Developing a Risk

Management Plan
Components of a Risk Management Plan
Developing a comprehensive risk
management plan is essential for any
business, particularly in the tourism and
hospitality sector, where operations are
complex and guest satisfaction is
paramount. A well-structured risk
management plan helps identify, assess,
and mitigate risks to safeguard the
organization’s assets, reputation, and
operational continuity.
 1. Establish the Context
A. Define Objectives:
Business Goals: Understand the strategic objectives of
your organization. Align the risk management plan with
these goals to ensure it supports overall business
success.
Scope: Determine the scope of the risk management
plan, including which areas of the business (e.g., guest
safety, operational processes, financial stability) will be
covered.
B. Identify Stakeholders:
Internal Stakeholders: Include management,
employees, and departments.
External Stakeholders: Consider guests, suppliers,
regulatory bodies, and the local community.
 2. Risk Identification
A. Identify Risks:
 Operational Risks: Risks related to daily operations such as equipment
failures, supply chain disruptions, and staffing issues.
 Financial Risks: Risks including budget overruns, financial fraud, and
fluctuations in revenue.
 Reputational Risks: Risks affecting the organization’s reputation, such as
negative reviews, media exposure, or ethical breaches.
 Legal Risks: Risks associated with non-compliance with laws and
regulations, including health and safety violations, and employment disputes.
 Environmental Risks: Risks related to environmental factors such as
natural disasters, pollution, and resource depletion.
 Strategic Risks: Risks that impact the achievement of strategic objectives,
such as market changes or competition.
B. Tools and Techniques:
 Brainstorming: Gather input from various departments and stakeholders.
 SWOT Analysis: Assess strengths, weaknesses, opportunities, and threats.
 Historical Data: Review past incidents and near misses for insight.
 Industry Benchmarks: Compare with industry standards and practices.
 3. Risk Assessment
A. Analyze Risks:
Likelihood: Assess how probable it is for each risk to
occur (e.g., rare, unlikely, likely, almost certain).
Impact: Determine the potential consequences if the
risk occurs (e.g., minor, moderate, significant, severe).
B. Risk Matrix:
Create a risk matrix to plot risks based on their
likelihood and impact. This helps prioritize risks and
focus on those with the highest potential impact.
C. Evaluate Existing Controls:
Assess current risk controls and their effectiveness.
Identify gaps where additional controls or
improvements are needed.
4. Risk Mitigation
A. Develop Strategies:
 Avoidance: Change plans to sidestep the risk.
 Reduction: Implement measures to reduce the likelihood
or impact of the risk (e.g., safety training, regular
maintenance).
 Sharing: Transfer the risk to another party, such as
through insurance or outsourcing.
 Acceptance: Acknowledge the risk and decide to accept it,
often with a plan for managing any consequences.
B. Action Plans:
 Assign Responsibilities: Designate individuals or teams
responsible for implementing risk mitigation strategies.
 Set Deadlines: Establish timelines for implementing risk
management actions and controls.
 Allocate Resources: Ensure adequate resources (e.g.,
budget, personnel) are allocated to risk mitigation efforts.
 5. Monitoring and Review
A. Continuous Monitoring:
 Regularly review and monitor risk management activities to
ensure they are effective and up-to-date.
 Use key performance indicators (KPIs) to track the
performance of risk management strategies.
B. Incident Reporting:
 Implement a system for reporting and documenting
incidents, near misses, and risk events. Analyze these
reports to identify trends and areas for improvement.
C. Review and Update:
 Periodically review and update the risk management plan to
reflect changes in the business environment, operations,
and emerging risks.
 Conduct annual or bi-annual reviews, or update the plan
after significant changes or incidents.
 6. Communication and Training
A. Internal Communication:
Communicate the risk management plan and its
importance to all employees. Ensure that everyone
understands their role in managing risks.
B. Training Programs:
Provide training on risk management policies,
procedures, and emergency response protocols.
Regularly update training to address new risks or
changes in procedures.
C. Stakeholder Engagement:
Engage with external stakeholders to ensure they
are aware of risk management practices and
understand their role in the risk management
process.
