Factors that shape a hotel company’s risk appetite

Abstract

Despite a growing scholarly interest in risk management within the field of hospitality, risk appetite, which plays a key role in effective risk management, has not yet received wider attention. This paper contributes to our understanding of risk appetite by exploring the factors that influence risk appetite in a hotel company context. Through in-depth interviewing with risk appetite experts and corporate-level hotel executives, we identified two sets of factors ('primary' and 'secondary') that influence a hotel compan's risk appetite. Although, at corporate level, these factors do not differ from other industry contexts, they can be used by managers in the hotel sector as a starting point to understand drivers and inhibitors of their companies' risk appetite while researchers can use them as a basis to develop descriptive or predictive models of a hotel company's risk appetite.

Identification of Factors Affecting Risk Appetite of Organizations in Selection of Mega Construction Projects

“…It is the third in the ranking of organizational risk factors. It is an important factor that influences the risk appetite of an individual or an organization while selecting a project [35]. Specific risk categories that an organization prefers are defined by the organization's risk culture and are comfortable with the quantity of risk, and risk appetite.…”

“…Risk capacity influences the risk appetite of the organization in project selection [35]. Risk capacity is an organization's maximum risk-bearing capacity in the pursuit of its goal.…”

“…Despite the fact that there is no commonly agreed definition [35,47], a widely held understanding of the term seems to be that it refers to a business' readiness to take calculated risks in order to achieve its objectives [26]. However, broad labels such as "risk-seeking" or "risk-averse" are insufficient to define this desire [36].…”

“…In this research factors were classified into five categories organizational factors, decision-makers factors, external factors named as environmental factors, project factors, and miscellaneous factors. This classification is performed on the basis of other studies, enterprise environmental factors, and organizational process assets [16,24,35,68,87].…”

“…Existing research on risk appetite is mostly conceptual in nature and is concentrated in the areas of economics and finance [28][29][30][31][32]. A little work is performed in the field of hospitality management [33][34][35]. The emphasis has been on discussing the concept's meaning [36], its function in risk management [23] as well as presenting several techniques to establishing a risk appetite statement [25,37].…”