Crisis Management, Tourism and

Sustainability: The Role of Indicators

Nicolette de Sausmarez
Department of Tourism and Leisure Management, Lancashire Business
School, University of Central Lancashire, UK

The damage to tourism caused by a crisis or disaster may not only have serious
implications for a national economy but also threaten the livelihoods of many in the
destination. The monitoring of crisis indicators could allow intervention to minimise
the crisis and offers a chance of protecting tourism for the benefit of all stakeholders.
This paper evaluates the role of crisis indicators in sustainable tourism development,
and shows why this is closely connected to issues in sustainable tourism. The author
challenges the conventional classification of crises and suggests that grouping them
according to their triggers is more useful in predicting and managing a potential
crisis. Empirical data gathered during interviews with senior Malaysian public and
private sector representatives highlight some of the practical issues associated with
the identification and monitoring of appropriate indicators. The paper concludes that
the new classification allows crisis management to be more cost-effective and may
also be a key to indicator development for other aspects of sustainable tourism. The
travel trade may hold the key to indicators of market trends, but there would be issues
in obtaining the necessary information for reasons of confidentiality.

doi: 10.2167/jost653.0

Keywords: crisis management, destinations, indicators, sustainable tourism,

trigger

Introduction
Tourism is a major global economic sector and is increasingly making a con-
tribution to national economies, particularly in developing countries, where it
generates employment, stimulates regional development and is a means of at-
tracting foreign exchange (Jenkins, 1982). There has been spectacular growth in
international tourism over the last 50 years, with arrivals increasing at an aver-
age rate of 6.4% from 25.3 million in 1950 to an estimated 763.2 million in 2004
(World Tourism Organisation [WTO], 2005). Since the United Nations’ Earth
Summit in June 1992, greater efforts are being made to apply the principles of
sustainability to tourism development in order to ensure its intergenerational
viability and its contribution to sustainable development. To this end, the WTO
(2004: 1) states that sustainable tourism should ‘ensure viable, long term eco-
nomic operations, providing socio-economic benefits to all stakeholders that
are fairly distributed, including stable employment and income-earning oppor-
tunities and social services to host communities, and contributing to poverty
alleviation’. This paper will argue that, through the judicious use of indicators,

0966-9582/07/06 700-15 $20.00/0

C 2007 N. de Sausmarez
JOURNAL OF SUSTAINABLE TOURISM Vol. 15, No. 6, 2007

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Crisis Management: Role of Indicators 701

a destination may prepare for a possible crisis, which will help sustain tourism
and benefit all stakeholders.
Natural disasters and crises arising from human activity are not recent phe-
nomena, but the extent of their impact is new. It is estimated that the global
economic cost of natural hazards rose by 36.4% from US$44 billion in 1991 to
US$60 billion in 1992 (WTO/World Meteorological Organisation [WMO], 1998).
Crises are now occurring more frequently, possibly as a result of greater pres-
sures on business and industry from global market demands, and they may
have a much more severe impact; in developing countries alone, there were
more than 12 banking crises in the period 1980–1998 with bail-out costs of
US$250 billion (Goldstein, 1998). In addition, the rise in activity of Al Qaeda
and other disaffected groups has made acts of terrorism both more common
and more widespread.
Crises and natural disasters jeopardise tourism development not only by the
damage they inflict but also by their unpredictability. The impact on tourism
of terrorist actions and disasters, such as the Bali bombings and the Severe
Acute Respiratory Syndrome (SARS) outbreak, has highlighted the vulnerability
and volatility of the sector. While the tangible impacts on the destination’s
infrastructure may be relatively localised, as in the Indian Ocean tsunami in
December 2004, the damage to the image of the destination as a safe place to
visit may be substantial and so seriously affect tourism demand and consumer
confidence (Ashley, 2005). Full recovery after the crisis may take a considerable
time and be aggravated by the substitution of other destinations. In addition,
although crises may occur in a single country or region, the repercussions may
be global. It is imperative, therefore, that wherever possible, destinations should
manage crises or avert them altogether; the means of doing this, however, is not
always clear.

