HLT 7038 - Strategic Crisis Management in the UK Hotel Industry

This report provides a critical analysis of crisis management in the UK hotel industry, with a specific focus on Hôtel Des Galeries. It explores theoretical frameworks, crisis typologies (natural, civil, health, and technological), and various crisis management models like strategic crisis management, the crisis management framework (mitigation, preparedness, response, and recovery), contingency planning (incident response, disaster recovery, and business continuity), and crisis leadership. The report evaluates the responses of Hôtel Des Galeries, the government, and investors to past crises, such as the 2016 London terrorist attack. It also offers policy recommendations for both government and firms to improve future crisis preparedness and response. The analysis highlights the importance of proactive crisis management for sustainability and growth in the hospitality sector, emphasizing lessons learned and future risk planning.

Running head: STRATEGIC CHANGE MANAGEMENT
Strategic change management
Name of the student:
Name of the University:
Author note

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Executive summary:
Among many industries Tourism, Hospitality and the event (THE) industry is one of the
sector, which is highly elastic to the crisis that makes it essential for the managers to manage
it effectively and efficiently in order to provide essential growth and sustainability. In order
to provide clear understanding about the crisis management of different sector, this report has
considered the United Kingdom (UK) hotel industry with special focus to the Hôtel Des
Galeries. In addition to analysing the basic theoretical framework of the crisis management in
the hospitality industry it has tried to envisage the response to the crisis and the risk perceived
by the relevant stakeholders. From the discussion it has been found that the crisis
management is an essential part for the growth of the organisation. With the presence of the
crisis, firms can face lower amount of revenue and if it can overcome the same through
utilisation of the proper crisis management program, then it can lead the firm to the zenith of
the success. Considering the case of the UK hospitality service, it can be seen that terrorist
attack in London in 2016 has caused high amount of cancellation and subsequent drop in the
revenue of the firm. However, through proper crisis management program the firm has saved
itself from breaking down. As the former worker of the firm entails, the Hôtel Des Galeries
has learned its lesson from the said crisis event and now the firm is focused more to provide
better security while drilling the contingency programs on quick frequency. Government of
the locality has quickly responded to the hostile situation and managed the same with
affiance, however, they can perform better with reduced response time and through having
better equipment and repeated practise of the hostile situation.

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Table of Contents
Introduction:...............................................................................................................................3
Application of theory:................................................................................................................4
Crisis typologies:....................................................................................................................4
Theoretical approach in crisis management:..........................................................................6
Critical review of hospitality industry of UK with special focus on Hôtel Des Galeries:.........9
Critical evaluation of the response Hôtel Des Galeries to the crisis:.......................................11
Response of the government:...............................................................................................11
Response of the selected Hôtel Des Galeries:......................................................................12
Response of the investor of the selected business organisation:..........................................12
Lessons learned from the crisis and future crisis and risk planning:.......................................12
Policy recommendation:...........................................................................................................13
From government’s perspective:..........................................................................................13
From firm’s perspective:......................................................................................................13
Conclusion:..............................................................................................................................14
References:...............................................................................................................................15

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Introduction:
21st century is a complex world, where the industries are indulging with each other to
achieve cumulative gain from the international business. However, it has made the present
global situation complex to operate in one hand and on the other hand it has integrated both
the endogenous and exogenous factors that lies outside the operational structure of the
industry (Fukuyama 2017). Under this complex situation, it has become evident that the firms
are ought to face crisis situation in their operational framework. Among many industries
Tourism, Hospitality and the event (THE) industry is one of the sector, which is highly elastic
to the crisis that makes it essential for the managers to manage it effectively and efficiently in
order to provide essential growth and sustainability (Kasemsap 2016). Endogenous as well as
the exogenous factors prevail within this industry is highly potential to deter it from the
natural growth path. Under this context crisis management has become a component of THE
industry that possess paramount importance.
Considering the above context, this report is aimed to perform critical evaluation and
application of the relevant theoretical approaches in the case of crisis management. In order
to provide clear understanding about the crisis management of different sector, this report
will consider the United Kingdom (UK) hotel industry with special focus to the Hôtel Des
Galeries. In addition to analysing the basic theoretical framework of the crisis management in
the hospitality industry it will try to envisage the response to the crisis and the risk perceived
by the relevant stakeholders. Through analysing the framework of the hospitality industry of
the UK the report will trace the factors that has been altered to withstand against any crisis
instance in future and in addition it is aimed to provide recommendations to gauge the
situation too. To conclude it will provide a summarised overview of the findings and portray
what has been perceived from the analysis regarding THE industry.

