RUES Hotel Management & Consulting

Risk Management in El Salvador

Gist – Risky Business

Eberhardt Rues, managed the former El Salvador Sheraton (1983 - 1987)  in midst of economical upheaval.  Sound management practice, creative problem solving, and common sense approach to risk taking turned the property in trouble into a solid, lively, and profitable operation.

It is every General Manager’s responsibility to take all necessary precautions to provide a viable security and safety plan for hotel patrons, its employees and assets as appropriate to the property and current circumstances.

Risky Business. Taking risks is a part of running any business, but conducting business during a worldwide recession in a country torn by political and social upheaval presented special risks. Decision-making and strategy planning to minimize risk were part of my daily routine at the former Sheraton.

Risks in hotels and tourism are very complex. They can be measured over a time span of immediate, short and long range. In today’s worldwide economic crisis and terrorism, risks are normal facts and every manager has to take advantage of each possible opportunity. “Turn crisis into opportunities.”

One cannot take risks for granted. Here is where professional ethics differ from acceptance out of habit or indifference. One should not become accustomed to negative events. As long as the mind thinks positively, the decision also leads to positive results.

Brief History

The history of the El Salvador Hotel is unique. Built in 1956, it was the first North American and largest convention and resort hotel in El Salvador. It was designed by William A. Tabler, one of the greatest North American hotel architects and operated by Inter-Continental Hotels Corporation, who initiated one of their first management contracts in Latin America in 1958. The hotel joined the Sheraton Corporation in 1975 as a franchise property until 1987. After a thorough retrofitting and renovation program Radisson Hotels took over the hotel under a franchise agreement in 1995 up to 2009.

The hotel has lived through significant phases: “Years of Growth” - “Years of Crises” - “The Rebirth” and “The Earthquake” - "Change of  Management & Franchise Companies ":

·  The pioneer American hotel of fifty years ago that influenced the growth of the American hotels and the entire hotel industry in Central America;

·  In 1979 internecine warfare broke out, leading the hotel into a very difficult situation in both economics and prestige;

·  In 1983 the rebirth of the hotel, dormant for over five years, occurred during a controversial time of acute economic crisis, guerrilla warfare, and a government election in 1984.

·  On October 10, 1986, I witnessed the most disastrous earthquake affecting El Salvador in the 20th century. This earthquake registered seven on the Richter scale and the epicenter of the quake was in San Jacinto, three miles from the Sheraton. In view of the severe damage primarily to the main building (built in 1956) I closed it pending a complete evaluation of the potential for repairing the building. The convention center and VIP tower luckily were not significantly affected by the earthquake, so sixty percent of the hotel’s operation continued functioning.

·  The peace agreement between the FMNL and  the Salvadorean government was signed in 1991.