The aftermath of the Arab Awakening

Nomad Leisure Solutions chief executive officer Liam N. Fitzgerald presents the case for crisis management and survival strategies in the face of political instability in the Middle East

Loss of customers. Falling revenues. Increasing costs. Poor cash flow. Staff absenteeism and breakdown in cohesion. Disruption in supplier services. Potential shut-down of business.

Tourism and leisure industry owners and operators in countries that have been affected by the “Arab Awakening” may face some of the above scenarios in the aftermath of a political crisis.

These issues may be compounded by the failure of the national government and private institutions, such as the banking system, utility suppliers, transportation and communications infrastructure, to name a few.

The long-term impact of a political crisis on the tourism and leisure industry may not be immediately apparent. When we look at the above issues in their entirety, however, our industry is potentially facing a major crisis.

Businesses will have to adapt and make decisions on the limited information that is available to manage the expectations of all relevant stakeholders, including owners, customers and staff.

If the security situation allows you to remain operational during the crisis, the following short-term crisis management strategies may enable your business to survive.

Initial Financial Review and Scenario Planning
The first step in the face of a political crisis should be a financial review of the business to assess some of the following scenarios: How long can your business survive if income levels drop, even up to 100%? Can you pay salaries?

Can you meet supplier demands for cash on delivery? Do you have direct access to cash in case the automated banking system fails? Do you have good relations with local businesses, which may be raising prices? While there may be surprises, scenario planning can assist in the management of your business through the initial phase of a crisis.

Operational Restructuring
Based on the initial financial review, an operational assessment of the business needs to be undertaken.

What can be done to cut costs? The following are some questions you may want to explore: Should there be staff restructuring? Is there potential for temporary reductions in staff salaries? Can changes be made to operating times and schedules? What is the possibility of a partial shutdown of non-essential parts of the business?

Could there be reduced food and beverage costs, including changes in menu provisions? If the government is rationing electricity, do other operational adjustments need to be made, such as reducing the use of generators, adjusting the consumption of fuel and utilities through acceptable changes in pool or air temperature? The business may need to cut certain value added services, such as valet parking.

The Human Element
Your employees and your customers are the key to your survival. The skillful management of staff and customer relationships should be the basis of both your short- and long-term turnaround strategies. With that principle in mind, the following are key areas to explore: Staff Absenteeism and Team Cohesion

A political crisis may affect your staff in multiple ways. For example, there may be an increase in staff absenteeism because of transportation difficulties or crisis-related family concerns.

In addition, the business may face a breakdown in staff cohesion because of staff members’ involvement in external political activities, which may affect the internal team mind-set.

Team cohesion will depend in large part on the established company culture and the relationship between owners/operators and the employees. A crisis is a tremendous opportunity to gel an otherwise broken team. In fact, a deciding factor in the success of your turnaround strategies is staff buy-in of short- and long-term solutions.

In the immediate wake of the initial crisis phase, group and one-on-one staff meetings are critical for understanding their concerns and sharing necessary information about the status of the business.

These meetings foster a culture of communication and give staff a sense of ownership of the issues. In addition, it also provides management an opportunity to emphasise that outside political involvement will have no place within the confines of the business.

Forming action teams to solve issues and provide solutions across the business will also provide a good starting point to move your business forward. Actively seeking staff input on where to cut costs and how to improve service will further enhance their buy-in.

Another measure is to ensure sharing of responsibilities across departments. Not only are you cross-training your staff to perform multiple roles, you are also ensuring that staff absenteeism because of political instability and related transportation issues is not endangering your business.

There also may be an opportunity to downsize employee numbers, or to utilise paid or unpaid leave to cut costs; an added benefit to allowing limited leave is that it provides staff with an opportunity to take time off as needed to deal with personal, crisis-related matters.

Naturally, the need for compassion in a crisis will have to be balanced with your business’ needs.

Customer Service and Loyalty
Despite the business slowdown, the following measures will work to ensure long-term loyalty from your customers who are continuing to patronise your services.

Most importantly, keep the channels of communication open. In other words, through the use of social media, email, text, or word-of-mouth, inform your customers of daily changes.

By staying open, you promote a feeling of loyalty as your customers may view you as a social hub during periods of instability. People need a sense of normality and routine during crises, and if there is an atmosphere of teamwork and enthusiasm amongst the staff, it will transfer to your customers.

Separately, your local national customers will respect that you are willing to stay open while competitors may have closed, which will have a longer-term impact on the turnaround of your business.

Given the importance of relationships and trust in conducting business in the Middle East, the steps above will contribute to the survival of your business. The human element cannot be underestimated.

Undertaking the above financial, operational and human element considerations in the short-term will form a solid basis for the long-term strategies you adopt for full recovery once stability returns.