Operation Decision Making in Tourism Business Administration - Essay Example

CASE STUDY: OPERATION DECISION MAKING IN TOURISM BUSINESS ADMINISTRATION Crisis Management In order to manage crisis situations we must have a deep understanding of the term crisis. Although there is no specific definition for the term, experts agree upon the fact that all crisis situations have a few elements in common. An event causing substantial change that poses a challenge to the existent scheme of working, routine operations and survival strategy of an organization acts as a triggering mechanism for a crisis. It comes with an element of surprise infusing a sense of urgency. It is often observed that the effected organization finds it difficult to cope with the situation. Crisis adds a notion of dynamicity and instability. (Wilks, 267) Crisis may be classified into three different stages. Potential Crisis - During this stage the crisis is an imaginary construct and as the organization may be considered to be in the quasi normal mode of operation. Latent Crisis - At this stage the crisis has already been triggered in actuality but has not yet been identified or acted upon by the organization in a manner by which outcomes can be inferred. Acute Crisis - This is the duration or time period in which the negative consequences of the crisis is evident and the organization attempts to cope with the situation. Crisis situations in the travel and tourism industry are even worse because it usually occurs at a remote location and thus it is difficult to handle logistics during a crisis. Being a very sensitive issue it attracts media attention very easily and consequences often include fatalities and serious injuries. Thus a crisis management scheme is very essential and should be organized and ready to be called upon at any instant. (Fall, 238-250) Crisis management operates in three phases. Crisis Precautions - A crisis prevention team should be in place, assigned with the task of preparation of strategies in terms of planning and execution in the event of a crisis situation. Crisis Avoidance - A crisis avoidance team must be formed and should be assigned the task of assessing early cautions and the modification that might be made during a crisis. Crisis Coping - A crisis coping team has to be deployed during emergencies assigned with the task of employing measures to prevail over the crisis. The crisis management process consists of four steps: i) Risk Assessment ii) Procedure Development iii) Training of Crisis management team iv) Testing Plans (Goodrich, 573-580) The crisis management team has to be properly structured and organized in order to operate efficiently. Generally a senior manager is assigned the role of the initial contact who is to be the first person to be contacted in emergency situations. He acts as the head of the crisis management team and oversees the operations of the sub teams. The sub teams for a crisis management division are normally divided into four teams. i) The Media Team ii) The On-site Team iii) The Passenger Information Team iv) General Enquiries Team The Media Team acts as the face of the effected organization during crisis periods. It handles all media contacts, interviews and press releases. It constantly monitors the activity of the press and stay in touch with them. It maintains a log of situations that develop in the area of media management. (Tse, 112) The On-site team is deployed for client assistance in the event of a crisis. It deals with various authorities involved. It ensures that medical help reaches the site where the crisis has developed if required and maintains close contact with hospital authorities in cases of serious injuries. It is also responsible for the welfare of the staff affected by the crisis. It inscribes a detailed report of its activities. The Passenger Information Team acts as a liaison for the family members of effected clients. The personnel get in touch with relatives of the clients and keep them informed about the situation. It has to maintain regular and updated logs. The General Enquiry Team is setup to handle calls related to the crisis and acts as a communication channel for various agencies or individuals seeking information. (Hitchcock, 62-76) Quality of Service Systems As in any other industry Quality Management is also an essential element in the Tourism sector. The quality of services offered and customer satisfaction are key factors effecting the growth and survival of the business. Quality may be defined as the feature or attributes of a product, package or service which excogitates its ability to adhere to the expressed or implied needs and requirements. In order to meets the demands and wishes of a client various tools based on Total Quality Management (TQM) are developed, where, Total indicates the enclosure of all divisions of the business and the entire staff. Quality stands for the unswerving readiness of all operations to meet the quality standards and the demands of internal and external customers/guests. And Management refers to the accountability and inventiveness of the top management in the context of systematic quality development. Total Quality Management encompasses three facets: i) Quality Target ii) Quality Development iii) Quality Assurance Quality Target refers to the self-sown high standards of service to gratify the needs and demands of every guest or client and also the staff. Quality development refers to energetic development of the worth of