Social Sustainability in COVID-19 Crisis: The Case of the Hotel …1441677/FULLTEXT01.pdf · 2020....

Social Sustainability in COVID-19

Crisis: The Case of the Hotel Industry

Master Thesis, 15 ECTS

Master’s Programme in Sustainable Management

Department of Business Studies

Uppsala University, Campus Gotland

Academic Year 2019/2020

Authors: Beka Katsadze & Daniel Milojevic

Supervisor: Matilda Dahl

Katsadze & Milojevic- Social Sustainability in COVID-19 Crisis: The Case of the Hotel Industry

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Acknowledgements

As the Visby Scholarship holder, I (Beka Katsadze) want to thank the Swedish Institute for giving

me such a great opportunity to study in Sweden, at Uppsala University and to gain tremendous

academic and personal experience. We both want to thank all our professors for the great courses

during the academic year and we especially want to express our gratitude to our supervisor, Matilda

Dahl, who all the time provided us with helpful feedback, self-confidence, and motivation. We

also want to thank our fellow classmates, who have always been supporting us during the whole

program. In addition, we would like to thank our families and friends for their endless support

during an intense year. And finally, we want to thank all the hotels and their managers that decided

to participate in our research regardless of their extremely busy schedules due to the crisis.


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Abstract

The COVID-19 outbreak, travel restrictions, or other safety norms had a huge negative impact on

the world hotel industry from the beginning of 2020. In response to the crisis majority of the hotels

all around the world had decided to get closed temporarily. Such a deep crisis arose many social

problems especially among the employees of the industry. However, there were still cases, when

hotels decided to choose different strategies rather than closing their doors for their customers.

One of us had a great opportunity to spend 14 days of quarantine in one of such hotels and to

collect the valuable information from inside the hotel room, which had been converted into a

quarantine zone after the virus outbreak. Besides, we also explored several more cases from 4

different countries about the hotels that have chosen to create social benefits in different ways. In

this thesis, we have analyzed socially sustainable strategic solutions from the hotel industry,

explored characteristics, and described the circumstances that encouraged such solutions.

Key words: COVID-19, hotel industry, social sustainability, crisis management.


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Table of Contents 1. Introduction ........................................................................................................................................... 1

1.1 Problem Formulation and the Research Question ............................................................................. 1

2. Theoretical Framework ......................................................................................................................... 3

2.1 Crisis Management Theory and the Tourism industry ........................................................................ 3

2.1.1 Pre-Crisis ...................................................................................................................................... 4

2.1.2 During the Crisis .......................................................................................................................... 4

2.1.3 Post-Crisis .................................................................................................................................... 5

2.2 Social Sustainability and the Hotel Industry ....................................................................................... 5

2.2.1 What is Social Sustainability? ...................................................................................................... 5

2.2.2 Social Sustainability in the Hotel Industry................................................................................... 6

3. Methodology ......................................................................................................................................... 8

3.1 Research philosophy ........................................................................................................................... 8

3.2 Research design .................................................................................................................................. 8

3.3 Research strategy ................................................................................................................................ 9

3.4 Data collection .................................................................................................................................... 9

3.4.1 Interviews ..................................................................................................................................... 9

3.4.2 An Auto-ethnographic Study ..................................................................................................... 10

3.4.3 Secondary Data Collection ......................................................................................................... 10

3.5 Data analysis ..................................................................................................................................... 10

4. Empirical Studies ................................................................................................................................. 12

4.1 COVID-19 Pandemic and the World Hotel Industry .......................................................................... 12

4.2 Country Overview - Georgia .............................................................................................................. 12

4.3 Case 1 - Park Hotel Tsinandali, Georgia ............................................................................................ 13

After the Crisis......................................................................................................................................... 16

4.4 Case 2 - Sheraton Grand Tbilisi Metechi Palace, Georgia ................................................................. 16

4.5 Country Overview – UK ..................................................................................................................... 18

4.6 Case 3– Ten Hill Place Hotel, UK ....................................................................................................... 19

4.7 Case 4 – The Grange Hotel, UK ......................................................................................................... 21

4.8 Country Overview – Canada ............................................................................................................. 23

4.9 Case 5 – Burrard Hotel, Canada ........................................................................................................ 23

4.10 Country Overview – USA ................................................................................................................. 25

4.11 Case 6 - Wythe Hotel, USA .............................................................................................................. 26


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5. Analyses .............................................................................................................................................. 28

Table 1. Strategic solutions and the influence on stakeholders ............................................................. 29

5.1 Pre-Crisis ........................................................................................................................................... 29

5.2 During the Crisis ................................................................................................................................ 30

5.3 Post-crisis .......................................................................................................................................... 33

6. Conclusion .......................................................................................................................................... 35

6.1 Research Limitations and Further Research ..................................................................................... 35

7. References .......................................................................................................................................... 37

8. Appendix ............................................................................................................................................. 42

8.1 Interview Questions .......................................................................................................................... 42

8.2 List of Interviews ............................................................................................................................... 44

8.3 Pictures: Hotels During the Pandemic .............................................................................................. 45


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1. Introduction

During the first half of 2020, we are living in a different world. The world started to change from

Wuhan (one of the biggest industrial centers of China) in January 2020 when carbon and other

greenhouse gas emissions started to fall dramatically. The trend from China was soon followed by

the whole world, mainly Europe and the USA. Industrial activities and the use of transport were

greatly reduced all over the world and, as a result, the world’s total carbon emissions are expected

to fall by 4% during the year. However, the reduction is still not enough to reach the global 1.5°C

temperature limit but still might become the biggest fall in history (CarbonBrief, 2020).

If the above trends were a result of a successful predetermined policy against climate change

problems, they would constitute a promising starting point for a thesis research in sustainability

and the tourism industry. Unfortunately, all the above-mentioned positive environmental changes

were caused by the deadly COVID-19 virus, which began spreading in late 2019 from China. The

virus, which is often called coronavirus, was reported by the World Health Organization (WHO)

on December 31st, 2019. As of January 13th, WHO had already reported about the first virus case

detected outside of China. Already on January 23rd the Chinese Government made a decision to

lockdown Wuhan and a month later almost every country all over the world started to close their

borders as well. Countries started to announce a state of emergency and total lockdowns one after

another within their country territories (World Health Organization, 2020). Even though, as shown

above, the crisis caused some positive changes in environmental problems, restrictions on travel,

public gatherings, and economic activities ended up in an economic recession and increased social

problems (United Nations, 2020).

Now, at the beginning of May, I (one of the authors of the research) am staying in the quarantine

zone in Georgia (my home country), writing these lines and waiting for 14 more days to pass so

that I can finally go home. The quarantine zone is arranged in the Park Hotel Tsinandali and is

intended to host citizens of Georgia that enter the country from abroad. The hotel, which had been

hosting guests from around the world before the pandemic, has now changed its purpose

dramatically. Sitting at the table in my hotel room and observing the events from inside makes it

more obvious how different the world that we are living in today has become. Restrictions on

travel, recommendations against public gatherings and restrictions on many economic activities,

finally resulted in a huge economic recession, which according to the United Nations (2020) might

lead to a 1% world GDP reduction, instead of 2.5% planned growth. Obviously, the different

sectors were affected on a different scale by the crisis, but the tourism might be one of the most

affected among them. International travel and hotel occupancy levels declined dramatically during

March and April. As a result, international tourist arrivals are expected to fall by 20%-30%,

translating into a $300-$450 billion loss in 2020 (World Tourism Organization, 2020).

