WHAT IS A RISK MANAGEMENT SYSTEM?

A basic risk management system can roughly be divided into four components.

• The first component is the risk assessment, which simply involves analyzing what could go wrong in an activity organized for a tour. What consequences could the activity have? How serious are these consequences? What is the likelihood of them occurring? Is the risk acceptable? These are questions that the risk assessment aims to answer. 
• The second component addresses standard operating procedures (SOPs). SOPs are designed to address the risks that came to light in the risk assessment; they deal primarily with prevention. What procedures should the staff have in place in order to minimize the risk? What training should they have? What equipment do they require? What should the staff/tourist ratio be? These are questions that should be addressed in this second component. 
• The third component involves emergency preparedness plans, which come into play when, despite careful preparations, an accident has occurred.  What are the immediate steps that staff should take if a certain kind of accident happens? Emergency preparedness plans give quick and precise guidelines to staff in the field and aim to enable them to appropriately deal with sensitive and dangerous situations.
• The final component address incident reporting; the aftermath of an accident and requires tour operators to report on accidents and near-accidents. What are the important details to include? How should the reports help update tour itineraries and risk assessments and strategies? These are questions that this final component addresses.

• … to tourism sectors worldwide?

Safety is a vital component in providing quality tours in the global and increasingly competitive tourism industry. Travelers are becoming more and more aware of risks associated with journeying to foreign countries and often choose their destinations based on expected levels of safety. Increasing safety standards will attract more visitors and generate a higher turnover for the tourism industry. Tourism service providers are often well-acquainted with potential risks to travelers and can therefore play an influential role in establishing good risk management practices in a country.

• … to emerging and developing regions?

Responsible and sustainable tourism can significantly contribute to socio-economic development in terms of generating employment, supporting diverse value chains and promoting a country’s visibility. The market share of developing countries in global tourism is furthermore growing at a fast pace. To further encourage this growth, tourism service providers need to be equipped with appropriate risk management methods to meet visitors’ expectations of safety.

• … to small- and medium- sized businesses?

Risk management plays a highly important role in protecting one’s clients and business. In the case of accidents or disasters, small- and medium-sized business often do not possess over the finances necessary to deal with lawsuits nor diverse portfolios to deal with shocks to their reputation. Risk management does not require a certain firm size nor does it require great financial investment; rather, it requires firm-wide commitment to safety as well as behavioral and procedural adjustments.