Crisis Management and the Impact

Title: Crisis Management and the Impact on the Global Hospitality and Tourism Industry


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This infographic aims at representing various crisis and disaster experienced by the respective industry, different thematic areas to be presented as well that are suitable for crisis management, then communication strategies with tools are to be explored, and finally, a theoretical perspective is to be provided as well.

The most probable types of crisis and disaster

The respective industry, specifically the international tourism demand is acknowledged for being vulnerable to disasters or crises (1). Being a part of HRD of Hilton Hotel, it is important to focus on all the probable crises and disasters to that the respective hotel might be prone. The current Covid19 outbreak including the resulting restrictions followed by city lockdowns, travel restrictions, closure orders, and social distancing has caused a sharp decline in the respective industry (2). However, terrorism, health epidemics, natural disasters are common disasters or crises. The concerned industry seems to highly be vulnerable to external and internal shocks as diverse as natural disasters, economic downturn, international conflicts, terrorism, and health epidemics (3).

Effects of that crisis and disaster on the hotel

The effects of every single disaster, whether it is a natural disaster or Covid19, are always found to be long-term, where consequences imposed by these crises and disasters are long-lasting. In addition, the concerned industry is specifically vulnerable and further exposed to the risk of the property being destroyed or physically damaged. For example, a natural disaster like an earthquake causes a huge loss to the tourist destinations by reducing the total number of tourists, who visit the relevant tourist sites and adversely damaging the tourist’s attractions with facilities. As a result of this consequence over tourist destinations, hotels also get adverse effects of this consequence, since visiting such destination leads the tourists staying at hotels. Resultantly, the local communities rarely maintain their livelihoods.

Overview of a concept, Crisis Management

Crisis management refers to a set of factors that is designed for combating crisis and for lessening the actual damage inflicted by any crisis (4). This management involves four interrelated factors as Prevention, Preparation, Response, and, Revision. A leader is found to be the crucial element to the crisis management process, however, several factors affect a leader’s ability for leading. For instance, a powerful CEO and a strong board need to enhance internal crisis leadership, although a strong board might work for curbing CEO power, and a powerful CEO usually seeks for reducing the board’s effects (5).

Importance of Crisis Management

Crisis management from a hotel perspective is all about being responsive enough to any kind of disastrous events like Covid19 or man-made terrorist attacks. Crisis management lies in the strategic planning that incorporates contingencies for unexpected events, however, a major challenge for any organization is to recognize the earliest warning sign and take suitable action accordingly. A crisis response move and practice need to be scheduled for taking place sudden after any disaster hits the hotel. It is important to be prepared for crises, managing costs during the crisis, making full use of local advice, maintaining good communication with the guests, and the proper use of technology for enhancing the hotel security.

Thematic areas, where this concept arises in the respective sector

The major three thematic areas, where crisis management emerges in the respective industry are provided below:


Due to this, the economy of the world was shut down almost overnight (6). This pandemic situation has confronted the hospitality industry with an unprecedented challenge. However, the hospitality industry has slowly been recovering, this crisis continues for exerting its profound effects on how the hospitality industry operates. Amid unprecedented travel restrictions, the UNTO expects that the international tourists would be down by around 20% to 30%. This industry accounts for 10% of the overall GDP across the globe.

In Europe, the hotel industry’s profit gets declined from 11% to 29%. As per a survey, cancellations rose by almost half, because of emergency measured being put in place by the EU government; there is a loss of 33%.

In India, the respective industry has likely been hit hard; March was borne the brunt of most of the large-scale cancellations across MICE, corporate, and leisure segments.

In China: As compared to 2019 figures, hotel occupancy gets down by around 68%, however, the crisis management of China government brings good news to their hospitality industry, as per the data, around 87% of Chinese hotels are now open, and hotel occupancy began to rise.

Hotels across the United States experienced unprecedented booking cancellations that resulted in eliminating 50% of the hotel jobs across America. The average occupancy in the UK gets down by 67% and in Italy by 96%.

As per the WTTC, a cutting of 50mn jobs worldwide in the respective industry has been observed.

Terrorist Attack in holiday resorts such as Bali

The magnitude of the terrorist attack regarding 9/11 in terms of the number of injuries and facilities played an important role while spreading the fear and insecurity of recursive attacks in tourist destinations and disruptions to air transportation (7).

13th November, seven locations in the Capital city of Paris had been attacked by gunmen and kamikazes, and on 7th January, Paris again fallen a victim to terrorism. The occupancy rate in Paris gets fallen by 20.8 and 23.1points on Saturday and Sunday nights, resulted in pulling the RevPAR (Revenue per available) down with the same. It gets dropped 21.1% Saturday and then 28.5% Sunday.

