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Running Header: RISK MANAGEMENT
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Front Office Risk Management
Yamilette Albertson
MGT/455
Nov. 6, 2017
Robert Preble
RISK MANAGEMENT
2
RISK MANAGEMENT
There are three major risk management methods namely risk control, risk finance and
risk transfer. These can be further classified into loss retention and risk transfer with loss
retention composing of both risk finance and risk control. Loss retention simply refers to the fact
that the losses incurred will be accrued by the resort or hospitality establishment. Loss transfer
involved risk transfer where a resort can transfer losses acquired to other parties. When risk
control is used, it is meant to reduce the cost of losses that can be acquired by reducing the
frequency and possibilities of these losses happening. Risk finance, on the other hand, refers to
the different methods used to obtain funds that will be used to cover losses acquired. An example
of risk transfer can include covering the resort facilities with insurance before any losses happen
(Mauri, 2013).
Implementing risk management resources is one of the hardest tasks; therefore, it would
be of great importance that a few things are taken into consideration. These resources must be
designed to focus on the business processes; therefore, they must be complementary to effective
risk analysis and be the basis of the risk information analysis methodology of an organization. It
is also important that in choosing the methodology of information risk analysis an end-to-end
risk analysis process is followed, and this would involve preparation, risk evaluation, business
impact assessment, vulnerability assessment, risk treatment and threat assessment (Leung, 2013).
FRONT OFFICE
One of the major areas of risk management in resorts is the information systems. The
privacy and security of guest’s information is one of the most crucial areas of the business and
could cause huge losses and damages to establishments. Problems involved with guest
information leakage would include lawsuits from guest as well as a tarnished public image. It is,
RISK MANAGEMENT
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therefore, crucial for hospitality establishments to ensure this privacy and information security.
The rise in cybercrimes has prompted most organizations including those in the hospitality
industry to ensure they put in place measures of cybersecurity. Every resort uses information
systems which are used to make reservations and ensure that the correct billing is done for each
guest rooms. To ensure that guests' data are not stolen from these systems, it would be crucial for
every resort to ensure they have proper security measures (Leung, 2013).
These measures could include encryption of file which ensures that information has an
extra layer of security. Access control is also a major area that every front office must embrace.
Access control is used to ensure that only the right and authorized people can access the
information in the hotel systems. This would ensure that guest information such as credit card
details and room numbers are only available to the authorized personnel in the hotel. Access
control would also include the use of electronic devices to give guests access to their rooms and
other facilities. This ensures that anyone else without the access cannot enter the guest rooms.
Access control would also ensure that different personnel within the hotel only have access to the
information that is useful to them (Leung, 2013).
Risk management in the front office is also done through risk finance. There are
numerous risks involved in the front office. The front office is responsible for checking in and
checking out the guests; therefore, it is of high importance that these processes run smoothly.
The billing process can be a major concern when it comes to checking in and checking out. To
avoid guest from checking out without paying several strategies must be put in place. Obtaining
credit card information from a guest is important since it makes sure that the guest has a way of
paying his bills and that in case of anything one could always use the credit card details for
security reasons. In the case where credit cards are not available, it is highly recommended that
RISK MANAGEMENT
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the guests pay fully in cash to avoid inconveniences. Security measures involved in check-ins
involve obtaining the correct information about the guests that are staying at the resort. The
correct guest information is very useful in establishing that the guest boarding in the resorts are
not criminals or do not possess any security risks (Ahmad, 2014).
The front office is also responsible for coordinating other billings apart from boarding
that guests acquire from the different departments of a resort. This interdepartmental
interrelationship can cause major issues if the billings form each department are not put together
correctly. To ensure that this type of error does not occur, it is therefore very important that the
information systems designed in resorts are customized in a way that fits each establishment with
its differences. Acquiring an information system does not only require it to be functional but also
flexible and able to be customized to fit the different needs of an organization. It would,
therefore, be very important that the billing systems of the resort are designed to obtain different
billings from different departments for a certain guest and able to compile these billings together
so that the final billing at the front office can be inclusive of everything to avoid losses (Mauri,
2013).
In light of this issue, it would, therefore, be of great importance that all the employees of
the resort undergo a thorough training on the use of the information systems to ensure that they
are knowledgeable and equipped with the right skills to implement the information systems. This
also ensures that fewer or no errors are occurring over the use of these information systems. The
front office is also responsible for handling all customer complaints and issues. One of the risk
management strategies that front office could establish is making sure that they choose a front
office staff with the right skills to handle customers. This would include staff who can think on
their feet when faced with problems and possess great problem-solving skills. Great
RISK MANAGEMENT
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interpersonal skills are also required in handling guests especially when they have complaints.
Front office staff also need to be highly informed of the resorts facilities, services and products
as well as other external things that guests may be interested in such as sights to visit, cinemas,
and car rental services among others (Ahmad, 2013).
CONCLUSION
Information and data management in the front office is among the major concerns of
every hospitality establishment, therefore, additional measures could include backing up data and
the storage of crucial documents off the establishment. Training employees on the proper use of
information systems and emphasizing the importance of guest information privacy would also go
a great way. With cybercrime and information theft on the rise, it would also be very important
to emphasize on practicing proper information equipment by employees to avoid leaving
loopholes that can be used for hacking such as not logging in or using easy passwords that can be
easily guessed.
