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SKILL TEST
Topic: Crisis Management in Hospitality Industry

Table of Contents

Sr. No. Topic Page No.

1 Learning Objectives 2
2 Introduction. 3
3 What is Crisis? 3
4 Types of Crises. 4
5 Objectives of Crisis Management. 4
6 Managing Crisis in Hospitality Industry. 5
7 Conclusion 6
8 References 7

Dr. Himanshu Malik Crisis Management in Hospitality Industry SVSU/2020/Estt/T/008_022_5005

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LEARNING OBJECTIVES

By the end of this lecture on “Crisis Management in Hospitality Industry” the learner will be
able to
• Define Crisis.
• List different types of crises.
• State objectives of Crisis Management.
• Discuss the stages of crisis management in hospitality Industry.

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INTODUCTION
The hospitality industry, its immaturity and dramatic expansion are noticeable, though
hospitality has a long history but the modern mass tourism practices started only after second
world war. The industry has a complex structure and it provides experiential products which
are a collective work of various stakeholders (Suppliers, Manufacturers, Employees, Investors,
Transport, Travel agencies Travel guides, Government and Non-Government Bodies)
associated with the industry which leads the potential problem of fragmented control.
This relation of mutual dependency amongst various components also translates that the crisis
for one may spread to the other. For instance, in case of a transport related crisis it will have
huge impact on tourists travelling to different destination, food supplies for hotels and
restaurants, employees travelling to work and earning of stakeholders.
This vulnerability of hospitality industry towards crisis of various nature makes it vital for
hospitality managers to understand and practice crisis management. This pre module guided
reading is intended for learners who are here to learn about crisis, types of crises, objectives of
crisis management and stages of crisis management.

WHAT IS CRISIS?
The Cambridge Advance Learners Dictionary defines Crisis as “A Situation That has reached
an extremely difficult or dangerous point; a time of great disagreement, Uncertainty or
suffering.”
On the other hand, the concise Oxford dictionary defines crisis as “A time of intense Difficulty
Or danger”
And the online oxford learners dictionary “A Crisis is a time of great danger, difficulty or doubt
when problems must be solved or important decisions must be made”
Henederson (2007) one of the leading authors on tourism crisis in his book “Managing Tourism
Crisis” states that Crisis does not have a universally acceptable definition however Crisis has
been described differently by various authors. These descriptions have three elements in
common namely
1. A triggering event causing significant change or having the potential to cause
significant change.
2. The perceived inability to cope with this change, and
3. A threat to the existence of the foundation of the organization.
For example, the present scenario of Covid19 is an event of crisis that is causing significant
changes in the hospitality operations, initially organizations were unable to cope with these
changes and many hospitality organizations have this threat to existence of their foundation.
Crises in hospitality industry also share these elements however certain crisis situation can be
predicted like those tourist destinations which are suffering from rising sea levels due to global
warming. There is remarkable range and variety of crises which are discussed in types of crises.

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TYPES OF CRISES
Each crisis is unique, broadly Crisis can be categorized into following six categories.
1. Economic
2. Political
3. Socio-cultural
4. Environmental
5. Technological
6. Commercial
Economic Crisis is an event or situation of crisis that is related to financial threats which can
be external threats like recession, currency fluctuation, taxation or internal threats like rising
cost, falling revenues and unprofitability.
Political Crises consists of events that are caused by political environment and can cause
external threats to an organization in the form of Government policies, international relations,
Instability and Terrorism.
Socio-cultural Criss deals with the events of that are social or cultural in nature and this crisis
category causes external threats like Unrest and Crime and internal threats like Staffing and
Cultural conflicts.
Environmental Crisis is a situation that may rise because for environment related issues and
these can cause external threats related to Natural phenomena, Natural disaster, Pollution and
Health Scares and internal threats like overdevelopment and Environmental degradation.
Technological Crises includes situations of crisis concerned with technology and can cause
external threats of Computer system failure, Mechanical failure, Design fault and Fire and
internal threats like Transport accidents.
Commercial Crises are related to external threats of Regulations and Government intervention
and internal threats of competition, Labor dispute, Management decisions and human error.
These types of crises are just broad general category an individual event of crisis may fall in
multiple categories for example fire can be technical crisis when cause due to mechanical error
or electrical short circuit same can be environmental in case caused by natural disaster like
earthquake or lightening and it can also socio-cultural when caused by a mob protesting for
cultural rights.

