Pankaj Jauhri, a hospitality professional came up with ‘Crisis Management in response to covid-19: An exploration of New Zealand hotels’ research when Covid-19 hit the world.

It was unprecedented that all the borders were closed, all the business were shut and not operating smoothly, even the people were not allowed to move out of their houses, it got him worried and pushed him to find answers on the industry which is the biggest in New Zealand – hospitality.

Has the hotel industry changed after pandemic, definitely yes! Everything has changed, how we see and operate hotel has changed exclaims Pankaj.

Hotels have faced immense crisis because of this pandemic. Pankaj also talks about the hotels that were not converted into hospital like MIQ facilities. He says that they have operated at unimaginable percentage of survival, with the result they had to close several services in their hotels. The hotels had to make their staff redundant, the staff that was working there for many years.

Based on the research there came out some important points while he carried out interviews and had interactions with managers of various hotels. Some people lack in communication, then people lacked in taking decision, while some jumped in taking quick decisions, he says the main thing to note is that hotels lacked crisis management.

Unfortunately, the hotel industry in New Zealand is not prepared to take up crises, especially one like covid-19. While reading one such article, he read that the crisis management plan was turned off and the authorities were not using it assuming the emergency wouldn’t come or there were no funds to sustain it.

To read the full research, please see the link below, it can be beneficial for hoteliers and all the sectors in the industry. It would also help students or other people who are taking up research on this topic as at present this pandemic is far from over.

“I have realized that we should be prepared for unforeseen things in life and we should never get surprised, we should be ready for changes, as the people who accept changes quickly are the people who become more successful” concludes Pankaj Jauhri when asked what message he has for anyone reading this article. – Vritti Parasher

Full research by Pankaj Jauhri – https://1drv.ms/b/s!AlQbxDQJRLprzR7WGKGjyObAK1Sn 

About Pankaj

Pankaj Jauhri is a hospitality professional having approximately 30 years of rich working experience.

He has worked in corporate sectors, luxury hotels, and institutional hospitality sectors in India and New Zealand.

Before coming to New Zealand, he was working as Senior Manager (HR-Hospitality Services) at Nuclear Power Corporation of India Limited. He is proficient in hospitality operations, service level agreements for hospitality contracts, public relations, budgets, compliances, grievance handling, and training.

Pankaj got interested in the COVID-19 crisis due to its massive adverse impact globally on all industries. He decided to research its impact on the hotel industry in New Zealand.

His thesis – ‘Crisis management in response to COVID-19: An exploration of New Zealand hotels’ is original research. It is also the first such research in New Zealand.

He lives in Auckland with his wife Mrs. Himangini, and son Tanmay. He likes meeting new people and sharing ideas. He likes to travel, see new places, try new cuisines, and cook at home.

Pankaj is happy to share ideas with hospitality businesses. His email address is pankajjauhri123@gmail.com.

Research Summary

The global hotel industry encountered a severe crisis due to the COVID-19 pandemic, which originated in China in December 2019. By June 2021, there were 172 million cases and 3.7 million deaths. To control the pandemic, many countries, including New Zealand, closed their international borders and restricted travel, which resulted in a crisis for most businesses, including the hotel industry. The hotel industry in New Zealand had an 8.91% share of tourism’s revenue and was the country’s largest foreign exchange earner in 2020. The drop in occupancy levels adversely affected New Zealand hotels. This research would benefit New Zealand based hotels, motels, backpackers, serviced apartments, and other accommodation providers.

The global and New Zealand hotel industry has faced several past crises. Two severe earthquakes (on 4th September 2010 and 22nd February 2011) in Christchurch (NZ History, 2011) adversely affected the tourism industry (Orchiston et al., 2014). Other significant past crises were the Kaikoura earthquake in New Zealand during 2016 (Cradock-Henry et al., 2018; Madsen, 2017; Prayag et al., 2019), the tsunami in the Indian Ocean due to a strong earthquake near Indonesia (Cheung & Law, 2006; Robinson & Jarvie, 2008), the global financial crisis (Crotty, 2009).

This research interviewed twelve hotel managers from three to five-star hotels affected by the COVID-19 crisis. This study found that only 17% of hotels had crisis management plans for a pandemic. The hotels’ motivations to continue during this pandemic was saving jobs (83%) and the welfare of stakeholders (58%) such as directors, suppliers, and guests. In response to the crisis, hotels reduced tariffs, provided contact-less services, economised operations, maintained good relations with their stakeholders, and offered free cancellations. They developed creative business recovery strategies to prevent further financial losses (Malhotra & Venkatesh, 2009), such as exploring new markets (50%), enhanced levels of health and safety, redundancy (42%), lesser operational costs (50%), communicating with the stakeholders, re-negotiation for rents and sharing knowledge with other hotels. During this crisis, 75% of participants learned to be mentally prepared for an emergency and accept changes; 67% realised the importance of planning, 58% learned to be innovative, while 42% acknowledged the importance of health and safety.

The crisis management theory (Bundy et al., 2017) discusses three stages: pre-crisis, during-crisis and post-crisis, primarily relevant to the situation with predictable duration (Figure 1). Due to extended stage-2 of the COVID-19 crisis, ‘strategic change management theory’ could be integrated with the ‘during-crisis stage’ to modify this theory (Skalik, 2016) (Figure 2). To counter future crises, three steps ‘Kurt Lewin’s strategic change model’ could be used (Hussain et al., 2018): study the existing methods, implement changes and precise implementation. Hotels could undertake two activities in the ‘during crisis’ phase (Figure 2). As the first activity, the managers might identify the key issues such as loss in income, operational expenses, low occupancies, and massive cancellations. Afterwards, managers might involve stakeholders in determining the best decisions for the situation. As a third step, managers would ensure the accurate execution of these preferences. The second activity (Figure 2) could save the hotel from the crisis, remain competitive, enhance stakeholders’ trust and reputation. The actions might include exploring new market segments, re-negotiation for rents, and reducing operational costs.

Managers’ view about the future

The future looked promising to the participants due to un-explored domestic tourism, enhanced cleaning, efficient operations, use of online platforms and enhanced market for luxury serviced apartments.

Key recommendations

Hotels need crisis management plans for pandemics, alternative sources for PPE (hand gloves, face masks, and sanitisers), business recovery plans, and a core team supported by casual or part-time workers to minimise redundancies. The managers need to communicate with stakeholders, involve stakeholders in decision-making, and maximise knowledge sharing with other hotels. (The main summary contains refrencing, it has been not published here in the article as it will consume space)