Business Response to Crisis and Disaster

In this self-paced course, tourism professionals in management positions will explore the challenges and benefits of resilience in tourism. You will learn how to respond as a business to crisis and disasters by looking at the three phases preparation, response and recovery.

Who is this course for? 

The course is intended for tourism professionals in management positions, and anyone interested in the topic.

What will you learn? 

• You will learn how to prepare as a business for crisis and disasters
• You will learn how to respond as a business to crisis and disasters
• You will learn how to recover as a business after crisis and disasters

Keywords: Sustainability, tourism, resilience, business response, crisis management, disaster management

 

Introduction to Business Response to Crisis and Disaster

Lesson 1: Introduction

Description

Hello and welcome to the 4th learning unit of the course Resilience in Tourism.

In this section, we’ll be focusing on the measures that businesses should take in response to crises. How businesses respond to a crisis or disaster can determine whether the business survives the event or not.

According to the US Federal Emergency Management Agency, 40% of businesses do not reopen after a disaster and another 25% failed to stay in business the following year.

There is a need for proactive crisis management within the tourism sector, but the organisational responses required for this to be effective often lie outside businesses regular management activities. This makes it all the more important to prepare comprehensively for such situations and to be ready for all eventualities.

There’s a whole range of measures that businesses can implement to build resilience.

When considering crisis response, it was found that the preparatory stage of crisis management forms the beginning of any strategic response. In fact, crisis management involves activities before, during and after a crisis which, following prevention or mitigation, can be grouped into three additional phases, preparation, response and recovery.

So, let’s find out more about this important topic

 

Preparation of Business Response

Lesson 1: Resource management and crisis communication

Having detailed emergency response plans is important in order to prepare a coordinated response in the event of a crisis. There may be different emergency response plans for different types of events and they need to include goals and objectives such as protecting people from hazards, including staff, guests, contractors and other relevant stakeholders; minimizing business disruptions, preventing environmental pollution minimizing damage to assets and facilities and protecting the organisation’s image or brand. It is important to include clear roles and responsibilities in the plans (who does what) and to update them regularly. Ideally, trainings and exercises should be conducted regularly.

“While emergency response plans set out details how the organization responds to a crisis, it is important that a degree of flexibility is maintained to allow for swift decision making at the operational level”. Julia

Resource management

Detailed information on the required resources are needed, including both internal and external resources.  These may involve people, facilities, equipment, communications and information technology, materials, supply, financial resources, expertise. Identifying resource requirements may involve a needs assessment which can be mapped against existing resources. Resource management includes a logistics component as it needs to consider not only what resources are required, but also how they can be accessed during crisis.

Emergency response

The development of emergency response plans commences with a risk assessment (module 3), to identify potential emergency situations. 

Step 1: Protect lives and people

The primary objective and first priority of the emergency response should be to protect lives and people present at the property, including staff, guests, suppliers, contractors and others. Second priority should be to stabilize the incident. 

Step 2: Shelter or Evacuate

Emergency procedures include evacuations (in event of fire for example), sheltering/shelter-in-place (for example from storm events or chemical clouds), or lockdown (when faced with violence for example), but also first aid or containment of chemical spills. The plan needs to identify the most appropriate action for each hazard. Local emergency services may provide localized information, maps, kits or guides that support this process. 

Step 3: Have relevant information ready

Site and facility plans need to form part of the plan as well, as external emergency services have limited knowledge of your premises. Site information should also include details of equipment stored, locations of controls for building management, utility or protection systems and instructions how to operate emergency equipment or systems.

Step 4: Inform local emergency services

Get in touch with your local emergency services to confirm the information they recommend to be included in your plan and provide them with a copy. Other relevant management or security services should also receive a copy.

Crisis communication

Cisis communication includes developing and implementing crisis communication plans and strategies, including communication protocols.  It is critical to have a plan in place that outlines who communicates what and when, including how people will be warned of a hazard and who alerts first responders such as emergency services, internal fire warden or the responsible person. Having a communication plan in place allows the business to communicate the relevant information promptly and accurately with  each stakeholder group. 