OBJECTIVES OF CRISIS MANAGEMENT

After understanding the attributes of crisis as in how it can cause a significant threat and change
that organization are not prepared for as a result the existence and foundation of an organization
can be threatened. This makes it critical to understand the objectives an organization should
incorporate for managing crisis situations. Following are the objectives of Crisis Management.

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• To reduce the likelihood for occurrence of a crisis situation.

• To shorten the duration of a crisis situation.
• To limit the impact of crisis to various stakeholders of the organization.

MANAGING CRISIS IN HOSPITALITY INDUSTRY

During the various situation of a crisis the hospitality industry has faced threats to man and
material and even closure of organizations. In order to ensure the safeguarding of various stake
holders an effective crisis management practice is required. As for the term crisis, crisis
management also lacks a universally acceptable definition however the that covers all
dimension to fit for hospitality industry was given by Santana (2004) as an “ongoing integrated
and comprehensive effort that organizations effectively put into place in an attempt to first and
foremost understand and prevent crisis, and to effectively manage those that occur, taking into
account in each and every step of their planning and training activities, the interests of their
stakeholders.”
The stages of crisis management as described by Henderson (2007) are six stages to effectively
understand and prevent crisis and also to manage those crises which occur. These stages are:
1. Pre-event,
2. Prodromal,
3. Emergency
4. Intermediate
5. Recovery, and
6. Resolution
Let us see various steps an organization of hospitality industry should take
Pre-event
• Appointment of a crisis team manager who will be in charge of environmental scanning,
identifying and assessing the risk of potential disasters or threats
• Establishment of a crisis management team and allocation of specific responsibilities
and duties to relevant individuals
• Brainstorming on possible scenarios and preparation of contingency crisis management
plans
• Assessment of capability to cope with the impacts of crisis
• Development and documentation of crisis management strategies which are aligned to
overall mission and objectives
• Identification of relevant external agencies and ascertainment of desired and likely level
of cooperation in times of crisis
• Determination of procedures for the procurement and allocation of necessary resources
• Communication of the crisis management plans to all levels of employees, making sure
that individuals are certain of their roles in the event of a crisis
• Development of a corporate culture of crisis awareness and preparedness

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• Establishment of media communication strategies and management policies to be used

at all times
Prodromal
• Establishment of crisis management command center
• Activation of selected procedures
• Raising of level of preparedness across the organization
• Determination of primary objectives in the management of the crisis so as to focus the
direction of all actions to be taken
• Review and revision of marketing
Emergency
• Assurance of the safety and well-being of guests and staff Protection of property
• Commencement of evacuation procedures if necessary
• Activation of emergency services
• Introduction of health screening of staff and guests
• Intensification of existing routines of cleaning and disinfecting
• Contacting of partners and implementation of systems of cooperation
• Adherence to official directives
• Maintenance of open communication channels to reassure guests and employees
• Employment of media communications strategy
• Monitoring of marketing activity
• Application for official aid if provided
Intermediate
• Assistance to guests and employees in meeting their medium-term needs
• Assessment of the impacts of the crisis and extent of damage
• Cleaning up the residual impacts of the crisis
• Beginning of the restoration of normal business operations
• Modification of marketing
Recovery
• Full restoration of normal business operations
• Improvement of facilities and customer service
• Conducting of extensive advertising and promotional campaigns
• Entering into cooperative and collaborative initiatives
Resolution
• Closure of crisis management command center and debriefing of all parties involved in
managing the crisis
• Collation of feedback from all parties
• Review and enhancement of crisis management strategy, gathering knowledge from
lessons learned and applying it

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CONCLUSION

The management of crisis and its stage may vary from industry to industry and organization to
organization. It majorly depends on the nature of crisis and its association with the
industry/organization. Another approach of managing crisis by distinct authors say that crisis
has only three stages which are pre-crisis, crisis, and post crisis or before crisis, during crisis
and after crisis. The interpretation or approach may vary by various authors and decision
makers however the main purpose behind the crisis management is to prevent crisis at first, be
ready when it occurs, response quickly and effectively during crisis and finally implement
recovery plans to get back to normal.

REFERENCES
Dictionaries, O. L. S. (2017). Oxford Learners Dictionaries. Retrieved December, 2021.
Fowler, H. W., & Fowler, F. G. (1931). The concise Oxford dictionary of current English.
Henderson, J. C. (2007). Managing tourism crises. Routledge.
Walter, E. (2008). Cambridge advanced learner's dictionary. Cambridge university press.

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Dr. Himanshu Malik Crisis Management in Hospitality Industry SVSU/2020/Estt/T/008_022_5005