CRISIS MANAGEMENT IN HOSPITALITY

Crisis Management in Hospitality



Executive Summary

The aim of this paper is to discuss the Crisis management in hospitality industry. Effective crises and risk management can identify risks. An organization that clearly understands the risks it faces and can assess them in order of priority and take appropriate measures to reduce losses. The paper will discuss significance of crises management, its types and impact over global hospitality industry. Since hospitality industry represents a vital part of tourism industry, the theoretical discussions on tourism response to crises is generally valid for the hospitality sector as well.

Table of Contents

Executive Summary1

Introduction to Hospitality Crisis Management3

Types of Crises4

Crisis Management Benefits5

Research Methods7

Case Studies7

Economic Crisis of 20087

September 2001 (9/11) Twin Towers Attack8

Approaches towards Crisis Management9

Significance of Risk Management in Contemporary Hospitality12

Conclusion12

References14

Crisis Management in Hospitality

Introduction to Hospitality Crisis Management

Crisis management is competitively a new field of management. Generally, activities which are the part of crisis management are: forecasting about the potential crisis which is expected to come in future, and to take precautionary measures to mitigate the future risk. Crisis Management is in the face of development, currently real crisis covers to identify the real nature of current risk. It focuses on the public relation to recover any damage the public image, give assurance to the stakeholders that recovery is possible in case of any crisis.

Although a number of authors have attempted to define the crisis and its impact to the tourism industry, there is no universally accepted definition what constitutes a crisis. The authors generally make a distinction between crises and disasters. While the word 'crisis' comes from the Greek 'krisis', which means a differentiation or a decision, in systemic approaches crisis is defined as a critical change in important variables that endanger or destroy either parts of or the entire system (Faulkner 2001, pp. 135). One of the most comprehensive definition of a crisis that describes its vital variables and impacts in tourism is the following: A crisis is authentic as an undesired, extraordinary, generally abrupt and appropriate bound action with clashing development possibilities (Goodrich, 2002, pp. 1). Complexity of the crises' origins affects the lifecycle and duration of the crises, thus impacting its intensity and impacts to organizations. Since tourism industry is very vulnerable to different crises, the scope of crises impacts in tourism is multilevel. Hence, crises impacts in tourism are visible equally on many managerial levels: governmental (international, national, regional, and destination), industry sectors, corporations and organizations and, business units (Duncan, 2005, pp.21).

Types of Crises

Risk management allows an organization to make sure it knows and understands the risks it faces. Risk management also leads the company / organization to develop and implement a plan to prevent disasters or reduce their incidence. A risk management plan includes strategies and techniques to recognize these threats and contain them. Good risk management is not necessarily expensive or time consuming. It may simply be to answer three questions:

What could go wrong?

What will we do to prevent damage and respond to ...