Monday, October 31, 2005

Crisis in Cancun

In a recent post, I discussed how Wal-Mart's positive response to hurricane Katrina improved their public image. The response of the largest company in the world to the most high-profile natural disaster in the history of the U.S. is bound to generate lots of headlines. But beyond the Fortune 500 there are thousands of companies with limited resources who must also respond well to a crisis.

Cancun_2 One of those companies is the Royal Sands, the newest property of Royal Resorts in the hurricane-ravaged city of Cancun, Mexico. This came to my attention because my wife and I have a vacation planned at this resort in the near future. After seeing and reading news coverage of the devastation wrought by hurricane Wilma in Cancun, I naturally became nervous about my planned trip.

With the revenue for Royal Sands depending on me and thousands of other nervous vacationers, the resort is facing a real crisis and effective communication could limit their loss of revenue. In that light, it is interesting to note that Royal Resorts has set up a blog of sorts to issue daily progress reports on the hurricane recovery. Their first post on October 28 tells of their decision to close the resort until November 25 for clean up and details the (comparatively) minimal damage to the resort.

Today's post gives a progress report on clean up at the resort and informs readers that life is returning to normal in Downtown Cancun. It also reports the return of inbound flights to Cancun International Airport.

The updates are exactly what's needed, but the execution could have been better. First, the information is only accessible from the front page of the Royal Resorts web site. There are no links on any of the other Royal Resorts pages and no link anywhere on the Royal Sands web site. Second, the hurricane update page has no contact information for guests to get more information. In a crisis such as this, when a company's revenue is in jeopardy, every effort must be made to communicate to potential customers.

The hurricane also provides an example of why it is so important for companies to communicate during a crisis. If consumers aren't getting information from the company, they will seek it out in other places; especially on the Internet. Sure enough, although it took Royal Resorts one week to post their first information on the web site, TripAdvisor had their first review up in five days...and it isn't good news for the resort. A site member from Washington, DC lambasted the resort for failing to communicate with guests prior to the storm. Here's an excerpt:

The resort staff and management had not sent, or posted any notice of impending danger about the hurricane as late as Wednesday (9am), Oct. 19th when we left the resort for the airport. At this point it was pretty clear that it was coming right at Cancun. If we had not have looked at the weather channel for an hour so late Tuesday night, we would not have know this record hurricane was coming toward us.

Later on in his post, "DC" puts it all in painful perspective:

What makes me so angry about it is that I had a 30 minute discussion with a concierge and a salesperson Tuesday at 6pm and they just said it was going to be rainy. They did not say, "you might want to think about the fact that a powerful hurricane is coming this way," or "we just want you to know what's going on." I understand that them telling everyone to leave or that a big hurricane is coming there way would mean the loss of money, but not telling their members to a loss of trust. Which one is worth more do you think?

That, in effect, is the question every consumer is asking during a crisis: 'Do you care more about me or my money?' If they perceive that a company is more concerned about them, consumers will give that company both their trust and their money. A company they perceive to be more concerned about their money, won't get either.

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