The Context
Crisis management involves intervention in the unfolding of a crisis to pre-
vent the situation deteriorating further or, if this is not possible, to minimise the
damage caused and assist recovery and the return to the status quo (Rosenthal
& Pijnenburg, 1990). It has been a recognised practice since the 1960s and the
majority of research has tended to focus on recovery after a crisis. Less common
are studies of the management of the build up to an anticipated crisis. These
are found usually where an incident would almost certainly have a devastat-
ing and widespread impact with loss of life and serious economic and even
political implications, such as in the nuclear industry (Willby & Potter, 1995).
Although some research has been done into crisis indicators and their identi-
fication (Coombs, 1999; Mitroff et al., 1996), the scale of this research has not
reflected the potential of indicators. This is surprising considering the financial
and political gains that could be made if a crisis is managed successfully.
Crisis management research in the context of tourism dates back to the 1980s
and a large part focuses on recovery after a crisis or disaster (Henderson & Ng,
2004; Hitchcock & Darma Putra, 2005; Huang & Min, 2002; Peters & Pikkemaat,
2006). Despite the importance of anticipating a crisis, and thereby being better
able to minimise its impact, there has been relatively little work done on this
702 Journal of Sustainable Tourism

aspect of crisis management, possibly because it is more abstract and more

complex. Research into the management of a specific, expected crisis includes
McKercher and Young’s (1999) analysis of the potential impact of the Millennium
Bug on tourism, reviewing the steps taken globally to manage or avert the
approaching crisis and Page et al.’s (2006) examination of Scotland’s scenario
planning exercise to test the potential response to the arrival of Avian influenza.
In both cases, because the crisis was known about, there was no cause to reflect
on indicators.
A more generic, strategic approach to crisis management is taken by both
Faulkner (2001) and Ritchie (2004) who have developed models for tourism
disaster management that are applicable to any destination hit by an unforeseen
disaster. Although reference is made to risk assessment and environmental
scanning during the period prior to the crisis, it is not explicit. Cassedy (1991)
offers a practical guide to developing a crisis management plan for a destination,
based on the lessons learnt from the crisis experience of three destinations, but
again fails to include any reference to indicators. Only de Sausmarez (2004),
addressing the issues around formulating a national crisis management policy,
incorporates the consideration of indicators as one step in the process.
Research into indicators in the context of sustainable tourism development
has tended to focus on identifying indicators for use in managing development
and in monitoring the negative impacts of tourism on the destination (Dubois,
2005; Dymond, 1997; Hughey et al., 2004; Manning, 1999; Twining-Ward & Butler,
2002; WTO, 2004). Nowhere in this literature is there any reference to preventing
or dealing with crises as a means of stabilising the environment in its widest
sense and so moving towards a more sustainable situation. Of considerable
relevance to this research, therefore, are Farrell and Twining-Ward’s (2004, 2005)
overviews of the reconceptualisation of tourism as a complex adaptive system of
interconnected elements that influence and are influenced by factors extending
far beyond a single destination.
Complex adaptive systems are unstable, unpredictable, multidimensional and
in a state of constant change. Some researchers (e.g. Faulkner & Russell, 2001;
McKercher, 1999) now consider chaos theory to be a more appropriate concep-
tual basis for understanding tourism systems. They argue that it is not only
simplistic but also unrealistic to view tourism as a linear progression or to focus
on single cause – effect interactions. Stability in the system indicates a lack of
resilience and an inability to adapt easily to change that results in vulnerability
to unexpected events, such as a crisis or a disaster.
In recognition of this complexity, sustainable tourism development requires
a multifaceted approach with a long time frame. It aims to provide benefits to
all stakeholders and to protect host communities and habitats. It is, therefore,
paramount that the destination is not threatened by crises, and that it seeks to
predict and so help protect itself from crises. Indicators arising in any part of the
tourism system may signal the crisis itself or stability in the system and implicit
vulnerability to change. It is suggested, therefore, that the destination should
monitor not only indicators of the impact of tourism on its greater environment
but also consider indicators of the impact that its environment may have on
tourism itself.
Crisis Management: Role of Indicators 703