1.1 Problem Formulation and the Research Question

Unfortunately, statistical data, like reduction in revenue, often translates into social problems and

the crisis in the tourism industry is not also an exception. According to the World Travel and

Tourism Council (2020), almost one million jobs are lost daily in the travel and tourism industry


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during the hardest period of the pandemic (late March and April). They estimate that up to 75

million jobs are at immediate risk, depending on the period of the pandemic and international

lockdown (World Travel & Tourism Council. 2020). At the same time, closing hotels not only

endangers the wellbeing of employees but also prevents the industry from creating welfare for

other stakeholders like their customers, local communities, and others. In response, we see many

cases from all over the world when different hotels try to find different solutions when instead of

closing their doors, they continue creating benefits for their various stakeholders. In this research,

we will dig into such stories from hotels and will try to find their socially sustainable strategic

solutions. Hence, our main focus will be to identify and analyze social sustainability in their

strategic solutions.

Nowadays there are different definitions of social sustainability, however, the main idea of the

concept is common and is related to creating the well-being of human beings. According to one

known definition by Harris and Neva: “The social dimension [of sustainability] may be defined as

progress toward enabling all human beings to satisfy their essential needs, to achieve a reasonable

level of comfort, to live lives of meaning and interest, and to share fairly in opportunities for health

and education.” (Harris & Neva, 2001, P 27). Besides, on the business level, Dillard et al. (2008)

emphasize the importance of stakeholder interactions as the social sustainability creation tool from

business organizations. Therefore, when talking about the social sustainability of hotels’ strategic

solutions, our focus will also be on their different stakeholders like employees, customers, or local

communities and the influence on their well-being.

When the world is fighting against the pandemic and industries, especially the hotel industry is

facing probably the biggest crisis they have ever experienced, now the problem of social

sustainability is probably more acute than ever before. Now, when hotels are striving to somehow

survive the crisis, how are they supposed to work with social sustainability issues? Is that even

possible? Thereby, our main research question is:

How do hotels manage the crisis caused by COVID-19 pandemic in a socially sustainable

way?


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2. Theoretical Framework

Since we aim to analyze social sustainability in hotels’ strategic solutions during the COVID-19

crisis, we decided to base our research on two main theories: crisis management and social

sustainability theories. In this chapter, we will firstly introduce and discuss the crisis management

theory mainly related to the tourism industry. Based on the existing research we will discuss the

theory according to three main phases: pre-crisis, during the crisis, and post-crisis. Secondly, we

will introduce the concept of social sustainability and different theories related to social

sustainability and the hotel industry.

2.1 Crisis Management Theory and the Tourism industry

Crises are concomitant phenomena of the modern economy and business organizations face them

whether they are caused internally or externally (Ritchie, 2004). A crisis can create devastating

consequences for an organization and its stakeholders and it was defined by Bundy et al. as

follows: “an event perceived by managers and stakeholders as highly salient, unexpected, and

potentially disruptive—can threaten an organization’s goals and have profound implications for

its relationships with stakeholders” (Bundy et al., 2017, P1662). Such instabilities in the

organization, that are caused by crises may raise problems of the brand’s reputation, organizational

learning and adaptation, as well as the financial position and stakeholders' perception about the

organization (Bundy et al., 2017).

In the tourism industry crises raise from different reasons and except for internal sources, when

the crisis might be caused by internal organizational problems, many uncertainties in the modern

world also lead the tourism industry to crises triggered by various external sources like natural

disasters, terrorism and political instabilities, virus outbreaks, financial crises, and etc (Richter and

Waugh, 1986; Faulkner and Vikulov, 2001; de Sausmarez, 2003; Ritchie, 2004; Henderson, 2007).

From many other external sources, crises caused by disasters have been broader researched by

scholars of the tourism industry. However, such studies mostly highlight reactive responses and

recovery strategies rather than reduction or readiness strategies (Ritchie, 2004). Faulkner defined

the disaster in the tourism industry as follows: “where an enterprise (or collection of enterprises

in the case of a tourist destination) is confronted with sudden unpredictable catastrophic changes

over which it has little control” (Faulkner, 2001, P144) and developed tourism disaster

management framework with 6 main phases. However, in general, crisis management theory has

mostly been divided into three main phases: Pre-Crisis - Prevention & Preparation, The Crisis -

Response, Post-Crisis - Learning & Revision (Coombs and Laufer, 2018; Bundy et al., 2017).

Therefore, in this chapter, we will discuss the crisis management theory and the disaster

management framework, offered by Faulkner, chronologically based on the above-mentioned

division.


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2.1.1 Pre-Crisis

The research on pre-crisis management, according to Bundy (2017), approach the topic of crisis

management from two main perspectives: internal and external perspectives. From the internal

perspective, scholars emphasize the importance of proper organizational systems and the decision-

making processes. Reliable and quick decisions are crucial when dealing with unexpected crisis

and system collapse. The major factors for an organization’s successful management of crisis are

the development of flexible and fast internal organizational systems, such as organizational

structure, culture, and making efforts to reduce the dysfunctional nature of the organization.

(Bundy et al., 2017). Since there is a high correlation between preparedness for the crisis and the

frequency of damage, he highlighted the importance of identifying the first signs of the crisis to

avoid a big impact. As for the external perspective, scholars argue that positive stakeholder

relationships are crucial for reducing the likelihood of a crisis. (Bundy et al., 2017).

Coombs (2007) suggests the Crisis Management Plan (CMP) as a tool of companies’ preparedness

for the upcoming crises. Such plans may differ depending on business sector or other

circumstances. However, according to Coombs, it should provide the organization with reminders,

predetermined messages, and other important functions. Except that, the tourism disaster

management framework from Faulkner (2001) also emphasizes the importance of preparedness.

In the initial stages of the crisis, the framework suggests organizations to develop crisis

management teams and crisis management strategies. According to Faulkner such strategies

should be based on potential disaster assessments, which enable the existence of different scenarios

in response to diverse possible challenges (Faulkner, 2001). However, already in 1995, Drabek

identified problems in the practical implications of Crisis Management Plans. He claimed that

CMPs in the tourism industry were mainly informal and undocumented and even more, they were

intended for a limited set of circumstances like hotel fires and etc. (Drabek, 1995). Thus, the

tourism industry faced the crisis caused by the SARS virus outbreak in 2002-2003 and the pre-

crisis management phase turned out to be much shorter than expected. The crisis management

started already with the following phases like containment and damage limitations. (Henderson,

2007).

2.1.2 During the Crisis

During the crisis management phase, scholars describe the flexibility of organizational structures

and the leadership skills of the managers as important internal factors for successful actions. James

et al. (2011, P 458) emphasize the importance of “crisis handlers”, leaders that take responsibility

to lead the organization during pre- and post- crisis periods. They discuss the characteristics of

leaders, like charisma, to be an important contributor for successful anti-crisis actions from the

organization. Besides, Dowell et al. (2011) suggest that more powerful CEOs increase the chances

of quicker decisions and therefore decrease the likelihood of the failure. According to Bundy:

“leaders who frame crises as threats react more emotionally and are more limited in their efforts,

while leaders who frame crises as opportunities are more open-minded and flexible” (Bundy et

al., 2017, P1671). However, the effort from the leader is not the only solution and independent,

small boards with quick decision-making processes are also the main contributors to the process

(Bundy et al., 2017). Besides, Coombs (2007) discusses internal communications and quick


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information exchange processes to be crucial to make competent decisions and keep control of the

processes.