services and its continuous upgrading of the standards. Quality assurance refers to the habitual scrutinizing of the standard of service as well as reactions if irregularities gradually sneak in. Thus in order to meet quality of service the business has to generate a stirring vision and facilitate others to realize it. It needs to promote excellence and empower quality people, pledge a long-term assurance to quality and devote time, energy, tolerance and determination. (Siomkos, 101-108) In the tourism industry, the final consumer is the tourist. Thus contentment of the tourist is the primary objective of the business. From the perspective of the guest, services are thought of as a complete package comprised of individual services. These individual services are all interconnected and form a chain of services: prior information from a Tourist agency, journey towards the holiday destination, stay at the vacation resort, food at the restaurant, outings and excursions and lastly the trip back home. All specific services leave their mark on an individual level and even on the entire holiday experience. Put into practice a total quality system is a complicated task, but it must be executed with precision. In order to compete and survive in the actual tourism arena the total quality management is vital and the organization must be conscious of issues involved and realize its importance. (Litvin, 188-197) Analysis Snow Canyon is a four season resort situated in Virginia. It provides a number of services which include skiing, golfing, rock climbing and bathing in spas. It aims at offering a complete experience to the guests visiting the resort. It is established as a premiere skiing resort with its tallest mountain being 3,800 feet high. Its offers high quality skiing and snowboarding experiences with slopes open from 9 in the morning till 4 in the evening. It boasts of having five lifts which carry tourists from the bottom to the top of the slope with Paradise being lift with the longest vertical drop. In the actual order of events, tourists arrived at the skiing spot early in the morning with the entering rate peaking at 11 in the morning with 8 people entering per minute. The entering rate fell sharply to less than one person at half past twelve in the afternoon and again shot up at twelve past one in the afternoon to 3.8 people entering per minute. The management plans an expansion of the resorts capacity by installing a high-speed chairlift named Paradise Express at the paradise slope in order to draw more skilled skiers and snowboarders. The plan involved installation of a lift which would carry visitors to the top in less than four minutes so that they could spend more time on actually skiing instead of having to wait and waste time for lifts. (DePaul, 1-4) In this context three options were considered. Option One: Buying a new engine for the current lift which enables the lift to run 50% faster. Option Two: Increasing the chair capacity to four people per chair. Option Three: Replace the old chair lift with a new high-speed six-person chair lift which travels at a speed which is two and a half times the speed of the current lift. The lift would initially have 44 chairs which could be extended to 52 with the growth of business. This option also includes a plan to extend the skiing area by 15%. In option one, if the speed of the lift is doubled the time for a one way trip is reduced by half. This would allow the lift to make only 13.2 one-way trips in an hour. Thus the lift would take 4.545 minutes to reach the top with a maximum capacity of 486 skiers at a go with a chair capacity of three. With each skier taking 20 minutes to ski down the slope and an average of 3 minutes to reach the lift once he reaches the bottom, it would take him a total of 23 minutes to reach the lift from the time he starts skiing. Lets suppose, there are more than 1000 people at the bottom at a certain point of time. After the first 486 people would be loaded on to the lift, the second 486 people would have to wait 9.09 minutes for the lift to arrive again at the bottom. This calculation is made without considering the unloading time of the people at the top. Thus in reality it would take the lift more than 9.09 minutes to reach the end of the slope to load in the second lot. For the third lot which would have increased in number due to skiers completing their skiing runs and reaching the lift, the wait would be a minimum of 18.18 minutes without considering the loading and unloading time of the first two lots. Considering increased sales, during peak hours if there are a large number of people in the skiing arena the lift would prove to be insufficient for handling the pressure. This would lead to customer dissatisfaction and would prove to be detrimental for the business. Secondly, this option does not meet the target of carrying guests for the bottom of the slope to the top in less than four minutes. Although it would be the cheapest alternative the wait time for the lift would be a considerable duration and would be deficient in coping with increased sales. Thus option one would not be recommended and is not likely to be implemented. (Ritchie, 87) In the second option, with the chair capacity increased to 4 people per chair the maximum capacity is increased to 648. But in this the speed of the chair lift remains the same, i.e., it takes 9.09 minutes to complete a one way trip. Thus it would be able to make only 6.06 one way trips and 3.03 