key: cord-0041851-ytal7wog authors: Henderson, Joan C.; Ng, Alex title: Responding to crisis: severe acute respiratory syndrome (SARS) and hotels in Singapore date: 2004-12-09 journal: nan DOI: 10.1002/jtr.505 sha: ef22a957ed28519863132e87a54ca253cb5d9bf4 doc_id: 41851 cord_uid: ytal7wog The sudden outbreak of severe acute respiratory syndrome (SARS) in Singapore in 2003 was a grave crisis for the tourism industry as a whole and highlights the importance of effectively managing and planning for such occurrences. This study looks at the particular consequences of the infectious virus for the hotel sector and reactions to the challenges posed. Further health‐related crises seem inevitable in the modern world and some guidelines for dealing with these are proposed, based on the Singapore experience and an existing framework for tourism crisis management. Copyright © 2004 John Wiley & Sons, Ltd. I n an increasingly uncertain world, almost all organisations connected to the tourism industry face the likelihood of experiencing some form of crisis. However, levels of preparedness and the competence with which difficulties are handled vary and the topic of tourism crisis management is attracting greater attention from both academics and practitioners. This study is concerned with severe acute respiratory syndrome (SARS), a new and potentially fatal virus, which affected much of the East Asian region during early 2003. It focuses on how the epidemic impacted on Singapore's hotel sector and management reactions to it, affording insights into the problems caused by outbreaks of infectious disease at destinations and possible responses. After an opening summary of the literature on tourism and crisis, certain features of SARS and the implications of its presence in Singapore are outlined. Steps taken by hotels are reviewed and the paper concludes by presenting proposals for the management of similar hospitality crises which might lie ahead. Findings are derived from a sample survey of Singapore's largest hotels, supplemented by interviews with managers, and the analysis also draws on secondary data from published sources. Crisis and disaster are prevalent nationally and internationally (Blakie et al., 1994) and commentators maintain that it is no longer a question of whether they will arise, but when and how they will be dealt with (Barton, 1994; Kash and Darling, 1998) . Faulkner (2001) distinguishes between disasters resulting from exogenous catastrophic change and crises due to organisational problems such as weak management. The conditions are closely related, however, and an outside disaster can evolve into an institutional crisis so that the terms are frequently used interchangeably. Tourism has proved itself sensitive to a host of internal and external influences that can disrupt operations (Faulkner and Russell, 1997; McKercher, 1999; Nankervis, 2000) , and Fink's (1986, p. 7) observation that 'any time you're not in a crisis, you are instead in a precrisis, or prodromal mode' would seem especially apt. The industry's exposure to crisis has been acknowledged by researchers, its vulnerability revealed by the wave of adverse events that marked the opening years of the 21 st century and their harmful repercussions. Terrorist activity has become a primary concern (Pizam, 2003) , but health scares should not be overlooked and have the capacity to inflict serious damage (Travel Business Analyst, 2004) . The World Health Organisation (WHO) warns of the risks of known and unknown communicable diseases, the progress of which could be accelerated by tourism movements (WHO, 2002) . Members of the World Tourism Organisation (WTO) have also been called on to formulate tourism health policies incorporating mechanisms for reporting conditions at destinations (WTO, 1991 (WTO, , 1996 . The expanding literature on the theme of tourism and crisis includes case studies of good and bad practice, with a consensus that planning for various scenarios and allocating responsibilities in advance could be vital in averting crisis or surviving it and even finding new commercial opportunities to exploit (Pottorff and Neal, 1994; Roberts, 1994) . The significance of good communications is highlighted in many accounts, and the media is seen to occupy a central role in the dissemination of information and formation of opinions and images (Berno and King, 2001 ). Nevertheless, not every public or private sector tourism organisation is in possession of a plan (Cassedy, 1991; Prideaux, 2003) and those that do exist are often informal and undocumented, addressing only one particular type of hazard (Drabek, 1995) . Neglect of such an important area as crisis management is surprising and an untenable position given contemporary global instability. Faulkner's (2001) exploration of the dynamics of a tourism disaster is commonly cited by researchers and he traces the disaster process through a series of stages noted in Table 1 . Although derived from evaluation of a natural disaster, the theory is agreed to have a broader relevance that permits its applicability to other emergencies (Ritchie, 2004) . The model thus provides a suitable framework for examining the ways in which the disruption created by SARS was handled by Singapore's hotels. Appropriate actions to combat a health-related The coronavirus caused a contagious atypical pneumonia, with a mortality rate of 14-15%, which spread rapidly after its discovery. The epidemic centred on East Asia and locations such as China, Hong Kong, Singapore and Taiwan were amongst the worst hit. Fears of infection by the potentially deadly disease were widespread, aggravated by intense media publicity and speculation about its means of transmission, which is now assumed to be through vapour droplets. There is no vaccine or cure as yet, control depending on the identification and isolation of suspects. Air travel was seen as facilitating diffusion of the virus and the WHO advised aircraft disinfection and health screening