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Tourism Crisis Management as Business Continuity Plan 4

We have previously observed some cases where the tourism crisis management successfully minimized the casualty of the hazard and accelerated the recovery of the disaster-affected destinations. Let us make one step forward to discuss what needs to be done for the post-crisis recovery of tourism.

Masato Takamatsu

Masato Takamatsu Managing Director & Chief Research Officer, Head of Tourism Crisis Management Consulting

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Table of contents

Tourism crisis management includes the measures and actions for the post-crisis recovery that are taken from an early stage of the disaster. Planning post-crisis activities for quicker recovery of tourism in the damaged destination is just as important as evacuating and rescuing tourists on site. In other words, tourism crisis management works as the business continuity plan (BCP) for the destination and tourism related enterprises in the devastated area.
All the efforts to cope with the crisis such as communication activities, support for recovery of the destination and tourism business, and the measures for the employees of tourism industry who have temporarily lost his/her job, need to be designed from the perspective of post-crisis recovery.

1. Marketing & Communication

After the crisis, the first thing an affected destination should do for the earlier recovery of the tourism is to communicate the accurate and precise information of the damages to the source markets and other stakeholders.

(1)Communication immediately follows the occurrence of the crisis

Upon the outbreak of a crisis incident, formulate a communication team as early as possible in order to win the trust, confidence and support from the market and from the entire society. Appoint the chief of communication to whom all the facts about the crisis is reported, such as information about the measures that have been and will be taken, and the number of casualty.
The collected information is provided to the mass media reporters at the regularly scheduled press conferences, through the web site, SNS (twitter and Facebook) and mail news. Launching an emergency web site immediately after the crisis is not easy. A number of global companies have, therefore, prepared the web pages that are to replace the top page of the existing corporate site at the event of emergency.
The most important rule for the crisis communication is to accurately communicate only the facts. Strictly sort out the information based on facts from other kinds of information such as estimation and rumors.

(2)Controlling reputation

Crises are often followed by reputations. Insufficient information about the crisis and current situation and delayed communication are likely to cause reputations among people. Reputations tend to induce overreaction of the market; the damage and the affected area of the crisis tend to be understood larger than it actually is.
After the East Japan Earthquake, a news caster of a major French TV, showing a video taken in Tokyo in late March, commented that many citizens of Tokyo wear a mask to prevent internal exposure to the radiation. In fact, many people in Tokyo were wearing a mask at that time of the year, not to protect themselves from radiation but to prevent inhaling cedar pollens which they are allergic to. Consequently, the comment by the TV caster resulted in the reputation that Tokyo is too dangerous to visit because of the radiation.
Timely provision of accurate information is an effective way of controlling the reputation. But no one can perfectly prevent the reputation. Once there is a reputation, try to provide information with counterproofs to the reputation and to educate the market that the reputation is based on misunderstanding of the facts.
Bali after terrorism, Phuket after tsunami and Hong Kong after SARS epidemics invited the media people from all over the world to give them an opportunity to observe firsthand the situation of the recovery in the destination and share it with the people in their home counties through their media. It is an effective way to cope with the reputation after the crisis.

(3)Communication with the customers

Successful post crisis communication with the customers has a remarkable impact on the recovery of business from the disaster.
A considerable number of tourism related enterprises and organizations in Japan had a major damage in their business by the recent earthquake and tsunami. Not only in the areas directly hit by the quake and the tsunami, but in much wider areas in the eastern Japan, tourism business suffered from a sharp decline of visitors triggered by the periodical blackouts and the rumors about aftershocks and radiation issues. In the areas where the rumors decreased the visitors, quite a few tourism service suppliers that had little damage by the quake itself temporarily closed their business.
While a majority of tourism service providers were struggling with the slow recovery of the market, there were some companies that showed a remarkable resilience of their business. Observed among them in common are the continued efforts to communicate with their customers after the disaster. They listened to the voices of the customers and communicated their updated information on their business operation to their clients, which helped them win the customers’ reliance and support.
A Japanese style ‘ryokan’ with 24 guest rooms in Miyagi Prefecture suspended its business for 40 days after the earthquake as the owner found it difficult to continue the operation with trouble in lifeline and difficulty in purchasing food material. In the meantime, the employees of the accommodation not only cleaned the every corner of the public area and guest rooms to prepare for re-opening, they also sent postcards with handwritten messages to invite the customers to stay with them once they resume the operation. The landlady of the inn kept updating her blog site, with the messages and photos to show the progress toward the reopening of the facility. On April 23rd, the accommodation opened doors to the customers once again. The guest rooms were fully booked by the patron customers who were looking forward to this day.
Another case is with Eagle Bus Co. Ltd. a bus operator based in Saitama. All the bookings of coaches for chartered tours were cancelled after the earthquake, leaving the bus fleet and the drivers resting helplessly in the bus depot. There was a telephone call to their office from a manager of a factory in the vicinity. The factory manager was having a trouble arranging transportation for their employees to commute to his factory. It had a couple of buses that run between the factory and the nearby train station for the convenience of the commuting employees. After the earthquake, the train operation was reduced in frequency and the factory had to change the time of operation in response to the government’s request to save electric energy to avoid unexpected black-out in the metropolitan Tokyo. As a result of the changes and irregularity, more frequent shuttle service was needed to accommodate all the factory workers.
The salesperson of the bus company picked up this phone and then called all the major factories in the area to see if they had trouble with commuter shuttle bus. A number of requests came from other factories, and the bus operator dispatched the coaches in the depot to the shuttle service for the factory workers.
The bus company’s revenue for March 2011 was just as the same as that of previous year, while most of other bus operators in the area suffered a sharp decline of the revenue following the earthquake. The Eagle Bus succeeded in coping with their business crisis and winning reliance from their corporate clients. The lesson: If a company listens carefully to the voices of the customers, identifies the needs and does whatever it can to meet the customers’ needs, it will be awarded with a success in business even in the crisis.

