What is Hotel Risk Management?Published December 10, 2019 • < 1 min read
Hotel risk management entails identifying, evaluating, prioritizing, and controlling risks to enterprises in the hotel industry. Hotel management faces several types of risk:
- Operational risk to day-to day operations
- Project risk, encountered when building or expanding a hotel
- Strategic risk, to the hotel’s ability to achieve strategic objectives
- Security risk, including cybersecurity
Hospitality businesses including hoteliers face the same risk management process as those in other industries, starting with a risk assessment and including decisions about whether to avoid, mitigate, or accept the risks that assessment reveals.
But hotel owners do face risks unique to the hospitality industry. Cybersecurity can be especially challenging. Renting hotel rooms to travelers from around the world means collecting personal data and payment card information from many people and businesses every day, and hackers are eager to exploit that data. Marriott International, Hilton, Hyatt, and Holiday Inn have all been victims of cyberattacks, and have revamped their risk management strategies.
Although there is no risk management framework specially developed for the hospitality industry, a number of frameworks are beneficial for secure hotel management. These include:
- Payment Card Industry Data Security Standard (PCI DSS), compliance with which is required for all who store, process, or transmit payments by credit or debit card
- General Data Protection Regulation (GDPR) for those processing the personal data of European Union residents
- California Consumer Privacy Act (CCPA), for hotels processing the personal data of California residents or those with locations in California.