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2005 6: 89Tourism and Hospitality ResearchJoan C. Henderson

Responding to Natural Disasters: Managing a Hotel in the Aftermath of the Indian Ocean Tsunami  

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Responding to natural disasters:Managing a hotel in the aftermath of theIndian Ocean tsunami

Joan C. HendersonReceived: 4th July, 2005

Nanyang Business School, Nanyang Technological University, Nanyang Avenue, 639798, Singapore

Tel: +65 6790 6116; Fax: +65 6791 3697; E-mail: ahenderson@ntu.edu.sg

Joan C. Henderson is an associate profes-

sor in the Business School at Singapore’s

Nanyang Technological University. Her

current research interests include crisis

management and tourism in South East

Asia and the marketing of heritage as a

tourist attraction.

ABSTRACT

KEYWORDS: hospitality management,

Thailand, tourism crisis, natural disasters

The case describes the experiences of the Gen-eral Manager of a luxury resort hotel on theThai island of Phuket in the days immediatelyfollowing the Indian Ocean tsunami at the endof 2004. Although the property escaped physi-cal damage and there were no fatalities amongresidents and staff, the management had to dealwith an unprecedented crisis caused by disrup-tion to the tourism industry in the destination asa whole and a dramatic fall in arrivals. Recov-ery efforts are outlined and reference is made tolonger-term impacts on business and the chal-lenges of restoring confidence and returning tonormality. Issues arising from the case are sug-gested in a final list of questions for discussion.

INTRODUCTION

Tourism crises are a topic of growinginterest to both academics and practitionersin a world of increasing uncertainty and

unexpected events, features which heightenthe risk of a crisis occurring. Several studiesanalyse crisis dynamics and processes andpropose planning and management models.Crises can evolve at great speed in a chaoticmanner, however, and are not always iden-tifiable in advance. Recommendationsabout how to deal with them may proveeither overly general or be too closely tiedto a particular set of circumstances. Theunderlying problem of predicting theunpredictable means that managers are notalways fully prepared and must respondintuitively to unfamiliar and confusedsituations as they unfold in a randommanner. Handling crisis is an especial chal-lenge for those at work in the tourismindustry, which involves the movementand accommodation of people. Customersface personal inconvenience when thingsgo wrong and their physical well-beingand lives, as well as those of staff, may bethreatened in the most severe conditions ofcrisis.These characteristics of certain tourism

crises are illustrated by natural disasters andthis case is concerned with the tsunami inthe Indian Ocean on 26th December, 2004.Its implications are considered from theperspective of the General Manager (GM)of a luxury hotel resort on the Thai islandof Phuket. The property is located in one

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pp. 89–96

# Henry Stewart Publications,

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of the most popular beach areas, about 20kilometres from Phuket town and eightkilometres from Patong beach. It is builton eight hectares of ground along 500metres of beachfront. The GM’s experi-ences in the immediate aftermath of thetsunami are recounted, consequences forbusiness and responses are outlined andquestions for discussion are then suggested.Material was collected in a series of per-sonal interviews conducted during a periodof fieldwork.

The intention is to highlight thedemands made on managers during periodsof crisis and the tools at their disposal tohandle difficulties. The account also revealshow tourism destinations as a whole maybe damaged by a crisis such as that causedby a large-scale natural disaster. Manage-ment and recovery thus become a collec-tive effort involving a multiplicity ofindividual enterprises from the public andprivate sectors.

THE INDIAN OCEAN TSUNAMI

Earthquakes and volcanic eruptions triggertsunamis, waves which can exceed 100kilometres in length and travel at 800 kilo-metres per hour. The waves increase inheight, sometimes up to 30 metres, whenthey slow in shallow water and battercoastlines on reaching land. The 2004Indian Ocean tsunami was an exceptionalexample with powerful waves whichstruck the shores of 12 countries across twocontinents. Over 225,000 are estimated tohave died, among them many tourists, andthere was widespread devastation. Somecoastal resorts in Malaysia and India wereaffected, but tourism infrastructure damagewas greatest in Thailand, Sri Lanka and theMaldives.

The tsunami waves in Thailand resultedin physical destruction and the deaths ofover 5,000 people, almost 2,000 of whomwere tourists. Six provinces bore the bruntof the tsunami, yet its impacts varied.

Khao Lak and Phi Phi Island lost most oftheir hotel stock of 6,000 and 4,000 hotelrooms respectively while only 20 per centof Phuket’s hotels saw serious damage and85 per cent were open one week after theevent. It was anticipated by officials thatrecovery would be a matter of weeks atsome sites, but might take from one totwo years elsewhere.

