In a hugely competitive business, hotels live on their reputation for service and quality. A single health and safety incident or unfortunate interaction with a guest can gain traction and go viral on social media, leading to serious reputational and financial consequences.
These concerns were underlined in our 2023 Reputational Risk Readiness survey, when customer abuse and bodily injury emerged among the top reputational risks.
Based on the findings of our survey, and our experience of cases and claims, we’ve identified key risks facing hotels – and steps you can take to mitigate them and reduce the damage if they happen.
Rule number one in hospitality is keeping guests safe while they are staying with you. In recent years, hotels have suffered negative press as a result of incidents from fires to carbon monoxide poisoning and falls from hotel balconies.
Companies should strengthen their safety procedures and training to prevent such incidents and manage them better if they do occur.
Companies can suffer serious reputational damage if they are thought to have caused an incident that makes guests ill, or if they fail to manage the situation effectively.
We’ve seen incidents where multiple guests have suffered serious illnesses from legionnaire’s disease to norovirus at hotels either because hygiene standards were not good enough or were poorly enforced.
This is the most preventable, yet common, cause of reputational damage to hotels. There have been numerous cases of alleged discrimination against ethnic minorities, and LBGT+ guests in recent years, as well as cases of abuse of guests by hotel staff.
Hotels have been a frequent target of armed attacks by terror groups and individuals, with many fatal incidents in the last 10 years.
Active assailant attacks were the second biggest concern in our Reputational Risk Readiness survey, reflecting worries that companies could be perceived to handle the situation badly or contribute to a lapse in security.
Abuse or exploitation of hotel employees can lead to negative publicity and reputational damage if the company is seen as causing or condoning the treatment. Even reputable hotels have seen cases of physical and verbal abuse and sexual assault against employees in recent years.
For more smarter strategies to managing reputational risks in the hotel sector, please contact our specialists today.
Iris has over 20 years of construction related insurance industry experience and has held various senior positions with major insurance brokers, focused on construction projects in Hong Kong, Macau, China, Singapore, Malaysia, Vietnam, Indonesia and North Mariana Islands. Iris is always seeking innovative risk transfer solutions for infrastructure, superstructure, hospitality, power and petrochemical projects in the region. Her core expertise includes contentious claims handling, lender advisory, risk analysis, insurance broking, and managing self-retention insurance programs and captives. Iris specializes in driving new business, designing project-specific and annual renewable insurance programs for mega-sized infrastructure and building projects from the construction phase to interfacing with the operation phase.