Crises and Their Classification

Prior to any discussion of crisis management, it is necessary to clarify the
anatomy and classification of different types of crisis. Meyers and Holusha
(1986) suggest that, in its most basic form, a crisis can be broken down into
three stages: an initial pre-crisis period, which may vary in length depending
on the crisis; the crisis itself, which is usually very brief; and the post-crisis
period, which again may last for a considerable time. The pre-crisis stage may
be either very long or so short as to be virtually non-existent and it is during
this period that signals, or indicators, warning of the approaching crisis, may
be identified. These can be monitored and remedial action taken if significant
change is detected.
The identification of appropriate indicators is considered by Pauchant and
Mitroff (1992) to be one of the greatest challenges for crisis managers. Action
prior to the event is only possible if the approaching crisis is detected early
enough. This requires that there should be a substantial pre-crisis period and
that relevant indicators have not only already been identified but also that they
should have been monitored over a period of time. During the pre-crisis period,
warning signs may be present but may not be recognised as indicators of a
particular crisis, especially as crises seldom occur in isolation but are usually
the result of a number of interacting or concurrent events. This was seen in
Malaysia in 1997 when, in addition to the Asian financial crisis, there were
outbreaks of Japanese encephalitis, Coxsackie virus and the South-east Asian
haze, all of which affected tourism to a greater or lesser extent.
Crises are traditionally classified as either natural (hurricanes and earth-
quakes) or man-made (industrial accidents, plane crashes and terrorist events).
More recently, Siomkos (1992) classifies crises according to the length of the
pre-crisis period, which might at first appear to be of greater use when consid-
ering the issue of indicators. Thus, discrete crises are those where there is very
little warning and considerable impact, as in the case of a tsunami or the sudden
collapse of a tour operator, while continuous crises are those where there is a rela-
tively long period before the full extent of the damage appears, as with financial
crises or the decline in generating markets. However, there are problems with
this classification. First, crises classified as discrete may, in fact, be continuous
but the warning signs are not recognised as such. Second, the time frame of
continuous crises is not explicit, and therefore trends such as global warming
or declining birth rates could be indicators of a very long term future crisis in
tourism (Prideaux et al., 2003).
Because of the complexity of the interactions of the many variables leading to
a crisis, Pauchant and Mitroff (1992) suggest that it is more appropriate to talk of
an event triggering rather than causing it. A natural disaster, such as a volcanic
eruption or severe forest fire, is not in itself a crisis but may be the trigger for
either an environmental crisis in its surroundings or a crisis for tourism in the
area or both. The trigger may be either an occurrence within a given sector
or organisation, or it may come from outside it. Thus, in the case of the 2001
foot and mouth disease outbreak in the United Kingdom, the contamination of
animal feed by imported meat triggered the disease outbreak, which in turn
sparked the crisis in the UK tourism sector in the same year.
704 Journal of Sustainable Tourism