THE TSUNAMI HITS PHUKET

Boxing Day 2004 was the GM’s day off,but he had an appointment at a sister prop-erty and left his own hotel at about9.50am. He was driving along the coastalroad when he was met by several touristsin swimsuits running, shouting and wavingat him to get out of the way. He then sawthe water approaching and hundreds ofpeople fleeing from the beach and acceler-ated inland up a hill which was within 50metres of the road in between two hotels.The water flooded the road within seconds,bringing with it a black mass of whatlooked like cement, pushing everything inits path out of the way. Screams wereheard from a small restaurant at the foot ofthe hill as the water poured through theground floor and into the bedroom of theowners. The second and third waves struckabout ten minutes later and cars, sun-beds,umbrellas, tables and people were seenbeing picked up and washed away by thesea. Some people and objects were thenbrought back to the shore or deposited in anearby lake.

Many had gathered on the hill for safety,including individuals separated fromfriends and family who were becominghysterical. Local beach vendors taking shel-ter there were extremely anxious to returnand try to save their livelihoods. Withinabout 15 minutes of the final wave, thewater level on the beach seemed to be backto normal. No one was sure what mightfollow and a hush came over the wholearea. The destruction along the roads was

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high and cars, minibuses and an ambulanceappeared as the water subsided. Mobilephones were jammed as people tried tocommunicate the news. The GM wasunable to contact the hotel and remainedon the hill for another hour. Then, along-side others who were ready to move, heleft and drove back towards the hotel.Black silt was lining the roads, cars werepiled two or three deep and people were ina state of confusion.

AT THE HOTEL ON 26th DECEMBER

Arriving at the hotel on an inland road andusing the main back entrance, the GM hur-ried past reception to the beach which wasseparated from the hotel by a small five-metre-wide track. The water had gone, butleft a mass of garbage, sun-beds, umbrellas,bags, personal belongings, cars and taxispiled up on top of each other. The hotelitself was undamaged and seemed to havebeen protected by a large sand-dune cov-ered by mature vegetation which gave itadded stability.The GM found his assistant who was in

charge that morning. There were touristsin their swimsuits walking around aim-lessly, trying to find other members oftheir party and personal effects. Manyappeared to be in shock. Hotel staffinformed the GM that they had been ableto save the lives of several tourists usingthe hotel’s beach rescue lifebuoys whichwere thrown across the track into the sea.One father and his two children were

wandering around the hotel enquiring ifanyone had seen their mother. They werenot staying in the hotel, but had beenwashed 500 metres along the beach. TheGM’s first job was to have them comfortedand assign a member of staff to escort themto the reception area to see what could bedone. The receptionist was given the taskof getting in touch with hospitals andhotels to try and trace the mother and thefamily was given a guestroom and free

refreshments. This situation was to berepeated during the early afternoon and thestaff were asked to show compassion andoffer the best possible service under the cir-cumstances. Extra staff were put on duty inthe public areas, especially the lobby andmain coffee shop, to deal with distressedguests. The GM was to be complimentedmany times on the sensitivity and sympa-thy exhibited by staff.The Front Office Manager was

instructed to complete a roll-call of allguests and count room keys in an attemptto determine who was not on the premises.As guests returned to the hotel, their nameswere checked and the number unaccountedfor fell quickly to 40 out of a total of 420residents. Guests were known to havetaken day trips and the travel agents andtour operators organising these were con-tacted to confirm they were unhurt. Allguests had been accounted for by 11pm on26th December and only two sustainedcomparatively minor injuries whichrequired stitching and bandaging.Personnel took a register of staff and

found that at least 50 of the 339 on dutythat day had left their posts and gonehome. There were no fatalities among thestaff and only one had been slightly hurt,although the families of two had beenswept away. Employees were not penalisedif they failed to communicate with thehotel during the first three days after thetsunami and were allowed leave if neces-sary. All staff were back at work by theend of the month.There was news that the bridge linking

Phuket and the mainland was closed andthere were doubts about the airport,although this did re-open at about 4pm.The refrigerators and stores were lockedand keys given to the GM who was wor-ried about shortages of food and thieving.Telephone operators were instructed to

liaise with the local police and weatherstations and keep the management updated

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about possible aftershocks and officialinstructions. The Assistant Manager andthe chef prepared a buffet lunch for allthose in the hotel, but nobody really knewwhat to do for the best. The internet andtelevision were the main sources of infor-mation, the latter tuned to BBC World.The realisation of what had happenedbecame apparent as pictures of devastationwere broadcast, the first images shown ofThailand being footage of nearby Patong.

