Experts Decry Rising Fraud in Hospitality Business

 Omolabake Fasogbon.

Hospitality and Tourism operators in the country have been advised on taking proactive steps against rising fraudulent schemes threatening sector continuity and earnings.

The operators were tasked on defense strategies, including forensic accounting and audit to be able to identify and investigate suspected fraud, analyse financial records and spot red flags and inconsistencies. 

Referencing report from the Association of Certified Fraud Examiners (ACRE), Deputy Vice Chancellor of Atiba University, Prof. Wasiu Babalola stated that global hospitality industry loses between five to six percent of its $3 trillion annual revenue to fraud. 

Similarly, it was reported that fraud in the travel industry expanded by an overwhelming 156 per cent in 2021.

Babalola, who was speaking at OGE Business School (OGE-BS) training for fraud examiners, recently, mentioned that both hospitality and tourism industries which comprise diverse businesses were characterised by high volume transactions, exposing them to revenue leakage and fraudulent schemes. 

He said, “Fraud in these businesses manifests in several ways as employee theft, billing schemes such as fake reservation and inflated invoices, credit card fraud, vendor fraud, management fraud which could be in form of embezzlement as well as asset misappropriation. 

“There are equally cases of revenue leakages which happens through -point of sales manipulation, overlooking or under-reporting cancellation as well as free services or goods not properly document”

 Wasiu, noted that if fraud was left unchecked, it poses devastating effect on investment including damaging reputation, bottom-line as well as loss of loyal customers. 

Lending his voice, Lead facilitator and Founder, OGE- BS, Prof. Godwin Oyedokun, said operators must step up their operations to create more robust environment for financial security and reduce risk of falling to fraud. 

“Players must endeavour to strengthen organisation’s procurement procedures, enhance revenue control, invest in employees training, implement surprise audit, foster a speak up culture and be abreast of emerging trends in forensic accounting”, he enlightened.