There is, therefore, an argument for classifying crises according to their trig-
ger. If the trigger comes from within the sector, the crisis might be termed an
endocrisis and be the result of a gradual change in the status quo. An exam-
ple of an endocrisis in the tourism sector might be one brought about by the
change in consumer demand for a particular destination. In contrast, if the crisis
is triggered by an event outside the sector, it might be called an exocrisis and
is unlikely to have been anticipated by the tourism industry. An example of an
exocrisis would be the crisis in the tourism sector in Bali, Indonesia, after the
terrorist bombings in Kuta in 2002. A single event can, therefore, bring about
both an endocrisis and an exocrisis; the flotation of the Thai baht and its subse-
quent collapse in July 1997 triggered an endocrisis in Thailand’s financial sector
and an exocrisis in the tourism sector.
How crises are classified is ultimately a question of semantics but may have
some influence when it comes to their management. This study seeks to discover
whether the classification of crises as endocrises or exocrises has any bearing on
the use of indicators and the management of the crisis. Through an exploration
of the Malaysian management of the Asian financial crisis with special reference
to tourism, it considers the potential role for indicators suggested by tourism
professionals in the destination, based on their experience of the crisis.
The 1997 Asian crisis started as a financial crisis in Thailand but spread
through most of South-east Asia, developing into an economic crisis of serious
proportions with widespread unemployment, inflation and contracting gross
domestic product (GDP). A market-driven crisis, its causes and progress are
analysed in detail by Chote (1998) and interpreted within a tourism perspective
by Prideaux (1999) and the WTO (1999). The greatest impact of the crisis was on
the ‘tiger’ economies of South-east Asia where the movement of private capital
changed from a net inflow of US$93 billion in 1996 to a US$12 billion outflow in
1997, which caused international confidence to collapse (Hill, 1999).
Prior to the crisis, Malaysia had been considered one of the most successful
emerging economies in South-east Asia with an average annual growth rate
of 8.8% and per capita income increasing from US$1850 to US$4425 in the
decade leading up to the crisis (Athukorala, 1999). Tourism was the third largest
source of foreign exchange earnings after manufacturing and palm oil (Tourism
Malaysia, 1998a) when the turmoil in the regional financial markets in 1997
caused the ringgit to fall 40% against the US dollar and the stock market to
collapse (Musahet, 2001). Revenue from tourism in 1997 fell by US$342 million,
a 14% drop from 1996 (Sadi, 1999). Employment in the tourism sector decreased
by 23.8% in 1997 and investment in Malaysian hotel and tourism projects, which
had shown a 61.2% increase in 1996 over 1995, fell by 39.5% in 1997 and a further
67.9% in 1998 (Tourism Malaysia, 1998b). A full account of the crisis and its
impact on tourism can be found in Musa (2000), while details of the tourism
sector’s response are provided by de Sausmarez (2003).

Research Design
Empirical data were collected during a field trip to Malaysia in 2001 where in-
depth, semi-structured interviews were held with 16 individuals in high-ranking
positions, many of whom were involved in policy formulation. The interviews
Crisis Management: Role of Indicators 705

took place in or close to Kuala Lumpur where the government and the head-
quarters of many of the federal organisations are located, on the northwestern
island of Langkawi, which is considered the flagship of Malaysian tourism, and
in the southern state of Johor, a very popular destination for Singaporeans. The
organisations and institutions represented included the Ministry of Culture,
Arts and Tourism (MOCAT); Tourism Malaysia; the National Economic Action
Council Secretariat; the Malaysian Industrial Development Authority; the Johor
State Executive Council (JSEC); the Langkawi Development Authority; the
Institute of Strategic and International Studies (ISIS); the Malaysian Associa-
tion of Tour and Travel Agents (MATTA); the Malaysian Association of Hotel
Owners (MAHO); Monash University Malaysia, and the leisure complex Sun-
way City Berhad.
Because the number of high-ranking people eligible for the study was limited
and in order to consult a wide range of individuals, selection was by non-
probability purposive sampling and by snowball sampling. Snowball sampling
was used in order to improve the response rate as Goldstein (2002) recommends;
it is particularly productive in South-east Asia where contact by means of per-
sonal introduction is customary. The respondents were not stratified with regard
to their ethnic origin or gender as, although it was recognised that this would
inevitably influence their perceptions and opinions, it was felt that the variety
would enrich the data rather than detract from it. The face-to-face interviews
lasted approximately one hour and were conducted in English; they were very
loosely structured as the respondents differed considerably in their areas of
expertise and so time would not be wasted discussing issues they knew little
about. The topics addressed included the lessons that had been learnt from the
crisis experience; the selection, monitoring and evaluation of appropriate indi-
cators for use in future; the development and funding of any crisis management
initiative and the roles of the public and private sectors. QSR NUD*IST NVivo
was used as a sophisticated search engine to facilitate management of the data
obtained.
The objective of the interviews was to explore the views of selected individu-
als rather than to obtain an absolute set of data. The method was chosen because
it allowed close interaction between researcher and respondent; face-to-face in-
terviews were preferred over telephone or mail questionnaires because they
reinforced that close interaction. In addition, greater control could be exercised
over the progress of the interviews, which, given both the high status of many
of the interviewees and the cross-cultural element in the research, is recom-
mended by Odendahl and Shaw (2002). It also reduced misunderstandings due
to language differences. Second, in many Asian cultures, ‘loss of face’ is taken
very seriously and participation in crisis management may be perceived as a
tacit acknowledgement of the existence of a crisis, which, at government level,
may imply incompetence or failure to govern properly. However, there were
limitations to the research. The number of suitable candidates available for in-
terview was limited because of their senior position and was further restricted
to those who spoke English. In addition, as English was not the first language
of most of the participants, some of the nuances of meaning were unavoid-
ably lost, despite great care being taken to clarify any ambiguities wherever
possible.
706 Journal of Sustainable Tourism

