Disaster Preparedness in the Thai Hospitality Industry

On behalf of Anika Malhotra:

Disaster Preparedness in the Thai Hospitality Industry

One of the deadliest natural disasters in recorded history, the 2004 Indian Ocean earthquake and tsunami, resulted in the deaths of over 230,000 people in fourteen countries and provoked worldwide humanitarian efforts which led to the donation of over USD$14B in aid. Of these fourteen countries, Thailand was one of those that were hardest hit with an estimated 8,212 death toll.

The two industries that were greatly impacted by this disaster were the fishing and tourism industries. The destruction of industrial infrastructure in coastal areas within the fishing industry had substantial impacts both on regional and national scales, affecting employment in coastal regions and foreign exchange earnings on a national level.

 

With these direct effects of the tsunami, came indirect effects within the hospitality industry. As investigations into the disaster continued, there was speculation that many of the resort hotels directly hit by the tsunami did not alert guests in a timely fashion and that staff were not well equipped to handle such situations. Moreover, regardless of whether tourist’s travel destinations were affected or not, there was a psychological concern and fear for their safety while traveling in areas of this part of the world. The hospitality industry was then hit with numerous cancellations as a result.

 

Tourist’s concerns and trip cancellations created a negative image of the hospitality industry for their lack of disaster preparedness. As the industry began to fear that this negative impact might be long lasting, many hospitality companies joined forces with humanitarian organizations to develop stronger disaster preparedness, recovery, and risk mitigating skills.

 

Addressing issues of crisis management and providing hospitality employees with the necessary skills involved gives these companies a competitive advantage. The first step in these efforts is focused on pre-crisis communication. The thought here is that communicating more effectively and implementing solutions for these situations will help rebuild trust and credibility from the public’s perspective.

 

Rather than a focus on maximizing profits for shareholders, there has been an increased focus on corporate social responsibility (CSR) within the hospitality industry. Although brand reputation and financial factors still play a major role in the decision making process for tourists and potential employees, they are looking more for companies who contribute to more wide-ranging societal goals. These CSR contributions are often in the form of cash donations, work force initiatives, partnerships with NGO’s, and by providing shelter and evacuation. The top 3 hotel companies in the industry that are most contributing to this reform are Hilton, Marriott, and Accor.

 

The Ministry of Public Health in Thailand, The International Federation of Red Cross and Societies, and other NGO’s, as well as those in the Thai private sector formed partnerships with these hospitality companies to train employees and provide assistance and funding in these efforts to rebuild the economy in Thailand. The Tsunami Victim Relief Center was also founded days after the tsunami to help in mobilization efforts. The Royal Thai Government (RTG) has also been greatly praised for their role in providing support to the affected communities. The United Nations Country Team along with bilateral development agencies worked with the RTG to address issues and challenges in the rebuilding effort.

 

The efforts of these organizations in collaboration with hotel companies and educational efforts proved to help tremendously towards rebuilding the hospitality industry in Thailand. Below can be found the Tourism and Earnings Growth in Thailand chart as of one year after the tsunami (2005):

The above chart proves that not even fully into 2005, in Q2, there was shown a significant positive change in the percentage of tourism earnings in one year from

-6.2 to +4.4 in growth.

 

The monsoon season in Thailand in 2011 was a period in which was demonstrated how far humanitarian aid efforts and disaster preparedness have improved since the tsunami disaster in 2004. As a result of the storms during this time, flooding began to spread throughout the Northern, Northeastern, and Central areas of Thailand. These floods resulted in the deaths of 815 people, with a total of 13.6 million people having been affected by the same. The Tourism Authority of Thailand (TAT) projected a combined loss of USD$825M as a result of reduced international and national tourism, with people having cancelled their trips to the region.

 

Hotels in and around the affected areas in Thailand began to take measures to ensure the safety of their guests, and help with the relief efforts of the surrounding community. The Mandarin Oriental in Bangkok organized a thorough workshop for more than 1,000 of its staff members to drill them in how to manage the flood situation. The Shangri-La Hotel also took precautionary measures during this time by placing sandbags outside of the property in an effort to prevent water from flowing into the property and by storing enough food and medical supplies for their guests and staff to last three days in the case of an emergency situation.