of outbound travellers from areas with local transmission in a bid to prevent further contagion (WHO, 2003) . Given the lack of knowledge and limited understanding of SARS, Singapore was initially unprepared for and unprotected from the disease. This was imported by three residents returning from Hong Kong and confirmation of their state in early March 2003, accompanied by a wave of infections, precipitated public health and tourism crises. Visitor arrivals fell dramatically for the April to June quarter, reaching a nadir in May when figures were over 70% lower than the previous year (STB, 2002 (STB, , 2003a . Tourists from around the globe either cancelled or postponed their trips and passenger traffic at Singapore's Changi Airport halved, several airlines halting flights altogether (The Straits Times, 2003a). Travel warnings were issued by the WHO, as well as governments overseas, and leisure and business travel both slumped. Several companies turned to alternatives of video and teleconferencing and prohibited staff from travelling to countries where SARS had been reported (The Straits Times Interactive, 2003) . Many locals also chose to avoid public places, thereby contributing to the decline in leisure spending. The unanswered questions originally surrounding the virus should be stressed and these added to anxieties and complicated decision making, nobody knowing how long the outbreak would last and its ultimate extent. As the epidemic ran its course, the number of those who succumbed dwindled and there was growing confidence that the battle was being won. However, the crisis remained acute until late May when Singapore was declared free of local transmission of SARS by the WHO and travel warnings were downgraded. The final death toll was 33, another 238 patients recovered and thousands had been subject to a rigorous system of home quarantining for individuals having contact with SARS sufferers. Although the WTO announcement was an occasion for celebration, the industry sought to guard against complacency. Worries persisted at home and abroad that the virus might return and scientists cautioned that total eradication would be impossible, but the downturn in tourist arrivals was arrested and there were signs of a return to normal flows by the end of the year. Nevertheless, SARS proved an unprecedented tourism crisis and seriously undermined Singapore's reputation as a destination synonymous with safety and security (Henderson, 2003) . Hotels in Singapore have to be registered by law and there are 101 that are formally gazetted, a status determined by features such as the number of rooms, attached bathrooms and food and beverage outlets (HLB, 2003) . These are liable for cess duty payments, unlike nongazetted units, which are generally very small establishments. Of the total gazetted in 2003, 24 were classed as medium sized (201-400 rooms), 26 as large (401-600 rooms) and nine as very large (over 600 rooms); these collectively constituted the sample population. The postal questionnaire survey sought details about the consequences of SARS for hotels and their attempts to overcome the problems it brought in its wake, being completed at the close of 2003 when recovery was well underway. Only nine hotels responded, or 18.6%, but the different sized properties were almost Consequences of SARS for Hotels in Singapore 413 equally represented and their guests came from all Singapore's principal tourist generating countries with an emphasis on Asia. The findings thus represent an industry view of the gravity of the crisis and policies pursued during its lifecycle, although the limitations of such a disappointing response are accepted. Singapore Tourism Board (STB) statistics confirm the severity of the situation for the hotel sector as a whole. The average hotel occupancy rate (AOR) for the second quarter of 2003 was 21%, compared with 74.5% for the previous year, and average room rates contracted by 18.8%. Industry-wide data correspond to those for the surveyed hotels, which had an average AOR in April of 35.8%; this dropped to 27.7% in May, before rising to 42.3% in June. There were some contrasts in the performance of individual hotels and one saw occupancies of only 10% in June (STB, 2002 (STB, , 2003a . The respondent hotels tended to rely on corporate clients, who made up over 60% of customers. Demand from both business and leisure travellers was, however, almost equally eroded by an estimated 52.4% and 58.1% respectively. The greatest decreases were recorded by guests from Japan and Hong Kong, followed by those from Australia, America and Europe; in comparison, the Indonesian, Thai and Indian markets were perceived to be more robust. On average, the hotels surveyed calculated that they would lose at least one-third of their annual revenues because of SARS, two hotels expecting to sacrifice 50% of earnings for 2003. The Singapore Hotel Association expected revenue losses as a result of cancellations and postponements to be in excess of $28 million for all Singapore's hotels (SHA, 2003) . Expressions of government concern reflected an acute awareness of the havoc being wreaked by SARS as it reverberated through the economy and also the direct and indirect value of international tourism to the republic, justifying a degree of official intervention to protect the industry during the depths of the crisis. Several assistance programmes were assembled, the most prominent being an S$230 million relief package aimed at the tourism and transport industries, which included property tax rebates and bridging loans for small and medium enterprises (SMEs) facing cash difficulties (The Straits Times, 2003b). A major portion was allocated for hotels, comprising measures such as a halving of the unskilled foreign worker levy and the waiver of television licence fees (The Straits Times, 2003c) . The STB, together with the Standards, Productivity and Innovation Board, also launched a fixed interest rate financing scheme to help