High Alert: Preparing for the Next Crisis

By Kathleen Cassedy

Probably no organization, when incorporating crisis management into its overall strategic business plans, could have anticipated the horror and scale of the terrorist attack on America on September 11. Yet those companies that already had developed crisis management plans or had previous experience in dealing with disasters were able to act more quickly and proactively to regain the confidence of travelers and customers than other organizations. And when it comes to a crisis, whether it is real or perceived, acquisition of reliable information and speed of action is integral to recovery.

Not all travel organizations suffered from the tragic events of September 11. Fear of flying sent many to trains for both business and leisure travel. On September 12, visits to Amtrak’s recently designed web page increased by 101 percent over an average day in August. That climbed to 182 percent within a few days. Bookings for the week through September 16 increased by 3,453 from the week before.

Meanwhile, Amtrak’s corporate communications staff literally moved to the company’s central control operations room to disseminate the newest and most accurate information regarding train travel to the media, fielding up to 300 phone calls per day.

For the high-speed Acela Express and Metroliner on the East Coast, Amtrak reports that their combined ridership was up 40 percent for the months of October and November 2001. Meanwhile, long distance train travel also increased, often selling out in sleeper class, so that extra cars were added as needed. Because of Amtrak’s increased ridership–where everyday has been like Thanksgiving–it sought $3 billion in aid from Congress to beef up its security on trains and along routes, as well as upgrade its infrastructure.

JETBLUE DEALS WITH CRISIS

After air travel security measures were strengthened, Americans tentatively began to fly again. Typically, low-fare airlines have done better than major carriers. One of these is JetBlue Airways, inaugurated in 1999, which now flies 90 flights daily. The airline was the first to install bullet-proof doors on its cockpits following the tragedy.

Like all airlines, JetBlue has a crisis management plan ready to activate if a disaster should occur, but “no one builds a company prepared for a terrorist act of that magnitude,” remarks Amy Curtis, JetBlue’s vice president of marketing.

Immediately after hijacked planes hit the World Trade Center, JetBlue established an emergency command center to determine the safety of its co-workers and passengers. An established relationship with a crisis communication reservation center was activated to help manage phone volume. Within two hours of the attack, crisis counselors were available to help those JetBlue flight attendants and other frontline staff who were struggling with fear and anxiety.

“JetBlue went back to proactive marketing just three weeks after the 11th [of September],” Curtis says. “We were proud of the business that we had built, and confident that we were running a safe, reliable operation–no matter what else was going on in the world.” JetBlue’s ads were reworked to provide a softer message to encourage flying, which basically said, “When you are ready to fly again, we’ll be here,” Curtis explains. In fact, people started coming back almost right away, and the carrier was able to pick up market share from other airlines that had reduced capacity on some routes.

During October and November, JetBlue maintained an average load factor in the high 70s. Curtis says the airline is doing better than anticipated after September 11, and would have done better than its annual projection if the tragedy had not occurred.

After the attack, people wanted to stay closer to home and airlines flying long haul routes had many empty seats. Even JetBlue delayed its planned West Coast service until spring of 2002, and instead inaugurated new service between Washington Dulles and Fort Lauderdale.

CITIES RESPOND TO CRISIS

Because business travel was already declining due to the country’s weakened economy, the terrorists’ attack only worsened a bad situation. City hotels, particularly upscale properties, and fine restaurants, which depend on business travelers’ expense accounts, were suffering the most. Dining establishments in major cities, such as New York, Washington and San Francisco, offered reduced prix fixe meals during one- or two-week promotions to encourage more local patronage and attract the “foodie” market segment.

In San Francisco, the convention and visitors bureau refocused most of its national advertising, including two seasonal hotel package promotions, to regional print and radio buys to reach people within a day’s drive to the city. The disaster did not affect San Francisco’s long-term convention business booked into the Moscone Center, but short-term group business was hurting. So the SFCVB held a telemarketing day in December with 40 hotel representative members calling meeting planners to entice them with availability and reduced rates.

The travel and tourism industry is particularly vulnerable to crises, whether they have natural or human causes. The airline segment, which showed an almost 40 percent decline in total revenue passenger miles for its fourth quarter in 2001, probably has the most impact on other travel segments. Both cruise line and tour operator businesses were immediately and directly impacted by September 11, due to the grounding of airlines. Many booked travelers could not reach their trips’ embarkation cities and ports, and others could not return home because of lack of air service. Once planes started flying, a fearful population refused to fly, and innumerable conferences and conventions were canceled, postponed or moved.

Cruises through New England, designed to admire the fall foliage, which would have started from New York City, were repositioned to leave from Boston or Philadelphia. Local customers were bused by the cruise line to the substituted ports of embarkation. To encourage reluctant cruisers to take winter vacations, companies moved their ships to ports of call that are closer to home. For example, a Caribbean cruise would replace a Mediterranean or Pacific cruise.

