Intro to Tourism & HospitalityChapter 11

Copyright

Introduction to Tourism and Hospitality in BC by Morgan Westcott, Editor, (c) Capilano University is used under a CC-BY 4.0 International license.

This chapter is by Don Webster and is used under a CC-BY 4.0 International license.

Learning Outcomes

Define the concepts of risk and risk management

Apply the four steps of a risk management process to a tourism operation

Identify potential liabilities and develop strategies to minimize the impact of these

Identify the four elements of a negligent action

Describe the components of a valid contract under Canadian contract law

Appraise statutory requirements for a tourism or hospitality operator in BC

Demonstrate a working knowledge of occupational health and safety in tourism

What is Risk Management?

Risk: the potential for loss or harm (CTC, 2003a)

Can be financial, property damage, or injury to staff or guests

Risk management: practices, policies, procedures designed to minimize risk (Cloutier, Heshka & Jackson)

Figure 11.1: Signage indicates a risk

Why Practise Risk Management?

Reduces the likelihood of an unwanted and unplanned event

Reduces consequences of the event

Enhances ability to access cost-effective, comprehensive insurance

(CTC, 2003a)

Figure 11.2: Media attention after risk

Concepts of Risk

Real risk: actual statistical likelihood of an incident occurring (not ambiguous, not subjective)

Perceived risk: perception of risk by those undertaking, or evaluating, an activity (very subjective)

Inherent risk: risk that must exist for the activity to take place (e.g. risk of drowning when swimming)

Risk Management Process

1. Risk identification

2. Risk analysis

3. Risk control

4. Risk treatment

(CTC, 2003a)

Figure 11.3: Ambulance outside a Vancouver hotel

Risk Identification

On-site inspections

Discussions with management and staff

Review of products, services, processes, and contracts

Review of historical activities and losses

Identification of possible risk scenarios

Risk Analysis

Compares the probability (frequency, likelihood) of risks occurring by the consequence if they do happen

Can be either a number (quantitative) or a statement (qualitative)

E.g. probability of a ski lift failing is low, but consequence could be extremely high

If the probability is unacceptable, the consequence is unacceptable, or the combination is unacceptable, then risk control is needed

Risk Control

Exposure avoidance: mitigation to avoid exposure to the risks (e.g. cancelling a tour in bad weather)

Loss reduction: acknowledge the risks but take steps to mitigate the severity (e.g. requiring ski students to wear helmets – they can still fall, but damage will be less)

Figure 11.4: Safety equipment for ziplining

Risk Treatment

If you can’t control the risks, you have to treat the risks

Risk transfer: puts the responsibility on another party (through a contract or through insurance)

Risk retention: choosing to retain the risk

Tort Law and Negligence

Tort law: “body of the law which will allow an injured person to obtain compensation from the person who caused the injury”

Intentional torts: assault, battery, trespass, false imprisonment, nuisance, defamation

Unintentional torts: negligence

Figure 11.5: The plaza at BC’s law courts

Negligence

“The omission to do something which a reasonable man … would do, or doing something a prudent and reasonable man would do” (Cloutier, 2000)

Four things you need to provde for successful legal action:1. Injury2. Duty to care 3. Breach in the standard of care4. Causation

Contract Law

Contracts include agreements for service, employment, rental agreements, legal releases (waivers)

Must have: Offer and acceptance Consideration (value) Capacity to sign (legal age,

etc.)

Figure 11.6: Signing a contract

Waivers

Transfers acceptance of risk to participants by: Requiring them to

acknowledge the risk Waive right to take legal

action if an accident occurs

Waivers have failed when not written or correctly delivered

1. Clear outline of risks

2. Waive the participant’s right to pursue legal action

3. Easy to read (short) with a spot for signature and witness

4. Signed only when given ample time to read and understand

Statutory Requirements for BC - Hotels

Hotel Keepers Act Can place a lien on guest property for unpaid bills Limits liability of hotel keeper in case of theft or

damage of guest property Allows hotel keeper to require guests to leave in

event of a disturbance

Hotel Guest Registration Act Requires hotel keepers to register guests properly Must note arrival and departure date, home

address, type and license of any vehicle

Statutory Requirements for BC - Liquor

Liquor Control and Licensing Branch (LCLB): regulates sale and service of alcohol in BC

