Risk Profile for a Casino Hotel - Essay Example

Risk Profile for a Casino HotelIntroductionEvery business faces risk and we have three choices about what we should do with them. One is we can do nothing and let the risk pass through to investors in the business-stockholders in a publicly traded firm and the owner. Secondly, we can protect ourselves from them by various approaches and finally, we can intentionally increase our exposure to various risks because we feel that it has several advantages in a competitive market. Of-course first one is not matching with the basic aim of business and about the last one, before we feel the positive side of it we have to go through the tackling issues initially.

In order to lessen their affect one has to understand the various risks that business is exposed to (Crouchy M). Basic step to embark upon this issue is to make an inventory of all possible reasons that are directly or indirectly influencing the performance of the business and then try to mitigate them. This essay mainly concentrates on a casino hotel -------------------- (name one hotel nearby your domicile); various risks involved with it and the ways adopted by management to overcome these issues.

Risks Overview & Steps Taken Risks are categorized into following forms:1) Structural Risk: It includes risk associated with the firm itself. Security issue is one of the major parts of it. Guests must be secured enough from any sort of criminal activities inside the hotel. A single anti-peace incident may fall down its market. To overcome it to a great extend, casino has its own security employees. They take care of any such violence in the premises and also special weapon checking facility has been implemented.

Next comes risk linked with cheating and theft. As it’s related to gambling games so, cheating is obvious. Management needs to observe closely whether any of their customer or hotel itself is getting cheated or not.2) Growth Risk: Risks arising from expected future performance is related to growth risk. It’s not a monopolistic market rather, there is strong competition and hotel authority must struggle for its existence. Management provides well structured perks and benefits to their members in order to retain them and also very often to the others to attract more customer.

Other than this, arrangements for special programs during festive days are taken so that, in market it is more highlighted.3) External Sensitivity Risk: There are some cases like increase in government taxes, political revolution or increase in foreign exchange rate which directly impacts on the business. Though management doesn’t have straight access to solve them but maintaining good relationship with customers as well as political party sometime gives good return. Conclusion Risk and management are two prime components of a business.

Unless and until risk comes into picture, business never gets its potential to sustain its growth and gradually loses its existence. Some of the risk factors of the casino hotel have been illustrated but truly there are enormous, same as problems in our daily life. Management has been trying to run smoothly against the risks but the question over here is, how long? Will it be a never ending process or just a journey towards very narrow passage!ReferenceCrouhy M, Mark R and Galai D. Risk Management.

McGraw Hill. 2001.