SMEs gain access to short-term funds (STB, 2003b) . The moves were welcomed by hoteliers, although some felt that the amounts of financial support could have been more generous. The sudden onset of the crisis and its nature cut short any pre-event or prodromal stages, with no chance of evasion and very little time to prepare. The crisis cycle thus commenced almost immediately at the emergency period when the principal worry for hoteliers was shrinking revenues linked to falling occupancy, priority being allocated to cost savings and generating income. With regard to human resources, none of the respondents retrenched permanent staff. However, seven terminated the services of contract workers, salaries were reduced at three hotels and all requested employees to go on unpaid leave. Multitasking was another popular option. To minimise other operating costs, six respondents took rooms or floors out of service and one shut down for a major renovation and revamp in the middle of the year. At the same time, the crisis was an opportunity to upgrade skills and six respondents accordingly sent members of their workforce for training, taking advantage of the SARS Relief Tourism Training Assistance (SRTTA) programme. This was a component of the government aid package designated for the retraining of employees in approved tourismrelated courses, one objective being to minimise redundancies (STB, 2003c) . In the face of mass cancellations and very few new bookings, hotels were anxious to sustain their day to day business and ensure some cash flow. With many foreign visitors 414 J. C. Henderson and A. Ng shunning Singapore, all respondents turned to residents and devised promotional packages targeted at them. This was considered a temporary arrangement only due to a long standing belief that the domestic market was too small to be commercially viable as geographical factors encourage Singaporeans to escape to neighbouring Malaysia and Indonesia for inexpensive breaks, instead of holidaying in their own very urbanised environment. One respondent described adding value through the offer of extra amenities to local and foreign guests, rather than discounts on room charges. Half of the respondents engaged in advertising campaigns and seven stated that they had collaborated with airlines, travel agencies and the STB in assorted schemes to attract more tourists. Hotels sought to demonstrate a commitment to exemplary standards of hygiene and cleanliness in an effort to reassure customers and build confidence. The Tourism Board's COOL Singapore project aimed to communicate the message that Singapore was not dangerous and specific venues were uncontaminated by SARS, providing guidance for industry participants on keeping the infection out of their premises. Hotels that met the criteria were granted COOL awards which they could display to try and convince the public that they were SARS-free and SARS-ready (STB, 2003d) . Most hotels surveyed were quick to be certified 'cool' and also abide by Ministry of Health (MOH) instructions. All hotels procured thermometers and daily temperature-taking of employees was conducted in accordance with MOH directives, fever being a key and easily identifiable symptom of SARS. The STB itself circulated information and proffered advice on practical matters, which hotels complied with, guests too being asked to complete health declaration forms. All but two of the respondents declared that they had crisis management plans prior to SARS, but these were not always strictly relevant and covered either eventualities unconnected to such a disease or were generic in scope. A SARS manager was appointed from the existing management team by most hotels to be in charge of liaison with the STB and MOH, as well as helping the general manager, with final decisions commonly left to the latter. The above measures were in place throughout the emergency, which prevailed until Singapore was removed from the WHO list of countries with local transmission of SARS on 31 May. The WHO declaration propelled the crisis nearer to recovery, judged by respondents to have begun in July. Common indicators of progress were an upturn in room occupancy, revenue and reservations and a slowdown in the decline of tourist arrivals. June therefore might be seen as the intermediate month, during which many aspects of the emergency regimes were maintained. Initiatives designed to secure and accelerate recovery were introduced after the WHO decision when attention shifted to marketing. Hotels retained certain procedures they had installed at the height of the crisis, with a gradual relaxation of some of the more stringent precautions such as constant screening for fever. Five indicated that they had or would be undertaking more advertising in a bid to increase customer awareness and stimulate demand, and six collaborated with other tourism organisations such as airlines and travel agencies in promotional campaigns. Only two hotels carried on actively selling to the Singapore market. In terms of product development, half the respondents were seeking to improve the quality of their facilities and seven of them to provide superior customer service. Business was deemed to have returned to pre-SARS levels by the last quarter of 2003 when room occupancies averaged 73.2%. As the recovery advanced and resolution seemed closer, there was time for reflecting on the past and looking ahead. Most hotels felt better able to cope with another SARS epidemic after having survived the first in which positive attributes such as team spirit, adaptability and professionalism had been fostered. In addition, procedures had been devised and tested that could be reintroduced at short notice should the virus resurface. The handling of SARS in Singapore does not entirely correspond to theories of crisis man-Consequences of SARS for Hotels in Singapore 415 agement as there was little advance warning of the virus or appreciation of its significance. The pre-event and prodromal