Mba in Hospitality and Tourism

TEI of SERRES

Department of Business Administration

MBA in Hospitality & Tourism

A Project

By

Konstantinos Karanikolas
Ioanna Koumleli
Victoria Tsiamoura

Date 22/01/2013

Professor: Maria Tsourela

Tourism is a sector that is more possible to be affected when a crisis occurs. As a crisis is defined every natural or man-made disaster that can impact the long-term functions of an organization or prevent it from keep operating normally. Management is never under a tougher test than in a crisis situation. When managers do or don’t do correctly, then and there, can have long-lasting implications for their organization. A well-defined crisis management program developed and implemented in advance can help a manager and their organization shine in what may otherwise be a time of dark disaster for everyone involved. Developing continuity plans involves identifying the strengths and weakness of the organization, designing contingency plans to mitigate potential loss and understanding how key stakeholders and the media are likely to react when they find out about a crisis. Examples of such crises are: terrorism attacks, air-crashes, hurricanes, tsunamis, political problems, economic crisis and so on. In order for an organization to be prepared to confront a crisis, survive from it and continue operating, there are some things that should be done and the most important one is developing a successful crisis management plan. There are many frameworks and approaches to risk and crisis management and we are going to use the 4 R’s approach. We will examine the case where a hurricane hits an area in Southeast coast of America, where there is a small tourism business. This business should follow the next 4 phases from which a crisis management plan should be consisted of. The first phase of the plan is called Reduction which involves understanding the threats to business operation and identifies the risks. In detecting the early warning signals of any potential crisis, a business seeks to prevent or limit the damages. A SWOT analysis is a useful tool for understanding on organization’s internal strengths and weaknesses and internal opportunities and threats. In this phase, regarding the safety the property, tourism as a service oriented industry, have moral and legal obligation to look after the safety and security of staff and guests. Measures to protect life and property should be an ethical and commercial imperative before, during and after the crisis. So, firstly the hurricane should be identified as potential crisis that is going to cause material and possibly human damage. Afterwards a SWOT analysis should take place in order to define and evaluate the possible impact of the hurricane to the life, environment and of course, the property. A crisis management team should be selected, in order to be in charge of discussing, developing, examining and evaluating every step of a continuity crisis plan that will enable the company to meet with the crisis successfully. A part of this plan could be having shelters or special designed places where the costumers could go and stay safe when the hurricane hits the place or maybe set up an emergency service such as liaison panel with people that are ready and trained to help in every case. Also, they should involve all suppliers, vendors and stakeholders in crisis reduction activities and in any case the business should be insured for material damages in order for the company to be ensured that it will not lose its money in case the hurricane demolishes all its facilities. When it comes to the communication’s part of the first phase of the CM plan, you should take into consideration that the media plays a significant role in crisis situations, effective communication strategies should include the interchange of any information within and beyond the individual organization. Misleading information can be limited through the prior identification of appropriate contacts, authorities, stakeholders, recourses and equipment. Here, the most important thing is to set up communication channels with travel agencies, media and national organizations such as embassies and ministries that will be ready to help and accept all tourists during the crisis. A good move could be organizing meetings and seminars to promote informal contact between all those that will be involved in the crisis, such as the company staff together with police, hospitals etc. Moreover, there could establish CM coordinator (possibly the general manager of the company) or a whole team that will be trained in public relations in order to communicate regularly with the media and have a good relationship with them. At the end of that first phase of CM plan, the Promotion and Marketing part plays an important role for the company as most tourism businesses are already familiar with the concepts of promotion and marketing. Successful enterprise requires a business to know and understand their market, and strives to stimulate increased interest. Marketing and promotion is perhaps even more significant in post-crisis recovery strategies and should be adapted to reflect changed conditions and circumstances. So, they should always have in mind that they should set aside budget reserves for emergencies (for additional promotion and communication activities which should always be ethical and honest). Moreover, they should run a business and impact analysis for the potential crisis. This means that they should make a research about all potential hazards and ways to confront each one of them. An additional step would be produce public educational material that presents their CM plan analytically to the stakeholders and the tourists and encourage the second ones to learn safety practices. Continuing, the second phase of the plan is Readiness. Readiness refers to the strategic (who, when, what) and tactical (how, where) component of the crisis management process. ‘Being ready’ involves more than making plans and running an occasional drill. Managers must regularly audit the plans, conduct crisis response exercises and continually acquire crisis management skills. Managers and the stuff should be psychologically and physiologically prepared for the impact and stresses that the crisis may impose to them. The organization should deepen more in preparing plans and crisis simulation exercises in order to be best prepared for the crisis time. For example, there could be an established day every 3 months in which there will be a hurricane crisis simulation where everyone will be trained to do a specific task (ex. the front desk employee helps the 1st floor customers to go to the shelter with safety). This is the reason why in that phase they should have a well-trained crisis management team, in order to be able to analyze to each employee what he has to do and how to do it with safety. Moreover, the company should place necessary items in key places all over the hotel that might be helpful during the hurricane time (ex. flashlights, fire extinguishers etc.). Lastly, they should be assured that the property will also be protected during the hurricane, (ex. protection from electricity columns in case they fall and high trees close to the entrance of the hotel). Having pre-determined elements such as individual roles and responsibilities (particularly for decision making and cooperation with external agencies), a notification system, media liaisons and a comprehensive recourse inventory, reduces uncertainty in crisis situations. As a potential crisis is detected, readiness enables a more coordinated and focused response effort. The next step is to assign responsibilities