Liquor Control and Licensing Act, includes: Legal drinking age in BC (19 years of age) ID requirements Restrictions on minors Serving in a restaurant (age 16 with provisions) Consuming alcohol in public Bringing a bottle of wine to a restaurant

Statutory Requirements for BC – Travel

Business Practices and Consumer Protection Act: Travel Industry Regulation Licensing Financial reporting Provision of financial security of travel sales Requires licensed travel agents to contribute to the

Travel Assurance Fund (compensates if travel provider goes out of business)

Statutory Requirements for BC - OLA

Occupiers Liability Act: applies to any business that occupies a premise (building, resort, property)

Defines a premise

Defines duty of care of occupier for condition of premises, activities on property, conduct of third parties

Figure 11.7: Abandoned hotel

Statutory Req – Resort Communities

Resort Associations Act Provides funding for the promotion of resort

communities Creates association structure Allows funding through member fees for marketing,

special events, signage, and serving as a booking service

Resorts must be within a designated region, have alpine ski lifts, and provide year-round recreation

Insurance

Commercial general liability (CGL): cover operators for liability of an accident occurs- bodily injury, medical payments, personal injiry

Property insurance: covers loss of assets such as buildings, equipment, merchandise

Accounts receivable insurance: covers if a customer fails to pay due to default or insolvency

Self insurance: company retains the risk (because they can’t get, or can’t afford coverage)

Occupational Health and Safety

WorkSafeBC is an independent agency managed by a board appointed by government

Average of 6,505 tourism and hospitality WorkSafeBC claims every year

Over $32 million paid out in claims

Figure 11.8: Workplace injury ranges from the minor, to the serious

Employment Standards Act

Defines legal requirements around employment Minimum wage Breaks Meal times Vacation pay Stat holidays Age of employment Leave from work

Conclusion

Risk management is complex

Involves: Adhering to stat requirements Taking steps towards occupational health and safety Undertaking analytical approach to mitigating

liabilities

Failure to do so can result in damage to reputation or property, fines, lawsuits – or most tragically, injury or death to guests or staff

References

British Columbia Ministry of Justice. (2015, April 15). Law basics – Liquor licensing in BC – Liquor Control and Licensing Branch. Retrieved from www.pssg.gov.bc.ca/lclb/LLinBC/basics.htm

Canadian Tourism Commission (CTC). (2003a). Risk management guide for tourism operators. Ottawa, ON: Fitzgerald, P.

Canadian Tourism Commission (CTC). (2003b). Insurance tutorials for outdoor tourism operators. Ottawa ON: Valade, G.Cloutier, 2000

Cloutier, R. (2000). Legal liability and risk management in adventure tourism. Winnipeg, MB: Hignell Printing.

Heshka, J. & Jackson, J. (2011). Managing risk: Systems planning for outdoor adventure programs. Palmer Rapids, ON: Direct Bearing Incorporated.

Attributions

Figure 11.1 Turbulent Flows by Curtis Perry is used under a CC BY-NC-ND 2.0 license.

Figure 11.2 Larry O’Brien Verdict press core-0219 by David Carroll is used under a CC BY 2.0 license.

Figure 11.3 Not a good thing to move from a hotel room to a hospital room by Canadian Pacific is used under a CC BY-NC 2.0 license.

Figure 11.4 Carabiner by Alberto is used under a CC BY-SA 2.0 license.

Figure 11. 5 2014 – Vancouver – Red Spring – Provincial Law Court Plaza by Ted McGrath is used under a CC BY-NC-SA 2.0 license.

Figure 11.6 Day 207: I’ve Contracted An Agreement by Juli is used under a CC BY-NC-ND 2.0 license.

Figure 11.7 Motel No Mo’ by Jerry Bowley is used under a CC BY-NC-SA 2.0 license.

Figure 11.8 Autsch !!! by Franz Walter is used under a CC BY-NC-SA 2.0 license.