At times of a crisis, there may not be time to craft messages carefully. Therefore, the plan may involve pre scripted messages that can easily be adjusted according to the incident. The plan also details what communication channels are used for distribution and who is responsible.

Lesson 2: Emergency response

Information technology

Most tourism businesses rely at least to some degree on information technology, be it online booking systems, payment systems, computers or wireless devices. 

A plan should be in place to respond to instances where they stop working, including communication protocols, having backups in place and trouble shoot plans. Where large amounts of data are stored, considering the safety of data is important, as well as how the business responds to data loss, error or theft as the impact may be significant. Like any other disaster response plan, the IT plan should be tested on a regular basis.

Employee assistance

A crisis may not only impact the business but employees and their families, either due to loss of work, injury, or in case of larger disasters, due to impacts to the wider community. These impacts may affect the psychological state of a person and thus impact the ability to work effectively (e.g. as decision making may be compromised). This may have wider consequences for the business itself. 

The emergency response plan should therefore include information how the business can support affected employees. This includes communication with employees, and may also include employee assistant schemes, where employees have access to counseling services to deal with the emotional impact of a disaster.

“If not available through the business, these services may be provided through the community. As a minimum, the business could point out these services. Advances on future wages or providing assistance for employees to access benefits available to them also provides effective ways of support”. Julia

Incident management

An incident management system sets out responsibilities and processes of how to coordinate activities should an incident occur. It important to manage the resources to respond to crisis including people, processes, procedures, equipment and facilities. 

It defines an incident commander, spokesperson, points of contact with external emergency agencies, and a physical or virtual emergency operations center, a space where staff meet to manage the crisis response.

Identify responsibilities

All emergency response plans should identify responsibilities of who is doing what at times of a crisis. These responsibilities should be mapped against existing skills and qualifications to identify gaps and training needs

Training

Emergency response plans should involve training and testing to ensure all staff are able to fulfil their responsibilities during a crisis.

Lesson 3: Be prepared

Preparedness is crucial as it builds the foundation upon which response and recovery activities occur. It can thus reduce the impacts of a hazard.   

“Where there is no or limited preparedness, businesses are passive and react once the crisis has occurred, thus limiting the opportunity to protect people and organisations. In climate change, this reactionary approach to impacts is understood as ‘coping’ which is common in tourism”. Julia

Information:

• Response plans including evacuation plans
• Building plan
• Inventory including latest stock
• Financial and banking information
• Lists of product and services including any trade secrets
• Document/IT back up including restoration procedure
• First aid register
• Business contingency/recovery plan

Contact Details:

• List of employees with contact details, including their emergency contacts
• List of current and expected guests with contact details
• Supplier contacts
• Contact details of emergency services, local authorities, insurance company

Interview with Dr. Johanna Loehr 

Dr. Johanna Loehr is an expert on sustainable tourism, climate change and resilience and is speaking today on the topic of “Building Human Capacity”.

Interview

Question: How can human capacity be built?

Answer: One way is to learn from previous experiences with crises. However, not everyone actually has to live through a real crisis in order to learn.

Learning can be supported through scenarios and practise drills which increase understanding and create confidence with staff to make the right decisions in emergency situations.

Question: What need to be considered in particular after a crisis or a crisis exercise?

Answer: After any crisis or practise drill, debriefing sessions should be conducted because learning doesn’t necessarily occur naturally. This allows the team to share their experience, discuss questions and concerns, and also importantly reflect on and question the effectiveness of any existing systems, processes or plan.

For this to be effective, the organisational culture needs to first of all allow people to speak up, but also allow changes to management practises and organisational policies to be made where required.

Question: What other possibilities are there for building human capacity?

Answer: In addition to practise drills and scenarios, human capacity to respond to a crisis can be built through training and development programmes that are aimed at improving awareness and the response effectiveness of individuals, teams and the organisation as a whole.

This also supports the development of crisis leadership and helps ensure that emergency plans are implemented effectively in times of crisis.

Training on emergency plans can form part of the induction and should also be repeated regularly.