As for the external communications, the response of the organization to the crisis can be different,

but if we try to generally characterize it, we can use the definition from Bundy and Pfarrer:

“response strategies that accept less responsibility - generally labeled defensive - attempt to

[reduce] an organization’s perceived association with a crisis… [while] strategies that accept

more responsibility - generally labeled accommodative” (Bundy and Pfarrer, 2015, P352). Every

crisis has a negative influence on companies’ different stakeholders and the attempt from the

company to reduce, minimize the negative impact is a matter of reputation and responsibility

(Kellerman, 2006). Experimental studies by Coombs and Holladay (1996) and by Dean (2004)

have shown less damage to the reputation of the organizations that have expressed their

condolences compared to those who have avoided doing so (Coombs, 2007).

2.1.3 Post-Crisis

As for the post-crisis phase, the research mainly focusses on organizational learning and changes

in internal and external policies. Organizations should use the crises as the learning possibilities

and therefore develop crisis management strategies for future challenges (Bundy et al., 2017;

Coombs and Laufer, 2018). Paraskevas (2006) define the phase as a "clean-up" process when the

organization analyzes crisis management to evaluate strengths, shortcomings, and learnings from

the failures that will lead the company to updated and valuable knowledge.

Faulkner emphasizes two main phases related to the post-crisis period in the tourism disaster

management framework. In long-term recovery and resolution phases organizations focus on

counseling victims of the crisis and putting all necessary measures to ensure the recovery of the

crisis victims (Faulkner, 2001). The recovery process can be different based on many

circumstances related to specific organizations or tourism destinations in general. According to the

theory, Crises might affect developing countries more, with less diversity in economic sectors. The

likelihood of a deeper crisis increases when the country’s dependency on the tourism sector is

higher (Allen, 2003).

2.2 Social Sustainability and the Hotel Industry

2.2.1 What is Social Sustainability?

Sustainable development has been one of the driving forces of the world economy from the end of

the 20th century, caused by increasing awareness of the expected ecological crisis (Pisani, 2006).

The term of Sustainable development was defined by the United Nations as follows: “development

that meets the needs of the present without compromising the ability of future generations to meet

their own needs” (WCED, 1987, p43). The concept is commonly described by the triple bottom

line model, which on itself recognizes three main dimensions of sustainability. According to the

model sustainable development is achieved when all economic, environmental, and social goals

are fulfilled simultaneously (GRI, 2006).


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Environmental and economic dimensions of sustainability have been recognized earlier, during

the second half of the 20th century, however social sustainability has gained broad popularity later,

only after 2000. Instead of only preserving natural capital or establishing economic stability, social

sustainability also encourages human happiness, equality, and well-being. Hence, human welfare

can be considered as a major difference between classical environmentalism, environmental

understanding of sustainability, and social sustainability (Caradonna, 2014). Social sustainability

is also quite significantly represented in United Nation’s Sustainable Development Goals, such as:

no poverty, zero hunger, good health and well-being, quality education, gender equality, clean

water and sanitation, reduced inequalities, sustainable cities, and communities (UNDP, 2020).

2.2.2 Social Sustainability in the Hotel Industry

United Nations’ World Tourism Organization’s (2020) definition of sustainable tourism includes

all three main dimensions of sustainability and is described as: “Tourism that takes full account of

its current and future economic, social and environmental impacts, addressing the needs of

visitors, the industry, the environment, and host communities” (UNWTO, 2020). Here we will

focus more on the social dimension of sustainable tourism, which according to UNWTO refers to

respecting the socio-cultural authenticity of host communities, at the same time preserving the

tradition and cultural heritage. It also requires equal opportunities for the whole society and

equitable distribution of tourism benefits (UNWTO, 2020). However, when it comes to social

sustainability in the hotel industry, business scholars mainly stress the importance of different

stakeholders’ relations and hotels’ responsibility for their well-being (Jones et al., 2016).

Not only in the hotel industry but also generally in organizational studies stakeholder approach is

a common method for defining the social dimension of sustainability. According to Dillard et al.

(2008), social interactions are a core part of organizations and involve a diverse network of

participating and/or impacted stakeholders such as staff, suppliers, customers, and the community.

“Business organizations have a myriad of social impacts from their interaction with, inter alia,

employees, suppliers, communities, and consumers. These impacts vary depending on the nature

of the organization, its activities, and stakeholder interactions” (Dillard et al., 2008, P 159).

Dillard et al. (2008) emphasize the importance of secure employment contracts, fair working

conditions, and fair salaries for the employees. Organizations should also recognize their influence

on their local communities and should try to eliminate the negative concequences of the influence.

And finally, according to the theory companies have a responsibility toward their customers to

deliver safe products by using responsible marketing tools, giving them accurate information about

the product and the risks associated with its consumption (Dillard et al., 2008).

Stakeholder theory is also actively used in CSR (Corporate Social Responsibility) theory and

practice. CSR, which is defined as follows: “the responsibility of enterprises for their impacts on

society” (European Commission, 2011, p.6) has gained high recognition and has been

progressively adopted by the hotel industry since the 1990s in order to demonstrate their

commitment to building sustainable tourism (Ayuso, 2007). CSR theory and practice acknowledge

and widely use stakeholder theory. A firm has a moral responsibility to its stakeholders, however

because of limitations, the choice needs to be made to the most important ones (Jamali,2008).

Exactly that is why companies have a choice to identify the most important stakeholders and use

their effort in accordance with their power and importance. Business scholars recognize diverse

stakeholders in the hotel industry; however, several main groups can be identified based on


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different researches such as Government organizations, tourists (customers), public sector,

employees, competitors and etc. (Pavlovich, 2003; Ritchie and Crouch, 2003; Miller, 2001).

As we have already mentioned before, the sustainable business model implies the identification

and contribution to the company’s significant stakeholders, therefore the model suggested by

Porter and Kramer (2011) discusses the role of a business organization toward its stakeholders.

The model is known as “Creating Shared Value” (CSV). While CSR theory is often blamed to be

adopted by companies as more marketing tools than their real will to make a positive contribution

to society, CSV suggests social responsibility as a core value of the company. The aim of CSV is

to create a shared value during the entire value chain (Kramer and Porter, 2011).

In the offered model Porter & Kramer (2011) illustrate three main approaches for companies to

create shared value. (1) According to CSV, by reconceiving products and markets, companies

should shift their focus from only profit and profitable products to real demand of customers.

(Porter & Kramer, 2011). By utilizing natural resources and contributing pollution, companies

often have a negative effect on the ecosystem and society at the same time. (2) By redefining

productivity in the value chain Porter and Kramer (2011) show the business the method to build a

responsible value chain and minimize the negative influence on a company’s employees or on the

society. And finally, (3) By enabling local cluster development companies are able to help a local

society, increase their well-being and at the same time contribute to the knowledge exchange

(Porter & Kramer, 2011).


