How Restaurants Can Plan for the Next Hospitality Crisis

The hospitality industry, in general, and restaurants in particular, face many different types of risk. And because restaurant owners can’t see into the future to predict exactly what will happen, the best course of action is to develop a crisis management plan. Being aware of your risk environment is a critical step that can help you recover from unexpected disasters. But the unfortunate reality is that over 50 percent  of companies that are struck by a disaster won’t recover. This is why you need a crisis management strategy that allows your business to respond to specific threats in a timely manner.  

The COVID-19 pandemic has highlighted the need for having a robust disaster response plan. Indeed, many businesses that were caught flat-footed are on the brink of closure due to disruptions in their daily operations. By having a crisis management plan in place, you can detect risks early and mitigate them before they disrupt your core operations.  

What Risks Does The Hospitality Sector Face?

As popular as restaurants are in today’s society, these businesses face many different types of risk. From foodborne illnesses to the spread of infectious diseases, restaurant owners need to be aware of how easily their operations could be disrupted on short notice. For example, the COVID-19 pandemic hit the hospitality industry by surprise. Few people would have thought that their business would need to be closed indefinitely, coupled with the prospect of a slow re-opening period. Being aware of these numerous risks will enable you to plan ahead for difficult times.

Some of the biggest risks that you’re likely to face as a restaurant owner include:

• Foodborne illnesses: food poisoning, contaminated water, and cross-contamination of cooking ingredients

• Spread of infectious diseases due to the social nature of restaurants

• A damaged reputation from low restaurant ratings or failed safety inspections

• Shortages in customer demand or employee services

• Cybersecurity threats   

• Operating system failure

• Security threats such as theft, violent robbery, or terrorism.

The Essentials Of A Crisis Management Plan For Restaurants

In light of the risks that restaurants face, having a crisis management plan ensures that your business is able to respond to specific threats in good time. A crisis management plan outlines steps that your company needs to take when faced with specific risks. Because this plan is prepared in advance, you can respond faster and mitigate potential losses that could otherwise paralyze operations. Here are the essential components that your restaurant crisis management plan should include:

1. Establishment of a Dedicated Crisis Response Team

In the event of a crisis, it helps to have a dedicated team that can respond to the situation in good time. Each team member should have specific roles that cover different aspects of the risk response plan. For example, there should be someone who handles communication, supply chain issues, financial forecasting, etc. Your team should include both experienced and qualified employees who know what’s required of them in the event of a crisis. 

2. Insurance

Insurance coverage is an excellent resource to have as part of your risk response strategy. Insurance policies cover injury to employees or customers on your premises, damage from inclement weather, and much more. When deciding which policy is best, consider all types of risks that you might face. For example, restaurants are particularly at risk of data security breaches because they handle credit card transactions on a regular basis.

It also helps to rank these risks in order of severity, ensuring that you have enough coverage for the most significant threats.

3. Remain Aware of Current Events

Being proactive is one of the best crisis management techniques you can have. This means that you need to be aware of upcoming threats and prepare for them in advance. But how can you predict a crisis before it happens? It’s all about paying attention to the warning signs. Remain current in the news and social media, and don’t forget to regularly review updates from your crisis management team.

4. Develop Effective Communication Channels

Communication will be vital during a crisis. You’ll need to share information and provide updates to employees, customers, suppliers, and other business partners. If your company doesn’t speak with a uniform voice, the message could easily become misconstrued and you may end up spending more time doing damage control.

Ideally, there should be a dedicated team that handles all essential communication tasks. This team should provide regular updates and be as transparent as possible. Transparency builds trust among stakeholders and helps prevent negative publicity.

5. Establish a Robust Supply Chain

In the event that your operations will be disrupted due to a crisis, you’ll need to remain as agile as possible. A robust supply chain helps you restart essential operations with minimal delays. You can strengthen your supply chain by building relationships with multiple suppliers, keeping up with inventory, and communicating disruptions in good time.