Calculated Risks

1/16/2013 | by Sean Downey
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Kevin Smith, general manager of Cassa Hotel and Residences in New York City, thought he was prepared for anything Hurricane Sandy could throw at him. “I’ve been through severe weather before, as has most of the staff,” he says. “We know the drill.” The hotel followed the disaster plan to the letter, stocking up on water, extra food, flashlights, and emergency supplies. The staff pulled everything off the balconies that wasn’t nailed down and checked the generators several times in the days leading up to the hurricane. “When the storm hit we had about 25 employees stay over at the hotel,” says Smith. They did that because many of the bridges and tunnels were already being closed and there was a good chance the mass transit systems would be knocked out by the storm. “We figured we had all our bases covered and we were in as good a shape as we were going to be.”

Despite all their careful preparations, there was one thing the staff of the Cassa Hotel wasn’t prepared for—an unexpected flood of guests. Two days after the storm hit, the Internet gateway to the Cassa’s internal property management system lost its connection to the cloud-based revenue management system and was unable to reconnect. “That night we didn’t receive a single booking or cancellation,” says Smith. “That’s when we knew something was wrong.” From the standpoint of the outside world everything was hunky dory. People would make a reservation and receive a confirmation, but the reservations weren’t being passed along to the hotel and the room inventory wasn’t being updated online. Smith says that they immediately rebooted the entire system. And once they were able to get everything up and running again, the bookings flooded in to the point that the hotel was oversold. “Soon we were faced with the prospect of a lot of guests coming in expecting a room and us not having one for them,” says Smith.

This isn’t an uncommon scenario. Hotels do their best to properly prepare for the outcomes of any sort of disaster, whether they’re natural or man-made. From fires, floods, and hurricanes, to power outages, earthquakes—and even acts of terrorism—hotels must be ready for anything. General managers, along with the hotel engineering staff, create strategic plans and appoint response teams to ensure every emergency situation is covered. But, as Smith points out, “There’s always something out there that will blindside you.”

When it comes to hurricanes and other hazards, every hotel’s disaster plan focuses on protecting guests and staff, securing the property, and maintaining business continuity. Yet it’s the last item on this list that often requires the most diligence. And network infrastructure has become the most troublesome thing on the list of what to look out for during a disaster. With more and more systems being put up in the cloud, you need less and less hardware in the building. This means that connection to the outside world is more important than ever. “It’s gotten so that you aren’t just dealing with securing the property, managing your external supplies, and making sure you can physically take care of your guests—now technology impacts all of those areas,” says Smith. “If you really want to be protected you need to figure out your highest risk area and invest in it.”

“You have to make sure that you don’t have a single point of failure,” says Bill Schweigart of the Department of Homeland Security (DHS). Schweigart is a program analyst for the DHS Office of Infrastructure Protection, which is tasked with keeping hotels, stadiums, and convention centers secure. As part of any disaster plan owners and operators need to know the details of the equipment in the building and where everything is located, regardless of the scale of the hotel. This can be as simple as putting together a map that plots where each line comes into the building, where the feeder routes go, where the cable vault lives, and where the operator consoles can be found. From there it’s easier to determine what risks exist that might exacerbate a disaster.

Since certain geographic areas are more prone to certain risks—hurricanes, wildfires, domestic terrorists—the DHS launched an online tool earlier this year that identifies and evaluates a property’s vulnerabilities. The tool was developed in collaboration with hotel chains such as Accor, Starwood, and Marriott. The RSAT tool works for any size hotel, including small and mid-sized facilities and combines DHS threat and consequence estimates with information about a hotel’s specific characteristics and potential hazards and threats. This helps owners and operators identify where more resources, procedures, or staff training might be needed to secure the property.

While the RSAT is primarily focused on security issues, it does provide a broader overview of the particular risk factors facing modern-day properties—and it’s a good place to start when comes to assessing a property’s potential points of failure. Hotels that register for RSAT supply basic information—including the capacity, locations, and potential threats—and receive two complimentary reports in return that they can use to identify the problem areas where additional measures, training, and procedures are most needed. The first report is a a self-assessment that provides detailed information on the facilities’ current vulnerabilities, as well as opportunities for additional protection measures. The second is a benchmark report that shows how a hotel’s infrastructure compares to buildings of similar size and use.

Once potential hazards and vulnerabilities are properly identified by an outside consultant or through a tool such as RSAT, a hotel’s disaster plan can address the best way to mitigate the risks. For hotels, it’s important to know how different systems going down will affect current and potential guests. “One of the recommendations our tool makes is to create a business continuity plan,” says Schweigart. This means determining the most critical processes and what needs to be done to keep them operational. With information on which particular areas have the shortest tolerance for an outage, a hotel can figure out where to make additional investments in redundancy and which areas to pay attention to when disaster strikes.

During the storm, the Cassa Hotel never lost power. It was the phone lines and the primary Internet connection that went down. And Smith says that losing connectivity is something the staff knows how to deal with. “We have a backup Internet system that kicks in for our guests and for our back office,” says Smith. “But when the RMS gateway disconnected from our PMS it was supposed to trigger a series of email alerts to our staff.” This was the crucial thing that failed to happen.

The final part of a disaster plan involves determining which communications equipment needs to be tested for damage immediately following the disaster. If a property knows what’s in use, it will be able to assess and fix those systems when a disaster occurs. Smith says, “We met with the company that maintains our network cables to figure out what kind of redundancy we can build into those systems.”

When something inevitably goes wrong, it’s the hotels that plan the most proactively that end up in a better position than properties that don’t. “This particular problem hit a number of hotels in this city and is one that I’ll be adding to the plan,” says Smith. Luckily the staff was able to find rooms at nearby hotels for many of the guests they couldn’t accommodate. There were even some that they put up on cots for a night. “You’re responsible for all your guests and your employees,” says Smith. “So you need to make sure you’re as prepared as possible to keep them safe no matter what comes down the pike.” 

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