Cyber incidents have been identified as the primary risk for the hospitality, leisure, and tourism sector in 2024, as the Allianz Risk Barometer highlighted.
Based on feedback from over 3,000 risk management professionals, the report stresses the importance of addressing these cyber threats to maintain business continuity.
This year, 36% of surveyed professionals marked cyber incidents as the leading concern, a notable shift in the risk landscape. The frequency of ransomware attacks has spiked, resulting in a 50% increase in insurance claims compared to 2022.
Hackers are targeting both IT infrastructure and physical supply chains with sophisticated cyber-attacks aimed at extorting businesses.
“Cyber criminals are exploring ways to use new technologies such as generative artificial intelligence (AI) to automate and accelerate attacks, creating more effective malware and phishing. The growing number of incidents caused by poor cyber security, in mobile devices in particular, a shortage of millions of cyber security professionals, and the threat facing smaller companies because of their reliance on IT outsourcing are also expected to drive cyber activity in 2024,“ explains Santho Mohapeloa, Cyber Insurance Expert, Allianz Commercial.
Investing in AI-supported detection technologies is seen as crucial for improving the early identification of cyber incidents. Lack of effective detection can lead to extended downtime, rising costs, and severe repercussions for customer trust and corporate reputation.
Although cyber risks are currently the most alarming, other significant threats include business interruption, regulatory changes, macroeconomic shifts, and natural catastrophes, each cited by 22% of respondents. Business interruption, previously the top risk, now follows cyber incidents in terms of threat level.
Natural disasters and fires are the main drivers behind business interruptions, highlighting the global business environment’s volatility and the critical need for resilient supply chains. Enhancing business continuity plans and diversifying suppliers are vital for mitigating these risks in 2024.
Regulatory changes also pose challenges, potentially increasing operational costs and impacting competitive positions. Companies must navigate these risks to avoid adverse effects on tourism demand and overall economic stability.
Macroeconomic factors further threaten the industry, with fluctuations in consumer spending, currency exchange rates, and inflation affecting operational costs and profitability. These elements underscore the necessity for strategic planning to safeguard revenue streams.
Additionally, natural catastrophes pose substantial risks by disrupting operations and reducing revenue through damaged infrastructure and decreased tourist arrivals. Effective crisis preparedness and risk management are essential for recovery and long-term resilience in tourism-dependent areas.
