Reference no: EM131303853

Vail Resorts Uses Public Relations to Put Out a Fire

Vail Resorts, Inc., is one of the leading resort operators in North America. The company operates four ski resorts in Colorado, including Vail, Keystone, Beaver Creek, and Breckenridge, as well as one in Lake Tahoe. Vail Mountain has become the most popular ski destination in the United States, with 1.6 million skier visits in the 2005-2006 season. SKI magazine has ranked Vail as one of the best ski resorts in North America since 1988.

Despite its success, the company experienced a very challenging year in 1998. In October of that year, just two weeks before the beginning of the ski season, the Vail Mountain resort suffered the largest "ecoterrorist" event in U.S. history. Several structures, including Patrol Headquarters, the Two Elk restaurant, and Camp One, were burned to the ground, and four chair lift operator buildings were damaged. Total damages exceeded $12 million. The deliberately and strategically set fires disabled three central lifts and the biggest restaurant and guest service center on the mountain. Shortly after the fires, the Earth Liberation Front (ELF), a radical environmental organization, claimed responsibility.

In an e-mail, ELF, which splintered off the better-known Earth First! organization, claimed to have set the fires to protest a planned expansion of the resort, which, the group argued, would threaten habitat needed to reintroduce the Canada lynx, an endangered wild cat. In the e-mail, ELF said, "Putting profits ahead of Colorado's wildlife will not be tolerated." ELF's communiqué also warned skiers to stay away from the resort "for your safety and convenience."

However, Earth First! and many other environmental groups, which had protested Vail's controversial plans to expand into lynx habitat, were quick to condemn ELF's firebombing at Vail. More than eight years later, Stanislas Meyerhoff and Chelsea Gerlach were arrested for and pleaded guilty to committing multiple ecoterrorism attacks including the incident at Vail. As with most disasters, the mass media quickly swarmed the scene at Vail Mountain, and the resulting stories published around the country were not always beneficial to Vail Mountain and nearby Vail, Colorado-or accurate.

Some newspapers reported that all ski lifts had been destroyed and that the resort would be unable to open for the season. A few reported that the nearby town of Vail was on fire, including hotels. Vail Resorts responded to the misinformation by launching a direct-mail campaign to communicate with everyone who had made reservations for ski vacations through Vail Central Reservations, as well as to travel agents and individual hotels in town. The company reassured skiers that the resort would indeed open and would be a safe place for their families to vacation. Vail Resorts managed to salvage the season and make it successful, despite the havoc wreaked by the fires.

Vail Resorts, like many firms, had a generic crisis plan in place at the time of the incident. However, some analysts contend that the degree to which the company followed that plan was questionable. In hindsight, Vail management has stated that things might have gone more smoothly in the first 48 hours after the crisis if they had adhered more closely to that plan. For example, managers now recognize that they did not use their staff as effectively as possible.

Instead of clearly defining responsibilities up front, staff members were called up somewhat randomly, adding to the confusion surrounding the event. The plan also failed to address communication with employees. Resort management quickly decided that keeping employees fully informed was a top priority because they were the best ambassadors to the public. Crisis management has been defined as preparation for low-probability or unexpected events that could threaten an organization's viability, reputation, or profitability. It has been viewed traditionally as "damage control," with little preplanning taking place. However, with the changing global political climate, events such as terrorist attacks and workplace violence have become more common, increasing the need for crisis management and disaster-recovery planning for businesses. Even small companies are beginning to recognize the need to plan for the unexpected.

Crisis management and disaster recovery are critical for most organizations that deal with large numbers of customers, especially in the recreation and entertainment industries. The negative publicity resulting from a crisis can be potentially more devastating than a natural disaster such as an earthquake or a technologic disruption such as a major power failure. The disruption of routine operations and paralysis of employees and customers in the face of crisis can reduce productivity, destroy longestablished reputations, and erode public confidence in a company. Crisis planning can arm a company with tools and procedures to manage a crisis, protect the company's image, and reduce unfavorable publicity.

By being forthright with the press and the public and taking prompt action, companies may be able to convince the public of their honest attempts to resolve the situation, and news media may be more willing to help explain complex issues to the public. Effectively dealing with a negative event allows an organization to reduce the unfavorable impact on its image. In the case of Vail Resorts, managers believe that they could have followed their previously established crisis management plan more closely. During the two days immediately following the fires, management was disorganized, and employees and Vail residents were confused about the future of the resort. Ultimately, Vail chose to be honest and open with the media and its employees, which helped the resort weather the crisis with its image intact.

The company's direct-mail campaign to vacationers also helped preserve public trust in the company. To prepare for unexpected events, all firms should develop a crisis management program, which includes four basic steps: conducting a crisis audit, making contingency plans, assigning a crisis management team, and practicing the plan. Conducting a crisis audit involves assessing the potential impacts of different events, such as the death of an executive or a natural disaster. Contingency planning refers to the development of backup plans for emergencies that specify actions to be taken and their expected consequences. Crisis management teams also should be designated so that key areas are covered in case of emergency, such as media relations and legal affairs. Finally, companies should practice the crisis management plan and update it as necessary on a regular basis so that all employees are familiar with the plan.30

Questions for Discussion
1. What tools did Vail Resorts use to respond to the crisis?

2. Evaluate Vail Resorts' response to the crisis. What did the firm do right? What else could it have done to relieve public concerns about the safety of the resort as well as its controversial expansion?

3. How can creating a crisis management and disaster recovery plan help a company to protect its reputation, customer relationships, and profits?