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3. Methodology

In order to answer the research question, we chose the qualitative research method to collect the

empirical data and to analyze it in connection with the theoretical framework. We have chosen 6

different cases of the hotels from 4 different countries and explored social sustainability in their

strategic solutions against the COVID-19 crisis. We conducted one auto-ethnographic study and

six online semi-structured interviews with managers of each hotel, alongside with the secondary

data from online media articles, reports, and webpages.

3.1 Research philosophy

Since our research theories: social sustainability and crisis management theory, along with our

business cases are both very closely related to social science, we base our research on the

philosophy of interpretivism. The philosophy of interpretivism is based on the idea that subject

matter of social sciences such as humans and their institutions are totally different from the natural

sciences. Therefore, the reality is created by human action and meaning-making, rather than

existing objectivity like in natural sciences (Bell et al., 2018).

When describing sociology, Weber stated: “[Sociology is a] science which attempts the

interpretive understanding of social action in order to arrive at a causal explanation of its course

and effects” (Weber, 1947, P 88). Lincoln and Guba also try to explain the interpretivism of social

action and discuss that there are no single realities in our surroundings which can be understood

in the same way by everyone at the same time. They believe in the existence of multiple realities,

which are socially constructed (Lincoln & Guba, 1986). Hence, we assume that our research can

also be influenced by our subjectivity. The research subject and research results are shaped by

objective facts and conclusions, but also by our point of view, beliefs, and values.

3.2 Research design

Our purpose of the research is to find and explore different socially sustainable strategic solutions

from the hotel industry. So, we chose comparative design as the main research design of our work.

The comparative design entails the study using two or more contrasting cases. It is based on the

idea that social phenomena can be understood better when it is described by comparing several

different but still interrelated cases (Bell et al., 2018). In order to explore the influence of the

existing COVID-19 crisis on the hotel industry and their social sustainable strategic solutions, we

decided to research several different cases from different parts of the world. Even though the hotel

industry faces almost the same crisis all over the world, strategic approaches from various hotels

are different from each other. Therefore, we decided to use cross country comparison as a tool to

explain different approaches and decisions from various hotels.

To choose the cases for empirical studies we applied purposive sampling, which implies that the

sampling should be conducted with reference to the goals of the research (Bell et al., 2018).

Therefore, we first of all identified hotels from all over the world based on the main selection


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criterion: hotels that we would use in the research should have chosen different strategies, rather

than closing their doors and waiting for the situation to change positively, they should have chosen

the strategy which would have any positive impact on the society. We intensively researched

online media articles and identified almost 45 different hotels from 13 different countries. The

cases were mainly about hotels, that converted into hospitals, quarantine zones, or the hotels that

offered free stays to different parts of the society. We sent the collaboration offer to every such

hotel and as a result, we received positive feedback from 5 hotels and proceed with further research

for these cases. The hotels, which we have researched were Sheraton Grand Tbilisi Metechi Palace

from Georgia, Ten Hill Place Hotel and Grange Hotel from the United Kingdom, Burrard Hotel

from Canada, and Wythe Hotel from the USA. As for the sixth case from Georgia, Park Hotel, it

was the hotel, where one of the authors of the research had been sent by the Georgian Government

for two weeks quarantine. So, we chose the last case based on the personal experience, however,

the hotel met every selection criterion that we had used before.

3.3 Research strategy

We chose to use a qualitative research method as a main research strategy for the thesis. The main

difference of the qualitative research method from the quantitative method is that it is concerned

with words and images rather than with numbers. Besides, the qualitative method is characterized

by interpretivism, since it tries to understand the social world with its interpretations (Bell et al.,

2018). In our research, we used a combination of several qualitative methods for data collection

including ethnography, qualitative interviews, and secondary data collection.

There are commonly recognized three main research strategies for reasoning: Deductive method

is used to test the existing theory, as for inductive method - the research is used to develop a theory,

while the newest approach called abductive method is a combination of above-mentioned two

approaches and is used to explore a phenomenon (Suddaby, 2006). We chose the abductive method

for reasoning the thesis since it involves back-and-forth engagement with empirical data and

theoretical understanding (Schwartz-Shea & Yanow, 2012).

3.4 Data collection

3.4.1 Interviews

We chose the approach of online semi-structured interviews as one of our data collection method

and we conducted one interview for each case. The hotels, that we chose to communicate with are

located in different parts of the world and online interviews seemed to be the only adequate method

to collect the diverse information. Synchronous online interviews were conducted by using modern

digital technologies, which gives us the opportunity to make a video or audio calls and therefore

receive the information in real-time with an increased possibility of interactions (Bell et al., 2018).


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As a result, Zoom and Google Hangouts interviews turned out to be the most preferred method

based on our and our respondents’ preferences. Interviews were based on the previously created

interview guide, which we mainly created using our research question and the theoretical

framework (See in the appendix, chapter 8.1). Since our questions were mostly related to

companies’ anti-crisis strategic solutions and other major decisions, we decided to conduct

interviews with hotels’ CEOs, General Managers, or other leading positions (See the list of the

interviews in appendix, chapter 8.2).

3.4.2 An Auto-ethnographic Study

Since one of us (Beka Katsadze) was spent to a mandatory quarantine for 14 days in the local hotel,

in Georgia, we were given an incredible opportunity to conduct participant observation studies

there. The hotel was converted into a quarantine zone and actively collaborated with the

government in order to provide social benefits to its different stakeholders. Thus, we decided not

to waste such an opportunity and use the quarantine period to gather valuable information from

inside the hotel. We were able to gather information about all important procedures and details

that we would not be able to understand from other sources and what is the most important we

were given a chance to get an emotional connection to the processes. By experiencing living in the

quarantine zone, we gained the understanding of the customer, one of the key stakeholders,

perspective of the processes. During 14 days of the quarantine, Beka wrote a diary, where he

included his story starting from traveling from Sweden, ended with the last day of the quarantine.

He put his impressions, observations, and emotions on the paper, which we later used as the

empirical data.

3.4.3 Secondary Data Collection

The collection of secondary data has mainly been done electronically via databases available in

Uppsala University's library and Google Scholar. Besides, we also actively used press articles and

information from official organizations’ webpages. As for the books that have been used as

secondary sources, they have been found in the Almedals Library. The secondary data found in

the library or online scientific articles, helped us to develop the understanding of the term of social

sustainability, its perceptions on the organizational level, and the theory of crisis management.

Except for the theoretical part, we also actively used secondary data in our empirical studies. We

were actively involved in online media coverings of the topic related to the pandemic and

especially in the context of hotels and the tourism industry. Besides, we explored webpages and

reports of different international or local organizations, we used webpages of the hotels from our

cases in order to access important general or statistical information (Check the pictures in

appendix, chapter 8.3).

3.5 Data analysis

The thematic analysis method has been chosen for our data analysis. Our interviews have been

recorded via audio recording and later have been transcribed verbatim. The sound recordings have


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been re-listened and other written materials have also been re-read and re-analyzed several times

to ensure that the contents of the data are correctly interpreted. We used the Crisis Management

and Social Sustainability theories as a theoretical framework to help us analyze the empirical data,

gathered from different sources. In order to explain the differences between the theory and the

empirical research, later the work was divided into three different parts based on three main stages

of the crisis: pre-crisis, during the crisis, and post-crisis phases. By combining and comparing the

data gathered from different cases we identified commons and differences between diverse

strategic approaches, which helped us to answer the main research question (Bell et al., 2018).


