Building Long Term Resilience in Tourism

In this course, tourism professionals in management positions will learn about the importance of knowledge, information and learning when it comes to building long term resilience. You will also learn about the importance of innovation with focus on tourism and hospitality and diversification of products, services, and/or markets.

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 get an overview of the role of stakeholders in building resilience by looking at a responsibility matrix
• You will learn about the importance of innovation and diversification in building resilience
• You will learn how to contribute to resilience

Keywords: Sustainability, tourism, resilience, diversification, building resilience, innovation

Long Term Resilience

Lesson 1: Introduction to Long Term Resilience

Description

Welcome to the 5th and final learning unit in this course series on Resilience in Tourism.

As I’m sure you’re aware, tourism businesses, including the people who depend on them, are vulnerable to a number of potential hazards. In regions where tourism represents a high proportion of GDP and is located in sensitive and exposed locations such as low lying islands, coastal areas or mountains, the sector is often classified as highly vulnerable to a range of hazards.

As a result, adaptability, the ability to deal with and adapt to change, plays a major role in these regions in particular, but it’s also important for tourism more generally such adaptability.

And resilience can take many forms and in order to achieve a sustainable effect, it needs to be as long term in its outlook as possible. What’s important here and how this can be achieved are the subjects of this learning unit. 

Building resilience is an ongoing process as social, economic and environmental conditions are constantly changing. In addition to identifying and assessing relevant risk by means of a risk assessment, as well as planning for a crisis or disaster in order to reduce vulnerability and build resilience, businesses should be proactive by initiating, restoring and redesigning their organisational structures and relationships. 

In short, the goal when it comes to building resilience should be to protect what is valuable and at the same time to be prepared for change in order to take advantage of the opportunities that arise.

So, let’s jump straight into the topic.

 

Role of Stakeholders

Lesson 1: Knowledge, information, learning

Knowledge of risks and drivers of change and options how to respond effectively are critical. There is scientific knowledge available, for example on certain types of hazards such as climate change predictions, but also on new technology, mitigation and adaptation interventions, that has been generated through research. 

“Scientific knowledge is often not easily accessible which is a problem. Tourism bodies and associations may create partnerships with universities and other research institutions to access new knowledge but also to ensure that knowledge produced is applicable and relevant”. Julia

In addition, there is practical knowledge usually generated by the industry through experience. This knowledge is usually highly valued by businesses as it has been trialed and tested by organisations in a similar location or situation. This includes experiences other businesses have gained, as well as your own experiences with previous crisis or disasters. 

Tourism Associations may share practical knowledge through case studies or by facilitating workshops and events that enable operators discuss issues and share their learnings.

To make sure your business profits from its own experience responding to risk and building resilience, conduct debriefing sessions after events (even if small), involve all staff members and provide opportunities for anonymous feedback. Do not forget to monitor and evaluate new practices that have been put in place. 

Lesson 2: The role of stakeholders in building resilience

Building lasting relationships and networks can be critical in times of crisis and recovery. This includes relationships with both internal and external stakeholders. Building strong networks has been identified as important for business resilience, in particular for smaller businesses, where internal resources, knowledge and expertise may be limited

Employees

There are many arguments to why businesses should hold on to employees if they are able to, and evidence suggests that many businesses go a long way to carry key staff through a downturn. Building trusting relationships may result in mutual understanding, where employees are willing to work less hours in order to retain the job, or perform different tasks. 

Cutting cost and staff vs. retaining human capital

There are different views to how businesses should or could manage their employees while recovering from a crisis which has implications for long term resilience. This can be demonstrated by the following statements from two managers with different views:

Manager 1: The rational manager

• My responsibility is to make sure the business survives and is profitable.
• If I save the business, there will be future jobs.
• Reducing staff is an efficient way to reduce fixed costs.
• I have shareholders to report to.
• My boss at HQ wants me to lay off staff and I’ve got to do what he says to secure my own job.

