Chapter 2: Risk Management Applicable to the Tourism Industry

Tourism is a complex industry that involves a broad range of Risk Managers - specialized in identifying potential causes of
businesses, organizations and government agencies that work accidents or loss, recommending and implementing preventive
together at different levels to deliver a complete tourism package. measures, and devising plans to minimize costs and damage should a
Guidelines to manage the risks confronting the tourism loss occur, including the purchase of insurance. In other words, they
sector: coordinate loss control systems for organizations and businesses which
may include disaster recovery plans and emergency evacuation.
(1) Risk identification, (2) Determination or creation of a
management plan to address risks that could affect the tourism Basic classifications of a risk management plan:
business, (3) Collaboration with the stakeholders, (4) Provide
training for the staff, (5) Test the plan, (6) Provide transparent and Preventive strategy is designed to lessen the possibility of risk
honest crisis communication, (7) The revival of the business after a impact before the risk becomes realized. “The manager usually
crisis, (8) Reposition of the business after a crisis anticipates the coming of the uncertainty so it would post the question
of what they should do as the moment.

Risk identification is the process of determining risks that could

potentially prevent the program, enterprise, or investment from Contingency is designed to address the issue of risk at the time of
achieving its objective.It includes documenting and communicating the happening of the event.
the concern. As a way of risk mitigation, if not avoidance, the
manager should have made an identification of the eminent risks  Risk avoidance is the elimination of hazards, activities and exposures
based on his or her inventory of potential hazards attaching the that can negatively affect an organization's assets. Whereas risk
tourism-related activities. management aims to control the damages and financial consequences
of threatening events, risk avoidance seeks to avoid compromising
 The risk identification could concern any of the following: events entirely.

 1.Natural hazard is an extreme event that occurs naturally and Risk Reduction refers to reducing the risk level through minimizing
causes harm to humans – or to other things that we care about, either the likelihood or the consequence of a specific task through the
though usually focus is on humans. A natural hazard escalates into a implementation of precautionary measures, risk controls or treatments.
natural disaster when an extreme event caused harm in significant
amounts and overwhelms the capability of people to cope and Considerations of Risk Reduction:
respond. 1.Observance of the safety standards
2.Use of safety devices
  2.Civil or political hazards are those that are being confronted 3.Earthquake-proof building/proper waste management system
by investors, corporations, and governments brought about by the 4.Qualification requirements
political decisions may be considered as political hazard. Civil hazard,
on the other hand, are hazards caused by circumstances in the Risk Transfer -risks can also be partially or completely transferred to
society that could vastly affect the society as a whole. Examples: a third party. The burden is shifted from one party to another, from
Trade Barriers, Taxes, Legislation, Administration one individual to another, from an individual to an insurance company,
and Political Instability or from insurers to reinsurers. Risk transfer may be accomplished
through any of the following:
Sex tourism is phenomenon whereby an individual or group of
individuals who would travel to another place would engage in sexual 1.Outsourcing - process which commonly transfers a variety of risks
activity with prostitutes. to a partner. This usually involves a contract between the
management and the provider. May include penalties in case the
Westernization is a process whereby societies come under or project will not push through.
adopt Western culture in areas such as industry, technology, law,  
politics, economics, lifestyle, diet, clothing, language, alphabet, religio 2.Derivatives - financial instrument whose value is derived from the
n, philosophy, and values. value of another asset, which is known as the underlying. When the
price of the underlying changes , the value of the derivative also
3.Technological hazards include industrial pollution, nuclear changes. A derivative is not a product but a contract that derives its
radiation, toxic wastes, dam failures, transport, industrial value from changes in the price of the underlying. Underlying asset
or technological accidents. It is an effect of the globalization of e.g. stocks, bonds, commodities, currencies, interest rates, market
production, an increase of industrialization, and a certain level of risk indexes.
of accidents connected with production, processes, transportation,
and waste management. 3.Contracts - According to Boggs (2017), contractual risk transfer is a
non-insurance risk transfer mechanism that accomplishes the goals of
4.Biological hazards pertain to biological substances that stance a risk financing and risk control.
danger to the health of the living organism, chiefly humans. Also
known as bio-hazards. (THREATS; Virus, Bacteria, Fungi, 4.Insurance - Investopedia (n.d.) has defined insurance as a contract
Parasites) being represented by a policy in which an individual or entity receives
financial protection or reimbursement against losses from an insurance
Two essential risk concepts: company.

Inherent Risk – refers to the exposure arising from a specific risk Risk retention is a company's decision to take responsibility for a
before an action is to be made by a risk manager. particular risk it faces, as opposed to transferring the risk over to an
Residual Risk – is the exposure arising from a specific risk after risk insurance company.
manager has made any, and in case such action has proven useful.
Stakeholders are those  (individual or company) who can affect or be
 The following issues must be addressed well in the risk affected by the strategy or project of an organization. They could have
identification: a wide range of involvements, that are not necessarily related to
ownership or money.

1. The cause of the event

2.Areas of impact  Regulators
3.Enablers
4.Events  Environmental Partners
5.Potential consequences

 Community Groups
Risk management plan is necessary for the conduct of tourism
activities to lessen the possibility of the risk being accomplished or at
least to lessen the impact of the risk at hand. The risk management  Local Authorities
plan contains an analysis of the potential risks together with possible
impact (high and low) and strategies to mitigate the derailment of
the project if the problems would arise.  Contractors and suppliers
 Chapter 2: Risk Management Applicable to the Tourism Industry

 Customers

 Employees

 Investors

 MP’s

 Media

Risk and safety management in the tourism sector is a

continuous process that focuses on ensuring safety of tourists/clients
and staff by efficiently managing operational risks through leadership
commitment, clearly defined responsibilities, roles, processes and
procedures (e.g. Standard Operating Procedures (SOPs), Emergency
Preparedness Plans (EPPs), Incident Reporting), building capacity
among staff with training's; and monitoring of practices and results
with objectives and targets.
A safety drill is a concept or practice of preparing people for an
emergency. It is done through simulation of the actual happening of
uncertainty that may affect the business.

First aid is the assistance given to any person suffering a

sudden illness or injury, with care provided to preserve life, prevent
the condition from worsening, or to promote recovery. It includes
initial intervention in a serious condition prior to professional medical
help being available, such as performing CPR while awaiting
an ambulance, as well as the complete treatment of minor conditions,
such as applying a plaster to a cut.

Risk management process does not stop with the identification of a

solution to a problem and training the staff for the execution of the
plan should the event comes.

The risk management plan must be tested to determine its

strengths and weaknesses to make sure that we could handle the
risks and reduce losses.

Types of Personal Protective Equipment

1. Resprotectioniratory

2. Eye Protection

3. Hearing Protection

4. Hand Protection

5. Foot Protection

6. Head Protection

7. Working from heights

8. Sun Protection

9. Other personal protective equipment