Risk as opportunity: Leveraging financial risk management for business growth

The way you manage risk can make or break your hotel – here's how to use it to maximise commercial performance.

Embracing risk management can hold the key to successful growth for hotels and resorts. But unlocking this rich source of untapped potential requires the right approach – and a firm handle on your data.

Risk management is more integral to the hospitality industry than ever before. While it has always been seen as a necessary evil, the process of managing risk is increasingly crucial as technology advances, the industry grows, and guest expectations evolve. As such, it is now a source of untapped potential for hotels and resorts all over the globe – and, far from just due process, it can hold the key to successful growth and expansion during competitive economic times.

However, many hotels find that there’s a missing link: data. A robust set of risk management and compliance practises can work wonders for driving innovation and growth. But putting these protocols in place is near impossible without getting a handle on the reams of data your hotel processes every day. So, let’s have a look at how analysing data around risk management and compliance can unlock opportunities to maximise commercial performance.

Maximise profitability by taking better risks

Risk is inherent in any industry and is simply part and parcel of doing business. But hoteliers face an additional challenge due to the high number of moving parts required to sustain efficient every-day operations across a portfolio of hotels and resorts, such as intricate supply chains and staff schedules. Those in hospitality can find themselves reluctant to make certain decisions, even when they are likely to yield positive results. After all, there are few industries where a business is judged so greatly on review channels from its customers.

Thankfully, there are ways to ensure that the risks you do take have an extremely high rate of success. By integrating your hotel’s information into new cloud-based solutions, you can get access to intuitive and relatable dashboards that act as a window into your current level of risk based on specific triggers in your hotel in real-time. This gives you the power to investigate a decision’s potential impact on commercial performance before choosing that path, ensuring that guest expectations can still be met and resources are deployed in the most profitable way possible.

Simulate scenarios to plan ahead for anything

Every hotel plans ahead for the year, but how do you know if the plans you’ve made are the best use of your staff’s time, the unique features of your venue, and the resources available at that time? As the hospitality industry becomes increasingly competitive, guesswork is no longer going to cut it. It’s easy to assume the plans you manually decided upon are the best possible route, but this can lead to playing it safe – and falling behind competitors as a result.

To remove doubt when it comes to choosing a new direction for the road ahead, there are now ways to run simulations of different scenarios to see how they would likely play out at the hotel’s current level of performance. For example, what would happen if your hotel accepted a large last-minute event booking during its busiest season?

By analysing historical data about hotel performance, new solutions allow you to demonstrate how each scenario would pan out, with the ability to tweak different aspects to raise the likelihood of success – maybe that event could cause friction on the current staff timetable, but what would happen if you hired an external catering team to lighten the load, or were able to ensure that leisure facilities remained safe to use by implementing maximum capacity limits?

Make maintaining compliance easy

Maintaining regulatory compliance is an increasingly complex undertaking, particularly when dealing with a global suite of hotels and resorts. It may be one of the less exciting aspects of risk management, but the risks of getting it wrong are huge. For example, the average cost of a data breach incident for hospitality businesses in the U.S. was around $3.4m – and when almost a third (31%) of those in the hospitality industry reported experiencing a data breach, it’s wise to ensure your data protection protocol is up to scratch to avoid reputational damage and worse.

From digital privacy to alcohol regulation, keeping on top of changing compliance requirements across every environment your hotel operates in can be simple with the right tools. New hotel management systems can help with this by using your data to establish which compliance measures are required for your hotel. They can then monitor regulatory developments and notify you when changes are necessary, or even make the changes automatically. This way, you can ensure that compliance is always maintained with minimal input from your teams required.

Winning the future with data

It’s time to take risk management from performative to powerful. By leveraging smart new solutions, your hotel can foster a culture of responsible risk-taking, leading to a more profitable, successful, and agile business overall. You've already got the data at your fingertips, but having the right technological tools to plug it into can be the difference between surviving and thriving.

Discover how to boost financial performance with data in our new infographic. Download now.