Tourism Industry

1
Tourism Industry

• Tyler Kawamura
• Kimberly Kelepolo
• Jimmy Yeh

2
Risk Avoidance

• Conscious decision not to expose oneself or ones
  firm to a particular risk of loss.
• Decrease ones chance of loss to zero.

3
Risk Avoidance

• Do research and find places where natural
  disasters never occur.
• Build tourist attractions in the perfect place
  where there are no natural disasters.

4
Risk Avoidance

• When risk is avoided the potential benefits are
  given up.
• Building a tourist attraction in the middle of
  nowhere would avoid the risk of natural disasters
  but would not be profitable.

5
Loss Control

• When particular risks cannot be avoided, actions
  may often be taken to reduce the losses
  associated with them.
• Reduce the probability of losses or decrease the
  cost of losses that do occur.

6
Frequency Reduction

• Loss control measures designed primarily to
  reduce loss frequency.
• Natural disasters are unpredictable and there is
  nothing the tourism industry can do to reduce the
  frequency of loss.

7
Severity Reduction

• A method of loss control that will reduce
  seriousness and extent of damage should a loss
  occur.
• Tourism industry focuses on this type of loss
  control when dealing with natural disasters.

8
Insurance-like Instruments

• Catastrophe Bonds
• CATEX Swap
• offered through the Catastrophe Risk Exchange
• Chicago Board of Trade Options (CBOT)
• Catastrophe Equity Puts
• Contingent Surplus Notes
• Weather Derivatives

9
Catastrophe Bonds

• Offerings to date have generally been very
  private
• Very little documentation, and only provided to
  buyers
• Types of catastrophe bonds
• hurricanes
• earthquakes

10
Disaster Preparedness

• Cooperation between the insurance companies and
  tourism industry

11
Areas Included

• Mapping of hazard zones
• Assessment of loss potentials
• Recommendations for regulations or restrictions
  on land use
• Recommendations for standard building regulations
• Promotion and use of warning systems
• Information, education, and motivation
• Analysis of disaster losses
• Compilation of lists of competent institutions
  and experts

12
Solutions to Minimize Loss/Damages

• Handbook by the World Tourism Organization
  (WTO) and World Meteorological (WMO)
• Crisis Management
• Disaster Management

13
Expect the Unexpected

• World Tourism Organization (WTO) and World
  Meteorological Organization (WMO)
• The Handbook

14
Handbook

• Natural Disaster Reduction
• risk assessment
• disaster reduction concepts
• disaster preparedness
• soci-psychology of disaster befalling tourists
• responses and relaunching of tourist facilities
• Mitigate Risk
• (I.e.,Mauritius)

15
Handbook

• Location Warnings
• Anti-Seismic Construction
• Forecasting Techniques
• Step by Step Plan
• Detailed Plan on Rehabilitation

16
Weather Derivatives

• Market for these instruments are growing at a
  fast rate
• Different weather derivatives
• temperature
• precipitation
• hail
• tropical storms

17
Crisis/Disaster Management

• Ensure an organizations long term survivability
  and economic success
• Links various management organizations
• Drills and Exercise Functions
• disaster recovery
• business resumption
• business continuity