Access to information including early warning 

Early warning systems can be critical in providing sufficient time for last minute preparations and to respond for events that can be predicted, such as cyclones or tsunamis. There are different early warning systems:

Tourism bodies and agencies can play a leadership role by providing businesses with localized information and support. This may involve training or crisis management tool kits and guides, but also provide access to weather data and other early warning systems, local emergency contacts and evacuation routes.

 

Development of Response

Lesson 1: Crisis communication

Crisis communication is critical to an effective response. Crisis communication involves internal communication as well as external communication, including with external agencies, guests and the media. 

Effective communication

Effective communication can support the coordination of the response between staff members, teams and external stakeholders. When a crisis occurs, staff needs to be informed. Current and expected visitors will need to be informed especially with regard to how they are personally affected. 

There may be requirements to communicate with relevant regulators, agencies or government officials. If the incident happened at the hotel, neighboring businesses and residents may need to be contacted if they are at risk. Below is a list of potential audiences that need to be communicated with:

External:

• Survivors or people harmed by the incident and their families
• Emergency response services
• Investors
• Media
• Community, neighbours
• Authorities, including regulators, government officials or agencies
• Suppliers and contractors

Internal:

• The management team, directors 
• Employees and their families

Guests:

• Guests
• Expected guests

“Contact details for each of the relevant audiences need to be readily available, for example, by adding them to the crisis communication plan – make sure the list and details are regularly updated”. Julia

Ways to communicate

The communication strategy is usually developed by the management teamand is part of the overall crisis communication plan and the emergency management plan. The communication strategy should define who is responsible to communicate what information in which situation. Especially in times of crisis and when managing sensitive information linked to injury and death, communication needs to be closely coordinated with management, company spokesperson (if relevant) and public agencies.

Plan

There needs to be a plan in place how to reach management in times of crisis, including on weekends or at night.

Training

Staff need to be trained to know how to communicate with guest in times of crisis.

Regulations

Regulations such as operational health and safety or environmental regulations determine when to inform certain agencies about incidents that occur on the business premises need to be understood and adhered to avoid costly fines and negative publicity.

“When preparing messages to each stakeholder group, think about what this group needs to know, for example, how they will be affected, what is expected of them”. Julia

Type of indicent that require crisis communication

The risk assessment informs the type of incidents that may require crisis communication, for example:

• Incidents where people get injured
• Incidents where company facilities get damaged
• Incidents that cause disruption to the provision of services (whether they occur internal or external to the organization)
• Incidents that cause harm to the environment

Crisis communication needs to support the overall crisis response and forms an integral part of the strategy to manage the crisis. 

Lesson 2: Managing media

A crisis or disaster often impacts the image of the destination or organization. Effective communication and marketing strategies are therefore an important part of the response and also the recovery phase to minimize reputational damage, rebuild the image, and reinstall trust and a perception of safety.

Podcast Episode 1: “Managing media”

Guest speaker: Elaine Zuma

Podcast

Julia: Welcome to the first episode of my podcast. This session is all about managing media. My guest today works as a manager in the hotel sector, Elaine Zuma. Elaine, thanks so much for joining us today. 

Elaine: Hello, Julia. Thank you so much for having me here. 

Julia: We’ve just been talking about crises and how to respond to them. What role does the media play in all of this? 

Elaine: Well, the media is absolutely critical as we know the media often put a keen focus on crises and disasters. And that, in turn, can have a negative effect on the image and perceived safety of a destination. So, It’s very important to consider how a crisis is framed in the media, and it’s important to keep a positive relationship with journalists and media outlets throughout the recovery phase, too.

Julia: When a crisis occurs in a tourist destination, local businesses are often bombarded with inquiries from the media. What’s the best way to deal with this? 

Elaine: First of all, you’re absolutely right, and sometimes inquiries come not only from the local media, but also from regional and even national media.

It can be very stressful managing large demands for information and preparing official statements so knowing which requests to prioritise and developing templates for talking points and press releases can help businesses feel confident and well prepared, and also enable effective communication when things have to happen quickly.

Julia: Yes, great, that’s very good advice. And what should businesses pay particular attention to when communicating with the media?

