Cyber concerns top risk for hospitality, leisure and tourism sectors
Cyber incidents have surged to become the primary concern for the hospitality, leisure and tourism sectors in 2024, with 36% of respondents highlighting them as the most significant risk, according to the Allianz Risk Barometer.Ransomware attacks have seen a 50% increase in insurance claims compared to 2022, with hackers targeting both IT and physical supply chains. The adoption of new technologies like generative artificial intelligence (AI) by cyber criminals poses further threats, alongside a shortage of cybersecurity professionals and the vulnerability of smaller companies reliant on IT outsourcing.
Investment in detection, particularly leveraging artificial intelligence, is seen as crucial for incident identification to minimize unplanned downtime, costs, and reputational damage. Following cyber incidents, business interruption, changes in legislation and regulation, macroeconomic developments, and natural catastrophes jointly rank as the second most concerning risks, each receiving 22% of responses.
Natural catastrophes and fire are identified as the top causes of business interruption following cyber incidents, emphasizing the industry's vulnerability to both physical and digital disruptions. This highlights the need for robust business continuity management, supply chain optimization, and alternative supplier development.
Changes in legislation and regulation pose additional risks, including increased compliance costs, uncertainty, and operational disruptions. Macroeconomic developments such as fluctuations in consumer spending and exchange rates can impact revenue streams and profitability.
Natural catastrophes pose risks including physical damage to infrastructure, transportation disruptions, safety concerns for travellers, and revenue loss from cancelled bookings. Effective crisis preparedness and risk management strategies are essential to mitigate the economic losses associated with such events.
To future-proof operations, businesses must prioritise robust operational processes, regular business continuity planning reviews, and comprehensive cyber protection measures including data backups, segmentation, endpoint detection, and multi-factor authentication. Insurers like Allianz Commercial can leverage company data to tailor risk assessments and develop personalised mitigation strategies.