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4. Empirical Studies

In this chapter, we will introduce six different cases about hotels from four different countries. In

each case, we will discuss the strategic solutions of the hotels against the COVID-19 crisis. The

information will be presented into three main phases: pre-, during and post-crisis. We will try to

highlight social sustainability in each such case, but before that, we will start with the general

overview of the pandemic and its influence on the hotel industry.

4.1 COVID-19 Pandemic and the World Hotel Industry

On December 31st, the World Health Organization (WHO) in China published a report that would

later affect the entire world and its economy (World Health Organization, 2020). Soon the virus

started to spread worldwide and the rapid spread of the (later known as) COVID-19 virus has

forced countries to respond by declaring social distancing, lockdowns and other measures. Closed

companies rising unemployment level and reduced consumption have devastating consequences

for the global economy (Bank of England, 2020). The business that can be worst affected by the

pandemic is a tourism industry, which generates just over 10% of global GDP and creates every

fourth job produced in the world (WTTC, 2020). According to UNWTO (2020), the industry

already experienced a 57% fall by March, equivalent to loss of 67 million arrivals and 80 billion

dollars in revenue. The consequences of the pandemic have the potential to eliminate between 100

- 120 million jobs related to the tourism industry, depending on how the situation changes during

the year (WTTC, 2020).

4.2 Country Overview - Georgia

Measures against COVID-19 were implemented in Georgia earlier even before the first confirmed

case was detected in as late as the 26th of February. However, restrictions started to become even

more strict afterward. Already from the March 18th the country closed its borders for non-Georgian

citizens and started to put everyone arriving in the country into two weeks mandatory quarantines

(NCDC, 2020).

The tourism industry is one of the main priorities of Georgian economic strategy during the last

several years and is also one of the fast-growing industries in the country. After the COVID-19

outbreak and all the measures from Georgian Government, the tourism industry was not able to

continue functioning anymore, however, 83 hotels all around the country were given an

opportunity to be converted into quarantine zones and host people having the necessity to be

isolated (Ministry of Economy and Sustainable Development of Georgia, 2020). The government

supporting package consists of different action including postponing taxes of next four months,

paying 80% of 6 months interest rates of hotels’ bank loans and supporting workers that lost their

jobs from the industry by 200 Georgian Laris (approximately $65) monthly payments during 6

months (similar to other sectors of the economy). The government plans to open up the industry


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for internal travelers already from the June 15th, as for international travelers - from the July 1st

(Ministry of Economy and Sustainable Development of Georgia, 2020).

4.3 Case 1 - Park Hotel Tsinandali, Georgia

Before the Crisis

The Park Hotel Tsinandali is a new hotel located in the historical region of Kakheti, Georgia. The

hotel opened in 2019 and is owned by Silk Road Group, one of the biggest investors in Georgia.

Since the Park Hotel is located in the small village of Tsinandali, it is one of the biggest employers

of the village (Everyone in the hotel’s staff is local, except for the part of top management) and is

actively involved in developing Tsinandali as a sustainable tourist destination.

Already from the beginning of March the hotel already faced massive booking cancelations and

radically reduced new bookings due to the beginning of the pandemic. The signs of a huge

upcoming crisis were already apparent. By this time the company did not have any predetermined

crisis management plan or manuals related to crises caused by pandemics. In these circumstances

the importance of quick decisions was vital to adapt to the situation, explains the hotel sales manager.

The Crisis

The Park hotel quickly managed to adjust to new circumstances and implemented major changes

for that. As soon as the Government of Georgia started to impose restrictions against the virus

outbreak, the Park Hotel was contacted by the Tourism Administration of Georgia offering to

convert the hotel into a quarantine zone to accommodate people with a high risk of spreading the

virus. “It’s not the situation when you think about benefits to be honest, because it is a very hard

time obviously for the country and for everyone, and you need to make some sacrifices.” (Kipiani,

2020) –explained the hotel’s sales manager the process of making the decision. The Tourism

Administration offered the hotel the payment for bookings, obviously, the rate was much less than

in a normal situation, but it was still enough to provide essential services to customers and to

maintain 100% of the employees. So, the management team quickly made a decision, and already

on March 15th Park Hotel was prepared to accommodate first guests.

The execution of the decision was not as easy as the decision on itself and the hotel worked a lot

to adapt its infrastructure and procedures to new circumstances. Park Hotel received detailed

guidelines and procedures from the tourism administration and executed all necessary changes in

order to provide the safety of the staff and the guests at the same time. As a result, the hotel already

received first guests from one of the international flights that landed in Georgia on March 17th.

After more than one month the coauthor of our research, Beka Katsadze was also taken to the Park

Hotel for 2 weeks quarantine after he traveled back home from Sweden.

Georgian government used to arrange several special flights per week from European cities in

order to bring Georgian citizens back to their country. Our coauthor was also brought back to his

country by one of such flights from Copenhagen, Denmark, with almost 50 other citizens. After


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the special flight arrived in the Tbilisi International Airport, all the passengers were checked for

fewer and everyone without virus symptoms were taken to the hotel according to special

guidelines.

“The situation looked very different from what I’ve seen before in Sweden or in Denmark,

everyone looked very mobilized trying to follow quite strict guidelines. Airport terminal

looked empty and scary just like in Copenhagen, but the difference was that procedures

were very strict and controlled by the police or airport staff, everyone was wearing masks,

face protecting glasses, or full PPE (personal protective equipment). […] After that, they

divided us into two busses and sent us to the hotel. I heard from someone that the hotel was

called Park Hotel… I’ve never heard about it, quickly checked it on Booking.com, looked

good. The bus was led by a police car, we stopped just once on the way and were not

allowed to do it again. Everything felt so creepy!” (Katsadze, 2020, fieldnotes).

The situation looks different in the hotel even from the beginning of the check-in procedure. Guests

are requested to make a line outside of a hotel entrance with 2 meters distance from each other.

Each guest gets disinfected by the hotel’s worker and after that, one after another, they are able to

enter the lobby. Every worker wears masks and gloves and tries to keep a social distance from the

guests and from each other. Guests approach the desk and stay on the distance from receptionists,

who start the check-in procedure.

“First of all, the receptionist asked for my personal information like my name and

telephone number, he also asked if I had any allergies and any preferences with food and

after receiving all the answers asked me to choose one of the room keys from the table.

[…] I quickly grabbed the key and the receptionist quickly explained the “basic rules”:

- After you enter your room you are not allowed to leave it for 2 weeks. There are

cameras in the corridor and they are controlled by the security staff. Food will be

served three times per day on the table in front of your door at 9 am, 2 pm and 7 pm.

There are garbage packs in the room and you can put the bag with garbage outside of

your room every day after 10 pm. If you have any questions the number of reception is

written on your card and you can call us at any time. If you want to buy anything from

the grocery you can transfer money on our account and we will try to provide anything

as soon as possible.

