1 Strategic Response to Turbulent Environment in the Hotel and Tourism Sector Introduction The hotel and tourism sector is one of the most significant sectors across the world, as it is associated with positive economic prospects for many countries. Despite the central place held by the tourism sector, it is very susceptible to disasters and crises. Disasters and crises create uncertainty in the hotel and tourism sectors as it is anticipated that the number of tourists arriving in the various countries is likely to decline. Evidence obtained from countries affected by civil wars suggests that tourism activities can be halted and that the development of the tourism sector can be impaired the same way it happened in Libya after the 2011 Libyan civil war (UNWTO, 2012).
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The paper considers the strategic responses to the turbulent environment in the hotel and tourism hotel. In order to achieve this, there is a need to consider crisis management in the tourism sector, measures used for recovery during turbulent times, frameworks for helping the tourism and hotel industry recover after turbulent times, and establishing dynamic capabilities during the dynamic times. The natures of crisis management in the tourism sector Irrespective of the disasters ad crises in the tourism sector, there is a lot of uncertainty and unpredictability. The moment a crisis occurs, so many negative adjustments happen, such as the significant reductions in the number of international visitor arrivals, loss of employment, cessation of further investment, and reduction of the private sector earnings, among other negative trends. The hotel and tourism sector has less formal disaster and crisis planning as compared to other industries. This can be attributed to the nature of the industry, as it is characterized by a large number of small and sometimes interrelated businesses. However, most crises and disasters exhibit the ability to act as a turning point for most tourism destinations and businesses. The disasters and crises bear some transformational connotations, with every event leading to some positive shifts such as recognizing the new markets and stimulating the new innovations. Turbulent times have also created a situation whereby leaders emerge to assist the tourism businesses, and hotels get back to normality or an improved state. With an improved state, the businesses in the sector can learn from the events and are better placed to modify the strategies and make the policy changes that did not work favorably for them.
3 Disaster management in tourism is important as it reduces the impact and improves recovery time at both the organization and destination level. Effective management of the sector during turbulent times consists of three-step. First, there are activities of preparedness and planning before a disaster or crisis happens. The second step has to do with the response to a disaster or crisis as it occurs, and finally, the move to improve the state and recreate normal conditions after the disaster or the crisis has ended. Recovery from turbulent times Communication strategies have greatly been leveraged in helping the sector recover. For instance, public relations strategies, global media networks, and even the press conferences made tend to be important in offering reassurance, enhancing reputation, especially in the overseas countries, restoring the image, and stimulating the bookings. Considering the Bali bombing case, various strategies were embraced, such as financial support, public communication, and insurance coverage, among other measures. Organizations such as the British Tourist Authority (BTA) have successfully responded to the crises by developing strategies that are tailored towards making use of the additional government funding to boost visitor spending. The organization was able to disseminate current information by embracing a public relations strategy, using the consumer e-mail campaigns, and the press conferences, which greatly helped in cushioning the sector against the FMD outbreak's impact. Various hospitality establishments utilized social media platforms as crisis communication practices or strategies such as mortification, corrective action, and apology. As such, the hotel guests, the employees and the public in general, and other stakeholders could get updates (Bingjie et al., 2015).
4 There have also been investigations on how small firms and restaurants in the sector responded to various crises. Some of the strategies they have been using include reducing their costs and expenditures and changing their product mix. Others affected by crises such as terrorist attacks included more stringent security measures such as seaports, airports, train stations, and bus stations. Such a measure could go a long way in ensuring that the airline sector was always in operation and that confidence was always restored among tourists and those who were traveling. Other tourist attraction facilities such as the theme parks and the museums in the US strived to ensure that the security measures were strengthened in the workplaces. To cushion important sectors such as the airliner sector from the impact felt by these sectors, the government went an extra mile to provide loans and compensation, and subsidies to the airline sector (Avraham, 2015). This was actually considered to be one of the most effective measures that the government took. The financial crisis of 2008 was also one of the disasters, which pinpointed the resilience measures that can cushion the tourism and hotel industry against the effects of such crises. For instance, taking an example of the Spanish hospitality sector, there was a quick move to improve some hotel characteristics, and this included an initiative to spend more on marketing, ensuring that hotels and other tourist sites secure a loyal customer base, building a strong brand image and offering very high-quality products and services. Such initiatives helped in improving the financial performance of the sector during the hard times. There were a lot of after-sales services that were also provided. For instance, the Thai hotels went to the extent of providing food and water supplies to those in need and accommodation and space for relief workers. Some hotel staff were released to help in recovery and rescue operations and did extra tasks such as translating and counseling (Avraham, 2015). Other staff cooperated and took part in clearing up
