Risk ManagementA Special Presentation for SGMP

James M. Goldberg

It’s more than just insurance

It’s the process of selecting and implementing countermeasures to achieve an acceptable level of risk at an acceptable cost

What is Risk Management?

Unanticipated occurrences◦ Accidents/negligence◦ Criminal activity/terrorism◦ Acts of God (e.g., weather)◦ Other (e.g., strikes)

Statutory/regulatory◦ Permits/licenses◦ Americans with Disabilities Act◦ Taxes

What Risks Does a Planner Face?

Self-assumed (e.g., contracts)◦ Attrition◦ Cancellation◦ Food and beverage minimums◦ Other provisions

What Risks Does a Planner Face?

Risk assessment Risk analysis Risk planning Risk control Evaluation and improvement

Risk Management is a Process

Answer these questions◦ What/who is exposed to loss?◦ What could cause a loss?◦ Who would suffer a loss?◦ What are the consequences?

Risk Assessment

Prioritize possible risks◦ Probability of occurrence◦ Consequences

Quantifying uncertainty◦ Is there historical data?◦ Comparable events?◦ Other events in same location?◦ Specific characteristics of this event?

Risk Analysis

Draft a risk management plan◦ Involve all stakeholders◦ Budget◦ Identify triggers for action◦ Coordinate with venue◦ Communicate to all, including attendees

Risk Planning

Risk planning produces:◦ Pre-defined action steps◦ Triggers for the action steps◦ How/what to monitor in order to trigger the action

steps◦ What the contingencies are

Risk Planning

Implementation of the plan◦ Brief all personnel prior to the event

Who/where to report problems Location of emergency facilities

◦ Make attendees aware of what to do Look for easily identifiable event staff

◦ Dealing with the media Tell the whole story quickly, but accurately Pre-selected spokesperson

Risk Control

Post-conference debrief◦ Underestimated risks◦ Overestimated risks◦ Plan for improvement

Correct for next day Correct for next event

Evaluation and Improvement

Reduce it◦ Don’t do dangerous things◦ Plan exposure carefully

Transfer it◦ Let the other guy handle it◦ Use contract provisions

Insure it◦ Protect financial assets (private sector)

Once Identified, How is Risk Managed?

Understand the market◦ Yours and theirs

Plan conservatively◦ Do not assume steep growth curve

Understand what you are signing◦ Hotel “standard” does not mean non-negotiable

Managing Risks in Contracts

“If it walks like a duck…”◦ Title of document is not important

Understand government contracting rules◦ What you can and cannot pay for◦ Understand hotel profit centers

Contract Issues

Attrition Cancellation Force majeure Indemnification Dispute resolution

Contract Issues