The Destination Experience

Exocrises
As defined earlier, exocrises are crises triggered by an event external to the
sector, in this case tourism. Such a trigger might be a natural disaster like the
Indian Ocean tsunami in 2004, a disease outbreak such as SARS, or a market
crisis. The problem for crisis managers in a destination is that, because the
trigger originates outside the tourism sector, there may be very little warning.
If this trigger is a natural disaster, it almost always comes as a complete shock;
if it is an unfolding market crisis, disease outbreak or ecological crisis, it is the
direction in which the situation develops and the extent of the impact of the crisis
triggered in the destination that is so unexpected.
The latter was true of the Asian financial crisis in 1997. The collapse of a
number of the East Asian economies after decades of strong economic growth
was dramatic and the intensity of the crisis was unforeseen. Despite having
witnessed the crisis unfolding in Thailand, most of the Malaysian respondents
considered that, even with hindsight, there had been no signs that their economy
was vulnerable too.

Everybody was caught off guard although they were preparing for it but
the way that it hit you, I mean never in the history of Malaysia has the
ringgit depreciated by almost 50%. It was so volatile; it was going down
almost every week. OK? . . . And the growth I think went down by 8.5%,
never before, even during the mid 1980s it was only about 1.1%. [ISIS]

Although obviously a crisis in the financial sector, few anticipated the impact
this would have on tourism:

Actually on the tourism side nobody expected it. . . . But on hindsight, as

you say, yes we should have seen that. Yes, we just saw it as a financial
crisis and not a total economic crisis. [MATTA]

Despite the importance of monitoring any deviation from the status quo
so that measures to counter the changes can then be accurately targeted and
therefore cost-effective, there was some criticism of the Malaysian government’s
monitoring of economic indicators:

Nobody really knows what the real situation is. One is because of lack
of transparency; the other is actually trying to get these figures. . . . This
is one of the weaknesses in this country and we are just finding it really
difficult to get a hold of all these data. I mean the Department of Statistics,
for example, is never given priority like in the US or elsewhere. Even
on the financial sector, our data is just not really very good. I mean the
major sources of data would be the economic reports. They are all arbitrary
figures – you can see that they all change. [ISIS]

In theory, even an imperfect situation, such as that described, should yield

enough information to construct a baseline against which future changes can be
evaluated and a strategy formulated.
Crisis Management: Role of Indicators 707

Monitoring all the potential indicators of any occurrence that might trigger a
crisis, however, may be an impossible task and beyond the scope of a destina-
tion. Early warning systems for disease outbreaks and disasters require regional
or global cooperation; currently the World Health Organisation (WHO) is mon-
itoring the global spread of Avian influenza and coordinating the response to
human cases (WHO, 2006) and an Indian Ocean tsunami warning system is
being developed under the aegis of UNESCO (United Nations, 2006). Once dis-
ease indicators have been identified it may be possible, in some instances, for
a country to monitor for them, as was seen in Singapore during the spread of
SARS when immigration authorities used thermal scanning to check for signs
of fever in travellers arriving at air and sea ports (Henderson, 2003).
It is beyond the scope of most tourism destinations to monitor comprehen-
sively for indicators but the changing status quo in other countries, particularly
tourism source markets, can be watched. The Malaysian government collects a
wide range of information from inbound tourists for monitoring purposes and
it observes events in the major markets, although only as far as they may affect
tourist arrivals.
We don’t keep track of what happens in other countries but we do take
note. For example, the chicken scare in Hong Kong, the mad cow disease
in the UK, we do monitor these, but the monitoring is that if this affects
the tourist arrivals from those countries. [MOCAT]
At a state level, data from sectors other than tourism are also closely observed
in some instances. The percentage change in turnover in retail outlets in Johor is
monitored with regularity as shopping is a major draw for Singaporean visitors
and any substantial decline would prompt further investigation (JSEC).
The Malaysian private sector also monitors the general environment both at
home and abroad in a variety of different ways, although the extent to which
this is done is unclear. One respondent commented:
What we are doing is we are monitoring what is happening in the business,
especially tourism and hotels, those policies and those financial matters
that could affect their operation and then would affect the owners, like
the imposition of tax or levy or tariff or whatever it is, and monitoring
the situation of the room rates. . . . Of course in individual companies,
I’m sure there are people who keep track on these developments that’s
going to impact their business. But I’m not sure whether anybody has any
particular strong or close monitoring of such situations, or they just wait
for things to happen. [MAHO]

