What is Risk and Risk Management?
Risk is characterized as the potential for harm or loss of either financial/monetary loss, property/equipment damage, or harm to staff or visitors/clients (including injuries and loss of life). Justifiably, this explains why adventure tourism operators become attentive to specific actions that could prevent such implications on their operations, hence leading to the necessity of thorough understanding and ‘know-how’ on risk management.
Risk management includes policies, procedures, and practices aim at alleviating, mitigating, or eliminating intolerable risks. All these may differ significantly according to the type of industry and operation where the risk management process is being implemented. Nevertheless, from the adventure tourism point of view, risk management can be considered as a systematic process for identifying and analysing risk exposure, which is then followed by relevant actions of whether to control, mitigate, or remove such risk.
Why it is Essential to Practise Risk Management?
In general, adventure tourism operators have two main motives for risk management; to ensure safety to staff and visitors/clients, and to prevent financial or physical loss for their business activities. The ethical duty and primary ‘code-of-conduct’ of adventure tourism operators is to safeguard staff and visitors/clients, while simultaneously prevent emotional or physical threats during a trip or programme duration. Meanwhile, protection on business operations entails prevention against property damage, reputation damage, and any financial consequences due to legal actions.
As an example in this case, if a visitor/client is injured, and the victim believes that he/she has reasons for financial claim, he/she can file a lawsuit against the adventure tourism operator involved. If the court finds that the claim is valid (due to any negligence or a breach of ‘duty-of-care’ from the adventure tourism operator), the operator might eventually obligated with a substantial financial settlement to be paid to the claimant. Concurrently, such incident could also jeopardise the tourism operator’s image and credibility, which in turns, would result in significant loss of visitors/clients.