periods, preceding the emergency, were therefore of very short duration. The delisting of Singapore by the WHO marked the cessation of the emergency and start of recovery, separated by a brief intermedial transition. Although the hotels surveyed were in possession of crisis management plans before the onset of SARS, discussions indicated that these were not entirely apposite and managers were caught unawares and forced to act instinctively. Decision makers initially were largely at the mercy of the epidemic's evolution until later when there were opportunities to take the initiative and seek to direct events. Responses ranged from reactive and defensive to proactive and offensive, incorporating collaboration with other agencies within and outside the tourism industry. Actions undertaken can be categorised as disease and hygiene controls, cost savings, marketing and lobbying for official aid. These tactics were also evident in Hong Kong where Singapore's hotel crisis was repeated (Chien and Law, 2003; Pine and McKercher, 2004) and echo measures of 'marketing, hotel maintenance, human resources and government assistance' implemented in other examples of hospitality crises (Israeli and Reichel, 2003, p. 353) , suggesting a common pattern of response. Partial recovery in Singapore had been achieved by the end of 2003, but resolution was still incomplete in the opening months of 2004 because of the threat of a resurgence of SARS and a few isolated cases across Asia. These circumstances created anticipation of a second outbreak and round of crisis, leading the industry to assume a pre-event stance of intensified vigilance. Foreseen damaging developments in the arena of public health were not confined to SARS and encompassed the mutation of a strain of avian influenza, which was erupting across Asia into an extremely infectious and deadly human virus (The Straits Times, 2004) . Although the direst predictions about so-called 'bird flu' had not been realised at the time of writing, the fact that it was hailed immediately as a potential tourism crisis indicates that lessons had been learnt from SARS. Such learning is a crucial final outcome of crisis and should inform and strengthen strategic planning. The Singapore experience of SARS offers a perspective on the demands made of the hotel sector when dealing with rampant infectious disease. Although suggesting the benefits of being in a state of readiness, the study does raise questions about the wisdom of investing scarce resources in formulating plans tied too closely to specific crises. More common incidents such as fire, power failure and food poisoning are relatively easy to plan for, but the uniqueness of certain situations frustrates advance identification and limits the general value of a narrow response strategy. It could be argued that hotels should avoid being overly prescriptive and maintain a flexible approach, giving some attention to drafting a series of protocols that provide broad guidance on structures and procedures to use in order to accommodate the unpredictable. External forces may also be a major influence on the efficacy of any plans, illustrated in this case by the WHO and the impact of its decisions. The imposition and continuation of advisories are likely to have undermined certain aspects of attempts to manage the SARS tourism crisis, not least marketing activity, by setting the pace of recovery. Another striking feature of the virus was that it affected both destinations and source markets, bringing tourism throughout much of the region to a halt. It was consequently beyond the ability of any single business or destination to manage comprehensively and, however competently the Singapore industry and authorities reacted to conditions in the republic, they were partly dependent on the manner in which public and private organisations elsewhere dealt with their own crises. Individual hotels, alongside other enterprises, were thus relatively powerless within the overall picture of the international crisis and its complicated dynamics. Nevertheless, outbreaks of existing or new types of infectious disease might be expected to recur and the risks should not be ignored by hoteliers. A set of guidelines to assist in coping with such a scenario is presented in Table 2 , drawing on Faulkner's tourism disaster directives. The proposals recommend fully utilising the preliminary pre-crisis stages to prepare for the climax of the crisis when a machinery of systems, processes and personnel can be installed with minimum delay and maximum efficiency. Meeting immediate needs gives way to a medium term perspective as the emergency recedes, to be replaced by an intermediate step when normal business operations can begin to be restored. Recovery requires marketing and development programmes, as well as government involvement if necessary, and a return to regular modes of operation. Resolution is a time for review when formal plans can be revised in the light of the knowledge gained from living through one crisis, enhancing their applicability to any of a similar character that might materialise in the future. The epidemic of SARS in 2003 was an exceptional crisis for Singapore's hotels and an exacting test for its managers, in which advances to near normality were dictated by outside developments and agencies as much as their own efforts. The struggle against the virus and its repercussions reveals the importance of being prepared and of devising strategies to provide direction and limit any damage when facing the potentially destructive forces unleashed by a crisis. Crisis management planning thus emerges as an essential responsibility of the tourism industry as a whole and it is hoped that this account has contributed to the debate about the principles of crisis management within a tourism context whilst also illuminating good practice in the hotel sector. Crisis management: preparing for and managing disasters. 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