Everything was clear, I went to the corridor. Young man, covered with full PPE introduce

himself:

- I am your doctor and I will be here during your stay, here is my number and you can

call me at any time if you need it. Here is also the number of psychologists and you can

also contact them any time you need. There is a thermometer in your room and we will

provide you with paper blanks every day. I want you to measure your body temperature

twice a day: at 10 o’clock in the morning and at 9 o’clock in the evening, write down

the numbers on the paper and put it on the table near the door outside of your room. I

will come and see you every evening.


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15

After that, I already went to my room on the first floor, at the end of the corridor. […] “you

are not allowed to leave”, “there are cameras”, checking body temperature twice a day,

everything seemed to be like I had expected to happen, but realizing that it is already a

reality and it is happening to me was shocking.” (Katsadze, 2020, fieldnotes).

Rooms in the Park hotel are arranged in almost the same way as in the usual situation; however,

guests still find some things that are not very usual for high-class hotel rooms. Rooms of 26 square

meters are equipped with double or twin beds, TVs, small wardrobes, comfortable bathrooms, and

balconies, with the view of the amazing nature of the Tsinandali Park. However, since the guest is

responsible for cleaning the room for 14 days, there are also brooms, chemicals for cleaning the

toilet, washing powder for clothes, full packages of toothpaste, and packs for garbage. The staff is

always equipped with protecting equipment and never have direct contact with their guests.

Providing the service mainly takes place with the help of small tables in front of every room. The

food, which is cooked in the hotel’s kitchen is delivered to the tables three times a day, and guests

are able to pick them any time after the delivery. In order to follow safety standards foods are

delivered with single-use tableware, which is thrown into the garbage each time after the use.

Doctors have daily contact with hotel guests, they check the health conditions and provide guests

with any kind of necessary treatment. Hotel corridors are disinfected by the hotel’s staff twice a

day with special equipment. The room service has also been changed due to the quarantine and the

hotel staff deliver any kind of products that the guest needs on their serving tables, guests are able

to transfer money on the hotel’s account to purchase anything from the grocery store.

When people are sent to 14 days obligatory quarantine, even if they spend these days in 4- or 5-

star luxury hotels they are still torn from the outside world and such experience might have an

influence on their mental and emotional health conditions. But how can such acts be perceived

from their guests? Are hotels helpful with their contributions?

“The most difficult thing in the quarantine is that every day looks like each other. You

never know what day it is today, what you did two days ago, or what your plans are for the

next days. It is shocking to see beautiful weather outside, to have the door open but still

not being allowed to leave We often take things for granted, just several days ago I was

walking on the beach with my friends in Visby, Sweden, but now I’m locked here in the

room and I’m dreaming of just being able to go outside. However, it does not matter how

bored I feel now, I still totally understand the necessity of such measures. As a student, I

had quite an active lifestyle and had communication with a lot of international students. I

am young and healthy, but now I’m back home, where I have my father who has just

performed the operation, or my grandmother who is already above 70 and I realize that

having the opportunity to stay in a quarantine zone for two weeks is the only way to be sure

that I will not harm my family. I’m very grateful that I’m able to spend this period in a

comfortable hotel room, where I have almost all the necessary comfort that one can have

being locked in the room. If I had to stay in quarantine, a high-class hotel room would be

the best place for it” (Katsadze, 2020, fieldnotes)

New reality is difficult not only for guests but is also very challenging for the staff of the hotel.

Besides every safety norm, working at such place can be perceived as risky and scary. But as the


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hotel’s sales manager told us they discussed the possible decision with every member of the staff,

giving them options to continue working in new circumstances or to refuse the government offer.

Finally, every employee decided to be a part of it and now 100% of the staff is working in the hotel

with full payments.

The participation of the whole staff was also crucial in the hotel’s main decisions. The

communication between the management team and the staff was constant and mainly based on 24

hours of online interactions. As the sales manager of the hotel revealed in the interview, the whole

team actively participated in the decision-making process and the final decision was made only

after the confirmation from each member of the staff. “It’s not just about you and me […] it’s

about us being a team […] and us being all together in this” (Kipiani, 2020). – explained he later.

Finally, a low level of bureaucracy and flexibility was factors that made the decision-making

process quick enough to make and execute difficult and important decisions.

After the Crisis

The state of emergency was finished on May 22nd in Georgia and based on success in fighting with

the virus more and more restrictions are expected to be removed soon. Even though the borders

will already be open from July for international travelers the company still does not expect big

numbers of guests from abroad and as the Post-COVID strategy, they have chosen to concentrate

on the local market from the beginning. Since the hotel already has the experience to operate in a

period of pandemics their knowledge to handle new safety norms, might be important gaining for

their future plans as well. In the country, which was mainly dependent on international tourism, a

massive reduction in international travel might have a huge impact on the economy, especially in

the hotel industry. The question is when people will start traveling again. Perhaps not very soon:

“We already arrived at Copenhagen Airport early in the morning. […] The airport which

impressed me with its huge size, a lot of shops, a huge crowd rushing to different directions

and which impressed me with the high temp of life during the flight last Christmas, now

looked like a post-apocalyptic place. Empty car parking, empty terminals with just several

travelers walking around with masks and scared eyes, airport staff with tired and bored

faces everything this made me even more depressed. […] After seeing this I just wonder

how the airport and the world will look like after the pandemic. When will we start

traveling again or will we start it at all?” (Katsadze, 2020, fieldnotes).

4.4 Case 2 - Sheraton Grand Tbilisi Metechi Palace, Georgia

Before the Crisis

Sheraton Grand Tbilisi Metechi Palace is a luxury hotel in the center of Tbilisi, the capital of

Georgia. The hotel has become a victim of the deadly COVID-19 virus as almost every other hotel

all over the world. Even though the influence of the crisis on the business, especially in the hotel


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industry was huge in Georgia, the management team of Sheraton Tbilisi tried to do their best to

keep the focus on the social contribution as before the crisis.

The general manager of Sheraton Tbilisi Hotel mentioned in the interview that customers,

employees, and the local community has always been one of the main focus of their decisions. As

he described, the hotel has never been closed since it was opened in 1991 and since then has been

a place of “hope” during wars and all difficult times that the capital city of Georgia has

experienced in the 1990s and even later. As part of the worldwide chain of Sheraton Hotels and

Resorts, social responsibility is also the topic of big importance for Sheraton Tbilisi. Their strategy

is to create a maximum career or personal development opportunities for the employees, to offer

the highest quality service to the customers and to contribute to the well-being of the local society.

However, the crisis, that endangered majority of hotels turned out to be a huge challenge for

Sheraton as well.

The Crisis

As the general manager stated in the interview, they saw the first signs of the crisis already in

January, resulting in reduced bookings and booking cancelations. But as he explained the hotel did

not have any crisis management plans regarding to virus outbreaks. “Every company has manuals

[for a crisis], crisis plans in place, but for this format? -No. You have manuals for illnesses, for a

breakout of viruses, but there are no manuals for closing down the hotel, which we needed to do”

(Smits, 2020). After a total reduction of customer demand and then after starting the government

restrictions, closing down the hotel seemed to be the only existing solution for Sheraton Tbilisi

Hotel. But the hotel managed to find a different solution which could contribute to society during

such a difficult period.