News was received at 1pm that morewaves were expected in the middle of theafternoon. The police arrived with mega-phones and urged everyone to move tohigher ground. The GM called an emer-gency meeting of managers on duty anddecided that they would request help fromthe hotel behind them which was on thehillside. It was arranged that this hotelwould provide space to where guests couldbe transferred if necessary. Guestroomswere then evacuated and guests and staffwere told to make their way to the secondfloor lobby, about 50 metres from thebeach road, and await further instructions.

Engineering staff started to clear the poolfurniture and place plastic tarpaulins on theunderground pumps in the five swimmingpools. Other furniture was also shifted as aprecaution. The security team was placedon the second-floor terrace at the beachside and acted as look outs. The beach istwo to three kilometres wide and facesright out to sea so that the guards hadample time to warn of any signs of distur-bance in the water. With all the guests andstaff assembled in the lobby, the GM madea final tour of the hotel and discoveredtwo newspaper journalists sitting on a wall.They told him that they were hoping forthe ‘one photograph’ which would ‘makethem a lot of money’.

Everyone was still in the lobby at 3pm,but there had been no more waves andpeople were starting to get bored. No realinformation was being distributed by offi-

cial agencies and there was a reliance onthe hotel management to find out whatwas happening. Guests praised staff fortheir efforts and offered to help, but therewas no alternative to sitting and thinkingabout how to react if the waves reap-peared. The GM took responsibility forreassuring anxious guests, a task madeeasier when they were gathered together.The hotel’s e-mail address was distributedfor the use of guests who were often moreconcerned about their Thai acquaintancesand friends than themselves.

A message at 5pm notified managementthat the immediate danger had passed andit was safe for beachfront properties torevert to normal practice. Pleased guestswere advised accordingly and more offersof help were proffered. The receptionistannounced that the missing mother wassafe in the international hospital and a carwas arranged to take the family there.

The telephones started to get very busyafter 5pm. Many calls were from overseastour operators who were desperatelysearching for rooms for tourists from KhaoLak and Phi Phi islands whose hotels hadbeen destroyed. One operator sent the GMa text message which described ‘absolutecatastrophe here in Khao Lak. I am walk-ing over dead bodies in the hotels. Thereare probably thousands dead. I could findso far only 50 of our 290 guests’. The com-pany had been one of the fastest to react,sending their Managing Director and Assis-tant Managing Director to Phuket on thefirst available flight from Bangkok. Theyhad arranged five coaches to evacuate theirclients, but had found the situation muchworse than anticipated. There was alsoword of teams from 28 embassies expectedin Phuket at 3am on 27th December whichwould be in operation later the samemorning. The island was in the middle ofthe peak tourist season and rooms weretherefore not easy to find. Inbound flightshad been halted, however, except for those

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carrying medical and emergency personnel,so some rooms booked for new arrivalswere empty.There was another management briefing

in which staff were advised to be preparedfor anything as the GM did not reallyknow what would happen next at thatstage. Nevertheless, the vacant guestroomshad to be made ready for immediate occu-pation as it seemed that they would behosting guests from Khao Lak and Phi Phiislands who had often been left with noth-ing but the clothes they were wearingwhen the tsunami struck. The rooms wereto be charged to the tour operators and thecompany’s marketing office telephoned toconfirm that normal rates were to be main-tained, unlike other properties which werereported to be raising their prices. Touroperators would pay for the incidentalexpenses of guests who had lost everything.At midnight, the hotel was full once againwith evacuated guests from other areas.

THE REMAINING DAYS OF DECEMBER

By 27th December, the focus was on therepatriation of tourists and the hotelbecame a centre for those waiting to travelhome and these included the walkingwounded. Many guests were accommo-dated for only one night as aircraft weresent from around the world to transportthem back to their country of origin. Thehotel’s original guests, in residence prior tothe tsunami, reacted in different ways. Anumber carried on as before, loungingaround the swimming pools where a fewcould even be found in the early eveningof 26th December. Others decided to leaveas soon as possible, sometimes pressed todo so by their embassies and tour opera-tors, and several were indecisive. Somelong-staying guests did leave, only to comeback later; for example, one couplereturned in the middle of February tocomplete their four-month holiday.Many guests chose to remain and contri-

