Analysis of Key Legal Legislative Risks in Hospitality Industry

This report delves into the key legal and legislative risks prevalent in the hospitality industry. It begins by outlining the various legal and regulatory frameworks that organizations must adhere to, emphasizing the importance of compliance. The report then identifies specific risks, including political instability, which can impact operations and supply chains, and premises risks, highlighting the need for safety measures. It also covers legal and regulatory constraints related to ethical considerations and consumer rights, as well as safety and environmental laws, and property risks. Furthermore, the report examines trade policies and their effects, liquor liability, and the increasing emphasis on sustainable development and green building practices. The conclusion stresses the necessity for hospitality businesses to proactively manage these risks to ensure growth and profitability.

Key legal legislative risks

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
The key legal legislative risks that needs to be considered in the hospitality industry...............1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Key legal legislative risks are basically risks related to some legal penalties or material
losses that an organisation may face as it fails to work according to industry laws(Gravely and
et.al., 2018). There are various laws and regulations that every organisation have to obey in order
to have best practices in the firm. Present study is based on the hospitality industry that gives
services to the customers related to entertainment, accommodation, food services etc. Report will
include the key legal legislative risks that needs to be considered in the hospitality industry.
The key legal legislative risks that needs to be considered in the hospitality industry
In Hospitality industry, there are different industry laws and there is legislative risk
related to change in these laws. For the same hospitality industry have to manage business
exposure risk and have to obey all the federal laws. There are different legal legislative risks that
needs to be considered and there are different legislation of UK that hospitality industries follow
in order to overcome these risk. These risks are as follows:-
Political instability:-
Hospitality industry is having risk related to political stability as there are different
threats that different companies faces as they operate in global supply chain. The political
instability is impacting the productively, quality and relationships of the organisation and
companies have to understand its positive and negative impact so that strategies can be made to
mitigate the same(Elshaer and Saad, 2017). Many studies have concluded that the suppliers of
the companies are basically located in the areas where the world is experiencing political turmoil
because of which hospitality industry is facing lots of issues. Organisations have to follow
international trade law that includes different rules in order to handle the trading between the
countries. These trade laws help the hospitality industries to have optimum use of there resources
and improving financial performance. In many countries' tourism arrival have dropped due to
different political factors like human rights violation, conflicts and different political events. If
political instability is high in any organisation, most of the customers avoid such location that are
associated with violence. Political instability is having very negative impact over the
organisation as it become less secure for its customers and working staff. It also leads to
economic instability with respect to inflation, recession, unemployment etc. Political risk affects
the business operations at hospitality industries that further impacts the profitability of the
business. The market risk factors rises as political instability is rises in hospitality industries.
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Premises risk:-
The risk related to any sort of injury is very high in hospitality industries and due to high
number of gust it becomes tough for the organisations have major control over these risks. For
the same organisations have to take precautions so that the risk can be overcome and it is very
essential for the firm to implement safety codes in the areas like floor, elevators etc. so that the
risk related to safety of employees and customers get reduced(Ivanov and Webster, 2017). The
health and safety of the employees have to be taken into consideration according to health and
safety act 1974 of UK. This act is basically to have control of work premises and this legislation
is used by the organisations in order to regularly review the safety policies and developing them.
According to this law, the managerial staff have to take care that equipment’s have to be used by
taking into consideration about safe and unsafe practices at the workplace. Organisation have to
avoid multiple handling and the manual tasks in the organisation have to be automated so that
risk get reduced. The workflow have to arranged properly in order to avoid physical and mental
issues.
Legal and regulatory constraints:-
There are various ethical constraints in hospitality industries that organisation have to
take in consideration. These are basically related to norms of society and hospitality industries
have to take care of the norms as not following the same may result in loss of business. If the
hospitality industries are not able to review a contract that may affect enforcement of its terms.
Many a times companies signs the contract but there is risk that they may fail to provide the
services to the customers on the given deadlines(Bello, Banda and Kamanga, 2017). According
to Consumer rights act 2015, customers of hospitality industries are having rights to take action
against the unfair terms. This law provides better protection to the customers and is risky for the
organisation. It protects the customers from hazardous services and misleading information. If
organisation lack in following the same, it may lead to some legal issues. Organisation have to
follow the legal terms and have to make the employees' aware about these laws so that they do
not make mistakes which can become risk for the profitability and growth of these companies
that are part of hospitality industries.
Safety and environment laws:-
There is another risk related to health and safety of the customers and contamination of
the environment due to business operations. Hospitality industries have to follow environmental