to the stakeholders too, (regarding the communication part of the crisis) and have a multi network communication system in place to alert all the colleagues about the hurricane. This system must be tested once before the crisis in order for everything that is part of it to be aware of its existence. The CM plan should be communicated to everyone: staff, suppliers, vendors, channel partners and tour operators in order to be prepared and aware of what are their duties when the crisis occurs. Furthermore, an emergency call center and a website that will provide information and have a contact email are absolutely necessary in order to have our plan supported and strong. Following that, there should be law enforcement during the whole crisis situation so as our company promotion is not damaged. Furthermore, there should be assigned to only one agreed spokesperson the collection and dissemination of appropriate info. This spokesperson should also make sure that the CM plan avoids trying to change how people normally behave in crisis situations. Lastly, we establish updates and reviews for our colleagues and also a legal review of the CM plan procedures. Proceeding to the third phase of the plan, Response, the company should emphasize on damage control in both lives and property. It also involves the activation of contingency plans and continuity and all the communication strategies must reassure the shareholders and the public, as well. All the short term safety actions must include, saving lives, preventing further damage and reducing effects, providing emergency medical services to the victims. Now, the crisis management coordinator or the team must identify and prioritize actions, and essentially retain control of business activities and functions. Moreover, the evacuation and rescue procedures should be activated immediately as soon as the crisis begins. Emergency accommodation and food should be given to the tourists in combination with medical support. At this time the priority is to protect the remaining guests and provide them also with psychological support, besides the physical. So there should be experts and primary authority cooperation in order to achieve the treatment of the hurt guests and their transportation. When it comes to the communication part, the most important is to give accurate, authoritative and regular statement at the media and constantly providing them information and updates concerning the situation in order to limit congestion caused by excessive responders and curious public. All action must be focused on activating the crisis response team, alerting relevant shareholders within 30 minutes and establishing the crisis communication system. Additionally, they should activate family notification procedures by calling them personally and giving them extra information about their beloved ones. The next step is to link the web master of the emergency website they’ve created with the media center for constant simultaneous updating. Moreover, after contacting the communication channels (tour operators, airlines colleagues etc.), they should provide the guests with instant access to their embassies and families by phone, fax etc., and arrange them discounts or even free transportation. The last element of that phase has to do with Promotion and Marketing. The first thing that must be done, is issuing a press conference within an hour after the crisis in local language and in English, describing the situation and giving basic details about the hurricane and the planned response activities within the next three hours. Following, they should stop all advertisement procedure immediately after the crisis in order to stop drawing additional attention from the public and they have a designated person as a spokesman in charge of media relations that provides constantly the media with feedback and represents the company in public. In any case the company must be kept operating. The fourth phase of a CM plan is called Recovery and relates to the period after the crisis when the company must be reconstructed and confront the losses. This period should also be used as an opportunity to improve the pre-crisis conditions. The very first thing that must be done is counseling and motivating the employees to overcome the psychological effects and stress that hurricane caused to them. Maybe a group therapy from a psychiatrist that will be paid by the company could be one solution. Following that, there should be extensive research and evaluation of the security procedures in order to improve the safety and the services of the hotel and examine what new measures can be taken for confronting a new hurricane with minimum losses. In terms of communication in that phase the company must stay in contact with recovering victims and with the families of the deceased and consult with them on memorial services in order to reassure its reputation and create possible royal guests. Also, the communication with media should be continued in order to inform them about the present situation of the property and try to look for positive new regarding the company. Maybe a donation it has made would be something positive about the image of the organization. Otherwise the company should target the travel consultants in its main markets in order to make a comeback and regain positive reviews. In every case it should have a strategic recovery plan draft involving all stakeholders, colleagues and travel agents Finally, when it comes to the promotion of the company -after the hurricane, a lot of effort is demand in order to get back to the market as soon as possible and become competitive again. Strategic marketing tactics will need to address any prevailing concerns, while re-branding and promotion sales should undermine long term business viability and profitability. In order to have effective crisis communications the company should fully explains the true extend of the crisis, put the issue into perspective and reassure the observers about the appropriate measures taken to control and address the situation. Rebuilding the image must be primarily founded on sensitivity and understanding. Something very positive, would be creating a new market product (ex. a service or a facility that any other hotel in the area does not have) or promotion in domestic market and of course creating price offers so as to attract more and more guests. Furthermore, a new media and relations plan must be prepared including hosting as many journalists possible and checking if perceptions in written articles in media are correct or wrong. Another good move for the promotion would be to have a public relations plan on standby such as one night stay for employees of companies in order to make new deals and approach new markets and clients. Heavy discounting may seem a viable option to recoup prospective commerce, extensive experience suggests that incentive and value adding such as upgrades in rooms. While developing a crisis management plan, the team that takes all the decisions about who, where, when and why will be responsible for dealing with each occasion at any phase of the plan must have in mind that in such situations we must predict the unpredicted and make the impossible -possible. We are all humans and it’s not always easy to handle such magnitudes especially when it has to do with nature but being very well prepared, knowing our team and cooperating with them effectively and learn from our mistakes, might give to our company the change not only to survive the crisis, but become stronger and greater by having as a treasure at the end, the most important competitive advantage, its human force-the employees.