From managing reputation to managing reputation risk
In leisure and hospitality, almost every business challenge has a reputational dimension. Anything from a mislabelled food item to a badly-handled weather event can influence public perceptions and customer behavior.
As societies become more polarized, even previously accepted positions on issues such as diversity and sustainability can rebound on a company’s image as these become contested arenas. This can be a difficult line to tread in an industry that must cater to all shades of opinion.
In our third Reputation Risk Readiness Survey, we asked 100 senior executives from leading leisure and hospitality companies around the world, how they are adjusting to this fast-changing landscape. What do they see as the main risks to their reputation? How ready are they to deal with the fallout from a reputational crisis. And how would they cope with the financial impact?
Our findings suggest that, as the sector’s risk landscape has become more complex, so has the matrix of issues that could have a reputational impact.
This was highlighted as cyber-attacks shot to the top of the list of reputational threats — reflecting the leisure & hospitality industry’s increasing dependence on sophisticated technologies.
The results also appear to confirm a trend we identified in 2023, of greater finance and corporate involvement in decisions around reputation management, reflecting a shift in focus among leading leisure & hospitality businesses from managing reputation as a function of branding to managing reputation as a risk.
Cyber-attack is no. 1 reputation risk
77% of leisure and hospitality firms in our survey put the potential fallout from a cyber-attack among their top risks to reputation, up from just 17% in 2023.
ESG concerns grow despite backlash
65% of leisure and hospitality firms named environmental issues among their top reputational concerns,while 60% cited governance, as ESG becomes embedded in law in many countries.
Firms manage reputation as a risk
92% said they have a formal process in place for assessing and managing reputational risks, with 24% saying this is linked to board key performance indicators (KPIs), up from 21% in 2023.
Crisis teams are stronger
93% say they have a formal team that trains together and responds to negative publicity events, with 28% saying this is linked to KPIs — up from 21% in 2023.
Financial impact modeling is low
11% said they had a great deal of modeling capability to understand the costs and liabilities associated with reputational damage.
In the leisure and hospitality sector, maintaining a positive reputation is paramount, as any public concern or shift in opinion can significantly impact operations. To mitigate these risks, companies must adopt a proactive approach to reputation management, particularly in today's polarized and socially charged environment.
Willis offers a comprehensive reputation risk management solution to support clients. This includes Polecat risk monitoring, risk quantification, crisis communications expertise to manage media during and after events, and reputational crisis insurance to cover any loss of gross profit resulting from a crisis.
To learn more, download your free survey report by completing the short form at the top of this page.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