bute to rescue and recovery work. Thesespent the remainder of their holiday at hos-pitals, embassy stations and blood banksassisting with translating, counselling andso on. Overall, tourists sought to help asmuch as they could with donations ofclothing and other items as well as blood.The local radio station started broadcastingcalls for blood donations at 11am the dayafter the tsunami as the three main hospi-tals on the island continued to admit theinjured. The GM asked for volunteersamong the guests and 30 agreed within 15minutes, a response which was typical.Money was given to a local charity recom-mended by the hotel to ensure that the aidreached needy villagers.Revenue was earned from rooms sold to

those awaiting repatriation as well as jour-nalists and television crews. Cancellationswere recorded straight away, however, andthere were ‘no shows’ from 26th Decemberonwards with a flurry of faxes, e-mails andother communications. Some guests whowanted to travel were advised not to do sobecause their presence would hinder rescueprogrammes. Clients were still cancellingin February, especially those who had pur-chased ‘early bird’ discounts in Octoberand November 2004 for accommodationup until the end of March 2005. Cancella-tion charges were generally not imposedand deposits made by tour operators wereeither returned or held, at their request, tobe used later in 2005. Payments for directguest reservations were repaid or retainedto cover postponed bookings.

CONSEQUENCES AND RESPONSES

The gravity of the crisis was reflected inthe hotel’s occupancy figures. Expectedoccupancies in January and February 2005had been 85 per cent and 92 per cent, butwere actually 12.5 per cent and 15 percent, respectively. March was projected tosee a slight rise to 22 per cent. Chinese,Korean and Russian charter flights were all

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cancelled and the hotel was still waiting tohear about starting dates for these in May.Asians generally seemed unwilling totravel, which the GM attributed to super-stitious reasons and the Japanese confirmedthemselves to be one of the world’s mostrisk-averse tourists. Visitors from Australiaand New Zealand were also slow toreturn. Europeans showed greater resili-ence, especially Scandinavians, and charterflights from there were restored by earlyMarch.

Marketing had to be constantly revisedas the days went on. The hotel’s sisterproperty was closed down because ofextensive damage and a company state-ment was issued to this effect, but it alsostressed that the GM’s hotel was fully func-tioning. Efforts were directed at conveyingthe message that ‘we are open and operat-ing’. The hotel entertained at least 15parties of representatives from the media,Tourism Authority of Thailand (TAT)offices worldwide, tour operators andtravel agents in January and February.These came from the principal markets ofJapan, Taiwan, Germany, UK, HongKong, Singapore, Australia and New Zeal-and. This was part of a public relationsexercise to get the hotel ‘back on the map’.Other marketing activity was essentiallyshort term and designed to generate much-needed cash flow.

High season rates had been forgotten andtour companies sought to negotiate specialdeals and reductions. The TAT hadstrongly recommended that hotels maintaintheir usual charges, arguing that heavy dis-counting would hurt the tourism industryin the long term. Most operators claimedthat lower prices were vital to entice tour-ists, although some believed that there waslikely to be a strong resistance to the ideaof holidaying in a place where so manyhad lost their lives. Companies from coun-tries such as Australia and New Zealandvisited the hotel to discuss possible strate-

gies to stimulate business. Initiativesinvolved bargain rates negotiated with air-lines as well as accommodation providers.The hotel agreed to provide exceptional‘flat rates’ which were valid until the endof October 2005 for its major Germanpartners.

Individuals making reservations directlyand through the internet also enjoyed verylow prices, often accompanied by value-added offers such as a 20 per cent discounton food and beverage purchases. Much ofthe work to drum up trade was devisedand implemented on an ad hoc basis, withmixed results. It had become a buyer’smarket with an unprecedented choice ofdiscounts and packages available.

The GM saw the TAT as very activeand helpful. Its Phuket office was extre-mely energetic and quick to arrange mediatrips to the island. Groups from London,Singapore, Korea, Taipei and Tokyo wereall hosted. The TAT also produced a shortDVD which the hotel showed to all theparties at dinner in order to inform theaudience about actual conditions in Phuket.This depicted the progress made in rehabi-litation and emphasised that 90 per cent ofthe island was untouched by the tsunami.Some of the groups held forums andinvited hoteliers and local destination mar-keters to attend, but others spent only oneor two nights on the island and were prin-cipally concerned with viewing the state ofthe beaches.