7. Documentation
A. Risk Management Plan Document:
Develop a comprehensive document outlining
risk management policies, procedures, risk
assessments, and action plans. Ensure it is easily
accessible to relevant stakeholders.
B. Records Keeping:
Maintain records of risk assessments, incident
reports, risk mitigation actions, and training
activities for accountability and compliance
purposes.
8. Example Risk Management Plan
Structure
 Introduction
 Purpose
 Scope
 Objectives
 Risk Identification
 Risk Categories
 Risk Register
 Risk Assessment
 Risk Matrix
 Risk Analysis
 Risk Mitigation
 Mitigation Strategies
 Action Plans
 Monitoring and Review
 Monitoring Procedures
 Review Schedule
 Communication and Training
 Communication Plan
 Training Programs
 Documentation
 Risk Management Plan Document
 Records Keeping
Conducting Risk Assessments
Conducting risk assessments is a systematic
process designed to identify, evaluate, and
prioritize risks to an organization. The goal is
to understand potential threats and
vulnerabilities, assess their impact and
likelihood, and develop strategies to mitigate
or manage these risks. Here’s a step-by-step
guide to conducting risk assessments:
1. Define the Scope and Objectives
 A. Define the Scope:
 Scope of Assessment: Determine which areas, departments,
or processes will be assessed. This could include specific
operational areas, projects, or the entire organization.
 Objectives: Clearly outline what you aim to achieve with the
risk assessment, such as identifying potential risks, evaluating
existing controls, and prioritizing risk mitigation strategies.
 B. Identify Stakeholders:
 Internal Stakeholders: Involve key personnel from various
departments, including management, operations, finance, and
safety.
 External Stakeholders: Consider including external parties
such as suppliers, clients, or consultants, if relevant.
2. Identify Risks
A. Risk Identification Techniques:
 Brainstorming: Gather input from team members and
stakeholders to identify potential risks.
 SWOT Analysis: Analyze strengths, weaknesses,
opportunities, and threats to identify potential risks.
 Historical Data: Review past incidents, near misses, and
losses to identify recurring risks.
 Industry Benchmarks: Research industry standards and
practices to identify common risks and challenges.
 Regulatory and Compliance Review: Check for legal and
regulatory requirements that may impact risk identification.
B. Document Risks:
 Risk Register: Create a risk register to document identified
risks, including descriptions, potential impacts, and causes.
 3. Assess Risks
A. Risk Analysis:
 Likelihood: Estimate the probability of each risk occurring.
Use categories such as rare, unlikely, likely, or almost certain.
 Impact: Assess the potential consequences or impact if the
risk occurs. Use categories such as minor, moderate,
significant, or severe.
B. Risk Matrix:
 Develop a Risk Matrix: Plot risks on a risk matrix based on
their likelihood and impact. This visual tool helps prioritize
risks by showing which risks are high-priority based on their
potential severity and frequency.
C. Evaluate Existing Controls:
 Review Current Controls: Assess the effectiveness of
existing risk management controls and procedures.
 Identify Gaps: Determine any gaps or weaknesses in current
controls that need to be addressed.
4. Prioritize Risks
A. Risk Prioritization:
Ranking Risks: Rank risks based on their
likelihood and impact. Focus on high-priority
risks that have the greatest potential effect on
the organization.
Risk Appetite: Consider the organization’s risk
appetite and tolerance levels when prioritizing
risks.
B. Risk Evaluation:
Cost-Benefit Analysis: Evaluate the potential
costs of implementing risk mitigation measures
against the benefits of reducing or eliminating
the risk.
5. Develop Risk Mitigation Strategies
A. Risk Mitigation Strategies:
 Avoidance: Change processes or plans to avoid the risk entirely.
 Reduction: Implement measures to reduce the likelihood or
impact of the risk (e.g., safety protocols, preventive
maintenance).
 Sharing: Transfer the risk to another party, such as through
insurance or outsourcing.
 Acceptance: Acknowledge the risk and develop contingency
plans to manage its impact if it occurs.
B. Action Plans:
 Develop Action Plans: Create detailed action plans for each
high-priority risk, including specific actions, responsibilities, and
timelines.
 Allocate Resources: Ensure that adequate resources (e.g.,
budget, personnel) are allocated to implement risk mitigation
strategies.
