Being prepared when certain things occur during times of uncertainty
Risk and uncertainty are intrinsic characteristics of all businesses and the hospitality industry is no exception. To begin, let’s look at a simple yet universal and conceptual definition of risk. ISO 33000.2018 defines it as: “Effect on uncertainty on objectives” – where objectivity may be safety related, performance related, related to failure or reduction on sales growth. It means that any effect due to any cause, which leads to deviation from expectations…is risk.
The whole concept of risk-based thinking relies on the reaction to uncertainty and that’s where uncertainty management comes into the picture. Uncertainty, according to the Cambridge English dictionary, is defined as “A situation where something is not known.”
Operating a hotel by combining bricks and cement with people and technology to create value, for both consumers and other stakeholders is a complex operation. While business can be good for prolonged periods, there’s always a possibility of a crisis deeply disrupting operations – even threatening the organisation’s survival.
When fundamentals such as safety, security, stability and free passage of people come under threat, the uncertainty it brings affects the performance of not only hotels, but the entire hospitality industry such as airlines and travels companies. These crises may be caused by natural catastrophes, political, economic, and terrorist or health and safety –related upheavals. What all this does, is alter the ways consumers behave.
For instance, the recent Covid-19 pandemic globally shifted towards heightened contactless services, increased emphasis on cleanliness and hygiene, and a distinct preference for outdoor spaces. Even sudden demand shocks from game-changing technological advances can cause business disruption.
Uncertainty, like change, is a constant. Expect the unexpected even in times of peace and tranquility. We live on a geologically active planet where earthquakes and tsunamis have always occurred, within all oceans and impacting all continents. On average, two tsunamis cause damage near their source each year. Tsunamis that cause damage or deaths on distant shores (more than 1,000 kilometers away) occur about twice per decade.
And yet, we chose to ignore the peril it can cause to those living in coastal areas – perhaps due to memory fade or ignorance. It took the Indian Ocean tsunami of 2004, followed by one that stuck the east coast of Japan in 2011, to raise tsunami awareness worldwide.
Hotels will need to prepare for the unforeseeable and to be agile enough to respond to new opportunities. This begins by including the gambit of a risk management framework that identifies all the known socio- economic, political, and environmental and natural / man-made forces at play; followed by catagorising and quantifying the principal threats that can befall from each of them. This is the first stage of developing a risk management strategy. Then follows the need to plan appropriate responses – depending on the severity of the identified shocks and threats’, including those that have as yet not been encountered.
Been also prepared with a Recovery plan that addresses not just how to survive a crisis, but also the wherewithal on how to capitalise on new opportunities that surface after overcoming the threat will help hotels emerge as winners. Staying resilient throughout the whole process is paramount that we Sri Lankans, especially those in the hospitality industry who endured a devastating civil war from 1983 to 2009, are resilient has become a cliché. Every time there was an attack or other disruption, it came as no surprised by how quickly the bars and clubs filled up the next evening.
Shafeek Wahab -- Editor, Hospitality Sri Lanka, Consultant, Customer Service Trainer and Ex-Hotelier
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