Elaine: I’d recommend that the company speak with one well informed voice, rather like that of a trained spokesperson. This should be part of company policy and an integral part of any induction training. Speaking with one voice will help make sure that messages communicated to the media and other stakeholders are consistent. That’s key when it comes to being seen as credible and competent.

Julia: More good advice. We’ve now come to the end of this episode of our podcast. So all that remains is for me to say a big thank you, Elaine, for coming in to talk to us today and for giving us such valuable insights. 

Elaine: Thank you too, Julia, and thank you again for having me here today.

Julia: And all of you listening, thanks for tuning in. I hope you found it helpful and that you can take something away for your own business. I look forward to welcoming you here again for the next episode. Until then, take care.

Establishing a common language

Establishing a common language to describe the crisis may be even more important when the crisis affects many businesses, because it is very likely that different stories and facts appear as businesses respond to the media. 

Coordination

 A destination may have a tourism crisis management group to coordinate the media response on behalf of the tourism industry which you should contact in case you have to speak to the media. Messages should focus on: 

Information

Providing consistent and coordinated information

Safety

Putting people’s safety first

Reducing sensationalism

Reducing sensationalism and minimizing misinformation

The following may also help navigate a media response:

• Don’t speculate
• Be calm and reassuring
• Acknowledge your responsibility to guests and the community, including the importance of visitor welfare (if relevant)

Lesson 3: Bookings and cancellation policy

Cancellation policy

One particular aspect relevant to all tourism businesses is to develop and implement a cancellation policy. A clear and concise cancellation policy that is easily accessible and communicated reduces potential negative consequences on the business in case of crisis. 

“For you as a business it is important to understand your legal obligations, including under which circumstances you are legally obliged to refund the deposit, for example if the access to your business is restricted due to a crisis”. Julia

There are other situations where customers may want to cancel their trip. Travel warnings due to disasters or other crisis for example may cause visitors rethink their travel plans, because the destination may not be considered safe any longer. 

It is important to clearly communicate what options customers have, for example: 

• by including the cancellation policy with any booking confirmation.
• mentioning the cancellation policy when bookings are taken over the phone.

During COVID-19, most tourists had to cancel, or at least postpone, their trip due to travel restrictions. Many tourism businesses responded by making it easy for customers to cancel, or change, their booking. 

While it may seem like a loss of business to let customers cancel their booking, chances are that they will be a visitor in the future and parting on good terms is part of good customer service.

Manage your bookings

“After the immediate response, you will need to think about managing your bookings. You should notify customers who are due to arrive at your property within 24hours of the crisis occurring to let them know whether they can visit”. Julia

It is also recommended to be proactive about managing bookings which can reduce the number of cancelations. To maintain cash flow as much as possible after the event, it is better for the business if guests re-schedule their trip if they cannot or don’t want to visit.

Know your cancellation policy

It is common to receive cancellations. Know your cancellation policy, when it applies, and when it is best to negotiate alternative arrangement with guests.

To avoid cancellation, you may be able to offer credit notes, transfer the booking to a later date or transfer the booking to another business in your group or the broader region. Also remember that visitors may cancel their trip because they think you or your region is impacted by a crisis, even if you may not be. Pro-active communication may reduce this risk.

Know your cancellation policy

It is common to receive cancellations. Know your cancellation policy, when it applies, and when it is best to negotiate alternative arrangement with guests.

To avoid cancellation, you may be able to offer credit notes, transfer the booking to a later date or transfer the booking to another business in your group or the broader region. Also remember that visitors may cancel their trip because they think you or your region is impacted by a crisis, even if you may not be. Pro-active communication may reduce this risk.

 

Recovery from Crisis and Disaster

Lesson 1: Business Continuity/Recovery Plan

Once the crisis has been responded to, and your business and the destination/region are open for trade, the recovery phase commences. This phase may take some time, depending on the impact and nature of the crisis or disaster. During this phase, the main objective is to stay in business. It is an important time to think ahead and to put in place strategies that help revitalize your business.

Business Continuity/Recovery Plan

A business continuity plan sets out how the business continues business activities. This begins with identifying what the essential services are that are necessary for the business to operate, includes conducting an impact analysis of the crisis, listing the critical assets required for the business to operate and what resources and steps are required to implement the recovery strategy.