6. Implement and Monitor
A. Implement Risk Mitigation Measures:
Execute Action Plans: Put the risk mitigation
strategies into action according to the established
plans.
Assign Responsibilities: Clearly define roles and
responsibilities for implementing and monitoring risk
management measures.
B. Monitor and Review:
Ongoing Monitoring: Continuously monitor the
effectiveness of risk mitigation strategies and the
status of identified risks.
Review and Update: Regularly review and update
the risk assessment and mitigation strategies to
reflect changes in the business environment,
operations, and emerging risks.
7. Document and Report
A. Risk Assessment Documentation:
Document Findings: Maintain comprehensive
records of the risk assessment process, including
identified risks, assessments, mitigation
strategies, and action plans.
Update Risk Register: Keep the risk register up-
to-date with new risks, changes to existing risks,
and the status of mitigation efforts.
B. Reporting:
Report to Stakeholders: Provide regular reports
to stakeholders on the status of risk management
efforts, including key risks, mitigation actions, and
any changes to the risk profile.
Example Risk Assessment Process
 Define Scope and Objectives
 Scope: Operational safety in hotel facilities.
 Objectives: Identify safety risks, evaluate current controls, and prioritize mitigation
actions.
 Identify Risks
 Risks: Equipment malfunctions, slip and fall accidents, fire hazards.
 Assess Risks
 Analyze: Likelihood (likely) and Impact (significant) for slip and fall accidents.
 Risk Matrix: Plot risks and prioritize.
 Develop Risk Mitigation Strategies
 Mitigation: Implement regular safety inspections, provide staff training, and ensure
proper signage.
 Implement and Monitor
 Implement: Execute safety inspection schedules and training programs.
 Monitor: Track incidents and review safety protocols.
 Document and Report
 Documentation: Update risk register and action plans.
 Reporting: Provide updates to management and staff.
Setting Priorities and Objectives

Setting priorities and objectives in the

tourism and hospitality industry is
crucial for managing risks effectively
and ensuring the safety, satisfaction,
and well-being of guests while
maintaining operational efficiency.
Given the unique challenges and
dynamics of this sector, here’s how to
approach setting priorities and
objectives specifically for the tourism
1. Define Clear Objectives
A. Business Objectives:
 Enhance Guest Experience: Focus on improving guest satisfaction,
comfort, and overall experience.
 Ensure Safety and Compliance: Prioritize guest and staff safety, and
comply with health and safety regulations.
 Operational Efficiency: Streamline operations to reduce costs and improve
service delivery.
 Protect Reputation: Safeguard the organization’s reputation from negative
reviews, incidents, or public relations issues.
B. Risk Management Objectives:
 Minimize Risks: Identify and reduce the impact of risks related to guest
safety, health, and security.
 Ensure Regulatory Compliance: Adhere to local, national, and
international regulations affecting health, safety, and hospitality standards.
 Manage Financial Risks: Protect against financial losses due to unforeseen
events, such as cancellations or economic downturns.
 Enhance Resilience: Develop strategies to recover quickly from operational
disruptions or emergencies.
2. Identify and Prioritize Risks
A. Risk Identification:
 Operational Risks: Equipment failures, staffing issues, supply chain
disruptions.
 Health and Safety Risks: Foodborne illnesses, slips and falls, fire
hazards.
 Reputational Risks: Negative online reviews, media coverage of
incidents, customer complaints.
 Legal and Compliance Risks: Violations of health codes, labor laws,
or other regulations.
 Financial Risks: Revenue fluctuations, economic downturns,
unforeseen expenses.
B. Risk Assessment:
 Likelihood and Impact: Assess the probability and potential impact
of each risk on guest experience, safety, and operations.
 Risk Matrix: Use a risk matrix to categorize and prioritize risks based
on their severity and likelihood.
 C. Determine Risk Appetite:
 Define Tolerance Levels: Establish acceptable risk levels based on
the organization’s capacity to absorb potential impacts without
significant disruption.
3. Develop and Set Priorities
A. Prioritize Risks:
 High-Priority Risks: Focus on risks that could significantly affect guest
safety, regulatory compliance, or operational continuity. For example, risks
related to food safety and emergency response procedures.
