In the hotel industry, few assets are as valuable as a good reputation. This blog explores the primary reputational risks within the sector and how to prevent an incident turning into a crisis.
Direct and Facultative|Reputational Risk Management
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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.
Harm to people on the premises
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.
Hold regular inspections to identify and rectify and potential hazards such as faulty wiring, heating systems, unsafe balconies or slippery surfaces, combined with a programme of preventative maintenance.
Provide safety training for all employees, including emergency response, fire safety and first aid. Make sure your people know to report and escalate safety concerns.
If a safety incident happens, communicate openly and honestly with guests, employees and the public. Acknowledge the issue and outline steps being taken to address it.
Make sure you have access to crisis management specialists to help you deal with the immediate impact of an incident and reduce injuries, losses and reputational damage.
Allegations of unsafe and unhygienic conditions
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.
Review your cleaning procedures, especially in kitchen and dining areas, and carry out regular health and hygiene inspections.
Schedule regular maintenance checks for all systems including air conditioning and plumbing that could lead to hygiene issues.
Strengthen your infection control and hygiene measures to ensure they can prevent incidents and pass unscheduled inspections by health officials.
If a breakout does happen, you will need to demonstrate that you have a plan for managing infections and that you have followed all the relevant protocols.
Discriminatory attacks or abuse on customers
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.
Provide mandatory diversity and inclusion training for all employees including anti-discrimination and cultural awareness.
Make sure your code of conduct is clear you do not tolerate abuse and develop clear procedures to act on reports of discrimination or abuse quickly.
Install surveillance cameras in public areas to deter abuse. Have a damage limitation strategy in place if a video of your employees discriminating against guests appears online.
Monitor social media, so you know what is being said about your business online. This will also help you understand when and how to react if something damaging emerges.
Active assailant attacks
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.
Carry out thorough risk assessments to identify potential vulnerabilities in your security.
Review and strengthen your security measures, including surveillance cameras, access control systems and alarms.
Train your employees in how to identify suspicious behavior and promote a culture that prioritizes security.
Have a clear plan of action if an attack happens and make sure that staff know what to do. Practice this regularly and monitor your readiness.
Establish a dedicated crisis management team responsible for planning, response, and recovery efforts.
Employee abuse
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.
Implement and enforce clear anti-discrimination and anti-harassment policies and make sure they are known and accessible to all employees.
Create confidential reporting channels, including hotlines and online platforms where employees can report abuse without fear of retaliation.
Carry out prompt and fair investigations of abuse claims using trained HR professionals or external experts. Also consider third party audits of workplace practices.
Develop a proactive public relations strategy to address any public concerns and have a crisis communication plan to manage the situation if an incident hits the headlines.
For more smarter strategies to managing reputational risks in the hotel sector, please contact our specialists today.
Disclosure
WTW offers insurance-related services through its appropriately licensed and authorised companies in each country in which WTW operates. For further authorisation and regulatory details about our WTW legal entities, operating in your country, please refer to our WTW website. It is a regulatory requirement for us to consider our local licensing requirements