Essential services

Essential services are services provided by the business that are essential to its operations. For a hotel, these may include having running water, or access to electricity (to run lights and ACs). When these are restricted, the hotel finds itself in a critical situation as it will not be able to provide accommodation any longer.

Non-essential service

Non-essential services are those services that are non-essential to the operations of a business. For a hotel, this might be certain recreational activities. The hotel might not be able to offer a snorkling tour, but that does not affect the operations of the hotel as such. 

Understanding the impact, the crisis had, critical business services, activities and assets required to operate the business will help identify the resource needs for recovery.

Make a Plan:

There should be a plan how to access funds such as insurance payments, as well as a back up plan if payout takes significantly longer than expected.

Implement the Plan:

Steps required to implement the plan and start recovery outlined in the plan may include detail on IT recovery procedures, relocation, reassessing of products and markets, repair work, reassessing suppliers, training of staff, new marketing strategies and monitoring and evaluation.

What are critical assets?

Think about the critical equipment, facilities and people required to operate, and what happens if these are not available after the crisis.

Options include:

• Hiring equipment
• Cross training or upskilling existing staff
• Selecting alternative suppliers or contractors
• Outsourcing certain activities
• Operate from a different location (such as a different premise or from home)
• Activate alternative essential services or have back-up options to access telecommunications, electricity, gas and water. 

In the recovery phase, it is important to understand what the next weeks, months and year may look like in order to plan accordingly. 

• Do you know what your bookings and turnaround ARE likely to look like? 
• How is that impacting your staffing? 
• Are your existing products and services still relevant/feasible? 
• What promotional activities should you undertake?

What are the critical assets of your business? Discuss as a group or write them down. Pick three and come up with back-ups or alternative options should they be affected by a disaster.

Lesson 2: Revise markets and manage staff

As part of the recovery phase, you will have to revise your products and services, and your market, to increase sales and stimulate cash flow.

Revise offer and markets

Knowing who your customers are and how they may respond to a crisis is important. Market recovery may vary depending on the crisis. If access is restricted or international visitors don’t perceive it as safe to visit (which may be stipulated by media reports), think about the domestic or local market and how your products and services could provide value. Focusing on a market segment that is less susceptible to the impacts your business or region has experienced may help you increase business.

Cash Flow

Make sure to keep a close eye on your cash flow as operating cost may have changed (such as staffing). You may be eligible for financial support from either government or non-government agencies to support you through a time of low turnover. 

“To find out what may apply to your business, contact your accountant, your local or regional tourism organisations, the local council, emergency services or speak to your bank directly which may be able to provide postponement of loan repayments”. Julia

To improve efficiency and cash flow, it is recommended to reduce wastages, or operating costs that are unnecessary and don’t deliver a return. There are different ways to cut cost that does not impact the business’s ability to compete long term:

Inappropriate or excess processing

Includes administration processes, communication, not understanding customer needs.

Unnecessary inventory

May lead to waste and incurs cost of storage.

Unnecessary motion or systems

Poor processes and planning, leads to non-value added time and increase cost.

Defects

Including defects of systems, equipment, products; lead to wasting resources and impact customer satisfaction

Non-utlisied talent

Affects the operational effectiveness and staff morale. The elimination of this type of waste has a positive impact on all the others.

To reduce these costs, ask yourself if there is a more efficient way to use resources, and whether staff understand their roles and responsibilities to reduce resource consumption where possible.

Manage Staff

Reducing staff to cut cost is a common response to improve cash flow as wages contribute significantly to a business’ operating cost. However, redundancies have consequences as staff will take their knowledge and resources invested in sourcing, hiring and training them with them. Furthermore, a reduced workforce can lead to increased workload and strain on remaining staff and consequently, a reduction in productivity.

An alternative is to reduce staff hours without losing human capacity, focusing on creating a collective sense of purpose and support and instead, increasing the quality of employees through training and by fostering motivation. This may be done by entrusting them and showing transparency of business results and targets, and by supporting employees (and thus communities) during difficult times

You have successfully completed the fourth learning unit of the course “Resilience in Tourism”.