CRUISE LINES STRENGTHEN SECURITY

Just as security for air travel has been strengthened, new safety policies and measures have been implemented for cruise travel by both the cruise lines and the U.S. Coast Guard. Guests can no longer board ships, and all passengers, including crew, must show a picture I.D. to board. All luggage is screened before going on the ship. Meanwhile, the coast guard is enforcing a 300-foot separation zone among cruise vessels while in port, and is escorting all cruise ships into and out of U.S. ports.

Many hospitality companies, such as the Hilton Hotel Corporation, relaxed their early departure and cancellation or “no show” fees after September 11. The Hilton policy covered individual reservations at U.S. hotels through September 30, 2001.

Because of the terrorist crisis, Trafalgar Tours, a global tour operator that specializes in both escorted and independent “free and easy” tours, reacted quickly to adapt itineraries and arrange with hotels to extend tour groups’ stays. Trafalgar also initiated a “Peace of Mind” guarantee for customers who had air-inclusive vacations with preferred airline partners. The guarantee allows customers to cancel their vacations within a specific time period, and apply money from the canceled trips to future tours. Trafalgar also began to offer additional travel insurance to cover terrorist incidents for an extra $35. With Protection Plus, if a terrorist act occurs within 30 days of the scheduled departure date, a customer can cancel and receive a full monetary refund.

“We were doing fantastically well before the attack,” says Maureen Van Metter, Trafalgar’s vice president of marketing. Following September 11, Trafalgar’s business was flat, but by December business was picking up to the point of surpassing where it was a year ago.

In early 2001, the company had dealt with another crisis that affected the tourism industry–the “hoof and mouth” disease, which kept many travelers from visiting Europe, and also limited some European tour itineraries.

TRAFALGAR’S DIVERSIFIED PRODUCT

Trafalgar’s global product allows it the flexibility to adapt to regional or national crises, but it was not always that way. Before the Persian Gulf War in early 1991, Trafalgar’s business was limited to European tours serving an American market. During the war, travel from America to Europe, the Mideast, and to destinations that needed to cross the Mideast dropped substantially. At the same time, destinations west to Hawaii and beyond, such as Australia, New Zealand, and the Pacific islands showed an increase of visitor arrivals. In fact, many of these destinations promoted themselves as “safe.”

Usually a company’s market mix and the financial strength will determine how much or how long a crisis will affect its return to business as normal. The way companies react to a crisis when it precipitates a downturn in their business typically is to: (1) redirect marketing efforts, usually toward regional or domestic markets, or (2) upgrade service and concentrate on existing markets, or (3) cut administrative expenses, including employees, or (4) a combination of these.

Following the Gulf War, Trafalgar diversified its product so it would no longer rely on just one market. “We never had a USA or Australia product. We do now, which we can promote,” explains Van Metter, who was with the company during the Gulf War. Trafalgar, which appeals to middle-income to upscale travelers, also offers tours to New Zealand, Canada, and the Orient.

According to the Travel Industry of America’s Travelometer, a monthly survey of 1,000 Americans, travel will decrease 8.4 percent this winter from the same time last year. But as terrible as the events of September 11, people will travel again– as they have begun to do–if they feel that they will be safe and that all possible security precautions have been taken. While transportation and hotel companies have crisis management plans for fires, natural disasters, and accidents, few plans anticipated a terrorist attack on the scale of September 11.

ADVANCE CRISIS MANAGEMENT PLANNING

The purpose of preparing a crisis management plan in advance–and a crisis management communication plan as part of it–is to have a process in place that immediately identifies the crisis and its potential to impact the business, and what action to take to ameliorate or resolve the situation.

The definition of a crisis in our industry is any event, whether it is a natural or a human-made disaster, that has the potential to totally disrupt a tourism company or the entire tourism industry. It can create chaos and ruin. The ramifications of the crisis also can extend beyond the actual damage to exaggerated perceptions about the catastrophe and lingering danger.

The way an organization or government tourist office handles a crisis (even if the business is not directly impacted by the event) can enhance its reputation, and can garner favorable publicity and possibly new marketing opportunities.

STAGES OF A CRISIS

A crisis has four stages. The first is the pre-crisis stage, when warning signals can appear. Natural disasters, such as floods and hurricanes, usually have advance warning; even a terrorist act or a political coup that happens quite suddenly can have some foreshadowing. During this phase, an organization may be able to anticipate a critical situation and work to shape events as they occur. The crisis may even be averted or delayed.

