Intro to Tourism & Hospitality
Chapter 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 CCBY 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
Figure 11.5: The plaza at BC’s law courts

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
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:
Injury
2. Duty to care
3. Breach in the standard of care
4. Causation
1.
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
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
 Waivers have failed when
not written or correctly
delivered
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
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Figure 11.1 Turbulent Flows by Curtis Perry is used under a CC BY-NC-ND 2.0 license.
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Figure 11.2 Larry O’Brien Verdict press core-0219 by David Carroll is used under a CC BY 2.0 license.
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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 BYNC 2.0 license.
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Figure 11.4 Carabiner by Alberto is used under a CC BY-SA 2.0 license.
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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.
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Figure 11.6 Day 207: I’ve Contracted An Agreement by Juli is used under a CC BY-NC-ND 2.0 license.
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Figure 11.7 Motel No Mo’ by Jerry Bowley is used under a CC BY-NC-SA 2.0 license.
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Figure 11.8 Autsch !!! by Franz Walter is used under a CC BY-NC-SA 2.0 license.