Crisis! What Crisis? A Descriptive and Normat ive Study on Crisis Management for Tour Operators Lönnroth Tanja and Saboundji Akram Graduate Business School Tourism and Hospitality Management Master Thesis No. 2007:34 Supervisor: Eva Gustavsson Abstract This study attempts to identify crisis management practices deployed by tour operators to face crises. Tour operators exercise a pivotal role in channelling tourism flows. Nevertheless, this role is often destabilized by crises in an increasingly volatile environment. Hence, sustaining the tour operators’ role and ensuring their long term growth demands a formal crisis management system. Yet, the ambiguous nature of the tour operating industry inhibits researchers from exploring existing crisis management practices. Therefore probing, metaphorically, is used to conduct an overview of these practices. It relies on a multiphase scanning of different sources representing various tour operators’ internal and external stakeholders. The study reveals that many tour operators consider crisis management as an operational issue, although crises are dealt with strategically. Furthermore, a generally adoptable crisis management system could not be clearly identified. As such, a flexible crisis management framework is suggested for tour operators to consider. The framework is based on the concepts of latent and active prevention, operational and strategic responses, legitimization, and organizational learning. The framework is also used to suggest areas for future research. 1 TABLE OF CONTENTS LIST OF FIGURES .............................................................................................................................................. 4 LIST OF TABLES ................................................................................................................................................ 4 ABBREVIATIONS USED IN THE RESEARCH .............................................................................................. 5 1. INTRODUCTION ............................................................................................................................................. 6 1.1. RATIONALE AND BACKGROUND OF RESEARCH ............................................................................................ 6 1.2. RESEARCH QUESTION................................................................................................................................... 8 1.3. RESEARCH PURPOSE ..................................................................................................................................... 9 1.4. OUTLINE OF THE THESIS ............................................................................................................................. 10 2. LITERATURE REVIEW ............................................................................................................................... 12 2.1. TOUR OPERATORS’ ROLE IN THE TOURISM DISTRIBUTION CHAIN ............................................................. 12 2.2. CONCEPT OF CRISIS AND CRISIS MANAGEMENT ......................................................................................... 14 2.2.1. Inadequacy of Traditional Crisis Management ................................................................................. 16 2.2.2. Non-traditional Approaches to Crisis Management .......................................................................... 17 2.3. TYPOLOGY OF CRISES ................................................................................................................................ 18 2.4. CRISIS MANAGEMENT FOR TOUR OPERATORS ........................................................................................... 21 3. METHODOLOGY .......................................................................................................................................... 22 3.1. SOURCES .................................................................................................................................................... 22 3.2. PROBING .................................................................................................................................................... 23 3.3. DATA COLLECTION METHODS ................................................................................................................... 25 3.3.1. Desktop Research .............................................................................................................................. 26 3.3.2. Field Study ......................................................................................................................................... 26 3.3.3. Annual Reports .................................................................................................................................. 29 3.3.4. Expert Input ....................................................................................................................................... 30 3.4. ANALYSIS ................................................................................................................................................... 30 3.5. TRUSTWORTHINESS AND ETHICAL CONSIDERATIONS ................................................................................ 31 4. OPERATIONAL ACTIONS AND RESPONSES ........................................................................................ 33 4.1. THE TSUNAMI ............................................................................................................................................ 33 4.2. HURRICANES .............................................................................................................................................. 36 4.3. PANDEMICS AND EPIDEMICS ...................................................................................................................... 38 4.4. FOREST FIRE .............................................................................................................................................. 39 4.5. TERRORISM AND ARMED CONFLICTS ......................................................................................................... 39 4.5.1. Internal effect on tour operators ........................................................................................................ 39 4.5.2. Tour operators’ crisis readiness and responsiveness ........................................................................ 43 4.5.3. Effect on customers ............................................................................................................................ 44 4.6. CRIMINAL ACTS ......................................................................................................................................... 45 4.7. CRASHES .................................................................................................................................................... 46 4.8. CONTAMINATION ....................................................................................................................................... 46 5. STRATEGIC DECISIONS & LONG-TERM ACTIONS ........................................................................... 48 5.1. THOMAS COOK ........................................................................................................................................... 48 5.1.1. Strategic Decisions ............................................................................................................................ 48 5.1.2. Long Term Actions ............................................................................................................................ 49 5.2. MYTRAVEL ................................................................................................................................................ 50 5.2.1. Strategic Decisions ............................................................................................................................ 50 5.2.2. Long Term Actions ............................................................................................................................ 52 5.3. TUI ............................................................................................................................................................ 53 5.3.1. Strategic Decisions ............................................................................................................................ 53 5.3.2. Long Term Actions ............................................................................................................................ 53 5.4. FIRST CHOICE ............................................................................................................................................. 54 5.4.1. Strategic Decisions ............................................................................................................................ 54 5.4.2. Long Term Actions ............................................................................................................................ 56 5.5. KUONI GROUP ............................................................................................................................................ 58 2 6. INTERNAL SYSTEMS & EXTERNAL SUPPORT ................................................................................... 60 6.1. INTERNAL SYSTEMS ................................................................................................................................... 60