Abstract
This chapter approaches crisis management for micro, small, and medium-sized travel agencies. In the first place, the author sets what a crisis is, which businesses should be considered as micro, small, and medium-sized, and which crises have hit travel agencies since the 1990s. Then, the author analyzes different strategies micro, small, and medium travel agencies have used for each of the above-mentioned crises, considers different strategies that could be implemented, and provides some relevant recommendations. Further, on the frame of the last crisis due to COVID-19, the author presents strategies that have already been adopted and others that could be implemented. Finally, the author highlights some differences between this last crisis and past crises of the tourism sector in general and micro, small, and medium travel agencies in particular.
TopBackground
Many definitions of crisis exist, in this chapter, the author refers to a tourism crisis as an event or any occurrence that can risk the normal operations and conduct of a tourism business or damage a tourism destination reputation of safety, attractiveness and comfort that interrupt the continuity of business by the reduction in tourist arrivals and expenditures (Israeli & Perl, 2011; Shehawy & Ragab, 2017).
Crises are characterized by four factors: Pressure of time, the extent and control of problems, concern about the scale or threat of such incidents, and the existence of limited response options (Fraiz Brea, & Rodríguez-Toubes, 2012). The events can be categorized also based on their severity and frequency (Tuclea et al., 2014), it is possible to classify crises as follows (Martens et al., 2016; Ritchie, 2004):
- 1.
Immediate crises, where little or no warning occurs.
- 2.
Emerging crises, which are slower in developing.
- 3.
Sustained crises, which may last for weeks, months or even years.
Crisis management strategies have to be placed in their context (Fraiz Brea & Rodríguez-Toubes, 2012), and the enterprise’s size is an important constraint when it comes to manage crisis strategies. According to Eurostat’s (2017) data, 92,86% of the travel agencies in the European Union (28 countries) were in the category of microenterprise, 5,92% were in the category of small enterprise, and 1,22% were in the category of medium enterprise. The European Commission (2013) adopted a definition of micro, small, and medium-sized enterprises in the Commission Recommendation of 6 may 2003:
Key Terms in this Chapter
Strategic Planning: An activity which determines the objectives and considers the internal and external environment, available techniques and resources to design, implement, analyze, and adapt the strategies by which an organization needs to achieve their goals.
Strategic Management: Initiatives taken by managers to enhance the performance of firms. They involve planning, monitoring, analysis, and assessment of the determined strategies in the strategic planning.
Customer Relationship Management (CRM): Strategic management of the relationship with the customers, formed by marketing plans, activities, and actions, with the objective of building loyalty and promoting recommendations from the customers to potential customers.
Digital Transformation: Integration of technologies to improve or reinvent an organization's business model. It involves the entire organization by considering human capital, moving out old technology, and modifying the company culture.
Small and Medium Enterprises: The category of micro, small, and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million and/or an annual balance sheet total not exceeding EUR 43 million.
Innovation: Development of new products, services, processes or organizational methods of business, marketing, or the improvement of the existing ones.
Quality of the Relationship (RQ): Evaluation of customers’ satisfaction with the product or service provided, their trust in the supplier, and their commitment with the firm.
Word of Mouth: The communicative action by which customers pass information of a firm and its products or services to other people. The objective of the firm has to be that this information is positive, in order to attract new customers, increase sales, and gain more profits.
Digitalization: Conversion process of adopting and using digital technologies to change a business to provide new opportunities.