Industry learns from SARS crisis

CIMTIG Debate Special: The industry has learned valuable lessons from the SARS epidemic and is better equipped today to deal with any future health scare, a crisis management seminar has heard. Jointly organised by the Pacific Asia Travel Association (PATA) and CIMTIG, the debate examined how sectors of the industry have dealt with recent crisis – focusing largely on SARS which shattered tourism to Asia last year. Cathay Pacific revealed it lost $3 million each day during the outbreak – but had learned crucial lessons in the process. UK and Ireland marketing manager Paul Cruttenden admitted the very future of the airline was at risk as record load factors and volumes rapidly dwindled. The impact of SARS will be detailed in its financial results due out next Wednesday. “On March 5 last year we recorded our second best year for the previous 12 months. Yet within six weeks we had lost 75% of our passengers, were losing $3 million every day and issued our first ever profit warning,” he said. Drastic cost-cutting measures, including the removal of water coolers from offices, were implemented to effectively save the company. Among factors which helped the recovery was communication and a commitment to its major destinations. “Our chief executive spoke frankly to us and made it clear the survival of the company was at stake,” Mr Cruttenden told the seminar. “One of the key lessons we learned was that communication, both internally and externally, is essential. You cannot bury your head in the sand. “We also continued to operate to Hong Kong. It was important to demonstrate commitment as those people who continued to fly could be used to rebuild confidence.” A combination of reassuring travellers that SARS was not contracted in flight, marketing initiatives and cut-price tickets helped the recovery. “People will have emotional reasons not to fly but if you give them a financial reason, those emotional reasons will disappear,” he said. One of Cathay’s mistakes was in failing to get cut price product into the market sooner, said Mr Cruttenden. PATA chairman Tim Robinson said the organisation has reacted by forming a task force in order to present a coordinated approach to any future crisis. It will involve discouraging media hysteria, encouraging best practice from members and promoting PATA as the first port of call for information on the region. “We started to get the plans together and had a cold dose of reality when bird flu struck,” said Mr Robinson. He said efforts had been made to reassure people there was a minimal health risk to humans. Meanwhile, the Foreign Office told the seminar it is due to complete a review into its travel advice shortly. Head of crisis group for the FO consular directorate, Ralph Publicover, said a paper is likely to be presented to ministers before Easter for approval. While no fundamental changes are expected, Mr Publicover said the FCO wanted to adopt a more open policy with the travel industry. “We know very well the travel advice is not a perfect product,” he said. A more consistent approach is expected with more clarity in wording and in the presentation of advice. Report by Steve Jones