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Application of theory:
Present critical global scenario has affected the economic, social and political as well
as the growth dynamics of the nation that has vast impact on the performance of the
organisation. Under this context, crisis management is one of the major factor that can aid the
firm to overcome any critical operational situation and let it drift with its natural flow (Imran,
Meier and Boersma 2017). Crisis management can be defined as the mechanism through
which the organisations deal with the occurrence of the unexpected or disruptive events that
possess substantial amount of negative impact on the financial performance of the firm as
well as economy of the nation through alteration in the employment status (Bundy et al.
2017). Depending upon the market scenario there are various types of crisis typologies is
present. Details regarding the same has been detailed below:
Crisis typologies:
The industry in their operation framework face various types of crisis that differ from
the each other depending upon the magnitude and the nature of occurrence. Each type of
crisis possess different characteristics and the implication of them are different from each
other to a large extent. According to the Moutinho and Vargas (2018), there are mainly four
different types of crisis typologies present, which are as follows:
Natural crisis:
In case of occurrence of the natural disasters like flood, tsunami, earthquakes,
hurricanes and other climatic shocks natural crisis takes place that provide much amount of
implication to the organization performance (Christensesn, Laegreid and Rykkja 2016). In
addition to this, individuals and stakeholders related to THE industry face the wrath of the
natural crisis in first hand due to their direct connection with the organisation.
Civil crisis:

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In the event of any social or political tensions within the geographical boundary of a
nation civil crisis takes places. In presence of the socio-political tension between the various
countries and situation like shootings, terrorism, was, sabotage and violence emergence of the
civil crisis takes place that provides substantial amount of negative impact to the organisation
as well as the stakeholders of the firm too.
Health crisis:
In case of occurrence of rapid outbreak of the epidemic diseases that spread through
various place of the world without considering the geographical boundary, health crisis
comes into existence. Diseases like swine flu, SARS, polio, malaria and others can be
accounted as the health crisis because it has the potential to bring crippling blow to the
organisational function in different sector of THE industry (Jin, Liu and Austin 2014).
Customers being sceptic to the diseases the factors can put a high toil to the hospitality
industry because tourists will eventually vacate the place where the health crisis is present.
Technological crisis:
This is the latest addition in the course of the crisis management because it occurs due
to the machine errors, however, human error can also be accounted for the occurrence of this
type of crisis. Technological crisis takes place, when there is glitches or technological failures
in the organisation (Tena et al. 2017). Magnitude of this type of crisis varies widely because
it can range from simple technological failure in the industry to industrial blackout where the
glitches or viruses or the software failure can pose high amount of risk to THE industry
(Drennan, McConnell and Stark 2014). It can be constrained within the geographical
boundary and on the other hand it can surpass the boundary and spread wide transforming
itself into epidemic.
Apart from these primary crisis typologies, there are other types of crisis typology
present too. For instance, there is crisis of malevolence, confrontation crisis and crisis from

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the misdeed of the industry and it may appear from the workplace violence too that affect the
sustainability, financial performance and the reputation of the organisation.
Theoretical approach in crisis management:
Over the year it has been observed that crisis in the industry is one of the factor that
determine the fate of the growth of said industry. With higher amount of risk there is high
return too, however, when it comes to THE industry, then crisis is one of the major issue that
can deter the respective firm from its natural growth path (Lehmann and Joseph 2015).
Clienteles of THE industry is highly sceptical to the crisis and that makes the mangers more
aware of keeping THE industry far away from the crisis. It is well documented that the better
crisis management in THE industry provides better amount of growth to the firms that make
them successful in their endeavours.
When it comes to the theoretical approach in crisis management, then there is various
conceptual model in the contemporary organisational framework from the global perspective.
Among many, the key theoretical approach of crisis management is as follows:
Strategy for crisis management:
In order to avoid the crisis in the operational framework of the firm that includes
future prediction depending upon the analysis of the present endogenous and exogenous
environment of the business operation strategic measurement of crisis management comes
into existence. As mentioned by the Parnell (2015), most of the firms utilise a basic five step
crisis management model that includes internal communication, positioning the assets,
understanding the potential impact of the crisis on the organisation, introduce means of
monitoring and learn and move forward in order to deter the possible trajectory of the impact
of the crisis on the organisation (Cruz et al. 2016). However it may not be same always, as
the method of strategic control for the crisis, depending upon the organisation different firm

