The 'short to medium term' response to a crisis can vary depending on the impact of the event. Typically, this period can last up to 14 days.
Response can be longer if there is a significant amount of work to reopen the business or if a business is open but their local area is closed for business.
Assess your situation
Assess the emergency situation as it evolves. This includes the status of roads and the condition of the attractions and services in the area that are destinations for your visitors.
Continue to monitor warnings from emergency services by visiting emergency.vic.gov.au
Decide whether you'll encourage customers to come or advise them to postpone their visit. Whatever you do, contact all customers who have made bookings for the next few weeks and update them on the situation.
Make a decision about bookings
Having accessed if it is safe and practical for customers to visit you should start to contact your customers.
Protect your bookings
It's important to be proactive in managing confirmed bookings for the coming weeks. This can result in fewer cancellations, which can assist with cash flow as you will be able to hold on to the deposit rather than returning it.
If it is safe for customers to visit you, you should:
- review your bookings and identify bookings that are particularly valuable
- prepare a message for customers with future bookings to appear in letters, telephone script, emails and on your website
- identify the positive reasons why customers should still travel
- contact all your customers and tell them that you are looking forward to welcoming them.
Reschedule rather than cancel
If you’re advising customers not to visit your business in the short-term, you will need to consider how you will manage their bookings.
It’s important to keep as much cash in the business as you can during a crisis event. Therefore, it is recommended that you encourage customers to reschedule their visit rather than cancel.
Cancellations
There will be customers who decide to cancel their booking, or you may have to cancel bookings. Be prepared for this by ensuring that your cancellation policy explains what happens if either you or a customer cancels a booking.
If you don't have a cancellation policy, read our advice on planning for booking cancellations.
Assess your finances
One of the first actions to take after a crisis event occurs is to assess how the business's finances will cope with the months or years ahead.
The extent to which your business will be affected by a crisis event will depend on:
- the nature and expected duration of the event
- your financial reserves and access to other funding sources
- whether the business can keep trading
- whether customers continue to come to your business
- the actions you take to reduce expenditure.
To help work out the financial implications of a crisis event and the best response, it's important to be realistic about how severe the impact of the situation will be, and for how long it will impact your business.
Seek assistance
Contact your financial institution as soon as possible to discuss your financial situation and possible emergency relief and support measures.
Financial assistance may be available when there is a crisis event, for example tax cuts, deferment of tax instalments, business grants, low-interest loans or business advice.
Important documents
As soon as possible, make sure you still have the following important documents:
- any business's records such as receipts, invoices, financial computer software, bank statements, licenses and accreditations
- personal records such as birth certificates, licenses, credit cards
Make time to organise replacements as these documents are important for helping your business to recover.
Some of these documents may be easily replaced by contacting the issuing organisation. Others may be irreplaceable and you may need statutory declarations or other actions to protect the legal position of the business.
Prepare a cash flow budget
When a crisis event hits your business, it may be important to develop or revise your cash flow budget. This budget estimates the future income and expenditure of the business, revealing any periods where it may fall short of cash.
By developing cash flow projections for several months in advance, you can estimate when the business will be short of money so that you can prepare beforehand. The cash flow budget is the commonly requested document when seeking finance from a bank or financial institution.
Irrespective of the nature and duration of the crisis event, it is recommended that you prepare and monitor an emergency management cash flow budget.
Use the following templates to prepare your emergency management cash flow budget:
Step 1: Determine the time frame
Decide on the timeframe the crisis event will have an impact on your cash flow. This might be a week, fortnight, month or longer. This is known as the ‘forecast period’.
Step 2: Estimate sales units
Estimate the number of customers or sales units you could expect for the forecast period. Do this for each of your areas of income such as meals, tours, accommodation or equipment hire.
Step 3: Estimate sales income
Multiply the customers or sales units by the actual (or average) price of each unit, to give the likely sales income.
Step 4: Estimate timing of income
Calculate when the sales income will be paid to the business's account, taking into account any deposits, cash payments or credit card payments.
Step 5: Itemise and add expenditure
Identify and add up all the expenses that must be paid in each forecast period. Separate the expenditure into fixed costs (those that will occur regardless of your situation) and variable costs (those that are linked to the number of sales).
Step 6: Work out surplus or deficit
Calculate the surplus or deficit for the forecast period. If there is a deficit, consider whether it can be covered by any cash you have on hand, or by an overdraft or other credit facilities.
Step 7: Review sales units
Review the number of sales units. Is there enough time to establish marketing strategies to increase sales with special offers or add-ons? Add in any extra units you could expect to sell, and recalculate steps 2-6.
It's important to keep advertising your business after a crisis. Don't stop marketing just because your cash flow is impaired.
Don Calvert, Mountain Grand Guesthouse, Halls Gap
Step 8: Review timing of sales income
Review when the sales income is likely to be received into the business. Are there any opportunities to increase income during the emergency projection period by providing incentives for cash payments, or by temporarily reducing the normal payment terms. Add in any changes to the timing of when income is to be received and recalculate steps 4-6.
Step 9: Review expenditure
Look at each expense item and ask whether any expenses could be deferred, reduced or avoided altogether without impacting your business.
The separated fixed and variable costs will make it easier to look for potential savings because the fixed costs will tend to be relatively constant amounts, paid at regular intervals irrespective of sales income, while the variable cost will be linked to the sales income for the period.
Deduct any changes to expenses and recalculate steps 5-6.
Step 10: Finalise the budget
When a result is obtained, finalise and print out the budget.
Look after yourself
Your capacity to manage stress can have a big impact on how staff and customers respond to an emergency. Looking after your physical and emotional wellbeing and that of others will help you manage your capacity and reduce stress levels.
Strategies to manage stress
- Take regular food, drink and breaks – preferably before you need them.
- Take mental wellbeing 'breaks' by putting aside fears and worries for a time by doing something practical.
- Physical energy and mental wellbeing are tied together. Don't think about emotional problems when you're tired. Promise yourself to think about it after you've rested.
- Manage your emotions and try not to feed negative feelings.
- Express positive emotions to others – such as optimism, faith in the future, confidence in survival.
- If you are feeling negative, talk about them rather than expressing them directly – you inspire others by how you behave rather than how you feel.
If at any time you're worried about your mental health or the mental health of your employees, call Lifeline on 13 11 14.
Where to get help
- Your doctor
- Your local community health centre
- Counsellor
- Psychologist
- Lifeline – call 13 11 14
- Parentline Victoria – call 13 22 89
- Kids Helpline – call 1800 551 800
- Nurse-on-Call – call 1300 606 024 offering expert health information and advice (24 hours, 7 days)
- Australian Psychological Society Referral Service – call 1800 333 497
Work with your region
Tourism Crisis Management Group
If a crisis event occurs in your region, DJSIR's tourism branch will work with your region's tourism organisations to establish a Tourism Crisis Management Group (TCMG).
This group will be responsible for developing and coordinating a crisis management plan for the tourism industry, including assessing the impact of the crisis on the region's tourism industry and industry communications.
As part of these activities, you may be asked to provide data or feedback on the nature and degree of impact the crisis event is having on your business such as the number of booking cancellations.
Become a member of tourism organisations
To receive the latest information about the crisis response and recovery process from the Tourism Crisis Management Group, make sure your business is listed with the nearest visitor information centre and/or the database of your regional and local tourism associations.
