Hotel Industry Legal Risks and Compliance: Semester 1 Report

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Business Skills
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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Conclusion.......................................................................................................................................6
Reference List..................................................................................................................................8
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Introduction
In the hotel industry, one of the crucial responsibilities of the staffs and managers is to ensure
that customers’ needs are met and they have been offered with an excellent experience, which
would influence their repeat purchase. For ensuring that all these criteria are being met and the
practices are being conducted in desired and standard manner, the marketers devise policies and
norms, aligning with the legislations and regulations in the hotel industry, to eliminate any kinds
of legal risk (Tankard, 2016). Legal risk in hotel industry could be defined as the legal
consequences for the negligence or failure to comply with the legal norms and regulations
associated with different aspects in the hotel practices, including “customer and staff privacy,
labor rights, food safety, risk management, health and safety of staffs, liability and licensing and
others related aspects. Considering this, the major focus of the following report is to understand
the legal compliance and legislative risks that the managers and employees should consider in
hotel industry.
Discussion
In the hotel industries, both the managers and staffs are responsible for comply with the legal and
regulatory norms and policies, through their practice, in order to eliminate any kinds of legal
risks. In addition, managers are also responsible for monitoring and reporting whether the fellow
staffs are meeting the standard legal criteria through their work or not. In this regards, from the
learning in the module, several aspects in the legal and regulatory systems have been learned,
which the managers and staffs in the hotel industry needs to be considered and for eliminating
the legal risk from non-compliance. The importance of the identified key legal aspects in the
hotel industry is discussed here.
Data protection – Protecting customers and staff’s data is a key concern for the hotel industry.
With increased access of online booking and customized services in the hotel industries, it has
become more complex at the same time important for the hotel staffs and managers to comply
data protection legislations, for ensuring privacy and confidentiality of the shared data by the
customers in the industry. In this regards, the role of the Data Protection Act 1998 is inevitable,
which served as the key guideline for the hotel organizations, to devise their data protection and
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privacy policies. This act has been replaced with the new pieces of legislations, namely GDPR
(General Data Protection regulation) and CCPA (California Consumer Privacy Act). The
managers and staffs need to comply with these legislations, as these are covering all types of
business activities in hotel industries, which need data protection, while highlighting the
penalties for non-compliances. Further, GDPR is giving the power to consumers by pushing the
organization to become transparent about their personal data protection and usage in hotels. It is
important for hotel staffs and managers to comply with GDPR to protect “personal and sensitive
customer data”. It is also helping to secure the software they use, through sharing a “Data
Processing Agreement (DPA)” (Tankard, 2016).
The hotel managers and staffs should care about consumer privacy and data protection as recent
reports revealed that consumers have limited trust about the hotels, how they are dealing with
data privacy. 59% believe that their personal information is vulnerable to security breach. On the
other hand, some reports have identified that offering control to customers about the way through
which data are being collected and being transparent about data usage through the use of consent
could improve the level of trust. It is indicating the importance of relying upon the legislations
related to data protection (Choi, Wallace & Wang, 2016). On the other hand, it has been claimed
that while data security and privacy could seem like low priority issues compared to the regular
demands of running a hotel, the significant brand impact of the data reach or privacy scandal
could have a high priority issue.
Health and Safety – Every employer is responsible for ensuring that the employees working in
the organization are being safeguarded in the organizational premises. Similarly, in hotel
organization, it is also important to ensure the health and safety of staffs during work hours. In
this regards, both the employer and employees has significant role in ensuring their safety. In
this regards, they need to comply with the organizational policy, which has been developed,
based on “Health and Safety act Work Act 1974”. If health and safety is breached, it can cost
huge for the organization, whereas, maintenance of effective health and safety could help to gain
trust of the employees, improve their productivity and commitment, while reducing legal risk for
the organization (Hughes & Ferrett, 2011). It has been learned from the module that the
managers in the hotel organizations are conducting health and safety risk assessment, aligning
with the requirements of “Health and Safety act Work Act 1974”, which is helping them to keep
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the business safe from high insurance premium rates and penalties, which could be charged by
the quality assessment boards like “Health and Safety Executive (HSE). Further, the module also
helped to understand that maintaining health and safety risk assessment and management in a
regular basis is important for upholding the reputation of the hotel in front of the customers as
well as the employees. Finally, it has also been learned from the module that in hotel industry,
health and safety management is the basic pillar for ensuring that the business is operating
ethically.