More major hotel companies are doing their part to help with disaster relief in other ways:

 

a)    Marriott International converts points donated by guests into cash for contribution to the IFRC Disaster Relief Emergency Fund.

b)    Hyatt has developed a volunteer outreach program, Hyatt F.O.R.C.E- allowing for employees to provide local and worldwide support on company paid time.

c)     Hilton Honors has implemented a charity titled “Blanket them With Love” to help with the after effects of the 2011 floods in Thailand. “The project will provide 1) immediate relief to victims by giving emergency life packs (includes food and other daily necessities) to evacuees, 2) 700 financially needy families affected by the coming 4 months of cold weather with blankets, so that the most vulnerable targets like young children and elderly will be protected from diseases associated with the cold climate. 3) Help to at least 10 affected homes with repairs after the floods, so that the family go back to safe shelters.”

d)    AirAsiaGo had absorbed the cost of credit card transaction fees on their website for one month from October-November 2011. In addition to this, they worked with local hotels in Bangkok to provide discounts to travelers.

e)    As part of their CSR initiative, Hilton Pattaya donated 100,000 baht to the Rotary Club of Taksin Pattaya to help with relief and rehabilitation projects for the aid of those affected by the floods in Thailand.

In order to help with the rebuilding efforts after the floods, the Thailand Convention and Exhibition Bureau (TCEB) has implemented a communication center that will keep event organizers updated as to the status of their future events, one such event being the annual Royal Flora Expo.

 

It is made evident to us that the efforts made for disaster preparedness by the hospitality industry in Thailand and throughout the world will help in reducing financial and emotional burdens of many of those affected by such natural disasters as the 2004 tsunami and 2011 floods. Whether it is by partnering with NGO’s or companies within the private sector to help provide employees and their families the skills needed to help mitigate the outcome of such disasters, by providing direct financial support, by sending its employees on volunteer efforts within the community or worldwide, or by providing food and shelter to those affected, the hospitality industry in Thailand is helping to rebuild security and lessen the fears of travelers worldwide.

 

 

35 thoughts on “Disaster Preparedness in the Thai Hospitality Industry

  1. Great research. Natural disasters are definitely a major threat to the tourism industry in Thailand. The October/November 2011 flooding was catastrophic for just about everybody involved in tourism. It looked like 2011 was going to be a much better year than the previous few (at least since the 2006 coup), but then the floods screwed everything up. The attitude now is that the flooding might become a recurring event (possibly annual). Thus a lot of hotels are being very aggressive to rake in as much revenue in the early parts of 2012 as possible for fear that in Q4, which follows the rainy season, another flood will result in massive cancellations.

    The hotel I was doing my training at for internship saw all metrics decline significantly in Q4 2011. October and November 2011 has to be thrown out of our additive forecasting model because its so off. Doing RM in Bangok requires a sound knowledge of past few years of history in order to improve forecasting accuracy because there are anomaly months peppered throughout the data!

    I’m curious about what you have found in your research in preparation for this blog regarding non-natural disasters. How has Thailand’s political instability since Thaksin’s ouster in 2006 affected the tourism industry? Are there any best practices among hotels regarding how to react when a political crisis, coup, terrorist threat, urban warfare, large scale protest erupts? I would guess that operationally there are implications regarding how to ensure guests remain comfortable, supply chain is somewhat maintained, staffing levels adjusted based on who can get to the property easily, security detail heightened, and PR and communication campaigns become very important. Any thoughts?

  2. Great post Anika. Training in effective crisis communication and management is certainly a skill that all of us would benefit from as future leaders in this industry. It still blows my mind to hear about some of the challenges that nations in SE Asia face. I imagine that natural disasters and other forms of crisis make for very unique challenges in the hotel industry.

    It’s great to hear that so many companies are playing an active role in assisting with disaster relief. As Donn pointed out, I would be curious to hear how these same companies handle the political instability in Thailand and in other nations. While I’m sure there is a degree of overlap in terms of crisis management, it seems like political crisis is a totally different beast. Did you find anything in your research that discussed how these companies handle other forms of disaster and crisis?

  3. I am very interested in this information. that we start now must take care of the environment and start from the environment around us. realize yourself to act better. not excessively damaging nature. sorry if my english so bad. thank you.

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