Recovery Marketing Strategies of Hotels in Bangkok: A Descriptive Study Relative to Unprecedented Human-Induced Crises

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1 Recovery Marketing Strategies of Hotels in Bangkok: A Descriptive Study Relative to Unprecedented Human-Induced Crises Hermae Aquines a, Amita Inah Marie Bancoro b and Mari Andriel Kalaw c Hotel and Resort Management Department, Faculty of Hospitality Industry Dusit Thani College, Bangkok, Thailand a hermae.aquines@dtc.ac.th, b amita.bancoro@dtc.ac.th, c mari.kalaw@dtc.ac.th ABSTRACT In Thailand, recent statistics reveal that the emergence of hotels is due to the significant growth of tourism receipts in the country, however fluctuations were observed caused by human-induced crises. This research intends to examine how hotels in business center of Bangkok were able to recover from these crises and to devise a guideline of recovery marketing strategies for hotels. This research applies quantitative and qualitative approaches. Survey questionnaires and in-depth interview will be conducted in selected hotels of Bangkok s business center. Since this is a working paper, it is waiting for outcome from the data gathering and analysis. The researchers hope to come up with a guideline of recovery marketing strategies beneficial for hotel businesses. Results of the study will also be valuable to other sectors of hospitality industry, moreover for the reference of future researchers. Keywords: Service Recovery, Marketing Strategies, Hotels, Human-Induced Crises Introduction In the year 2013, Thailand has imposed an impressive growth in tourism receipts. It ranked first in the world with the growth of 28%, having international tourists as the huge contributors for the figure projected (TheNationMutimedia.com, 2013). Marketing is indeed a vital branch for every country s tourism promotion success. There are different sectors under the tourism industry such as food and beverage, entertainment and tourist attraction, transportation and accommodation sector. Hotels in Thailand, especially in Bangkok, are growing in number. According to STR Global data, as of September 2014, approximately 101 hotels, comprising about 18,000 rooms, were introduced into the market. Apparently, the lodging industry is expanding in accordance with the growth tourism receipts as well. However, fluctuations on hotel demand have been observed due to various reasons. Tourism has been negatively affected because of issues related with political unrest and terrorism which were labeled as human-induced crises. These have the potential to rival with natural disasters in both scope and magnitude. Evidence suggests that the tourism industry is one of the most vulnerable industries to crisis. In this study, researchers defined the scope of the study as the Bangkok s business center, which surrounds the area of Silom, Ratchatewi, Sathorn, Rachadamri and Ploen Chit Roads. This research, therefore, is intended to examine how hotels in Bangkok within the business center able to recover. This study is developed with the authors idea hoping that the results will be beneficial for the hotels in developing their recovery marketing strategies. Literature Review Bangkok s Hotel and Tourism Industry In the year 2013, Thailand has imposed an impressive growth in tourism receipts. It ranked first in the world with the growth of 28%, having international tourists as the huge contributors for the figure projected (TheNationMutimedia.com, 2013). Tourists around the world visit Thailand all year round due to its reputation in having an elaborate history, rich culture and beautiful natural resources, and also because of

2 the hospitality of Thai people (Meng, Tepanon, & Uysal, 2006). Arrivals increased to in the first quarter of 2015, up 23.5% from the corresponding quarter in 2014 (at time of political unrest). An even stronger upward trend was seen in the second quarter with arrivals increasing from 5.1 million in 2014 to 7 million in 2015 (+37.5%). Apparently, the lodging industry is expanding in accordance with the growth tourism receipts as well. The relevant literatures for this research are as follows: 1. Hotel Recovery Marketing Strategies Accumulation of practical advice that all Hotel Managers can utilize regardless of the size of their hotel was studied by Outi Niininen (2013) such as: Crisis Preparedness. There needs to be an advocacy in the importance of being prepared in crisis situations in a Crisis Preparation Manual. The obvious/visual display of security measures (e.g. metal detectors at the entrance) is appropriate for specific target segments or situations only. The day-to-day security operations included the secondary security role assigned to most front line employees. This approach allows for a more discrete security operations and maintaining the appropriate quality of service. Cost Management. During any crisis, managing costs effectively is probably the strategic way to being able to remain in business during and after crisis, as any reduction in hotel occupancy rates will translate into a drop in the revenues. Cost saving exercise should be conducted in a way that allows the hotel to bounce back quickly once the demand for their services returns. A key cost area for service industries is the payroll, therefore if substantial cost cutting is required to survive the current crisis. Local Collaboration. Collaboration between hotels and authorities is to be expected during a crisis. The type of free advice offered by local authorities is determined by the location of the hotel. The location of the hotel will determine the required building standards as well as the requirement for a formal rescue plan to be lodged with the authorities, the frequency of relevant safety inspections and the extent to which the authorities are working with the hotels in a proactive manner. Guest and Customer Communications. Accurate customer records are the basis for excellent customer relations. These records will allow the hotel to learn about their frequent guests and to keep their loyal customers. Precise record keeping should not be limited to the Customer Relations Department but be a standard across all the departments within the hotel. Moreover, all well documented procedures can also stop a minor incident from becoming a major crisis as these files are needed to reply to a concerned guest whether they have been exposed to any external health risks during their stay at the hotel. Technological Application. Recording security cameras at key positions, alarms and motion sensors indicating unauthorized access as well as digital monitoring of access to the premises were nominated as common tools for maintaining hotel security. The Internet and were seen as a tool for the collaboration between hotels and the police to enhance the hotel security as well as a potential risk to the operations or the image of the hotel which is why there is a need for up-to-date firewalls to protect the hotels computer networks and back up data together with alternative communication to prevent alert scams. 2. Human-Induced Crises The targeting of hotel by terrorist organizations is not a new phenomenon. Among the earliest attacks was the 1946 bombing of King David Hotel in Jerusalem by the Zionist paramilitary organization the Irgum. The new wave of post-9/11 attacks on hotels is different in important respects from those of the past. On August 2015, there was a bombing at the popular Erawan Shrine in Bangkok. The bombing incident recorded 20 deaths and 125 casualties. Victims were citizens of Thailand, Malaysia, China, Hong Kong, Indonesia, Singapore, Japan, Maldives, Oman, Philippines, Qatar and Taiwan. (bbc.co.uk, 2015). It was 2006 when Thailand s political crisis begun the crucial event that had greatly affected the image