5 the operations beyond the grounds of the hotels. There was an attempt by various hotels to disseminate accurate information about the state of their properties and the conditions in which the destinations were. There are also attempts of restoration that are orally implemented after disasters and crises. The strategies are tailored towards repositioning the tourism destination, reestablishing the tourism confidence, and restoring the destination image through the crisis communication strategies and some of the post-disaster initiatives (Avraham, 2015). The scholars here underscore the need to provide up-to-date information to the important stakeholders that include the tourism industry and authority, the vital government bodies, and the tourists. In turn, this will reduce the impact of the disaster and the crises and rebuild a valuable reputation and image. There are discovery-marketing campaigns that have been very helpful to the sector. The best example here is about the SARS outbreak, which was miscommunicated by the World Health Organization (WHO) and the global media as a major pandemic. This was post ceded by recovery campaigns that involved most of the South East Asia countries. The recovery campaigns were characterized by the positive involvement of the major mainstream networks such as BBC and CNN in the regional recovery campaigns. The main aspect of the post-crisis communication plan is the marketing campaign used in the medium to short term to address the negative media coverage, inform the tourists, and rebuild trust and confidence to carry on with their intention to travel. In the long run, the initiative is expected to attract the markets back to the destination as well as the tourism businesses (Mair et al., 2014). There has also been an emphasis on the need for organizational learning as part of the strategies tailored towards tourism recovery. There is a need for tourism businesses and destinations to learn from the disasters and crises and develop more effective prevention and
6 proactive planning strategies to improve tourism products and services if crises happen. The tapping of the collaborative networks among the stakeholders is also the way to go, as this can culminate into inter-organizational and organizational learning (Mair et al., 2014). The organizations' ability to learn from the previous turbulent times gives a good understanding of the importance of embracing the best practices and the need for preparedness in crisis response. According to Paraskevas and Altinay (2013), previous experience exhibited by the managers in the hotel and tourism sector when it comes to managing the turbulent times is associated with better crisis readiness perceptions. The tourism and hotel organizations' ability to learn is directly proportional to their interest in learning from the initial turbulent times and adjust their organizational culture for the better. Frameworks for helping tourism and hotel industry recover after turbulent times The purpose of tourism crisis management frameworks is to provide guidance to the various managers and planners in the sector after and during the crisis or the turbulent times (Speakman & Sharpley, 2012). For instance, there exists Tourism Disaster Management Framework (TDMF), which was developed by Faulkner (2001). The framework helps in developing and analyzing proactive measures. Here, 6 stages have been developed for disaster management during turbulent times. The stages include prodromal, pre-event, intermediate, emergency, resolution, and long-term recovery measures. All these stages have responses, which have been suggested at each level. It has also been noted that even though the framework can be useful in the most turbulent times, there is a sense in which the framework has limited usefulness because not all crises tend to be the same. Some of the suggested measures that are supposed to be used during the turbulent times, as suggested under the framework, entails mobilization where there is a need for the disaster command center, warning system, and secure facilities (Speakman
7 & Sharpley, 2012). It has been suggested that there is a need for evaluation and identification of sources of greatest risks during the pre-event period. There is also a need for the identification and monitoring of indicators. The long-term stage is supposed to adopt measures such as adjustment, evaluation ad learning. De Sausmarez (2004) adopted a different approach by categorizing everything into three crucial steps: the pre-crisis period, the crisis period, and the post-crisis period. During the precrisis period, there is also the identification of the sources of the greatest risk and getting the monitoring and identification of the indicators in place. The development of a crisis plan is also important during this stage. During the crisis period, there should be the implementation of a CM and resolving the issues that have to do with implementation. As for the post-crisis period, there are evaluation, learning, and adjustments. Another model was postulated by Evans and Elphick (2005), and this is meant for recovery during terrorism. The framework divides the recovery period into three phases, i.e., the pre-crisis period, the immediate crisis period, and the period of recovery and turnaround. In this case, the pre-crisis period entails the crisis management plan, the training, and the communication and decision flow. The intermediate crisis period entails cooperation with the media, identifying some external groups that are likely to intervene during times of crisis, coming up with the crisis decision units and the crisis management teams. The recovery and turnaround period is characterized by the following activities; systematic debriefing procedure, communication processes, collaboration and communication with the government, and returning to the pre-crisis stage. Faulkner's TDMF (2001) was further improved by Ritchie (2009), who came up with a more holistic and strategic framework to managing crises in the tourism and hotel industry. The
8 framework starts with more proactive planning during the pre-crisis stage, followed by the strategic implementation, evaluation, and feedback. During the prodromal and the pre-event stages, crisis planning and prevention entails scanning the environment and in-depth analysis, planning that revolves around the scenario, and contingency and emergency planning. During the intermediate and emergency stages, the strategic implementation considers performing a set of policies and procedures related to the evaluation of strategies and strategic control, resource management, crisis communication, and collaborating with the stakeholders. As for the longterm resolution stages, feedback and evaluation consider restoration and resolution of tourism businesses or tourism destinations to the pre-crisis situation and organizational learning. Establishing dynamic capabilities during the dynamic times As the business environment proves to be more unpredictable and turbulent, there is a need to instill high-level dynamic capabilities. The capabilities are more likely to help the firm build on the existing dynamic capabilities that will modify and create the existing capabilities and resource bases (Pavlou & El-Sawy, 2011). Although various attempts have been made to explain the evolution of the dynamic capabilities, most of the postulated concepts tend to build on each other. It has been suggested that the dynamic capabilities are built by improvisation, learning through trial and error, and experimentations tailored towards learning how to deal with turbulent times. Other authors have also started capturing knowledge management perspectives in order to understand their role in information technology, innovation, and product development. Most of these researchers unveil that the firms' ability in the tourism and hotel sector to distribute, acquire, interpret, apply and retain the knowledge will influence their ability to create new or transform their existing capabilities into new ones and adapt to the turbulent environment.
