Critically evaluate methodologies for achieving risk management Essay

Critically evaluate methodologies for achieving risk management process evaluation and change and comment on the constraints - Essay Example The methodologies for the management of risk in the hospitality industry may be broadly classified as being organisational and financial in nature. The strategies for the management of risks in the hospitality industry may be classified as being defensive, cautious or offensive in nature and these may be dictated by the broad business environment of the day. Risk avoidance, risk reduction or risk transfer are the organisational methodologies for managing risks and their financial counterparts for the management of risks include risk retention, transfer of risk related financial liability and risk repartition in which risks are spread amongst a number of businesses or groups. Whereas a practical organisational strategy is likely to combine a number of techniques to handle risks associated with a hospitality operation, attempts towards the repartition of risks present the best way to deal with situations in a global economy in which the clients of the hospitality industry or the touris ts have a number of alternatives that are available to them. This brief essay attempts to take a look at the methodologies for managing risk in the hospitality industry. Any economic activity is characterised by an associated exposure to risk as a result of the conduct of the activity. Large projects may be exposed to risks associated with delays, cost escalations and exchange rate fluctuations etc. In the hospitality industry, risks may arise as a result of investment risks in ventures, risks arising out of the globalisation of tourism, risks associated with requirements to comply with legal and licensing requirements and health as well as safety risks in establishments. Investment risks and the risks arising out of the globalisation of the tourism industry have to be considered at the time of investing in a new venture and these risks are more of long term or strategic risks in nature. Risks that are associated