3 of Thailand were the airport closure in November In 2009 and 2010, but many countries announced the warning to their people of travelling to Thailand. Regarding to hotel industry, revenue of hotels located in Thai tourist attractions were affected by low room rate in According to Siam Commercial Bank as cited in Saensomboonsuk (2011) the number of tourists and revenue tend to improve in 2011 as a consequence of the economic growth and advanced reservation of cheap hotel. According to Eli Avraham (2006), there is a direct relation between the image of the affected tourist destination and the level of demand generated by tourists to visit it. Thus, this affects as well the number of hotel occupancies on the particular tourist destination. 3. Hotel Crisis Management Tourism is highly integrated with several industries like the hotel and accommodation industry. The ripples of a crisis event from the hotels supply chain can result in a flood of issues or problems for the business (Niininen, 2013). According to Fischer (2015), recent terror attacks in France and the heightened security measures in most if not all European countries hence in terms of providing security in hotels, there are local regulations, costs that need to be addressed; however, the physical safety of our guests should be among top priorities In 2008, Indian tourism and hotel industry was rapidly growing until the terror attacks in Mumbai that brought down the hotel occupancy to 30% for several weeks. In this case, industry managers perceived that government is an important element in crisis managements especially where the crisis is imposed by external factors (Israeli, 2013). Rampaging mob in a hotel in Cairo which was a major blow on Egyptian Tourism. Investments on hotel security technology can be costly. In new buildings, security is increasingly becoming a part of the architecture -- parallel to the construction plan is building an integrated security concept yet should not compromise the guests time for relaxation and feeling of ease (Wildberg, 2013). Methodology The study is classified as a descriptive research as it intends to describe the effects of the humaninduced crises on the hotels revenue and find out the recovery marketing strategies applied. The researchers utilized quantitative and qualitative approach in this study. Existing marketing strategies practiced by the hotels prior to the crises will be identified through a survey questionnaire on hotel staffs. The effectiveness of hotel s recovery marketing strategies towards crises will be analyzed through in-depth interviews on marketing department staffs. The variables used for this study are as follows: A. Independent variables: Best practices of crises management by Niininee (2013), Existing practices by hotels B. Dependent variables: Impacts of bombing incidents in hotels, Recovery marketing strategies for hotels The population used for this study is the hotels situated within the business center of Bangkok, as defined by authors, which consists of approximately 130 hotels. Since the researchers selected specific hotel staff which are assumed to justify the survey questionnaires, expert sampling under non-probability sampling is applied. Researchers will take three staff opinions (coming from marketing, revenue and front office departments) for each of sample hotel. Moreover, one manager per sample hotel will be the respondent for in-depth interview. Data results will be analyzed through descriptive and inferential statistics, and content analysis. From these, the researchers will be able to describe the recovery marketing strategies applied by hotels.

4 Results Upon the review of the literature, it is shown that the theory of best practices for crisis management created by Niininee (2013) and the examples of human-induced crises may lead to a good crises management by hotels. Moreover, it is also assumed that the example situations of human-induced crises which applied best practices may lead to a better guideline for recovery marketing strategies applicable in Bangkok. This leads to the formulation of research hypotheses and the establishment of the conceptual framework (Figure 1). Figure 1. Conceptual Framework As this research is considered a working paper, the findings are yet to be concluded. Once the results are taken and the research is completed, the researchers are certain that this will be beneficial as the hotels forecast for crises management. The recovery strategies to be defined will surely be a good model to follow being in a business vulnerable to myriad situations. References Horwath HTL-Pacific Asia. (2014).Thailand Industry Survey Retrieved from Israeli, A.A., et al. (2010). Hospitality Crisis Management Practices: The Case of Indian Luxury Hotels. Int. J. Hospitality Manage. doi: /j.ijhm Kotler P., Bowen, J., &Makens, J. (2014). Introduction: Marketing for Hospitality and Tourism. United States of America: Pearson Education Limited Mansfeld, Y. & Pizam A. (2006).Section IV: Tourism and Crisis Management Issues. Tourism, Security & Safety: From Theory to Practice (pp ). United States of America: Elsevier Butterworth-Heinemann Inc. Niininen, O. (2013).Five Star Crisis Management Examples of Best Practice from the Hotel Industry.InTech. dx.doi.org/ /55209 Reid, R. & Bojanic, D. (2010). Hospitality Marketing Management. New Jersey: John Wiley& Sons, Inc.

5 Prasanna, K. (2013). Marketing Strategies for Standalone Hotels: With Reference to Mayur Aaditya Resort, Dharwad, India. Research Journal of Management Science. Vol. 2(5), Fischer, J. (2015) Better Safe than Sorry Hotels in Major European Cities Need to be Vigilant and Ready. Retrieved from Wildberg, R. (2013) Under Attack When the Hotel Transforms into a Trouble Spot. Retrieve from