The second stage is the “turning point” when the disaster or crisis event actually occurs, followed by the third stage, which is the ongoing crisis, when the impact on the business is more fully felt. During this time, events are monitored, the situation assessed, and action taken to alleviate the impact. The final stage is the crisis resolution, when the impact of the crisis is no longer felt. This is the time to evaluate and update the crisis management plan.

CRISIS COMMUNICATION

Communication is the core of crisis management. In cases of “crises of perception” or “crises of confidence,” the crisis communication management plan is the crisis management plan. The plan establishes procedures to monitor the crisis situation and to exchange information among the various travel and tourism segments, government agencies, and the media. During a crisis, lack of information and erroneous information exacerbate the situation by creating another crisis: a crisis of perception.

Terrorist acts typically have been politically motivated by the fanaticism of extremists. Their goal usually is to destabilize a government so that it will eventually change policies or take actions that the perpetrators desire. Acts of terrorism can also wreak havoc on economies and almost always damage the tourism industry. Because, while people desire to travel, their desire to be safe and secure is much stronger.

A crisis can be perceived to extend much further than it actually does. On September 11, all civilian planes in the country were grounded and the President’s location was kept secret. Initially, because of lack of information, rumors flew, and the country feared it would be attacked anywhere at any moment. The U.S. Government clearly was not prepared for a serious terrorist attack.

Without a crisis management plan developed beforehand, the events of a crisis can propel a company in directions that it may not want to follow. Knee-jerk decisions can be made that seem right at the time, but later prove to be inadequate, or worse: they may even underscore the public’s lack of confidence of those in charge. It can take months, even years, to repair the damage from a crisis of confidence or a crisis of perception.

Within business organizations, the goal of a crisis management plan is to develop and implement marketing strategies, public relation programs, and better security techniques that will help organizations avoid or lessen the impact of a crisis. When a crisis management plan has already been developed and practiced before an actual crisis should occur, valuable time is saved because the framework already exists from which to make proactive decisions and to direct action.

CRISIS MANAGEMENT TEAM

The first step to create a crisis management plan is to select a crisis management leader and a team. This group should not be ad hoc, but a permanent component of the organization’s strategic planning division. The group should not be larger than a dozen people to maintain a group dynamic, since large groups tend to break into smaller ones. The team is responsible for identifying, analyzing, and diagnosing worst case scenarios that could threaten the business or organization.

The personality and experience of crisis management leaders are important because leaders must act as catalysts for action, effectively communicate the situation, and inspire trust. They must stay objective, calm, and controlled. They must know the people in the industry and the government. The government head or CEO may be too busy managing operations to be the crisis management leader or spokesperson. But whoever that person is, he or she must have the complete confidence of decision makers, and be able to devote all of their time to managing the crisis.

PLANNING WORST-CASE SCENARIOS

Worst-case scenarios originate from realistic assumptions of possible events that could trigger a crisis. Then action steps to manage each possible crisis are outlined. Tasks are assigned to individuals. Even though some tasks are as basic as putting together lists of home phone numbers of executives and contacts with suppliers, government authorities and other industries, if they are not prepared beforehand, valuable time can be lost during the crisis’ acute period.

The development of contingency plans to avert crisis is an important part of strategic planning. Contingency plans should be tested for weaknesses, such as too much reliance on a few suppliers. The development and practice of the plan creates additional benefits, which include improving employee communication and more clearly defining the organization’s goals and objectives.
The crisis management plan needs to be flexible so that it can adapt to the ways the events unfold. By having a crisis management framework in advance, panic can be avoided, and the recovery process is expedited. The “pre-selected” team is ready to immediately gather information to base logical and intelligent decisions. When accurate information is provided quickly to clients and media, then conjecture, exaggeration and misperceptions about the extent of the damage or disaster is avoided.

The crisis management team usually works out of a command center around the clock to receive and disseminate news and activities. The center should have the capability to generate electricity during a loss of power. After the crisis, the crisis management team needs to identify the support they can receive from travel associations and organizations to assist in new marketing efforts to rebuild the business.

If the extent of the travel and tourism industry had been largely invisible before September 11, the resulting empty theaters, city restaurants, hotels, museums and attractions, made it all too clear how crucial this industry is to the country’s economy.

THE INDUSTRY RESPONDS

To address the crisis of confidence following September 11, the Travel Industry of America organized the Travel Industry Recovery Campaign, which has included television advertisements that feature President George. W. Bush encouraging Americans to travel again. The broad campaign also includes other marketing activities, consumer surveys, and legislative proposals.

The TV spots first began running November 21 on four major networks, and cable news shows. Versions of the same ad are also running abroad to reach international visitors from major markets to America. The ambitious campaign will cost $20 million, funded by all travel and tourism segments. Yet the travel and tourism industry is still at risk from future terrorists attacks, and more than ever needs to be prepared with intelligent and foresighted crisis management planning.