Managing civil unrest risks: How L&H businesses can act now to prevent losses and mitigate risks

Current macro-economic factors could combine to create the conditions for riots and civil unrest. This means leisure and hospitality (L&H) businesses should consider the potential range of risks, as well as preventative and mitigating measures.

The current cost of living crisis in the U.K. is being exacerbated by spiralling inflation, supply chain volatility caused by geopolitical uncertainty, and the impact of high energy costs. Economic polarisation is both informing current political debate, as some homeowners face rising mortgage costs against the context of the falling pound,¹ and underpinning discussions around policing priorities.

In September, The Times reported police forces are braced for a rise in crime and a breakdown in public order this winter, as they draw up emergency proposals to deal with the cost of living crisis.² Contingency planning among police chiefs is reportedly under way to deal with the fallout that could result from millions of households falling into financial difficulties.

Further factors that might fuel civil unrest in the near future include:

• Industrial action weakening the country
• Supply conditions for critical utilities such as power or water worsening, resulting in restrictions or blackouts
• Public confidence in policing falling
• Delay or inaction by the Government resulting in loss of support
• Geopolitical threats destabilising the global economy further.

Leisure and hospitality civil unrest risks to consider

In light of the above, risk managers within L&H organisations may want to identify and mitigate the risks from a range of impacts. These include:

• Physical damage to assets
• Threats to employees and the potential for physical violence
• Disruption to operations
• Reputational damage
• Reduced footfalls, particularly in town centre locations
• More general pressure on revenues/profits
• Targeted cyber attacks
• Employees aligning to civil unrest issues
• Regulatory pressures
• Supply chain pressures
• Lending conditions becoming stricter
• Claims settlement being potentially subject to delays or dispute
• Increased risk of litigation as claims are disputed
• Loss of confidence in FTSE, leading to drop on share value
• Prolonged recession.

Here, it may also be worth considering certain scenarios involving your workforce.

Let’s say you employ shift workers, some of whom need to leave town centre premises safely after dark. What provisions might you have in place to ensure their safe entry and exit from the property in the event of unrest?

Also, as many L&H businesses rely on younger workers, it’s worth considering policies and procedures if you fear these young workers might prove vulnerable to involvement in disruptive activities. As LSE PhD candidate Cain Shelley notes on an LSE blog, the 2011 riots were partly the result of the social marginalisation of many of England’s young people. Shelley details how conditions have worsened over the intervening decade and poses the question: “What’s stopping England’s youth from rioting again?”³

Does your business have clear procedures that might be triggered in the event of a member of staff, young or older, becoming involved in disruption?

Actions for leisure and hospitality businesses to prevent or mitigate civil unrest risks

Kristalina Georgieva, MD of the International Monetary Fund (IMF) recently warned there will be “people on the street” globally unless steps are taken to protect the most vulnerable from inflation.⁴

As international governments wrestle with finding effective means of containing inflation, L&H businesses are well-advised to consider what preventative measures they might take in the calm periods ahead of potentially imminent storms.

Physical preventative measures include ensuring you have access to materials to secure your property, for example, for boarding up windows.

Also, check your alarms are fully effective and that staff are clear on your evacuation procedures.

In scenarios involving either panic buying or potentially the risk of looting, your business may need to be ready to call upon additional security staff. Are these resources lined up and ready to activate quickly?

Policy and procedure preventative measures might include ensuring civil unrest and associated risks are included and regularly evaluated in the context of the risk register and business continuity plans. Now might also be a good time to ensure your crisis response structure is clear and ready to be activated at short notice, and that you have established communication strategies in the context of civil unrest.

The business also needs to review its insurance provisions to understand exactly what is and isn’t covered and where any gaps may need addressing ahead of potential losses.

For support preparing your leisure and hospitality business for evolving threats, including civil unrest, get in touch.

Footnotes

¹ Nearly 300 UK mortgage deals pulled in a day as pound’s fall heralds rate rise

² Police fear hard winter of surging crime and civil unrest

³ Ten years on, what’s stopping England’s youth from rioting again?

⁴ IMF chief warns there will be 'people on the street' globally unless steps taken to ease inflation

Author

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Kay McMenamin

Leisure and Hospitality Practice Leader – London WTW

email Email phone +44 20 3124 6590

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