Instead of closing down the hotel, similar to the Park Hotel, Sheraton Grand Tbilisi Metechi Palace

decided to give the hotel rooms to the Government of Georgia to arrange free quarantine zones for

people who have a necessity to be isolated from the society. However, in this case the hotel refused

to receive any compensation and provided the government with free hotel rooms. “[We had] two

options, to leave the hotel empty while knowing what’s happening around us, or you say: Let’s

step in, let’s assist the government. […] We wanted to do something back to the community”

(Smits, 2020) – The general manager explained the decision during the interview. As he later

extended, the easiest decision for them would be to close the hotel until the crisis is over and reopen

it later. However, the team could not escape the responsibility that they felt toward the community

and employees. Finally, almost 200 rooms became occupied by people, who are sent to the

quarantine and the hotel provides them with safe isolation, three meals per day and all necessary

comforts.

Except for the impact on the community, Sheraton Hotel also needed to make important decisions

related to its employees. After reaching almost zero income level during the crisis, companies,

including Sheraton Tbilisi faced the necessity of reducing operating costs. Making decisions about

layoffs might be difficult everywhere, in every condition, however, local governments’ supporting

programs sometimes can reduce the pressure on the company. Though, it was not a case in a

developing country like Georgia. The general manager told us: “We are operating in a country,


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where […] if there is a crisis or you need to make decisions, there is no social system in place if

people lose their jobs” (Smits, 2020). So, the company managed to maintain everyone from local

employees and layoffs affected only the staff from abroad. As a result, the company managed to

sustain more than 90% of the employees.

Decisions on board were made on a team basis with the active participation of the staff members.

“With a group that we had leftover, we agreed and it was a mutual agreement with people on

board that everybody [from the board] would go on 50% pay cut and […] the staff would go on

40% pay-cut” (Smits, 2020) – explained the general manager the difficult decision about the

reduction of staff salaries. Since the safety of the employees and their family members is a big

priority of the hotel, all of them were given the option to continue working in different conditions

or to stay home if they would like to. “The biggest thing that I see in the staff is that it [existing

situation] gives [them] a very good spirit, a team spirit […] nobody has been forced to do this, all

are on a voluntary basis” (Smits, 2020). The majority of the workers decided to be a part of the

unique experience and to contribute their part to help society. After starting to serve the quarantine

customers hotel workers also are able to stay at the hotel not to put their family members in danger.

They also have proper training on how to safely deal with the quarantine and are equipped

properly.

After the Crisis

The Sheraton Hotel management team expects positive changes in the economy already from June

when the Georgian Government will probably start to soften some restrictions. The main strategic

focus of the company will be the local market in a near future and they will focus on the

international visitors only after the international travel industry starts recovering, which according

to management’s expectations might take much longer. Even though expectations for the coming

summer season is not high, the general manager hopes that learning outcomes from the crisis will

be significant. Decision-making is expected to become more linear, remote and efficient, like it is

now, during the crisis. As he mentioned in the interview, internal and external online

communication has become much more efficient than in many cases during a face to face

communication. And finally, the decision-making process is also quicker and more result-oriented.

4.5 Country Overview – UK

On January 31st, 2020, the first COVID-19 (Corona) case was confirmed in the United Kingdom.

Since that date, the number of Corona-infected patients has increased exponentially (BBC News,

2020; Statista, 2020). The UK government has recommended people to isolate themselves at

homes as much as possible. The government strongly advised the population to avoid any kind of

unnecessary travel and people were allowed to leave their houses mostly only for purchasing

essential products (GOV.UK, 2020).

Because of the crisis related to the COVID-19 pandemic, many companies needed to lay off their

employees. In such a case, Government support schemes are in place and employers are able to


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receive support from the government through the 'Job Retention Scheme,' which helps to cover 80

percent of staff salaries, and covers a salary of up to £2500 per month (GOV.UK, 2020). Besides

employees, government support was in place for companies as well. Financial aids for companies

vary depending on the size of the company and the amount varies between £ 10,000 and £ 25,000

per property (GOV.UK, 2020). According to the Bank of England (2020), the hotel and food

industry was the biggest loser in the pandemic, with an estimated average decline of about 80

percent, compared to a 60 percent decline in the second-most affected construction and retail

sector.

4.6 Case 3– Ten Hill Place Hotel, UK

Ten Hill Place Hotel is a 129 bed 4-star hotel located in the center of Edinburgh city, Scotland.

The hotel opened in 2006 and is owned by the Royal College of Surgeons of Edinburgh. Even

though Ten Hill Place Hotel is a part of the Best Western Premium Collection chain, the hotel is

branded independently.

Before the Crisis

The hotel openly declares its strategy to establish green tourism practices and therefore

implemented different projects related to water consumption reduction or plastic bottle elimination

in the rooms. Since the hotel is owned by the surgeon’s college and is also located next to its main

building, its social contributions are also quite often related to medicine and different health issues.

Ten Hill Place is actively involved in the project with its partners to help improve bowel cancer

surgery.

The hotel and its management team had a disaster crisis management experience from the 2010

volcano eruption in Iceland, when the natural disaster caused enormous disruption to air travel in

Europe. The management team faced the problems caused by a lack of international tourists and

decided to offer free stays to international travelers staying in airports after hundreds of flights

were delayed. However, the hotel did not have any crisis management plan or manuals in place,

especially related to pandemics. In the interview the managing director talked about the different

characteristics of different crises and emphasized the importance of quick decisions from

experienced management teams and not predetermined general guidelines: “every situation is

different, and that’s why you have employees and experienced management team who have gone

through situations before […] In my near 30 years of hotel experience now, each crisis situation

[…] has been different from the one before” (Mitchell, 2020).

The Crisis

Things looked normal for the hotel before the second part of March 2020 when the government

first time advised UK citizens to avoid public gatherings. As a result, the hotel did not have any

guests or bookings in the near future and the management team had to make a quick decision. The

board in the hotel consists of 7 members and therefore decision-making process has always been

quick without major complications. Because of that, the company turned out to be flexible during


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the crisis, having no problem to make difficult decisions quickly, without hesitation. They finally

decided to use the property to offer medical and other key workers free stays in the hotel. The

managing director explained their decision and the purpose of the decision in the interview:

“People in a medical workforce were having to work longer shifts, they had concerns at

that time about going home and passing the virus on to family members or vulnerable

people. Once we saw that we made an instant decision […] we would open our doors and

give our facilities free of charge, because that helps people stay safe and stay out work,

that ultimately helps not just individuals but the rest of the society by keeping as many

actively working at the medical workforce as possible.” (Mitchell, 2020).

The initiative was soon welcomed by the society and numbers of front-line workers willing to use

the opportunity to rest in the Ten Hill Place Hotel had been increasing daily. However, remaining

the hotel open during the pandemic and ensuring the well-being of customers, employees or other

stakeholders demanded huge changes in business processes and safety standards. “Almost in every

aspect of how the hotel operates, we now had to reinvent the way to be as safe as possible”

(Mitchell, 2020) - mentioned the managing director. The hotel from Edinburgh offered its guests

not only free stays in the hotel rooms, but also free breakfast and dinner, giving medical workers

the chance to rest and have social interactions after tiring and exhausting days from their

workplaces. However, breakfasts, dinners, and communications in the hotel restaurant could not

be the same as it was before the pandemic. The main concern of the guests during the pandemic

changed from maximum comfort to maximum safety. So, the tables in the restaurant have been

relocated separately from each other and only one person is allowed to sit at each of them. Besides,

changes were also made in many small details of different procedures of the hotel to promote social

distancing. The number of guests who are not willing to leave their rooms is increasing, which in

itself increases the demand for room service.

