|
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.
|