Food hygiene – The hotel organizations are offering different types of services, within which
food service is one of the main sectors. While serving food and beverages to the customers, it is
the liability for the employees and managers to ensure that food safety and hygiene is maintained
through the regular operations. From the module, it has been learned that the hotel organizations
serving food and beverages need to comply with the “Food Safety Act 1990”, “The Food Safety
and Hygiene Regulations 2013” and “The General Food Law Regulation 2002” (Araújo et al.,
2016). All these legislations are ensuring the safety and hygiene in resourcing, supplying,
storing, preparing and serving food and beverages to customers. It is important to maintain food
hygiene to eliminate any kinds of health issues of customers, which could lead to serious legal
risk, penalties as well as negative impact on reputation of the hotel. Thus, the managers are
responsible for regular quality checks and the staffs are responsible for any kinds of hazards,
which could compromise food hygiene and safety. It is also noteworthy that customers nowadays
are showing growing preferences towards hotels, which are offering clear ambiance with
hygienic food, which further indicates the importance of maintaining food hygiene.
Risk management – Hospitality industry is encountering unique set of risks and challenges
regularly for offering safe and excellent experience to the customers. The module helped to
understand that regular risk assessments are helping managers and staffs to identify and prioritize
key issues hindering efficiency of practice and finding effective solutions. It is also important
because, “prevention is always better than cure” and risk assessment, audits and management
helps to prevent misconducts, prior it happens. Further, risk management actions also help to
protect the brand also, through making continuous change and improvement, thereby grabbing
attention of customers. In addition, the modules also helped to understand that the risk
management procedures are also important for helping in security related contexts, like fire,
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flood or blackouts, while helping to customize security procedures. Finally, it is inevitable that
the industry needs are continuously changing and the security needs are further becoming
complex (Choi, Wallace & Wang, 2016). Effective risk management is required to ensure that
the firm is able to meet the changing needs of stakeholders.
Licensing – It has significant legal importance in hotel organization. One, who runs a business,
must have a trade license and registration, to ensure its legal viability. Non-compliance with
licensing procedure could lead to significant legal risk and huge amount of penalty. The module
helped to understand that for several reasons licensing is important for a hotel organization. For
instance, ensuring that the company is licensed, the owner can protect the business assets and
personal assets, in case of lawsuit, while having protection, if the business is damaged
(Carayannis, Dubina & Ilinova, 2015). License also ensures protection for employees and
customers, while ensuring that all the personal information remain private. Registered companies
are more trusted by customers and it is good for economy, in the increasingly competitive
market.
Key provision within Hotel proprietors Act 1956 – This legislation is an important consideration
in any hotel organization. It indicates that in some specific contexts, the proprietor or staff of the
hotel is liable o make good any loss of or damage to the customers’ property. It is an importance
consideration for the managers and staffs, especially for maintaining the hotel reputation and
elimination further legal risk (Kissi & Owusu-Mintah, 2015). Thus, considering this law, the
staffs and managers are responsible to eliminate instances, which could need application of this
law.
Conclusion
The hotel organizations need to meet the customers’ expectations to earn enough profit and
sustain business growth in competitive market. In order to meet these criteria, the staffs and
managers need to develop effective knowledge and skills regarding various essential aspects
related to regular practices in the hotel industry. In this regards, legal compliance is crucial. In
this regards, it has can be interpreted that compliance with the legal and regulatory norms is
crucial in the hotel organization to eliminate the legal risk, ensure that the organization is ethical
and to meet customer’s and employee’s satisfaction. On the other hand, it has several cons also.
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For instance, the discussion revealed that with growing demands and changing needs, it is
becoming difficult to meet the overall legal compliance and the organizations need amendments
in their organizational culture, along with training for to meet the complex needs.
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Reference List
Araújo, T. G. D., Botelho, R. B., Akutsu, R. D. C. C., & Araújo, W. M. (2016). Conformity of
food service units with legislation. Journal of Culinary Science & Technology, 14(1), 75-
89.
Carayannis, E. G., Dubina, I. N., & Ilinova, A. A. (2015). Licensing in the context of
entrepreneurial university activity: An empirical evidence and a theoretical
model. Journal of the Knowledge Economy, 6(1), 1-12.
Choi, T. M., Wallace, S. W., & Wang, Y. (2016). Risk management and coordination in service
supply chains: information, logistics and outsourcing. Journal of the Operational
Research Society, 67(2), 159-164.
Hughes, P., & Ferrett, E. (2011). Introduction to health and safety at work. Routledge.
Kissi, M., & Owusu-Mintah, S. B. (2015). Quality assurance in ghanaian hotels and
restaurants. African Journal of Applied Research (AJAR), 2(2).
Tankard, C. (2016). What the GDPR means for businesses. Network Security, 2016(6), 5-8.
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