 Medium-Priority Risks: Address risks that have moderate impact, such as
staffing shortages or minor operational disruptions.
 Low-Priority Risks: Monitor and manage less critical risks, such as minor
equipment malfunctions or low-impact reputational issues.
B. Define Action Plans:
 Immediate Actions: Develop and implement action plans for high-priority
risks. This might include enhancing safety protocols or upgrading emergency
response systems.
 Long-Term Strategies: Create strategies for medium-priority risks, such as
staff training programs or process improvements.
C. Set Measurable Goals:
 SMART Goals: Set Specific, Measurable, Achievable, Relevant, and Time-
bound goals. For example, “Reduce guest complaints related to food quality
by 15% within six months.”
4. Implement and Monitor
A. Implement Risk Mitigation Measures:
 Execute Action Plans: Implement risk management
strategies according to the defined action plans.
 Assign Responsibilities: Designate personnel or
teams responsible for each risk mitigation strategy and
ensure they have the necessary resources.
B. Monitor and Review:
 Track Progress: Regularly monitor the effectiveness of
risk management actions and track progress towards
achieving objectives.
 Adjust Priorities: Reassess and adjust priorities based
on new information, emerging risks, or changes in the
business environment.
5. Communicate Priorities and Objectives
A. Internal Communication:
 Inform Staff: Communicate risk management priorities and
objectives to all relevant staff members through meetings,
training sessions, and internal communications.
 Provide Training: Ensure staff are trained on risk
management procedures, including health and safety protocols,
emergency response, and customer service standards.
B. External Communication:
 Inform Guests: Share relevant information with guests, such
as safety procedures, health and hygiene practices, and
emergency contact information.
 Engage with Partners: Communicate priorities and objectives
with external partners, such as suppliers and local authorities,
to ensure alignment and cooperation
6. Example: Setting Priorities and
Objectives in Tourism and Hospitality
Scenario: A resort wants to improve guest safety and enhance operational efficiency.
 Define Objectives:
 Strategic Goal: Enhance guest safety and improve operational efficiency.
 Operational Goal: Reduce the incidence of safety-related accidents by 20% within the
next year.
 Identify and Prioritize Risks:
 High-Priority Risks: Fire hazards, foodborne illnesses, emergency response failures.
 Medium-Priority Risks: Staffing shortages, equipment malfunctions.
 Low-Priority Risks: Minor guest complaints, occasional delays.
 Develop and Set Priorities:
 Immediate Actions: Implement improved fire safety systems, enhance food safety
practices, and train staff on emergency response procedures.
 Long-Term Strategies: Develop contingency plans for staffing shortages and establish
routine maintenance schedules for equipment.
 Implement and Monitor:
 Execute: Upgrade fire safety equipment and conduct regular drills. Implement a new food
safety protocol and schedule staff training.
 Monitor: Track safety incidents and guest feedback. Review and adjust practices based on
performance metrics and feedback.
 Communicate Priorities and Objectives:
 Internal: Share safety procedures and operational changes with staff through regular
meetings and training.
 External: Provide guests with information on safety procedures and updates on
 Communication Strategies for Risk
Management

Effective communication
strategies are essential for
successful risk management in the
tourism and hospitality industry.
These strategies ensure that all
stakeholders are informed,
involved, and prepared to handle
risks effectively.
 1. Identify Key Stakeholders
A. Internal Stakeholders:
 Management and Leadership: Ensure that senior management and
executives are informed about risk management strategies and their roles
in decision-making.
 Staff Members: Communicate with employees at all levels about risk
management procedures, their responsibilities, and how they can
contribute to minimizing risks.
 Departments: Coordinate with different departments (e.g.,
housekeeping, food and beverage, front desk) to address specific risks
relevant to their functions.
B. External Stakeholders:
 Guests and Customers: Provide clear information to guests about safety
protocols, emergency procedures, and any relevant risk management
measures.
 Suppliers and Partners: Communicate with suppliers, service
providers, and business partners to ensure they understand and comply
with risk management requirements.
 Regulatory Bodies: Engage with regulatory authorities to stay informed
about compliance requirements and report on risk management
2. Develop Clear Messaging
A. Risk Management Policies:
 Policy Documents: Prepare clear and concise documents
outlining risk management policies and procedures.
