Comment: Don’t be caught out by a crisis

Many years ago, when MyTravel was experiencing financial difficulties, I remember reading an article in an in-flight magazine about the role of ‘company doctors’. They were individuals parachuted into companies in difficulty who helped to stabilise (more typically, save) the company and avoid insolvency.

I remember thinking at the time how well the leadership at MyTravel, formerly Airtours, had implemented most, if not, all the suggested techniques outlined in that article.

In essence, the key principles were simple:

First, cash is king, so do everything to retain cash – avoid spending unnecessarily and do everything possible to collect debts as soon as you can.

Second, try to avoid having in place too many, if any, contracts that serve no immediate purpose.

Those who led travel businesses through the Covid pandemic will no doubt recognise the importance of these principles as they largely acted as a framework for surviving the period when tourism stopped.

There are another two important rules which need to be followed. First, flexibility is critical, and you need to be able to think on your feet

Second, and related to the first point, “No battle plan survives contact with the enemy” – which I didn’t know until recently was coined by one of Bismarck’s generals, Helmuth von Moltke, in the 19th Century.

In the post-Covid world, some of the challenges faced by travel businesses tend to be more operational, and those tools which worked so well during the pandemic are not so helpful in addressing the types of crises more likely to occur now. Indeed, a rigid focus on cost can end up being a massive disservice in the court of public opinion.

However, the importance of having a plan as a basis for decision making cannot be over-estimated. Without a plan, you have no structure, and without testing that plan before a crisis happens you have no sense of whether that plan will work.

As long as you understand the importance of flexibility, it’s much easier to make adjustments within a defined framework than to create the framework in the heat of battle.

Another important distinction between an operational crisis and issues arising during Covid was that the pandemic was all pervasive – it impacted every aspect of the day-to-day operation of all travel businesses.

That meant the business leadership could devote their whole attention to handling the impacts of the pandemic.

In most cases, an operational crisis will only affect a small part of most businesses, even if the impacts extend much more widely. It is therefore a mistake for the entire business to become involved in handling the crisis.

You need to ensure dedicated leadership and resource are in place – and that the crisis is not handled off the side of people’s desks. Furthermore, it is important to switch quickly into crisis mode, as crises can easily accelerate out of the control of the business.

Many travel businesses now have good crisis plans in place, but these need to be regularly reviewed and tested, and it is often beneficial to have external support in that work. Having an ability to get such support during any real crisis can also be beneficial.

Therefore, it’s important to recognise that the tools and skills learned during the Covid pandemic may need reconsideration to ensure your business is ready to deal with any operational crisis.

2024 is rapidly turning into ‘the year of the crisis’. We have already had the earliest Category 5 hurricane to hit the Caribbean, wildfires around the Mediterranean and extreme weather events.

There are a number of sources of advice and support to help travel businesses prepare for handling operational crises, and if your business doesn’t have a plan in place, now is the time to get prepared.