The days of worrying about a hotel guest stealing a hand towel aren’t quite gone. But as the scams and fraud perpetrated against the establishments has grown, so has the scope of hotel operators’ worries.
Today’s issues are more complex – credit card fraud and identity theft – and require more sophisticated responses by hoteliers.
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Ralph V. Izzi – marketing and communications director for The Procaccianti Group, the operator of major Rhode Island hotels, including The Westin Providence and the soon-to-be-opened Hilton Providence – said the issue is of high importance to the company.
Because Procaccianti could run the risk of tipping off people who are looking to defraud the company, he wouldn’t reveal the specific policies and tools the company uses to fight crime.
Izzi did say, however, that the company implements all the latest and best technologies to fight fraud and protect its assets, as well as those of its customers. “Our customers are our greatest asset,” he said.
Howard Allen, the director of security at the R.I. Convention Center and a former security director at the Westin, said credit card fraud remains one of the key issues that hotels must fight.
“We have good systems in place to make sure that when someone checks in, we’re checking their card to make sure it’s viable,” Allen said.
On the employee side, Allen said that, in his four years at the Westin and 20 years at other Rhode Island hotels, he did not encounter widespread problems. However, much of that can be credited to hiring the right people, he said.
To avoid employee fraud, Allen recommends the basic tactics: checking identification and performing background checks and drug tests. But just as importantly, he recommends an intense process, because the labor pool for the industry is so broad that without serious scrutiny, unworthy employees may find their way onto a company’s payroll.
“Our industry is spread throughout the world,” Allen said. “We have people that work here in Rhode Island that are from throughout the country and throughout different countries. The hospitality industry has grown so much.”
J. Rudi Heater – director of hotel operations for Carpionato Properties’ facilities, which include the Crowne Plaza at the Crossings and the Holiday Inn Express & Suites, both in Warwick, and a past chairman of the Rhode Island Hospitality and Tourism Association board of directors – said his company has excellent controls and procedures, which include nightly audits, checking against posted sales, and a wide array of tests.
So, Heater said, he doesn’t worry a lot about fraud at his hotels.
However, he does think there is a more room for employee theft on the beverage side of the operation. Employees, either acting alone or in a group, are capable of bringing in their own liquor to sell, giving out free drinks or just outright stealing from the company, he said.
To weaken their chances, many facilities like the Crowne Plaza will use “spotters” – people trained to watch out for improper conduct by employees.
“The most effective prevention is the utilization of internal inspectors,” Heater said. “Most large beverage outlets utilize these services and take corrective action based on their reports.”
Allen said modern point-of-sale systems, such as Micros, also cut down on the opportunity for employees to skim from the company’s revenues.
In an essay on the subject, Peter Goldmann, the president of White-Collar 101, a leading publisher of anti-fraud information for corporate and governmental agencies, said that key steps hotel operators can take include anti-fraud policies and auditing.
The primary purpose of such a policy, Goldmann said, is to ensure that employees know the rules they are supposed to follow. A good policy should include definitions of fraud, specific language regarding financial statement fraud, and a whistleblowing policy.
Allen also said that internal auditing – a standard in the industry – is crucial to ensure that whatever policies exist are being adhered to.
The Rhode Island Hospitality and Tourism Association offers information and resources to help its members combat fraud. Allen, who is the chairman of the association’s security group, said that the network of companies and agencies across Rhode Island has made a real difference.
From problems as small as someone breaking into vending machine to ones that are much larger, he said, the ability to talk to authorities and peer facilities has helped make local companies aware of the things to watch for.
“We’ve developed really good teamwork and communication,” Allen said.