(4)Communication with the employees and staff

The crisis management plan is implemented by the frontline staff. Therefore, in the event of crisis, communicate with their employees to locate them and find out if they are available for emergency operation. Without identifying where the available employees are and what activities they are involved in, the management of the organization cannot figure out how ready they are to take crisis management measures. It is highly recommended the crisis management manual and the business continuity plan include the instruction to the employees regarding how and with whom they should communicate in an emergency situation. Preparing emergency communication channels is also recommended in case ordinary communication media are not available.
The measures should be taken to ensure that the employees involved in emergency operation can share the most update information delivered from the crisis management office. And the staff needs to be instructed in the manual who to report and consult in case there arises a situation where they cannot make their own decision.

2. Post-crisis promotion

Once the most critical situation of the crisis is over, the affected destination and tourism service suppliers should begin preparing for the promotional activities to attract visitors as early as possible. It will accelerate the recovery of tourist flow to the affected destination and hence the recovery of tourism related economy in the region. There will be an argument that it would be too early to prepare promotional activities before the destination is yet to be fully restored. It is understandable but if the promotional campaign begins only after the complete recovery of the tourist infrastructure and facilities, the destination has to wait another two or three months to see the visitors coming back.
The visitors would not complain or be dissatisfied with some inconvenience if they visit the crisis affected destination as long as the safety and the certain level of comfort is secured. Looking firsthand at how the people are working for the recovery of devastated area is also a valuable and unique tourism experience.
The destination that experienced a crisis should fully utilize the opportunities to get support from the industrial, governmental and international organizations in post-crisis promotion. After the tsunami in South Asia in 2004, the countries and regions that were devastated by the tsunami were offered a free booth space for exhibit at international travel fairs. Thanks to the support by the exhibition organizers, the tsunami affected destinations did a successful post-crisis promotion to attract international visitors once again.

3. Community Support

(1)Financial Support for SMEs

Most of the entities in tourism sector are small and medium sized enterprises with a limited financial capability. SMEs that suffer damages to their facilities and a decline of visitors need a financial support for the early recovery of the operation. They need to repair the damaged facilities and maintain the employment of the employees. After the East Japan Earthquake and Tsunami, a number of tourist accommodations went bankruptcy. A well-known Japanese inn with a 250 years business history put an end to their operation because of a financial difficulty that followed a sharp decline of business.
Post-crisis financial support is provided by either public sector or private sector or both. The interest rate for an emergency loan should be lower than ordinary business loan and the term of payment should be longer. The application procedure for such loans must be easy and quick. If it takes a long time to have the application approved and financing is delayed, the SMEs that need immediate financial support to continue the business may run short of operating funds and end up in a bankruptcy. Considering the possibility that some firms may have lost their properties in the disaster that can be collateral for the loan, a financial support scheme without security should also be prepared.
For financial institutions, the emergency support loan may be an unattractive product with lower profit and higher risks. But can it be an investment to accelerate the recovery of the community and the regional economy through tourism, by giving a support to the business continuity of the tourism related enterprises in the area?

(2) Technical Support

Technical support is just as effective as financial support to quicken the recovery of regional tourism. After the crisis, when affected SMEs try to upgrade their services by introducing new facilities, services and IT, they often confront with a challenge that their employees with necessary knowledge and skills are not available. In some cases there is no one in the destination who has expertise in marketing, product development or IT.
Why not send experts in these fields to the crisis affected destination to technically support the rehabilitation and restoration of the business? It will help the destination upgrade their tourism products and services after the crisis and consequently strengthen the destination’s competitiveness.

4. Sustainable Redevelopment

Redeveloping the destination after a crisis is a good opportunity to correct the inappropriate development in the past and redesign it to be a more sustainable destination that is more closely linked with the community.
That is, to design the community infrastructure in a more environmentally friendly way and to develop tourism products which make good use of natural resources and unique culture of the community and its surrounding area. Normally, it is extremely difficult to redesign the entire community into one concept as the interest of each individual and organization in the community always conflicts with one another. In the case of redevelopment after a large scale disaster, it may be easier to share a mutual goal and make a consensus among the community people. Once a concept of sustainable redevelopment is shared in the community, the owners of the tourism facilities are requested to restore and rehabilitate them in a more environment-friendly way. Thus the entire community will be more environmentally sustainable.

5. Risk Management for Future Crisis

As discussed in a previous report, risk management means to plan and implement measures to prevent the anticipated risks to occur.
The destinations and organizations that have experienced the crisis and realized risks learn what risks they need to anticipate and cope with. Having paid a big price of experiencing crisis, the destinations should take this opportunity to reconsider the measures to prevent the possible risks and minimize the damage.
The first step to prevent the same kind of future disasters and accidents that a destination has experienced is to thoroughly study and identify what exactly happened, how people reacted and how organizational preventive measures worked. It is recommended that a more practical and effective risk management plan and the measures to minimize the damage of the crisis that occurs be discussed based on the findings of the study. If there is a case that an existing emergency protection plan did not work at the actual crisis, the existing plan needs to be reviewed and redesigned easier to implement.

The next report will discuss how a destination and tourism service providers can create an effective crisis management plan.