversely workers who are more envious are less willing to perform these additional duties.”

Front-line employees are typically hourly employees who interact directly with guests. Since these employees have personal contact with guests, people staying at hotels become the unintended victims of on-the-job envy, according to O’Neill, who worked with Soo Kim, assistant professor, management and information systems, Montclair State University, and Hyun-Min Cho, tourism policy research division, Culture Contents Center, Republic of Korea.

For more:  http://live.psu.edu/story/48699

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by | September 25, 2010 · 7:08 am

Hospitality Industry Risk Management: “Premises Liability” Holds Owners And Managers Legally Responsible For Accidents And Injuries And Can Only Mitigated By “Daily Documented Property Inspections” Of Potential Hazards

“Premises liability” holds owners and property managers legally responsible for accidents and injuries that occur on property. Liability will vary depending on the legal rules and principles in place in the state where the premises liability injury occurred.

There are, essentially, three classifications of people on your property:

  • Uninvited trespassers
  • Licensees—those entering with permission for their own purposes
  • Invitees—those entering for the benefit of the owners and occupiers

Your obligations to each will vary, and your duty gradually increases as you move from trespasser to invitee.

Trespassers can be undiscovered or discovered. For an undiscovered trespasser, the obligation is not to willfully cause injury. A discovered trespasser should receive a warning of hazards that are not obvious. This is the same duty you owe a licensee.

The invitee garners the greatest obligation. Here the owner or occupier must act to keep the property in reasonably safe condition and warn the invitee of any latent defects.

For best results, employ and document daily property inspections. Have a plan in place that requires employees to keep an eye out for hazards and a system in place to document compliance with the process.

Nonetheless, injuries on your property can occur. However, liability is not automatic. If you have maintained a diligent inspection process and can document compliance, the claimant will have a difficult time proving that you knew or should have known about the condition causing the injury. This provides an avenue to escape liability.

Other traditional defenses center upon the comparative negligence of the injured person and can take many forms. For example, it includes the provision of warnings that go unheeded. It also includes hazards that are so obvious as not to require warnings, but nonetheless go unnoticed.

For more:  http://www.hotelworldnetwork.com/injuries/premises-liability-take-steps-now-protect-your-hotel

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by | September 21, 2010 · 8:06 am

Hotel Industry Risk Management: Hotel Management Must Have Policy For War Veterans Using “Service Dogs” (Video)

[youtube=http://www.youtube.com/watch?v=h7gToiVKY8g]

An Iraq veteran was on the verge of being kicked out of her temporary home, all over her service dog.
KOB Eyewitness News 4 cameras were rolling as police showed up. Retired Army Sergeant Erin Hunt is recovering from post traumatic stress disorder. Helping her is Memphis, a service dog given to her by the non profit “Paws and Stripes.”

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by | September 5, 2010 · 9:03 am

Hospitality Industry Health Insurance: American Health Strategy Project Aims To Lower Health Insurance Costs Through Increased Data On Employees Medical Leaves, Drug Utilization, Disability Claims And Demographics

 Until now, most employers setting up value-based insurance designs have relied primarily on medical claims data, which may or may not provide a complete picture of health risks lurking in their workforces, said Marianne Fazen, executive director of the Texas group.

In addition to medical claims data, employers participating in the American Health Strategy Project will collect data on family medical leaves, pharmaceutical and prescription drug utilization, short- and long-term disability claims, workers compensation claims, employee assistance program usage, disease management and employee demographics

The Texas Health Strategy Project is one of five initiatives announced in May by the Washington-based National Business Coalition on Health as part of the American Health Strategy Project, which intends to help employers use data from multiple sources to develop and implement value-based insurance designs. Such designs remove barriers that might prevent employees from receiving necessary health care, such as preventive screenings and maintenance medications.

While the Texas project is under way, the four other projects involving other coalitions—the Midwest Business Group on Health in Chicago, the Oregon Coalition of Health Care Purchasers in Portland, the Pittsburgh Business Group on Health and the Virginia Business Coalition on Health in Virginia Beach—are in various stages of deployment.

For more:   http://www.businessinsurance.com/article/20100905/ISSUE01/309059972

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by | August 30, 2010 · 7:59 am

Hotel Industry “Art Insurance” Issues: Hotels Are Increasingly Hanging “Real Artwork” In Lobbies And Hallways To Please More Discriminating Clientele

“Hoteliers are not only trying to come up with a theme or a style that attracts customers, but they are approaching it in a much more professional and involved way,” said Sean Hennessey, chief executive of Lodging Investment Advisors, a consulting firm in Valhalla, N.Y.

“It used to be that you could get away with just slapping something up in the lobby,” he added, “but more and more customers are looking and evaluating it much more closely.”

For the James, meeting that demand has meant trying to reflect the artistic microclimate of SoHo. Though many of the artists who once made the area a creative mecca have fled, an emerging art scene is still represented through nonprofit institutions there that support artists and show their work.

Denihan Hospitality Group, which is developing the hotel, operates another James Hotel in Chicago that is also dedicated to emerging art. At the Surrey, one of its New York hotels, work by established names like Jenny Holzer, Claes Oldenburg and William Kentridge nods to its location on East 76th Street, near major art showcases like the Whitney Museum of American Art.

For more:   http://www.nytimes.com/2010/08/30/nyregion/30hotelart.html?src=me

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