RISK MANAGEMENT
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References
Ahmad, R., & Scott, N. (2014). Managing the front office department: Staffing issues in
Malaysian hotels. Anatolia, 25(1), 24-38.
Leung, R., & Law, R. (2013). Evaluation of hotel information technologies and EDI adoption:
The perspective of hotel IT managers in Hong Kong. Cornell Hospitality Quarterly,
54(1), 25-37.
Mauri, A. G. (2013). Hotel revenue management: Principles and practices. Pearson Italia Spa.
Running head: RISK MANAGEMENT METHOD
Risk Management Method
Yamilette Albertson
MGT/455
Nov. 13, 2017
Robert Preble
1
RISK MANAGEMENT METHOD
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Front Office Department
The front office of the hotel and resort business has a lot of roles that they play. It should
be noted that the front desk in a hotel or resort is an area that has a lot of hotels activates involving
paperwork and streamlining of company’s check in and check out procedures. This means that this
is the point where guests visit when they first visit the resort and when going out of the resort after
their stay (Ahmad & Scott, 2014). The nature of the activities that go on at the front office
determines their liability. Hence before pointing out the responsibilities, it is significant to mention
the events at the front desk. For starters, the front office is the place guests’ check-in, and this
means that most payments procedures are done at the front office. In case the resort is using cash
payments, they will always be done at the front desk, and if the hotel uses other means of payment,
then the verification will also happen at that very point. Secondly, at the front office is where the
guests’ information is kept such as who they are, which rooms they have taken as well as other
relevant information regarding their stay.
Front Office’s Liabilities
What the above information is making evident is that the front office has a data-keeping
obligation. When guests check in, their names, nationalities, and all the necessary biodata are kept
at the front desk. As seen, it is the place where guests check in and so these are crucial information
needed by the hotel (Leung & Law, 2013). Secondly, the front desk is also the station where the
payments take place and so the financial information regarding the company is also at their
disposal. This only means that the front desk is liable for keeping guests’ data as they check in and
resort’s financial data when guests are paying. Finally the same happens when the guests are
checking out and so, verification of payment is the responsibility of the front desk department.
Potential Areas of Negligence
RISK MANAGEMENT METHOD
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Based on the liabilities of this department it is possible to point out that the unit can be
faced with potential negligence in the overall data keeping. It is possible for a careless front office
department not to secure the information involving the guests.it is also possible that if the workers
at the front desk are not careful, accounting for finances may be a challenge (Rutherford, &
O’Fallon, 2007). Also in connection with funds, negligence can be registered during the check out
for the guests so that some guests may leave without making full payments for the services that
they have used.
Potential Litigation and Losses
Based on the above information on the possible negligence, it can be deduced that the
mentioned negligence can cause severe litigations and losses (Rutherford, & O’Fallon, 2007). Take
for instance a careless keeping of the guest's information may lead to crucial guests’ data landing
in the wrong hands. Say, for instance, a guest’s name and personal information may be stolen by
malicious individuals. This can lead to a lawsuit against the resort. Secondly, negligence in keeping
financial data can also lead to loss of money through fraud or through guests who may check-out
without paying for services.
Department's Legal Duties in Reducing Risks of Liability for Guests and Employees
The first legal duty is that the department of the front office has in protecting lowering
dangers of accountability for the employees, and the guests are first, efficient training for the
employees in the unit. Employees when well-trained can know how to handle guest information
as well as the resort’s information and as such they can overcome negligence that then reduces the
risks of liability (Leung & Law, 2013). Secondly, the department should purchase and implement
practical tools of work that can ensure efficiency in the operation and security of data so that risks
of liability are reduced.
RISK MANAGEMENT METHOD
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Summary
Front office ion the resorts have two key activities that take place, and this is guest checkin and checks out as well as financial verification before guests settle to get the company’s services.
For this reason, the department is responsible for securing guests’ information and also tracking
and updating the finances of the company. With such duties, the department might be negligent in
securing guests’ information or tracking and accounting for finances. Such negligence can lead to
legal suit if a guest’s information lands on wrong hands or they may lose finances if they do not
protect the payments and account for funds. To protect from these liabilities, the company is
responsible for initiating training to ensure efficiency of employees as well as employing relevant
tools of work that can help in increasing productivity and increase proper and secure way of
keeping vital information.
RISK MANAGEMENT METHOD
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References
Ahmad, R., & Scott, N. (2014). Managing the front office department: Staffing issues in
Malaysian hotels. Anatolia, 25(1), 24-38.
Leung, R., & Law, R. (2013). Evaluation of hotel information technologies and EDI adoption:
The perspective of hotel IT managers in Hong Kong. Cornell Hospitality Quarterly,
54(1), 25-37.
Rutherford, G., D., & O’Fallon, J., M., (2007) Hotel Management And Operations(Fourth
Edition) John Wiley & Sons, Inc. Canada.
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