Endocrises
In contrast, the management of the build up to crises triggered by events
within the tourism sector holds much greater potential for a destination at both
national and local level. However, it is still difficult to identify indicators and
then to monitor them. National tourism statistics take a long time to collect and
analyse and by the time changes have been detected in, for example, visitor
arrivals and receipts or occupancy levels, it may be too late to take effective
action. It follows, therefore, that apart from monitoring the progress of a crisis
708 Journal of Sustainable Tourism

once it has arrived, these indicators can be used only to warn of a crisis with a
relatively long pre-crisis stage.
It is evident that the range of indicators currently monitored is limited and
identifying others would be of considerable benefit. The WTO (1999) recom-
mends that three categories of indicators in the major markets should be mon-
itored. These include short term indicators with a lead time of up to 3 months,
such as any increase in the time taken to settle accounts between travel agents
and airlines; medium term indicators with a lead of 3–12 months, such as the
number of tourism service business failures in key markets; and long term indi-
cators with a lead of more than a year such as large planned increases in hotel
room capacity in the absence of demand.
There is considerable discrepancy between the theory behind the selection
of indicators and the practice used by tourism stakeholders in the destination.
Okumus et al. (2005) report that a large number of hoteliers in Northern Cyprus
failed to predict the Turkish economic crisis or took inadequate precautions
against it because of lack of knowledge of how to proceed. The value of crisis
management was not disputed by the Malaysian respondents but neither was
the difficulty of identifying appropriate indicators. One suggested that there
should be greater monitoring of advance group bookings. Through the develop-
ment of good relationships with overseas tour operators and cruise companies,
the travel trade might obtain regular updates on booking patterns, especially
given the ease of electronic communication.
You see normally tour agents would know who are coming two months
ahead . . . they are doing these packages for next year too. . . . So tour agents
would be able to give a very good idea of inbound tourists and outbound.
Although Malaysians are more inclined to travel on the spur of the moment
rather than planning long term. [JSEC]
However, although advance bookings might have been a reasonable indicator
in the past, the increasing trend in many source markets towards last minute
bookings makes this a less realistic option:
Now if you look at the trends, the bookings are not that far ahead, in
comparison to ten years ago. It’s very odd. Now the bookings are coming
in maybe three months, four months, so it’s only short term. I think overall
the trend has changed quite a bit as compared to what we used to get
before. [MATTA]
Some respondents felt that the sharing of information by tour operators along
the lines suggested by the WTO (1999) had considerable potential but there were
doubts expressed as to whether the private sector would release confidential
information regarding business operations to the government or for use by
what amounts to their competition. Explanations included:
I wouldn’t want to give a total company breakdown. Sometimes the gov-
ernment departments do come and ask ‘give us the name of the company,
who is sending what’ and I say ‘what the hell do you want to know all this
for – it’s none of your business’! [MATTA]
I find that a lot of private sector people . . . are not even willing to divulge
information for fear that the information that they provide may . . . be
Crisis Management: Role of Indicators 709

