Rezidor is exposed to operational and financial risks in the day-to-day running of the business. Operational risks occur mainly in running the local businesses, whereas financial risks arise because Rezidor has external financing needs and operates in a number of foreign currencies. To allow local businesses to fully focus on their operations, financial risk management is centralised as far as possible to group management, governed by Rezidor’s finance policy.
The objectives of Rezidor’s risk management may be summarised as follows:
- ensure that the risks and benefits of new investments and contingent liabilities are in line with Rezidor’s finance policy;
- reduce business cycle risks through brand diversity, geographic diversification and by ensuring there is an appropriate mix of leased, managed and franchised hotels;
- carefully evaluate investments in high-risk regions, matching this with premium returns on investments;
- protect brand values through strategic control and operational policies;
- review and assess Rezidor’s insurance programmes on an on-going basis.