9 There are various components of dynamic capabilities that are important in this context. This entails seizing, sensing, and managing the threats. Sensing has to do with gaining knowledge about the internal and external environments but taking into account the decisions and the options about the strategic direction that is supposed to be taken. Sensing is important for individual insights, research and development, and the application of experimentation and analytics. It will also help in fostering a culture of open communication, which is very important during turbulent times. Another important aspect is seizing, which has to do with inspiring and mobilizing the firm and its complementary assets to develop an ecosystem and organizational readiness to leverage the opportunities and reduce the threats. Seizing also involves the active mitigation of risks (Feiler & Teece, 2014). For instance, reinforcing the operational characteristics is likely to improve the readiness for turbulent times. Some of the important activities here entail making a business case, executing the strategy, aligning the partners and stakeholders, having adequate financial resources, and initiating structures that provide structures for action. Managing trends or transformational capabilities are special routines tailored towards sustaining strategic relevance in the highly dynamic environment, realignment, co-alignment, continuous alignment, and organizing the resources as the environmental and organizational realities change. Crisis management entails creating a blueprint for support, especially during unforeseen and unexpected events. In many cases, some risks may take the form of a crisis because the incidents are unpredictable; this creates a situation where the tourism and hotel sectors face unprecedented outcomes. Crisis management makes it possible to formulate strategies on a quick note to overcome or reduce the threat's effects. Systems are supposed to be updated to meet with the unforeseen phases and be better positioned to guide the entire cycle of crisis management. In
10 managing crises in the sector, there is a dire need for timely coordination between team members and members in the different teams. Preparedness of the employees for the unforeseen contingencies and provision of reserved funds tends to be a crucial strategic area. Such a measure can be helpful in all types of turbulent times, including during financial crises, terrorist attacks, and disease outbreaks, among others. With preparedness, the sector is cushioned, and there are things that the firms in the sector will be able to maneuver effectively (Avraham, 2015). There are also some in-house strategic initiatives that the hotels and other tourism entities can leverage to survive during the turbulent times, irrespective of the nature of the crisis that they could be facing. During such times, there is a need for the firms to think carefully about the marketing and advertising activities and adjust them accordingly. Turbulent times require that a firm goes to the drawing board and reconsider everything. If the turbulent times have negatively impacted the firm's image and reputation and the sector in general, a firm may embark on aggressive marketing campaigns that will help build a positive image for the organization. Conversely, if the firm is striving to cope with the effects of financial courses, cutting down on the marketing and advertising costs will be the way to go. Sometimes, surviving during turbulent times may require an in-depth understanding of the customer. There is a need to understand the guests and understand their requirements. Some of the ways this can be introduced entail introducing in-house and inline questionnaires to offer what the guests will be looking for during such times instead of simply offering them what the organization wants to offer. During turbulent times, hotels and firms in the sector should not forget about their existing regular contracted contracts. They should strive to provide loyalty programs. Loyal clients are the ones who are likely to keep the hotels and forms afloat during hard times. It is easier and less expensive to keep the existing clients instead of finding new ones (Avraham, 2015). Customer
11 retention strategies, together with the cost-cutting initiatives, can help sailing the sector through turbulent times. Conclusion Turbulent times in the hotel and tourism sector can be navigated from various angles, at both the macro and the micro-level. The crises that have been taking place in the tourism sector have been a turning point to this sector and have helped it develop some resilience. For instance, there have been positive shifts such as recognizing the new markets and stimulating the innovations. Capable leaders also happen to emerge in order to steer the sector forward and survive the turbulent times. During such times, disaster management entails preparedness and planning to mitigate such turbulent times and the responses during the turbulent times. Other recovery strategies include open communication strategies, reviewing the expenditures and costs, strengthening security measures, and intensifying a marketing campaign to build a positive image. Theoretical frameworks also provide some insight into the strategic responses that can be taken during turbulent times. For instance, De Sausmarez’s framework came up with strategies that can broadly be classified into the pre-crisis period, the crisis period, and the post-crisis period. Establishing dynamic capabilities during dynamic times also goes a long way to help the sector to thrive during turbulent times. There are also in-house initiatives that can be adopted, e.g., customer loyalty programs.
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