leaked to others. Some do not want to divulge to us their figures – we

are talking about percentage increase. They were very guarded; they don’t
want their opponents to know that they are doing much better or worse
than the others. [JSEC]
To overcome this reluctance, a representative from MATTA suggested that
there could be an independent research organisation, which would gather in-
formation and then circulate it without identifying the sources.
Less practical but potentially of some value, one respondent suggested formal-
ising the travel industry ‘grapevine’, although he had no suggestions as to how
this might be done:
We do get [information] but not collected in a very professional or very
comprehensive way. . . . This is only informal discussions, you meet a hote-
lier, you meet an operator, you talk about visitors, ‘they are coming later’
and ‘they’re coming less’ or ‘they’re going to Langkawi warm [directly on
arrival], they are not staying in Kuala Lumpur at all’, and things like this
would come up. But there is no formal and organised way of getting this
information. And I think if there was it would be of tremendous use, so
giving early warning information to the trade, to the industry. [MATTA]
A more useful suggestion was to follow general regional issues and trends and
then to share this information between all the stakeholders in tourism:
What they really need to do is to be more in tune within general political
issues, cultural issues, how people perceive Asians in general and what
is happening in Asia and people’s reactions there and also to have gen-
eral views of business consultants about Asia and how things are going
economy-wise in Asia but a lot more to do with what the newspapers,
magazines, news stations, articles have to say about Asia and what is
going on through Asia in terms of safety, security. [Monash]

Implications of the Research

Because the tourism sector has links into so many sectors of the economy, it
may be affected by a crisis occurring in any one of them. To be effective, pro-
active crisis management would necessitate the identification and monitoring
of appropriate indicators in every sector in sufficient time to take remedial
action. This could become so complex as to be unrealistic. As the empirical data
suggests, indicators are extremely difficult to identify and, in addition, the cost
of monitoring them both in the destination country and in a number of sectors
of the economy of all its key markets is daunting. Any rationale for focusing
and refining this process, therefore, must be of value.
The length of the pre-crisis period is important as it offers advance warning
of the crisis and allows time for evasive action. So too are the circumstances in
which the crisis occurs. A robust sector will be resilient and withstand a crisis
better than the one with badly managed or out-of-date systems and dissatisfied
or inadequately trained human resources, where the impact of a crisis may be
devastating. The potential for crisis management depends on whether the crisis
is the result of deteriorating conditions within a given sector, which finally reach
710 Journal of Sustainable Tourism

a point where a crisis is triggered, or whether it is entirely unexpected. Indicators

may be considered as warning signs not only of an approaching crisis but also of
the vulnerability of the sector in which it may occur. Alternatively, they might
be described as feedback indicating reduced resilience to disturbance within
the system (Farrell & Twining-Ward, 2005). Prior to the terrorist attack on the
United States in September 2001 that triggered a crisis in the American airline
sector, there had been signs that the situation was becoming very volatile, such
as worsening relations between the United States and some Middle Eastern
countries, increased numbers of disaffected young Muslims, and other terrorist
incidents. There were also indications that the airline sector itself was extremely
vulnerable as it was overstaffed with too many routes and too much capacity
(Hughes, 2001).
To date, very little attention has been paid to the triggers of crises and this
may be a mistake. Classification of crises by their trigger gives an indication
of the options for preparing against and managing them, which, at destination
level, can make measures more cost-effective. Exocrises happen with little or no
warning and experience would suggest that there is little point in monitoring
for them as it is not economically worthwhile. In contrast, changes in indicators
may draw attention to the growing vulnerability of the sector and the increased
risk of an endocrisis. As an endocrisis may also be an exocrisis, comprehensive
monitoring of indicators in each sector for endocrises will reduce the risk to
all. Good communication and the sharing of information between all sectors
of the economy is, therefore, crucial. Available funding should be spent on
eliminating bad practices such as corruption and cronyism, as according to Aziz
(1998), countries with the lowest corruption indices were least affected by the
Asian financial crisis and recovered fastest.
Tourism statistics, such as tourist departures and consumer attitudes in major
markets as well as tourist arrivals and satisfaction levels in the destination,
are regularly collected by national tourism organisations. Together with data
supplied by the travel trade, such as booking figures, these could warn of an
impending crisis in the tourism sector and may also serve to alert key players
to the susceptibility of the sector to serious threats from outside it. Scenario
analysis1 might then be a useful tool to suggest how events might unfold. Table
1 illustrates how conventional indicators of sustainable tourism development
might be augmented with additional indicators of potentially damaging crises.
Whether or not such indicators could realistically be monitored is debatable.
In the first instance, there appears to be a need for a central body that would
collect and collate information and circulate it to interested parties, and which
would also act as an intermediary between the government and the private
sector. How effective such a body might be, how rapidly it could collect and
process information and how useful the information would be, would depend
on the cooperation of the private sector.