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utilise different method, however the main aim is same – to cope up with the outrage of the
ongoing crisis.
Model of crisis management:
This is another theoretical model that aids the managers to deal with the crisis.
Though the implication of this model is diverged depending upon the field of
implementation, however all of them includes the four basic steps of this model. As the
model depicts, through the cyclical process, fours stapes of this model, namely mitigation and
prevention, preparedness, response and recovery aid the firms to over from the crisis
situation.
Figure 1: crisis management framework
Source: (Bundy et al. 2017)
Four steps of this model depicts (Neil 2015):
 Diagnose the probable dangers and prepare for the worse
 Select the best available option as the response to the crisis
 Challenge the crisis and recover from the death pit through monitoring
Utilising these, the firm can become potential to mitigate and prevent the prevailing crisis or
deter the probable crisis.
Contingency planning:

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This is another basic crisis deterrent policy that taken into account by the
contemporary organization so as to prepare contingency plans. The contingency planning of
this model is as follow:
Figure 2: Factors of the contingency planning
Source: (Coombs 2014)
As the figure 2 suggests contingency planning of crisis management has three
different parts, which are incident response, disaster recovery and business continuity. Under
the simulated framework this type of crisis management program aids the mangers and the
stakeholders with essential inputs to deal the different crisis events. Through providing
essential inputs to deal with the crisis, this model entails the disaster recovery strategies and
helps to do the business continuity (Braun 2015). An ideal and effective contingency
planning attributes as the fast execution and facilitation of genuine information that helps the
managers to run the business even after crisis situation.
Crisis leadership:
The above three model has been developed to deal with the crisis management
through the performance of the stakeholders and the other factors related with the
performance of the firm. Though these models has considered the importance of the leader
under the crisis situation, however, no one has mentioned the role of the leader. This model is

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focused to provide a comprehensive guideline to the leaders who are supposed to guide the
crisis management program (Walker et al. 2016). According to this theory, there are five
competencies that a strong leader need to have in order to deal with the crisis situation.
Competencies of the crisis leadership program are as follows (Sommer, Howell and Hadley
2016):
 Create trust within the organisational framework
 Bringing in positivism in the organisational framework
 Tracing the potential threats to the organisation
 Decision making skill and decision taking skill under adverse situation
 Take lesson from the previous crisis and prepare the firm for the future
These are aimed to provide potential to the leader to deal with the crisis situation.
However, in practical the performance of this model has not been testified to conclude the
effectiveness of this model.
Structural functional system theory:
According this model proper flow of information among the different level of the firm
is essential in order to keep the firm away from the crisis like situation. Communication flow
plays an essential part in order to deal with the crisis situation and thus this conceptual
theoretical framework has focused on the actual and efficient flow of information. As argued
by this model, with proper flow of the information managers can aware and share information
to the various level of participant of the firm regarding the crisis situation, which will grow
trust among within the organisation and help it to overcome the crisis like situation smoothly
(Snyder and Diesing 2015).
Critical review of hospitality industry of UK with special focus on Hôtel Des Galeries:
Over the year UK has become one of the best place to visit by the tourists, however
recent civic crisis in the state has caused the industry to face some amount of slug (Carlborg,

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Kindstrom and Kowalkoswski 2016). From the figure 1, it can be seen that the compared to
October 2016, there was a drop of tourist visit in UK by 6% and the spending by the tourists
has fell by 1% in 2017 compared to the 2016 (Hosco.com, 2018). According to the same
source, during the year 2016, there was a rise of tourists in the country by 7% compared to
2015, however, post civic crisis it fell gradually.
Figure 3: UK tourist visiting
Source: (Hosco.com 2018)
The figure 4 highlights that the held rate post Brussel terrorism activity. From the
figure below, it can be seen that there was a substantial drop in the visitor held rate by the
hospitality service provider. It indicated any instance of the civic crisis cause huge amount of
loss to THE industry in the form of the cancellation of visit, and refund of the booking fees.

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Figure 4: Hotel held rate of UK before and after civil crisis
Source: (Hotel Designs 2018)
In the case of the Hôtel Des Galeries, it can be seen that post Brussel terror attack
there were more than 255 cancellation that caused the firm both financially reputation wise
too (Hotel Designs, 2018). People are sceptical to visit those place, which have earlier
instance of civic crisis that deteriorates the public figure of the said hospitality service
provider. The firm was forced to reduce the rate due to excessive gap in the demand of their
hospitality service and supply of the same. However, the situation remain out of control for
the hoteling industry owing to the 55% loss in the customers who have booked rooms for the
month of May and there were whopping 95% loss in the hotel booking during the month of
June (Wilczek and Blangetti 2018). It caused a crippling blow to the Hôtel Des Galeries.