Manager 2: The empathetic manager

• In this service industry good employees are everything.
• I have invested a lot of time and money to train my staff, if they leave, that investment leaves with them.
• In our small business, employees are like family.
• My staff trust me and rely on me. As their boss I feel responsible to do everthing I can to keep their jobs and livelihood safe.
• As a responsible business we need to support our staff through tough times.

Responsibility matrix

A responsibility matrix is a great tool to map and assess existing skill sets already present in the organization, assign and manage responsibilities and identify skills gaps and training needs. To develop a responsibility matrix, the following aspects need to be identified: all tasks required for a project or daily operations, the skills required to complete these tasks successfully as well as the skills of each team member. The responsibilities to complete the tasks are subsequently assigned to existing roles while taking into account existing skills and experiences of the team members. 

“When responsibilities for deliverables or tasks are identified, it is important that these are clearly communicated so that staff understand what is expected of them”. Julia

Guests and customers

Customers are critical to keep your business going. Thus, they represent an important stakeholder and need to be considered when building resilience. Guests who built a relationship with the hotel are more likely to return. Making sure communication with guest is proactive and provides a positive experience is an important step to building a relationship with guests. Having a loyal and diverse customer base can prove critical in times of recovery

Suppliers and partners

Building relationships with suppliers and partners helps to build resilience. Other businesses one has a trusted relationship with can act as a source of information and advice in times of crisis and thus enhance adaptive capacity. Trusting relationships may also mean that suppliers and partners will be accommodating and supportive in times of crisis, providing stability.

Tourism associations and industry bodies

Tourism associations and industry bodies can provide valuable support during crisis and recovery. Being a member can thus increase resilience. Industry funded bodies represent the industry as a united voice, they may lobby the government for assistance to support a recovery effort and support the industry by providing training. 

They also provide updates on policies and how they are relevant to the industry specifically. Further, they can help with identifying relevant regulations or risk, enable access to information and support knowledge exchange as discussed above.

Lesson 3: Stakeholder mapping

Stakeholder analysis involves a systematic identification, evaluation and prioritization of anyone who can influence or has an interest in your business (or destination). A common way to analyse stakeholders is through stakeholder mapping. There are different approaches and types of maps. 

Stakeholder map – type 1

A common approach is to plot all stakeholders against two variables: their interest in the business (low to high) and their influence on (or power to influence) the success of the business (low to high). This creates four quadrants. For resilience building in particular, the second variable may rate the stakeholder’s influence on responding to change or disasters, or their influence on building resilience.

Stakeholder map – type 2

Another way to map stakeholders is in a circle whereby the most important stakeholders are placed in its core, the direct stakeholder in the middle ring and the indirect or less important stakeholders in the outer ring.

 

Building Resilience

Lesson 1: Innovation

“From crisis events we not only learn what interventions and practices worked well to respond to risk and minimize impacts. Crisis events can also teach us what systems and processes were not effective, what did not work well (not just during the crisis but in general) and thus, has to change”. Julia

Previous crisis have created opportunities for innovation. Businesses which have used recessions and resulting changes in consumer needs as an opportunity to innovate have been able to improve profits and sales. Recognising change as an opportunity can thus provide businesses with an advantage, making them more open to rethinking their business model.

Innovation in tourism and hospitality, which is predominantly a service sector, does not necessarily require new products or technologies. Innovation can be developing a new way to deliver a service (e.g. through interaction with guests), changing processes (e.g. using resources more efficient or reducing waste), changing organisational structures or changing marketing strategies (applying a value-based approach). Evaluating and rethinking these business elements will make the business more agile to respond to change and thus more resilient.

Innovation is linked to knowledge

Innovation is strongly linked to knowledge, such as knowledge of unmet customer needs, an understanding of internal processes and wasteful systems or what incentives can improve staff morale. It is unlikely that one person will have all of these insights, which highlights the importance of communication, both externally (with customers for example), as well as internally, to enable staff to voice ideas for improvements.

