The Danger Zone

Now, more than ever, hotels
need a crisis-management plan
Now, more than ever, hotels need a crisis-management plan

It was an otherwise uneventful Wednesday when the heavens filled with ash and all the activity that hummed beneath stood suddenly still. Iceland’s Eyjafjallajökull volcano provided a natural spectacle for a global audience when it jolted into life this past April 14, along with cause for international pause and a life lesson for all of those companies caught in its feathery reaches. The latter is a long list and includes a heap of hotels whose management team and staffers had to adapt very swiftly to a new ash-choked reality.

“Starwood Hotels & Resorts’ operations, reservations, sales and events teams did their utmost to look after the well-being of guests affected by the adverse travel conditions [resulting from] this unprecedented event,” Amalie Craig, area public relations director for Starwood in the U.K. and Ireland, explained, post volcano. For one, Starwood waived cancellation charges for individual travellers unable to travel due to the closure of their departure or arrival airport. For another, accommodations were offered to those guests who needed to extend their stays as a result of airport closures, at the rate originally booked. And management worked to make the situation “more palatable” for guests with special children’s programs and restaurant offers.

From its earliest days, the hospitality industry has managed the human, logistical and financial palatability of disasters — man made and otherwise. Indeed, every crisis of any magnitude has aftershocks for the hotel industry, whether it’s a matter of circumstance, convenience or last hope. Ideally, the experiences leave their participants better prepared for the next one. And, rest assured, there’s always a next one.

“We tend to experience a crisis on an annual basis here in Asia,” says Judy Reeves, director of Public Relations for Shangri-La International Hotel Management Ltd. When terrorists attacked Mumbai’s Taj Mahal Hotel in November 2008 — a deadly series of coordinated shootings and bombings that killed more than 170 people and wounded at least 300 others — Shangri-La’s Delhi property felt the echoes, says Reeves. Add two more bombings of hotels in Jakarta in the past three years (Shangri-La took in more than 100 guests evacuated from affected properties while awaiting flights out of the country.); the May 12, 2008, earthquake in the Szechuan province of China that killed at least 68,000 people and damaged Shangri-La’s three area properties; a number of typhoons and tsunamis that upped the ante for hotel early warning systems and evacuation procedures, and you’ve got a recipe for cautious conduct and on-the-ball crisis management.

When it comes to the variety of potential disasters with which a hotel might potentially come in contact, fires take top billing. Every property could fall victim to a fire; however, the laundry list of other potential hazards seems to be growing by the minute. There are power failures, tornadoes, floods and earthquakes — each has its own likelihood for occurrence, depending on a range of situational and geographic factors. Brad Bonnell, director of Global Security for Intercontinental Hotels Group (IHG), says hoteliers must gauge them and assign a priority level. “And, in light of what happened in Mumbai, Islamabad, Baghdad and Jakarta, terrorism has risen to the top — both in the Americas as well as Europe and Africa.”

Once identified, potential crises need to provide context for a hotel’s ongoing, relevant, comprehensive equipment preparation, training and testing programs. “Mumbai was a big wake-up call for all hotels in India,” Reeves explains. Afterwards, the industry bumped up its security measures across the board, and invested heavily in equipment such as X-ray machines and bomb vapour detectors. Suddenly, the need for reliable communications emerged as more critical than ever. Hotels acknowledged the wisdom of having a dependable stash of walkie-talkies, in exchange for an ill-advised reliance on mobile telephones. More than that, Shangri-La — as is so often the case with hotels in crisis zones — undertook a total review of its security measures and evacuation procedures and emerged with a system with much stronger physical and equipment-related security than ever.

“Regular penetration drills must be conducted and equipment tested,” says Reeves. “No deficiencies in equipment can be tolerated.”

Proper training and testing procedures are also vital for lifting a hotel out of a disaster zone. IHG abides by an overarching corporate crisis-response plan that seeks to advise on what defines a crisis for the corporation; when the crisis response plan is to be activated; who owns the plan; what the duties of the crisis owner are; and how the crisis ownership escalates (in other words, at what point it becomes a problem of COOs, regional presidents, et cetera.). Everyone from HR, legal, risk management, internal communications and loss prevention has a role in the unfolding drama, and all are on call to support the crisis owner at the front line.

At the hotel level, an Internet training site provides IHG managers with access to the information they need to develop a crisis-response plan. A newly unveiled computer-based toolkit walks them through the development of a draft plan that outlines which vendors are involved in the cleanup, what supplies are required to keep the hotel going, and what resources are available. “We tell them to keep it real,” says Jim Swartz, vice-president of Risk Management for Americas at IHG. “You can put a pretty plan together, but if it isn’t realistic, it’s not going to work. Making a plan is not what it’s about. Working the plan and keeping it authentic is.”

In August 2005, hotels in New Orleans were given serious license to work their plans, when the costliest and fifth-deadliest hurricane in North American history set down. “Every hotel from Panama City to Houston was affected by Hurricane Katrina,” says Bonnell. In the end, Katrina provided a valuable learning experience for the hotel industry overall. It’s thanks to her wrath that so many coastal hotels in the U.S. now conduct hurricane preparedness workshops in March. “So, lesson learned,” says Swartz. “The memory of Katrina is not dead.”

Katrina’s legacy also provided an example of the hotel industry’s less official, but vital role in times of disaster. IHG properties provided lodging to Katrina evacuees for the better part of a year, to say nothing of the folks who came in from the government, FEMA, maintenance workers and so on. “Any RevPAR calculations go out the window at that point,” says Bonnell. “We had a hell of a lot of folks that just gave away rooms. It was not a profitable time for us.”

When a car bomb threatened the Marriott Marquis in New York City’s Times Square this past May, the hotel evacuated its guests into the nearby Crowne Plaza, where staff took them into conference rooms and looked after them. In turn, the Marriott has, in the past, provided similar reciprocal help. “That’s the history and culture of the hospitality industry,” says Bonnell, who points out that cooperation with competitors, through various industry associations, is common in times of trouble. “You throw the P&L aside. We play a social role that goes far beyond just selling rooms and meals.”

“There is no competition in safety and security,” confirms Swartz.

At the end of the day, says Bonnell, the Eyjafjallajökull volcano was not the disaster for the hotel industry that it might have been. “There was some impact, yes. There was an issue with business flow, a number of meetings had to be cancelled and many guests were stranded. But it didn’t threaten the existence of the corporation.”

Nevertheless, that doesn’t mean a more dangerous crisis won’t. “We tell employees it’s going to happen,” says Bonnell. “We tell them you’re going to have an emergency situation — a bomb threat, a fire — and then you’re going to be held accountable as to whether you acted responsibly. Be prepared.”

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