By, Guy Gioino, CSP, ARM, CHMM, ABCP, Senior Vice President, Risk Services Division

Hospitality businesses face myriad risks. With an industry business model based on public consumption, individuals from diverse demographics are both employees and customers.

Employers regularly face risks associated with wage and hour disputes, sexual harassment and discrimination, but may also face more extreme threats associated with civil unrest, terrorism, and cyber security. Your brand’s reputation can change in the blink of an eye, as reviews in social and conventional media can influence public opinion almost instantly.

That’s essentially what happened to Starbucks' brand after a video of two men arrested at a Pennsylvania Starbucks last year went viral. The video, and the related online rage it prompted, sparked protests across the country that led to public apologies by Starbucks and the subsequent temporary closure of 8,000 stores across the U.S. for special racial bias training for employees. This illustrates that it only takes one well-publicized negative consumer experience to push an established hospitality business into crisis.

What happens when something beyond your control puts your brand and reputation on the line? As a reputable hospitality business, what can you do to protect yourself?

Here are three ways to prepare your hospitality business to effectively manage a crisis:

  1. Perform a “What If” analysis. Look at the potential threats to your organization and rank the risks. What is the most likely event that could have the most severe impact on your business? Maybe it’s an active shooter event, a fire, a natural hazard such as a hurricane or a simple dispute between a customer and employee. Let the “What If” analysis inform an all hazards approach to identifying, assessing, and mitigating risks to the business at the corporate and branch level.
  2. Pre-crisis planning. Write solid protocols for new employee on-boarding and training, and monitor 90-day probation periods for any incidents that arise. Include protocols on when incidents get elevated from a local level to regional, national or the CEO’s desk. Embed the escalation and facts collection procedures in the incident investigation protocol and identify what would trigger a public statement. Your plan should identify a specific team member in charge of handling public relations during a crisis.
  3. Pre-script media relations messaging. Have a media relations statement prepared in advance that can be applied to multiple scenarios. This is the best way to ensure your business has the right response at the right time.

Responding immediately with the right words is critical to maintaining your brand’s reputation and it is the one thing many hospitality businesses fail to do well during a crisis.

Here are three best practices for your crisis response:

  1. Be as factual as possible. Don’t put information out there for the public to digest that isn’t 100% true or relies on inferences. It is better to say, “We’re still assessing the situation” than to make a mistake. If you do so, make sure to state a specific time you’ll release the next statement with your findings. Follow this rule of thumb: No comment equals a negative response. Put a statement out within 24-48 hours of the crisis.
  2. Look in the mirror. Conduct an internal after-action review to consider what went well and what opportunities for improvement exist. Share this information publicly to instill shareholder and consumer confidence. The direct approach is always the most effective.
  3. Re-evaluate current systems and protocol. While we wish robust policies and procedures would eliminate all risks and prevent bad things from happening, unfortunately, they will not. Learning from critical events and putting lessons learned into effect means first understanding whether an incident is an isolated event or requires a revamp of our training protocols. Organizations need to be proactive and strive for continual improvement in their ability to manage a crisis, not just implement a one-time lesson that’s never discussed again.

Contact your HUB hospitality specialist to find out how you can institute these best practices when determining how to manage a crisis, and ultimately best transfer your risk to the right coverage.