Europe, tragically, has endured multiple terrorist attacks in the last years. In the last 12 months alone, Europe has seen a shift in the way terror attacks affect hotel performance. For instance, the attacks at the Bataclan in 2015 and the Bastille Day Attack in 2016 caused RevPAR to decline. Since 2016, the Christmas markets of Berline got attacked, Barcelona, London, and Manchester suffered terrorist atrocities.

Costa Rica is a smaller destination geographically; however the no. indicates that the tourism industry seems to be highly developed in the destination. Terrorist attack imposed such adverse effect on Costa Rica that it could not recover itself from September 11 terrorist attack in Winter 2001-02.

Tsunami of 2018

The Sunda Strait Tsunami caused, on 22 December 2018, huge damage to Tanjung Lesung along with their tourism infrastructure (8). On the other hand, the 2004 Indian Ocean Tsunami makes most of the tourism facilities across Phuket experiencing a slump or bankruptcy (9). The hotel industry seems to be able for managing low impact hazard events well; however extreme events are usually poorly managed (10).

Analysis of communication strategies and tools used by a tourist destination

A Hotel Manager needs to stay away from reaction and random policies in the face of any crisis, however, they need to follow the scientific along with proactive planning approach for facing crisis through the following:

  • Predicting and preventing the expected crisis
  • Designing advanced scenarios with plans based on confrontation,
  • Finding the priorities agenda
  • Forming a crisis team with adequate resources
  • Designing an effective crisis communication along with an information system (11)

There needs to be good practice for the utilization of social media in crisis communication and risk. For instance, raising public awareness about crisis and risks, monitoring with situational awareness, and identifying the victims and survivors are the motives for that use of social media is important (12). Social media crisis communication is all about using an appropriate and calm tone, monitoring social media at a constant rate, and then realizing that social media seems to not be a substitute for traditional media.

From a hoteliers perspective, there are three rules to follow for crisis communication:

  • Planning: Creating a detailed scenario or contingency plan outlining all conceivable crisis with an appropriate response
  • Speed is a key: It seems to be imperative for acknowledging a crisis immediately, further, a prompt announcement to key public and media could minimize rumours and let the audience know the hotel is under control
  • Be transparent responsibly: Crisis communication directs a hotel manager not to get engaged in a cover-up, unethical or deceitful behaviour.

Tools to be used in crisis communication strategy include reality application, gamification, wearable technology, and innovative and new types of technology that would help in building trust engaging and collaborating, providing transparency, and helping the publics embracing uncertainty during the crisis. Social media is an effective tool for dialogic communication for implementing crisis communication at a critical moment (13). Websites could be an online communication tool. # (Hashtag), mobile tools, interactive stakeholder engagement, information, apps, sirens, Twitter, YouTube, digital tools, open-source software, and many others are a few tools that crisis communication strategy can use.

Theoretical approaches towards crisis management in the respective industry realistically

Coordination seems to be a key phenomenon in the organization along with management theory as coordination concerns how various areas of work could be performed in concert and crises also forces multiple firms to coordinate with each other (14). Structural Functions System Theory involves every single member of the management hierarchy in dealing with the crisis and keeping lines of communication transparent and open. A manager having an effective plan, which outlines who should respond to any question and how that specific response needs to be framed allows the management team for speaking openly, however guiding them while avoiding further issues. However, the DoI (Diffusion of Innovation) Theory leads a crisis manager to get their stakeholders and employees involved which could provide greater transparency and further acknowledge that the hotel could value their support and concerns. In addition, it would transform a heavy burden of any crisis into the team effort for fixing the issue and re-invigorating the hotel whenever a circumstance is looking bad. Unequal Human Capital Theory states that a crisis arises whenever a few people are treated comparatively more fairly than others. Whenever a crisis arises, any disregarded caste within any firm or stakeholder group could take the opportunities for expressing the opinions or acting in a way, which is detrimental to their desired reputation of positive efforts towards a good resolution of the issue.


After analysing the scenario, it can be concluded that the most probable crisis and disaster as per the current scenario are Covid19 that has already disrupted the entire supply-chain management of the respective industry, and its different waves currently and in future have a lot to impose on the same industry. Furthermore, the four factors are found to be incorporated in a usually used three stages approach considering crisis management as indulging in three phases such as the pre-crisis (prevention with preparation), the crisis phase that is a response, and the post-crisis phase that is learning and revision. The best communication strategy is to indulge social media and its different tools.

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