A sophisticated attitude to risk management can help drive hospitality businesses’ long-term success.

Most hospitality companies have business continuity and disaster recovery plans. While these are important, there’s a different approach to managing risk that allows businesses to view it as an opportunity for success.

Xenia’s newly appointed Risk Advisor, Gavin Love, is an experienced risk professional with over 28 years in the field. He provides risk advice to Xenia Mutual which offers protection for risk-mature hospitality businesses.

“I’m part of the Xenia Management Team and my focus is on liaising with The Board and mutual members about how we can better understand their risks. This involves identifying the necessary factors that will help them to achieve their strategy and operational plans,” says Gavin.

Having worked around Australia and across the world, in multiple industry sectors, Gavin says practical risk management begins with one common element. “Start by asking questions,” he recommends.

Differing thinking

At Xenia, risk management starts with exploring the business’s focus for the next one, three and five years. The idea is to identify factors that may stop the business from achieving its ambitions, as well exploring how to achieve those goals quicker.

Gavin explains the process of understanding risk is the same regardless of the industry in which the business operates.

“The key difference is the knowledge, skills and experience of the people in the business. Our role as advisers is to collaborate with the people in the business to better understand the challenges they face now and may face in the future. We tie together the knowledge of the past and present with the uncertainty of the future to form a view of the future.

“What’s key is to make risk useful. The value add is the interaction and discussion with the people in the organisation, their stakeholders and the communities in which they work.”

Long-term thinking

Part of the process is to build risk profiles for each of the fund’s members and to spend time with them individually to examine how they manage risks. There’s particular emphasis on sustainability or environment, social and governance (ESG) factors. Xenia Mutual are keen to understand how hospitality businesses are thinking through this trio of risks and how they intend to manage them.

A good example is a pub that is looking into adding an alfresco dining area to its offering. While this is a potential source of new revenue, it’s also essential to identify the risks associated with this strategy. Working with the business, Xenia would consider the revenue potential, costs to build the extension and the impact on the rest of the business as well as the community during building.

It’s a good way of examining the potential opportunity, whilst also being realistic about any downsides.

Contact either your insurance broker or Xenia directly to find out more.

Important note:

This general information does not take into account your objectives, financial situations or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker. You should consider the appropriateness of the information considering your business’s situation before you act on any information. Information in this article is subject to change.

Xenia Mutual Ltd ACN 650 383 430