Ensure these documents are accessible to all relevant
stakeholders.
 Key Messages: Develop key messages about risk
management objectives, procedures, and expectations.
Use simple, jargon-free language to ensure understanding.
B. Communication Channels:
 Internal Channels: Utilize internal communication tools
such as emails, intranet, newsletters, and meetings to
share risk management information with staff.
 External Channels: Use websites, social media, and
direct communication to inform guests and partners about
risk management practices and updates.
3. Implement Training and Education
Programs
A. Staff Training:
 Risk Management Training: Provide training for staff on
risk management procedures, including health and safety
protocols, emergency response, and customer service.
 Regular Updates: Offer refresher courses and updates on
any changes to risk management policies or procedures.
B. Guest Information:
 Pre-Arrival Information: Send pre-arrival communications
to guests with information about safety measures,
emergency procedures, and health protocols.
 On-Site Information: Display information in guest rooms,
common areas, and at the front desk about safety
procedures, emergency contacts, and risk management
practices.
4. Develop Crisis Communication Plans
A. Crisis Communication Team:
 Establish a Team: Form a crisis communication team responsible for
managing communications during emergencies or risk events. Include
representatives from key departments and management.
 Roles and Responsibilities: Define roles and responsibilities within
the team to ensure a coordinated response.
B. Crisis Communication Procedures:
 Emergency Contacts: Maintain a list of emergency contacts,
including media contacts, regulatory bodies, and key stakeholders.
 Message Templates: Prepare message templates for common crisis
scenarios (e.g., natural disasters, health emergencies) to ensure
consistent and timely communication.
C. Communication Channels:
 Internal Communication: Use internal channels (e.g., SMS alerts,
internal memos) to keep staff informed during a crisis.
 External Communication: Use external channels (e.g., press
releases, social media updates) to communicate with guests, media,
and other external stakeholders.
5. Ensure Transparency and Accuracy
A. Accurate Information:
 Fact-Checking: Ensure that all risk management
communications are accurate and based on verified
information. Avoid speculation or incomplete information.
 Consistency: Maintain consistency in messaging across all
communication channels to avoid confusion and
misinformation.
B. Transparency:
 Open Communication: Be transparent about the risks
and the measures being taken to manage them. Provide
honest updates during and after risk events.
 Feedback Mechanism: Encourage feedback from staff
and guests regarding risk management practices and
communication effectiveness.
6. Monitor and Evaluate Communication
Effectiveness
A. Monitor Feedback:
 Collect Feedback: Gather feedback from staff and
guests on the effectiveness of risk management
communications. Use surveys, suggestion boxes, or
direct feedback methods.
 Analyze Responses: Analyze feedback to identify
areas for improvement in communication strategies.
B. Evaluate Performance:
 Assess Effectiveness: Regularly review the
effectiveness of communication strategies and make
adjustments as needed.
 Update Plans: Update communication plans based on
lessons learned from feedback and past risk events.
7. Example Communication Strategies in
Practice
Scenario: A hotel is preparing to implement new health and safety measures due to a local
health advisory.
 Identify Key Stakeholders:
 Internal: Hotel staff, including housekeeping and front desk teams.
 External: Guests, local health authorities, and suppliers.
 Develop Clear Messaging:
 Policy Document: Prepare a document outlining new health and safety measures.
 Key Messages: Communicate the importance of these measures for guest and staff safety.
 Implement Training and Education Programs:
 Staff Training: Conduct training sessions on new health and safety protocols.
 Guest Information: Send pre-arrival emails to guests informing them of the new measures.
 Develop Crisis Communication Plans:
 Crisis Team: Establish a team to manage communications in case of a health-related incident.
 Message Templates: Prepare templates for communicating about health advisories and emergency
procedures.
 Ensure Transparency and Accuracy:
 Accurate Information: Provide up-to-date information based on official health guidelines.
 Feedback Mechanism: Set up channels for guests and staff to provide feedback on the new
measures.
 Monitor and Evaluate Communication Effectiveness:
 Collect Feedback: Use surveys and direct feedback to assess guest and staff reactions.
 Evaluate: Review feedback and adjust communication strategies as needed.
THE END