Lesson 2: Diversification

To build resilience, businesses are recommended to diversify their products, services and/or markets. Diversification means “not putting all eggs in one basket”, i.e. having different income streams in case one of them is affected by a crisis. 

Podcast Episode 2: “Diversification”

Guest speaker: Elaine Zuma

Podcast

Julia: Hello and welcome. This is now the second episode of my podcast. And I’m really pleased to have you all join me here again. Today we’ll be talking about diversification. And with me today is Elaine Zuma. Welcome, Elaine. 

Elaine: Thank you very much. Julia, I’m delighted to be back here with you.

Julia: Now, diversification plays a key role when it comes to building resilience. It can also function as a coping or response strategy. During a crisis, for example, should a particular sector see a fall in demand, diversification can ensure customer numbers overall remain steady. 

Elaine: Yes, absolutely. Businesses and destinations with a diverse range of products, experience and customers may be less vulnerable to a crisis hitting, say. one particular market. On the other hand, businesses which rely on a small market segment, just one season and favourable conditions are clearly vulnerable in such a situation. 

Julia: Let’s talk about the latter. So those businesses that are more affected by a crisis for the reasons you mentioned. Can you give us some examples? 

Elaine: Yes, of course. Certain products or activities such as a snorkelling tour may be at risk from changes in the weather, say if for example, it gets too windy. And of course, in regions where activities are very seasonal, such as ski resorts, businesses may even close completely during the off season. So how could diversification help in such situations? Well, for example, businesses could offer Wellness and spa treatments or other enticing indoor activities for those times when the main activities are not possible or off limits. Such diversification would increase the company’s resilience. 

Julia: And that, of course, would provide businesses with a response strategy for difficult weather conditions during the winter season. And it may even attract a broader market to the area, like families or couples who don’t ski.

Elaine: Exactly. Then it becomes not just about different weather conditions, but also about developing strategies for expanding the target group. On top of this, the business could develop activities for other seasons like mountain biking and hiking in the summer and so market itself and the destination as a whole as a place to visit all year round. Which of course would help it to be less reliant on limited seasons and a narrow customer group. 

Julia: Yes, brilliant. Well this has been a really interesting look at diversification and how to put it into practise. Thanks very much again, Elaine, for coming here and giving us some really useful Information. 

Elaine: It was a pleasure. Thank you very much for having me.

Julia: And I’d also like to take this opportunity to say goodbye to you, dear listeners. I hope we’ll hear from each other again soon. And in the meantime, take care of yourselves until next time.

Of course, the larger the crisis, the more likely it will be that several market segments, service offerings or experiences will be affected. For example, after a large crisis where international travel is limited, many tourism businesses and destinations are rethinking what markets they can reach, and what they have to offer them. 

“In those cases, reverting to attracting domestic or regional visitor, and even more, identify how they can provide products and services of value to the local population, is a good approach”. Julia

Thinking outside the box is important. Think: who is able to access our services? What do these people enjoy?

Diversification in response to COVID-19

The COVID-19 pandemic has had significant impacts on tourism businesses as in many parts of the world, lock down restrictions not only restricted international tourism, but also interstate travel. 

Think outside the Box:

The COVID-19 pandemic forced many tourism businesses to rethink their business model and think outside the box to diversify their product offering. A common thread was to identify what the business has to offer to serve the local community, a market readily available. This included identifying needs and market gaps the pandemic created

Find Solutions:

For example, hotels around the world offered accommodation for health workers or offered places for returning residents to quarantine. Others started renting out rooms as offices for people whose offices were closed, but weren’t able to work from home. There are also a number of examples where hotels partnered with local government agencies to offer rooms to homeless people which weren’t able to adhere to social distancing regulations living on the streets or in shelters.

Write down your current market, products or services and experience. Think about the hazards you identified and consider if you have sufficient alternatives in case one of your business arms is affected.

