Advice for Spas When Faced with a Crisis

The recent headline, “Norway Shooting” reminded me of the “Managing through  Crisis” panel at this year’s Global Spa Summit.  It was a real privilege to hear advice from four executives who had each lived through some major cataclysmic events.  Between the four panelists, they had experienced:  the Bali bombing and tsunami in Southeast Asia; the recent earthquake, tsunami and radiation leaks in Japan; the 2008 terrorist bombing in Mumbai; and the outbreak of swine flu and drug-related violence in Mexico.

Their advice was invaluable – and I will never forget that they all agreed on one major point in terms of priorities. (I highlighted below in red.)  You really don’t want to miss reading this breakout session summary.

Best,

Susie

P.S. All session summaries, powerpoints, and videos of the 2011 GSS Summit are now available online.  It is a lot of valuable information they let you share with others stating that it helps with good decision making and supports their mission of “Joining Together. Shaping the Future.”

Managing Through Crisis: Cataclysmic Events,
Geo-Political Instability, Public Health Emergencies

Concurrent Breakout Discussion
Tuesday, May 17th, 2011 11:30am – 12:30pm
Hibiscus Room, The Bali International Convention Center, Bali, Indonesia

Moderator: Mia Kyricos, VP, Corporate Wellness, Core Performance, U.S.
Panelists: Roberto Arjona, Chief Executive, Golden Door & Rancho La Puerta, Mexico
Jeff Matthews, COO & President, Mandara Spa, Indonesia
Dave McCaughan, EVP, McCann World group Asia-Pacific, Japan
Samir Patel, Managing Director of Spas, Six Senses Resorts & Spas, Thailand

I. BACKGROUND

The panelists were selected based on their professional experiences managing the aftermath of cataclysmic events in their respective regions including:

Roberto Arjona, who had first-hand experience managing the impact of a property fire on both employees and guests, the outbreak of Swine Flu, Recession and drug-related violence/terrorism in Mexico

Jeff Matthews, who had first-hand experience navigating the Asian monetary crisis, the Bali Bombings and the Tsunami in southeast Asia

Dave McCaughan, who most recently managed the needs of multiple clients directly after the March 2011 tragedies in Japan including the Earthquake, Tsunami and Radiation leak

Samir Patel, who also had first-hand experience with the Asian monetary crisis as well as the bombings in
Mumbai, the spread of SARs and the more recent unrest in Egypt and the Middle East

II. PANEL SESSION

Mia Kyricos:
How do you manage your brand integrity when there are competing priorities?

Samir Patel:
Firstly, I feel that it is important to define what is meant by the word “brand.” The word brand refers to a believed system and promises. Brand integrity refers to the promises made by the brand and the customers experience it through the behavior of the company’s people, especially during crisis. Thus, it is important to always follow through with your duties and respect the promises you have made; even during a catastrophe.

Dave McCaughan:
For managing brand integrity, you should cover these following points:
1. How did your loyal customers react following the catastrophe?
2. What support can you offer to your people and customers?
3. How can you positively motivate your staff and the potential customers?

It is essential to get your priorities straight when running a business:
1. Your staff
2. Your customers
3. Your investors

Most people watch the news and are aware of what is happening. However, what is really going on is usually
very different; that is why it is important to keep the lines of communication open.

Mia Kyricos:
How do you manage the human side in the operational level after a crisis?

Roberto Arjona:
It is necessary to keep brand integrity through leading by example. Crisis is a time when you need your employees by your side in order to recover rapidly, so you should communicate with them by being honest about what is going on.

Mia Kyricos:
What is the immediate reaction after a crisis?

Jeff Matthews:
When the demand for a certain service seems to be declining, the first reaction of the managers is to cut costs by firing people. This is not what you should do; not only do you need your employees by your side, but that will negatively affect your brand image.

Samir Patel:
You must be able to look ahead and predict how things will be when the crisis dies down. In this case, you should look to your employees for support and start the recovery together. Through leading by example and behaving according your brand’s values, employees will follow suit.

Jeff Matthews:
Before going back to your usual business and welcoming your guests, you need transition time. A ritual or ceremony will help people to evolve from sadness to hospitality.

Mia Kyricos:
Are there other challenges linked with a crisis?

Roberto Arjona:
The two main challenges are really how do you deal with your employees and how should you communicate with the rest of the world.

Mia Kyricos:
How do you manage marketing, especially communication, since it is usually the first budget to be cut when corporations are facing crisis?

Roberto Arjona:
During an economic crisis, the best strategy is to increase marketing, but after a natural crisis, it is important to be careful with the impact that will be made by your brand. For instance, after the Tsunami, most companies cut back their marketing budget which created dysfunction in the industry.

Dave McCaughan:
It is important to consider how long the stabilization phase will last before customers come back. It can vary depending on the market. In Europe or the US, it takes about nine months to recover a customer’s confidence after a major disaster, while in Asia it takes less than two months.

Mia Kyricos:
Nowadays, terrorism is widely spread. How do you juggle the need to prioritize human life with the financial needs of a company?

Samir Patel:
You have to accept the additional costs that a situation can create and deal with them, knowing that those costs are just temporary. It is the right time for finding other solutions; try being innovative or doing training. It is usually a joint solution solved by a team; no one person can do it alone.

Questions and Answers
Audience: Crisis is an opportunity to innovate a business and without major crisis, companies can hardly take time to innovate. For instance, in Dubai, the crisis permitted us to redefine the products and change the spa menu, in order to address it to another segment of the market. How do you deal with the media?

Dave McCaughan:
The media will generally show the negative aspect of the crisis; by doing so it will turn everyone off and create damage for the industry overall. You cannot influence the media, it is too powerful, but you can do a post-crisis campaign to communicate with the outside, in a more favorable way.

Audience:
How do you work with stakeholders for reducing the damage on the destination, in a more global point of view?

Roberto Arjona:
You should create a commission including all stakeholders (governments, suppliers, competitors, etc.) that collaborate for the recovery of the destination’s image. For example, in Mexico, we created a commission, invited all newspapers to make a statement: we will not do any advertisement if they were presenting an image that will hurt the country.

Audience:
What are your recommendations regarding destinations dealing with safety issues?

Roberto Arjona:
It is necessary to create campaigns geared towards your own citizens. Your citizens should not be negatively referring to their own country; this can bring down business tremendously. They should support the industry by talking first about the good things before the bad ones.

Mia Kyricos:
That’s a great segue to talk about the strength of the human spirit, or the positive outcomes often associated with disasters. The recent “Golden Week” in Japan is a good example. Can Maru – a Japanese member of our audience, describe what that is?

Maru (Tomonori Maruyama):
Golden weeks in Japan are the national holidays when people usually leave the country to travel. But this year, the population is supporting the recovery of the country by staying and doing domestic travelling in Japan to further the country’s recovery process.

Final recommendations from the panelists:
Roberto Arjona: You need to understand the risk, so that you can communicate about it.
Samir Patel: A stabilization phase is an opportunity to go back to the roots of your brand.
Dave McCaughan: Get things back to normal as fast as you can, use your resources well.
Jeff Matthews: If you know that you have a strong brand, do not panic. The recession is temporary; things WILL go back to normal!

My twitter address: @susieellis