Things also did not remain unchanged for 150 workers of the Ten Hill Place Hotel. Due to the

decreased number of guests, only a small part of the staff continued working on site after the

beginning of the pandemic. Employees had an option to temporarily stay at homes if they preferred

so and, in this case, they were involved in the government support scheme which provides them

80% of their initial salary. However, employees who continued working received 100% of their

salaries from the hotel. The only part of the employees, who voluntarily agreed to reduce their

salaries by 20% and 50% were the hotel management team and the general manager. The hotel

also provides its workers with all recommended personal protective equipment (PPE) to ensure

the safety of the staff and the guests at the same time. Employees are also advised not to use public

transport, though, if necessary, the hotel also provides them with free and comfortable stays at the

property between the shifts.

One of the key factors, that influenced the hotel’s strategic solutions during the crisis, was quick,

flexible decision-making, with a high level of team participation. “We can react quicker than most

of the medium or large size companies, we can decide something in the morning and act in the

afternoon” (Mitchell, 2020) – explained by the managing director. However, the quick decision-

making process did not encourage autocratic decisions and the role of the teamwork played a big

role during the crisis. The managing director revealed: “My mechanic [of the decision-making]

would be discussing [the issue] with the senior management team about what we think collectively


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is right. It’s not an autocratic business […] if five of my senior managers are saying A and I am

thinking B – well, we’ll go with A, because that’s the collective decision” (Mitchell, 2020).

After the Crisis

The Ten Hill Place Hotel expects things to change positively soon, but the difficulties in the hotel

industry are expected to last longer. The hotel does not expect to host international travelers during

the initial period of post-pandemic time. That is why they focus their near future strategic goals on

internal travelers from the UK. Thus, they already started to work on 2 projects which will be

implemented in the near future. Edinburgh Staycation will be standard 2-3 hotel packages for

guests from the surroundings of Edinburgh and the second option called Edinburgh Keyworker

Staycation will be the same package for keyworkers with a special discount.

The hotel industry will be different after the pandemic than it was before and Ten Hill Place Hotel

already started working on how to adapt the hotel to a new reality. They have already started

working on new procedures to organize safe events with social distancing, to serve customers in

the restaurant in compliance with all safety standards and etc. The managing director of the hotel

introduced us some specific solutions that the hotel is already working on such as serving

restaurant customers with single-use food boxes and organizing events by using many small tables

located at a distance. The company also plans to let administrative staff work 50% of their working

hours remotely, which would contribute to the well-being of employees and at the same time would

have a positive impact on the environment. Regardless of existing strategic plans and hopes, the

hotel still expects financially difficult several months or even years. The question is how the

company can support all its employees after the government’s supporting program is over.

4.7 Case 4 – The Grange Hotel, UK

The Grange Hotel is a small, family-owned 18-beds hotel with a small restaurant. It is part of Best

Western Hotels and is located in a small village of Oborne, Dorset County, England. The hotel is

actively engaged in the local community and is involved in many local cultural and other kinds of

activities. Besides, it is a significant employer of the village since 23 workers of the hotel out of

total 24 are locals.

Before the Crisis

According to the hotel’s general manager, the influence of the upcoming COVID-19 pandemic on

the Grange Hotel was already clear from the second half of February when they faced the situation

that demanded radical and difficult decisions from them. However, before the crisis, the company

did not have any predetermined crisis management plan for virus outbreaks. The general manager

told us that they have manuals for extreme situations like electricity cut-offs, though the company

had not determined risks related to virus outbreaks before. He also revealed that none of the hotels

he had been communicating with during the crisis had expected the pandemic of such a big scale.

“I contacted with maybe 150 hotels… some of them had a crisis management plan, [however] they

had nothing to do with this level of [pandemic]” (Fletcher, 2020) – he added later.


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The Crisis

The crisis had a huge impact on the hotel’s occupancy level from the beginning, which resulted in

financial problems and put the management team in a difficult situation. Closing down the hotel

seemed to be the only choice for them if not the offer from Best Western to convert the hotel into

a hospital. The grange hotel confirmed their interest to Best Western to become a hospital already

in February, but they made a final decision when the Dorset Council informed them about the need

for new hospital beds at the beginning of April. As the hotel’s manager explained the decision was

not difficult to make, first of all, because of their intension to make their part of the contribution

to society in such a difficult situation and, secondly, because of financial problems in the hotel.

“We didn’t really see the way that we were going to survive six months of being closed” (Fletcher,

2020) – told us the general manager.

Finally, the hotel signed a 3 months contract with local authorities and was reopened on April 13th.

According to the plan the Grange Hotel is supposed to serve symptom free COVID-19 infected

patients or other patients who are not infected by the virus but still require medical treatment due

to other health issues. The hotel and the whole region were lucky enough not to have necessity to

use the property by the time when we had an interview with the hotel’s manager (beginning of

May), though the hotel passed through all the procedures and is fully prepared to serve patients

when it becomes necessary.

As the hotel’s manager revealed the process of change was not easy and involved changes in many

directions: “The trouble is that, because it hasn’t been done before, nobody knew [what to do]”

(Fletcher, 2020). Changes were required in staff, physical equipment, procedures, safety norms,

and in many other directions. First of all, the hotel needed to purchase all the necessary equipment

like sanitizers, cleaning chemicals, personal protective equipment and etc. which were necessary

for their new reality. Secondly, they have totally changed the hotel procedures. After the

transformation hotel staff started to work in collaboration with medical workers. Doctors and

nurses took over responsibilities to treat and communicate with patients, while hotel’s staff are not

able to interact with patients or to enter their rooms. Cleaning of rooms had become the

responsibility of medical workers, as for the service, hotel staff provides patients with food and

other necessary items by leaving them on the table in the corridor without having any contact with

their guests.

The hotel’s decisions were broadly communicated through many channels internally and

externally. The General Manager introduced his new strategy to society from national television.

At the same time, they had open communication with the local community to ensure that any kind

of misunderstandings would be eliminated. The communication has also been important in

between the hotel’s staff and in times of social distancing online communication tools played a

significant role in the process. However, not everyone from employees stayed on-site in such an

unusual situation. Since the employees were provided with financial help from the government’s

social programs the Grange Hotel staff were given options to stay home and participate in

government schemes or to continue working in the changed working conditions. All the workers,

that decided to continue working were given training about sanitizing and other safety issues from

professionals, so they are fully equipped and prepared to handle the challenge. As a result, 8

workers out of 24 are right now on-site and waiting for the first patients. Since the hotel is family-

owned and has a very small number of employees, decisions were made quickly and with the


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participation of the staff members. As the result, the hotel managed to be flexible in the decision-

making process which resulted in their strategic solutions.

After the Crisis

The General Manager of the Grange Hotel expects that customer behavior might be changed for

an even longer period than the period of government restrictions. After the end of 3 months period

of being a hospital, the Grange Hotel expect it to be possible to reopen again as a hotel already

from September. Though, since the expectations about occupancy level are quite low especially

from the beginning, the hotel’s management team still doubts about the financial expediency of

remaining open. However, if the hotel opens in Septembe

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