Comments from media representativesindicated that journalists were over-whelmed by invitations to travel to Thai-land, Sri Lanka and the Maldives. Only alimited number could participate and suchvisits therefore seemed likely to decline infrequency. However, a major TAT famil-iarisation trip was promised for March2005 to enable tour operators worldwideto come and see conditions at the destina-tion for themselves. This was organised inconjunction with the Thai Hotels Associa-

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tion, of which the hotel was a member.The TAT also launched a ‘Thai love Thai’campaign to persuade Thai nationals toholiday in affected areas, although the hotelinitially did not benefit.Regional airlines, both full service and

budget, dramatically cut prices and manyhotels cooperated with them in joint pro-motions which produced immediatereturns for the hotel. Long-haul carriersflying out of Europe also discounted ticketsand worked with selected tour operators inassembling special package deals whichwere advertised in national newspapers.One Thai airline gave away several hun-dred free seats and ran a scheme wherebytwo could fly for the price of one on someof its international routes serving Phuket.

RECOVERY AND CHALLENGES AHEAD

The hotel did not suffer any physicaldamage so there was no delay to recoverydue to reconstruction and repairs. Staff did,however, help the Thai army and police toclear the surrounding roads in the after-math of the tsunami. They also joined over1,000 hotel staff from local hotels on thebeach in a ceremony to pay their respectsto the dead before starting to clean up theshore.Shops near the hotel which were badly

damaged had to be rebuilt, but most wereback in business by February. The sur-rounding area, apart from three shopswhich the owners decided to keep closed,had returned to full operation by the sametime. As enterprises re-opened, the widerlocality became more active. Even Patongwas seen to be returning to normal withonly a few hotels still under renovationand the main beach road boarded up inplaces so that building work was lessobvious.The principal post-tsunami challenge

acknowledged by the GM was financialsurvival given that peak season revenues inthe first quarter of the year usually sus-

tained the hotel during quieter months, butsuch income had been lost in 2005. Therewere also human resource difficulties toface as many employees had been releasedor chosen to leave the island. Staffshortages were thus likely when recoverywas more advanced. Dealing with existingstaff was another issue and hotels wereforced to cut salaries and ask employees totake between seven and 15 days’ unpaidleave every month until the situationimproved. Another key objective was torestore confidence in the hotel and destina-tion and convince tourists and the industryin generating countries that Phuket wassafe to visit.On the more positive side, the beach

and seawater seemed much cleaner and thesand finer after the tsunami. Marine lifewas observable in a way that it had notbeen before and these were strong sellingpoints. The crisis had shown the worldhow hospitable the Thai people were asthey demonstrated their compassion, help-fulness and friendliness to all visitors. Itwas also an opportunity to address envir-onmental degradation caused by earlieruncontrolled development such as the massof small restaurants, vendors and equip-ment on the beach which had marred itsquality. Better planning in the futurecould lead to improvements and a moreattractive ambience. The hotel also madeuse of the lack of guests, as well as goodweather, to undertake household tasks suchas painting the premises and waxing guest-room floors.

CONCLUSION

The Indian Ocean tsunami struck withoutwarning and gave rise to a crisis of greatcomplexity and gravity which extended tothe tourism industry. Its repercussionsmerit further study, but this case has exam-ined immediate and short-term impacts ona single hotel. The perspective affordsinsights into the pressures imposed on man-

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agers in times of crisis and the decisionswhich they have to make in difficult cir-cumstances which have not been antici-pated. Some questions for discussion basedon the material are listed below.

— Did the GM of the hotel manage thecrisis effectively?

— Could a formal crisis management plan,prepared in advance, have assisted theGM in handling the crisis?

— What should be the principalmarketing messages conveyed byuntouched hotels in the aftermath of anatural disaster at a destination andhow can these be best communicated?

— What are the advantages and disadvan-tages of employing heavy pricediscounting as a recovery strategyfollowing a natural disaster?

— How important is cooperation andcollaboration in crisis management?

— What are the main lessons to be learntfrom the tsunami for accommodationproviders?

FURTHER READINGBeirman, D. (2003) ‘Restoring Tourism Desti-

nations in Crisis: A Strategic MarketingApproach’,CABIPublishing,Oxford,UK.

EIU (2005) ‘Special Report. Asia’s Tsunami:The Impact’, The Economist IntelligenceUnit, London, UK.

Glaesser, D. (2003) ‘Crisis Management in theTourism Industry’, Butterworth-Heine-mann, Oxford, UK.

Muqbil, I. (2004) ‘Crisis management by theThai government and Tourism Authorityof Thailand’, Travel Newswire, Worldroom.com website. http://www.worldroom.com.

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