Conclusion
Malaysia’s experience of the Asian financial crisis has shown how difficult
it is to identify appropriate crisis indicators and there are a number of issues
associated with their monitoring that remain unresolved. The travel trade may
Crisis Management: Role of Indicators 711

Table 1 Augmented examples of sustainable tourism development indicators

Traditional sustainable tourism
indicators
Ratio of residents to tourists
Hotel occupancy rates
Tourist satisfaction levelsa
Decline in number of tourists intending
to returna
Figures for crime associated with
touristsa
Changes in income levels in local
communitiesa
Litter levels in tourist areas
Water shortages resulting from tourist
use
Possible additional indicators of
potential crises
Allocations at main resort areas
negotiated by tour operatorsb
Large planned increases in hotel room
capacity in the absence of demandb
Tourism service business failures in
key marketsb
Media focus in key markets on travel
to competing destinations
Advance cruise ship berth bookings in
destination ports
Media coverage in key markets of
political/cultural issues in
destination region
Signs of instability in other sectors of
destination economy
Changes in visa requirements for
movement between key markets and
competing destinations

Sources: WTO (a 1999; b 2004).

hold the key to indicators of market trends. Tour operators have access to data on
both supply and demand as they are situated in or have close links with either the
generating markets or the destination or both and they are, therefore, in a strong
strategic position to act as ‘risk brokers’ and to monitor and assess changes in the
tourism status quo. However, there remains considerable doubt over whether
the private sector would cooperate in the provision of the necessary figures
to either the government or to their competitors and there needs to be more
detailed research in this area.
An examination of the role of indicators in macro-level crisis management
favours the reclassification of crises according to their trigger rather than the
traditional criteria. The potential for proactive crisis management is clearly lim-
ited to maintaining the tourism sector in as robust a state as possible so as
to reduce its vulnerability. The regular collection of detailed and up-to-date
statistics is therefore a requirement, as is effective communication between gov-
ernment departments and transparency as to the status quo in order to forewarn
of any impending problem.
Tourism is vulnerable to a wide range of crises and a factor to emerge from
this research is the difficulty of establishing what form any crisis management
provision should take. It is suggested that regular monitoring of tourism trends
and prompt action on the information received will keep the sector healthy,
diversified and well regulated and, consequently, more resilient in periods of
adversity. In addition, good media relations, diversification of tourism products
712 Journal of Sustainable Tourism

and a competitive travel trade will make a major contribution to the rapid
recovery of the sector should a crisis strike.
These findings support the view of tourism as a complex adaptive system
(Farrell & Twining-Ward, 2005). Monitoring of indicators in the destination will
draw attention to the degree of stability in the system and its susceptibility to
disturbance. However, the identification of indicators must take into account not
only all the interconnecting elements in the system, including those far beyond
the destination itself, but also the very long time frame required. Rather than
focusing on the current and short term impacts of tourism on its immediate
surroundings, tourism should be viewed within a global context and examples
of best practice introduced, which will last well beyond the next generation.
Private sector investors and host communities need to have confidence in the
future of any tourism development they commit to and to ignore the possibility
of a crisis at some unspecified time in the future is to diminish this confidence.
It will, however, require considerable time and effort to develop appropriate
indicators as a tool for crisis management. It may also be that the concept of
monitoring indicators according to their triggers, and within a classification
system of endocrises and exocrises, could have wider value within the evolving
world of indicator development for sustainable tourism.

Correspondence
Any correspondence should be directed to Dr Nicolette de Sausmarez, De-
partment of Tourism and Leisure Management, Lancashire Business School,
University of Central Lancashire, Greenbank Building, Preston PR1 2HE, UK
(ndesausmarez@uclan.ac.uk).

Note
1. Scenario analysis is the process of forecasting a number of possible outcomes of a
future event, and then considering the implications of each of these. It limits the
range of eventualities and so facilitates planning, informs complex decisionmaking
and allows resources to be targeted and, therefore, more cost-effective.

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