Proposed risk management system for a reimbursement hotel project

2. BACK GROUND OF THE PROJECT
LIGHTHOUSE IS A 5-STAR FRANCHISE
HOTEL BELONGING TO JET WING
HOTELS, LOCATED IN GALLE, SRI
LANKA
THE HOTEL WAS COMMISSIONED BY
HERBERT COORAY IN 1995 FOR HIS
TRAVEL COMPANY JETWINGS AND
DESIGNED BY GEOFFREY BAWA

3. FEATURES OF THE EXISTING BUILDING
• The hotel had 60 rooms
• Three suites
• two restaurants
• a swimming pool
• recreational facilities.

4. PROPOSED FEATURES

5. EXPECTING RISKS
• Physical risks
• Technical risks
• Political risks
• Legal & contractual risks
• Economic/Financial risks
• Marketing risks
• Management risks
• Environmental risks
• Schedule risks
• Operational Performance risks

6. Risk Breakdown Structure
Level 0 Level 01 Level 02 Level 03
Internal Environmental Technical Risks Demolishion , support ,Design , Site
investigation (capable for the reimbursement,
Specification and source material
Managemental Planning , Confirm the safety , mange resources
and labors wastage
Administrative Labor , stores , transport
External
Environmental
Environment Weather and natural disaster
Financial risks Tax , inflation , foreign exchange , payment
delay , financial expenses
Political and legal Policy changes , customs , disposing and
liabilities

7. Propose risk management
•Innovative concepts
•Apply the effective
construction technology
Design
•Take precautions to face
environmental issues
•Effectively Use the
resources
Sources and
environment •Perfect funding resources
•Contingency for the
economic changes
Economic
•Create situation the
employers to work
•Complete tasks according to
the working schedule
Management •The esthetic appearance
according to the clients
objective
Out put

8. Awareness
• Aware the risk management team about the risks which will occur
during & after the amendments
• Stakeholders of the project;
• Client (Lighthouse Hotel PLC)
• Management (Jetwing Hotels)
• Contractor
• Legal bodies

9. Awareness cntd.
• Aware the relevant stakeholders about the amendments which are
made to the building structure.
• Aware the client about the risks which would occur during and afterwards of
the construction period
• Aware the client about the legal and practical obligations which would occur
against the amendments
• Risks with the site such as soil type and the bearing ability

10. Awareness cntd.
• Aware the stakeholders about the risks and the requirements of a risk
management process.
• Aware the stakeholders about the risk management process that we
implemented to the building.

11. Skills
• Empower the stakeholders with the skills that are required in risk
management.
• In this skills mean the steps that the stakeholders can take in order to
minimize or neutralize risks.
ex: Consulting a Geo-Technical engineer for analyze the soil and
neutralizing the risk with that

12. Skills cntd.
• After that we have to identify the skills which the personals who are
connected with the project indirectly and make usage of them.

13. Culture
• Every step which we take in the risk management process should be
accord to the culture of the hotel.
• Such as;
• It should be accord to the vision of the hotel
• None of the occupants must feel uncomfortable by the process
• Under this we have to make sure the risk for the safety of the
occupants during the construction period is penalized by
implementing suitable precautionary methods.

14. Image
• After implementing the risk management system the image of the
external parties towards the hotel must not be changed.
• After the implementation of the risk management system we have to
take a report regarding almost every aspects of the hotel and analyze
whether there are any deviations about them.
• Such as:
• Occupancy rate
• Safety issues
• Etc.

15. Image cntd.
• If the reports indicate negative deviations we have to change the
strategy which we used for the risk management system

16. Process
• Under this we have to determine that the process we use for the risk
management is accord with the contractual, procurement and
management practices.
• This is occur in situations such as if the amendment we are going to
do is contractually illegal we have to do variations for it.
• This implies that there is a contractual and procurement risk in this
kind of refurbishment projects.

17. Process cntd.
• To overcome theses risks we have to consult contractual expertise
such as Quantity Surveyors.

18. Confidence
• Under this step we have consider about how the stakeholders of the
project is confident with the risk management.
• For this purpose we have to take a feedback from the each
stakeholders and we should analyze their idea about the risk
management system which we proposed.

19. Applications
• After implementation of the risk management system we should
consider about the effectivity of that system to the day to day basis
operations of the hotel
• This also include determining that whether the risk management
system is applicable as a decision making tool for the client

20. • After practicing all of these steps we should rate each of them
regarding the feedback with the hotel project.
• This will enhance us to have an idea about how effective the system
we proposed is and will acknowledge us about the defects and the
adjustments

21. Purpose of having a risk management system
• The purpose of risk policy is not to completely eliminate the risk from
the hotel .
• To ensure that every effort is made by the hotel to manage risk
appropriately to maximize potential opportunities and minimize the
adverse effects of risk.

22. 4. Creating and Implementing a Risk Management
Risk Management Team
• Geo Technical Engineer- to assure the risks and errors that could arise in the soil
when modifying the hotel programme
• Structural Engineer - the assurance of the Newley constructing hotel room’s
structures
• Service Engineer/Facility Manager - should ensure whether all the facilities
provided without any failure.
Technical Risks

23. Managerial Risks
• Project Manager- Uncertainties that could affect the objectives of the
Hotel Refurbishment Project. (Eg: Time, cost,
performance, quality, scope, client satisfaction)
- Responsible for funding agencies to determine the
requirement for a contract modification regarding the
hotel project.

24. Financial Risks
• Quantity Surveyor responsible on the errors or risks that could
happen with the payments, rates etc, while hotel project is going
on.
• Financial Manager- the financial support relevant to the hotel
process.
 Therefore, a Risk Managing Team can be implemented with considering of the risks that can happen in the Hotel
Project.