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laws. Risk arise in the hospitality industries related to safety of the employees as well as the
customers taking services. Organisation have to take key measures in order to avoid these risks
and have to provide safety at work to its potential employees. The business operations have to be
environment friendly as many hospitality industries are at the location where the working staff or
the visiting customers may affect the environment. For the same organisation may have bear the
cost in breaking the environment laws. These legislations have to followed by the industries as it
is mention in the Environment protection act 1990. According to this law organisation are
required to take remedial action so that they do not affect the environment due to there
operations. A solid plan have to be made by the organisation in order to overcome the risk
factors related to safety of people and environment. These issues may results in poor reputation
of the organisation(Kramer, Kinn and Mishkind, 2015).
Property risk:-
Hospitality industries are facing risk related to property and its safety. There are multiple
ignition sources in the hotels and restaurants so organisations have to reduce these risks by
ensuring that all smoke and fire alarms are functioning well in the organisation. According to
Fire safety act 2005 of UK, it is responsibility of the organisation to have control on work
premises and reduce the risk related to fire and have to sure people can easily escape if there is
fire in work premises. These risks can be overcome by practising different safety measures in the
organisation and creating management risk plan in the firm(Sanjeev and Birdie, 2019).
Organisation can obtain insurance for the respective property and this will help to make the firm
protected over the risks that these companies may face.
Trade policies:-
There are different trade policies according to international trade policy that are
impacting the hospitality industries and if not followed they are coming as risk for the firm.
Organisations have to follow Trade description act 1968 according to which organisations are
not allowed to mislead the consumers. Companies are punished if they make any false statements
about the products and services. On the other side the import duties act 1932 states that general
tariff of 10% will be applied on most imports. These policies include imposition of tariffs and
quotas on imports and exports of services that organisation is providing in various countries.
Organisation is also having risk related to local producers in the market were they are giving
services(Khokhobaia, 2016). The hospitality industries may face risk related to exchange rate as
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they trade in other countries. Risk is also related with the transactions and liquidity. Currency
translation risk is another major risk related to trading and hospitality industries may face
problems in such situations.
Liquor liability:-
There are many business in the hospitality industries that are selling alcohol and it is very
risky as the company becomes the liable if the customer becomes overly intoxicated or any
accident takes place. According to Alcohol licensing law of UK, employees have to be given
training that is not to severe more drinks to the customer in order to prevent excessive drinking.
Organisation also have to insure its business with Liquor Liability insurance in order to bear the
risks(Li, 2017).
Sustainable development and building green:-
Another risk that hospitality industries faces is related to sustainability of the organisation
as having eco-friendly and LEED certified hotels are in the norms of the business. According to
Environment protection act 1974 organisations have to manage the waste and have control on
emission that affects the environment. For continuing these practices in the organisation,
environment friendly construction material have to be used by the organisation and for meeting
legal requirements, applications for tax credits or reimbursement all require detailed
knowledge(Han, Lee and Kim, 2018).
CONCLUSION
From the above study it is been concluded that there are different industry laws and there
is legislative risk related to change in these laws. There are different risks that hospitality
industries faces and these risk may cause problem for the growth and profitability of the
organisation. Report also concludes that proper measures have to taken by the Hospitality
industries in order to overcome these risks.
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REFERENCES
Books and Journals
Bello, F.G., Banda, W.J. and Kamanga, G., 2017. Corporate Social Responsibility (CSR)
practices in the hospitality industry in Malawi. African Journal of Hospitality, Tourism and
Leisure. 6(3). pp.1-21.
Elshaer, I.A. and Saad, S.K., 2017. Political instability and tourism in Egypt: Exploring
survivors’ attitudes after downsizing. Journal of Policy Research in Tourism, Leisure and
Events. 9(1). pp.3-22.
Gravely, S. and et.al., 2018. Knowledge, opinions and compliance related to the 100% smoke-
free law in hospitality venues in Kampala, Uganda: cross-sectional results from the
KOMPLY Project. BMJ open. 8(1). p.e017601.
Han, H., Lee, M.J. and Kim, W., 2018. Antecedents of green loyalty in the cruise industry:
Sustainable development and environmental management. Business Strategy and the
Environment. 27(3). pp.323-335.
Ivanov, S.H. and Webster, C., 2017, October. Designing robot-friendly hospitality facilities. In
Proceedings of the scientific conference “Tourism. Innovations. Strategies (pp. 13-14).
Khokhobaia, M., 2016. From Rational Policy of Tourism Development to the Effective Policy
(Case of Georgia). California Business Review. 4(1). pp.11-16.
Kramer, G.M., Kinn, J.T. and Mishkind, M.C., 2015. Legal, regulatory, and risk management
issues in the use of technology to deliver mental health care. Cognitive and Behavioral
Practice. 22(3). pp.258-268.
Li, H., 2017. An Overview of Dram Shop Law and its Validity with an Emphasis on California:
A Case for Imposing Civil Liability on Commercial Drinking Establishments.
Sanjeev, G.M. and Birdie, A.K., 2019. The tourism and hospitality industry in India: emerging
issues for the next decade. Worldwide Hospitality and Tourism Themes.
Slade, E.L. And et.al., 2015. Modeling consumers’ adoption intentions of remote mobile
payments in the United Kingdom: extending UTAUT with innovativeness, risk, and trust.
Psychology & Marketing. 32(8). pp.860-873.
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