Identify where you see an opportunity to diversify either the market, or your product/service/experience offered.

 

Contributing to Resilience

Lesson 1: Leadership and culture

To build resilience, leadership and organizational culture should be reflected on as these factors are fundamental to enable implementing the recommendations from previous lessons. According to research, crisis-prone organisations have the tendency towards denial, which has been identified as a significant barrier to effective crisis management. In order to overcome the inertia of denial, leaders must recognise not only that crises can happen to them but are likely to happen to them. 

A holistic approach 

Holistic approaches such as systems thinking help to better understand, and address, complex problems such as those of sustainability, climate change, or multiple risks, as they consider the bigger picture. 

While the survival of a business has priority for the owner and manager, it can be argued that a tourism business is more resilient if the whole destination is resilient. This is particularly the case for hazards that occur at a scale that exceeds that of the business premises. 

A destination may include other businesses and supply chains, the community (including those residents working in tourism and others), public infrastructure and the natural environment.

“Research found that communities and their organisations are strongly connected, and that community response and recovery to a crisis is linked to those organisations. For example, if community members are resilient and able to respond to shocks and changes, staff will be able to come to work and be productive”. Julia

Resilient Echo Systems:

Resilient ecosystems are able to cope with stressors better and thus continue to provide ecosystem services. These may include buffers and protection from hazards such as floods or storm swells, or natural attractions for tourism activities.

Resilient Infrastructure:

Resilient infrastructure ensures that access, supply and communication are maintained. Awareness that businesses operate within an interconnected system or network (or an individual as part of a team), and that these are required to successfully navigate a crisis is therefore important

Individuals, businesses and destinations who are able to apply a holistic view and understand their position within the wider system thus have an increased situation awareness.

Lesson 2: Contributing to resilience of the wider destination

Research has highlighted the link between business and community resilience in tourism. Examples of how the tourism sector can help communities become more resilient includes:

• Helping people to live with change and uncertainty by working in tourism
• Nurturing diversity
• Combining different kinds of knowledge
• Creating opportunity for self-organisation

Shared value-based position

A holistic approach to resilience may involve taking a shared value-based position. Creating shared value has been described as a “key to unlocking the next wave of business innovation and growth”. However, the dominant ideology in tourism in many places is driven by neo-liberalism, with a focus on generating profits for shareholders, achieving growth and on maximising price. This is also reflected in the knowledge that is produced on tourism and climate change, and ultimately affects how the industry responds to potential risks. 

“Understanding that tourism businesses heavily rely on other elements that are part of a destination system (such as a healthy environment, healthy and capable staff, a welcoming community and reliable supply chains) shows that a shift in mindset is particularly important for the tourism sector”. Julia

Such an alternative and holistic approach would see a business take a stakeholder centric  approach whereby benefits to all stakeholders are considered. Such businesses drive positive social change, take a long-term approach to growing slowly, contribute to building community and support individual growth. Thus they build human and social capital that contributes to long term resilience, including stronger networks, trust, and knowledge (through learning over time). 

Creating value the wider destination benefits from

Taking a destination wide approach may see a business adopt a stewardship approach, whereby it becomes a custodian or steward of the natural and culture assets of the destination, thus contributing to natural and cultural capital and again creating value the wider destination benefits from. 

In times of crisis

In times of crisis, people tend to reflect on what is important to them. Research into consumer behaviour during COVID-19 shows that people spend significantly less money, especially on items such as on clothing, or going out and traveling. Instead, self-care and sustainability considerations have increased, and people expect businesses to consider their stakeholders’ well-being.

“Making customer health and suppliers needs part of the business success has been recommended in response to previous recessions, as this creates a focus on collaboration and creation of shared value”. Julia

Pick one stakeholder group important to your business and identify how your business/destination could work much more closely with this group to create benefits of value to your business and that group. Discuss how this helps your business, and the wider destination, increase resilience.

You have successfully completed the fifth and final learning unit of the course “Resilience in Tourism”.