25. Risk Mgt. Manual
• Includes the Risk Managing practices throughout the Hotel Project
• These are used to record the opportunities, threats and risks at each stage of
“Hotel project with refurbishment” and to provide the on-going action plans to
address the risks.
A detailed techniques of
Risk Identification
Eg: Risk due to the lack of
strength of the foundation
of the existing building
ResponseAnalysis
Required tastings,
modifications are
explored.
Installing external
foundations to give
the sufficient
strength

27. Risk Mgt. Plan
• This document includes the records of the project
and the made decision.
• In this Hotel refurbishment project, the remedies/
decisions taken to minimize/ avoid risk as the
most suitable option
• Maintained records of such risks for reference(Plans)
in the future and is recommend that an archive risk
register is kept.

28. Risk Mgt. Training & Rewarding System
• A proper training should be done in order to obtain a effective Risk management in
accordance to the Hotel Project
• The Risk Managing Team has gained a proper and suitable training with relevance to
the Hotel project with refurbishment
• The personal rewards that can be gained with a proper Risk management system with
managing financial, managing, technical, …, risks that come across.

29. Risk Mgt. Information Systems

30. Risk Mgt. Information Systems conts…
• Record details of risks which occurs in the refurbishment of hotel project, controls and
priorities, and to show any changes in them
• Record risk treatments and related resource requirements;
• Record details of incidents where the new application of refurbished building, and loss
events, and the lessons learned
• Track accountability for risks, controls and treatments
• Track progress and record the completion of risk treatment actions
• Allow progress checks against the risk management plan
• Trigger monitoring and assurance activity
Purpose of RMIS

31. Risk Mgt. Performance Measurement System
• Risk management and performance measurement should be linked together to
enable, to each supply chain partner, to define and guide its overall risk profile,
as well as to shape its strategic direction.
• The Risk must be continuously addressed and monitored in order to refurbish
the hotel building and get the attraction of the customers with out getting
damaged through risks.

32. 5. Building a Risk Mgt ethic into corporate culture
• The way the stake holders of the construction process act, behave, refers to the
culture of that organization.
• As the last step of the Risk Management System, the ethics, principals that should
be within each other while managing the Risks according to the Project that is
going to be completed.

33. Scope of the policy
• Risk is an inherent aspect of all management, administrative and
commercial business activities. Sound risk management principles
must become part of routine management activity across the hotel.
• The key objective of this policy is to ensure the hotel has a consistent
basis for measuring, controlling, monitoring and reporting risk across
the hotel at all levels.

34. Detailing the policy
• Detailing the policy is important to identify the key parameters and
important factors that we should have to include in the Risk
management policy form. Those details are as follows.
• What is risk
Risk exists as a consequence of uncertainty and is present in all
activities whatever the size or complexity and whatever industry or
business sector.
We can’t forecast the risks accurately for the hotel when designing the
risk management system.

35. The hotel approach
• The Risk Management process will be as user friendly as possible and
add value
• The concentration on control improvements to mitigate significant
risks.
• produce a comprehensive picture of risk across all hotel activities.
Risk responsibilities
• It is essential that all participants in risk management are aware of
their roles in the overall process and their own responsibilities.

36. Risk review
• The Group Risk Manager manage the risk process including the roll out of
the risk management programmed.
• The Group Risk Office will maintain the hotel’s strategic risk register.
• It will help to audit risk periodically.
Project risk management
• Project risk management will follow a similar process to that defined for
corporate risks.
• The Project Manager will take responsibility for risk management.
• The risk register in the format set up in this policy will be populated at the
point at which permission is sought for a project to proceed.

37. AR management company ltd. Is keen to inform that the company will make sure
to do in company’s full potential to manage risk that arise in this hotel’s internal
and external environment. Identification of those risks will help the employer to
achieve his organizational and operational goals with out any delay.
We ensure that we will give enough knowledge about risk identification and risk
management to all the occupants in the hotel. The required lectures will be
conducted by experience professionals in risk management field. We ensure that
risk management will be a part of the company’s culture and operation of the
company.
Through this risk management strategies hotel can gain following positive
outcomes,
 Increase the efficiency and effectiveness of decisions that hotel
administration or management would take in crucial occasions.
 Maintain the risk management strategies all over the company.
 Follow the legal and regulation policies.
 Implementation and improvement of risk management prosses.
 Efficient implementation of risk management plan.
RISK POLICY FOR JETWING HOTEL PROJECT

38. Monitor whether the risk
management system is
functioning well.

39. After developing risk management system we have to check whether
the system is functioning efficiency and effectively to manage the risk.
We can monitor the system accordance with following facts.
Analyze the risk management system
• In this process we do check whether this system minimize the risk and
maximize the efficiency.
• How the system comply with the hotel operation .
• What are the treat to manage the risk.
• Are there any implementations and improvements should do to the
system

40. Are their any changes to do
• Check whether there is some risks have to give the priority.
• Do some modification to management process if it is required.
New risks
• Check weather there is some missing risks that has been not detect by the
system.
• What are the emerging risks.
• What are the implementation that is required to do to manage those new
risks

41. The process of monitoring risk management system
• Risk is about uncertainity.
• The main objective of the monitoring is to evaluate the progress and
impact of the risk management option determine whether adaptive
action is required.
• End of this process we determine that current options should be
continued or go for some modifications to the risk that we identify in
this hotel.
• We communicate with the stakeholders and inform all the details of
this process with them.

42. Record the monitoring process
• It is important to record those monitoring details because when some
need of implementation arise it is easy to do those implementations
to the risk management system by looking at those records.
• We can moderate previous system by looking ad those monitoring
records.
• Identify defects in future to forecast and be prepare for future risks.

43. CONCLUSION