trips carrying people from the bottom of the slope. A skier requires 20 minutes to come down the slope and a further 3 minutes to reach the lift. Again considering the example of 1000 people, the second lot would have to wait a minimum of 18.18 minutes before they could board the lift without considering the loading and unloading time of the first lot. Another thing to consider would be the situation at the top. Even if there are only 52 people at the top, which in reality would be more, the total number of people at the top of the slope would reach 750 when the first lot is unloaded. This would be way above the comfort zone of the guests. Thus it would lead to a crowded scenario and a chaotic situation at the top at the peak hour if the lift operates at its full capacity. Also to consider in this case is the fact that there would always be more people at the top than the bottom. If the lift has to operate at its full capacity in its second trip, 296 more skiers will have to join the second lot. This situation becomes highly unreal with just 52 at the top, 1000 at the bottom and more than 296 people in transition. Moreover, after the lift completes its third trip, there would be complete chaos at the peak. This option is highly discouraged as it would lead to a high wait time for people waiting at the bottom to reach the top, and might even lead to a chaotic situation with increased number of people at the skiing arena as they will not be properly distributed over the top, bottom and in the transition phase. Moreover, it does not come near to the target of carrying skiers from the bottom to the top in less than four minutes. This option is highly unlikely to be implemented. Option three with 44 chairs, a chair capacity of 6 and a high speed of 3.636 minutes with an increase in skiing area by 15% would be a profitable option to cope with increased sales. It would be able to make 16.5 one way trips in an hour i.e., 8.25 trips upwards. This indicates that a second lot would have to wait a little over 7.2 minutes to board the lift after the first lot has been loaded. This is considerably lower than the wait time in the other two cases. This also means that the crowding at the top of the slope can be avoided as the maximum capacity of the lift would be lesser than the other cases and would mean lower loading and unloading time. Thus the distribution of the skiers would also be optimized. 15% increase in the skiing area would mean more than 750 skiers at the top of the slope could enjoy the experience simultaneously. Initially, the lift could have only 44 chairs for cost effectiveness and later can be extended to 52 depending upon the growth of business. Installation of this high-speed lift would be able to increase the quality of service and enhance customer satisfaction as skiers could spend more time in actual skiing than waiting for the lift. This would attract new and more customers and thus would increase the profitability of the business. Customer satisfaction along with proper advertisement of this enhancement of service quality could also boost the repute of the business. The budget for enhancement includes the extension of the skiing area by 15 %. Thus available resources should be efficiently managed. It would be suggested that the lift should start its operation with 44 chairs and only a fraction of the 15% of the skiing area must be increased initially. The sales figures should then be studied carefully to analyze the growth in sales and profits. Based upon these results future growth must be predicted and the budget utilization should be optimized by deciding how many more chairs is to be added which can be extended to a limit of 52 chairs and how much more of the skiing area is to be extended which could go up to 15% of the current skiing area. Proper cost planning and budget utilizations would make the implementation of this plan proficient and would thus be sustainable. If the plan is executed successfully, it would give the business an edge above its competitors. The holiday season during the winter is the time when the peak of the sales is reached. Projected number of clients shoots up during this season. It should be ensured that the guests receive an enthralling experience during their stay. In order to do so, the lift should be effective by that time as this option is capable of handling increase in sales and large number of people during the peak hours of the holiday season. Risks involved in adventure sports are high. With the execution of this plan risks also increase. Any minuscule mechanical error may lead to serious injuries or even fatalities. Also increase in the number of skiers means more chances of skiing accidents occurring. Thus it is imperative to structure a risk management strategy in the event of a crisis which may involve accidents or a calamity. Regular mechanical surveys must be carried out and medical help should be kept on standby and also crisis management teams must be properly trained and should be ready to face crisis situations. (Reisinger, 212-225) Work Cited: Beirman D. Restoring Tourist Destinations in Crisis, CABI: London (2003) DePaul, C. Sungnam, K & Landel, RD; Snow Canyon Resort: Paradise Ski Lift; Darden Business Publishing; University of Virginia; 2004; 1-4 Fall L.T. The Increasing Role of Public Relations as a Crisis Management Function, Journal of Vacation Marketing, (2004) July 1st, 10(3), pp.238-250 Glaesser D. 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