CHAPTER 12: CASE STUDIES

Millions of people around the world were forced into lockdown and they suddenly found themselves at home with time on their hands. They reacted in so many different ways. Some faced this situation with fear and trepidation, for any one of a number of reasons. Conversely, there are those I know personally who looked upon this free time as a heaven-sent opportunity to undertake some personal projects they had been meaning to do in some cases for years. Two learned new languages, one learned to play the guitar, while several cleaned out their garages and sold surplus items on websites, such as eBay. As for me, in what free time I found, I set about writing this book.

It was Napoleon Bonaparte who attempted to deride the British when he is alleged to have said:

Winding forward two centuries and we find that, from an employee headcount perspective, 95% of all British businesses are classified as ‘micro-businesses’, each employing between one and nine staff. Numerically, this would more or less fit into the typical headcount of a shop as envisaged by Bonaparte back in the late eighteenth and early nineteenth century. But, so many of these micro-businesses are simply not part of the retail sector. Even so, collectively they are the engine room of the British economy.

If I consider my own situation, I have been working as a freelance consultant since 2013, and late into my career I have developed what I would call a portfolio career:

• I provide consultancy on business continuity, IT disaster recovery, crisis management and of course pandemic planning.

• I offer commercial training around my area of expertise.

• Occasionally, I lecture to both undergraduate and postgraduate students at universities.

• Finally, I discovered late in my career that I enjoy writing and I have become a successful published author. My first book, In Hindsight: A compendium of Business Continuity case studies, topped the Amazon bestsellers lists, while my third publication, the prequel to this book, became a world bestseller.

So, how did the pandemic affect my own business? The university lecturing all but stopped. But, the world discovered the prequel to this book, and I was being regularly contacted about consultancy primarily around contingency planning for pandemics. I received enquiries from as far afield as Australia to the east and the US to the west. The demand for my classroom training courses dropped off, and those courses that I did continue to run turned into an online alternative (see section 13.7). But, what has also kept me busy during the pandemic has been writing. In addition to this book, I have three other books partially written. So, in putting together this chapter of case studies, rather than focus on how the bigger organisations have weathered the pandemic storm, I chose to primarily look at examples from that 95% of the British economy made up of micro-businesses.

Survival can depend upon a business’ versatility and whether it can find legal and safe workarounds to any lockdown constraints. I have previously mentioned those businesses, both large and small, that switched to making PPE to meet the soaring demand. In this chapter, I look at a number of SMEs whose resourcefulness and resilience helped them to survive. For example:

• Some businesses believed that business interruption insurance (BII) would cover their pandemic-related losses. But did it?

• The nutritionist who worked face-to-face with clients pre-COVID found that she could still work with her clients by switching to an online approach.

• The restaurant that survived and flourished by switching to offering a take-out service, only to find it was in danger of becoming a victim of its own success.

• The hairdresser who started selling ladies lingerie online during lockdown.

• The entrepreneur with the cancelled gin festival switched to jam making.

• The gymnasium that had actually done some pandemic preparation.

• The business that survived not just one but six severe crises, including a pandemic.

I nearly didn’t include the final case study in this section as it is not about COVID-19. That said, it was located in a British-controlled colony for the first 23 years that it traded – until Hong Kong was decolonised. However, I included it because it makes the point that any business can expect to have to deal with different types of crises. In the case of Louis’ Steak House (refer to section 12.4), it survived several, including the 2002-2003 SARS outbreak that economically decimated Hong Kong. By including this study, I particularly wanted businesses, especially small and micro enterprises, to realise that they should be prepared to face different types of crises.

12.1 Business interruption insurance

During my career I have worked for several insurance companies, albeit in information technology roles. This included four years at Zurich Insurance Group. In times of crises that disrupt business operations, organisations will invariably turn to their insurers and make a claim on their BII policies. This section examines what amounts to a conflict between businesses and insurers, specifically in the UK and the US. Similar situations are likely to exist within the insurance industry across the globe, especially as many of the major insurers within the UK and the US are themselves multinational organisations. That said, differences in the interpretation and application of BII are likely to be affected by variations in local legislation and regulation.

I would also imagine that many businesses believed that their cover would include something disruptive, such as a pandemic. But the UK’s Association of British Insurers has warned claimants that:

The reality is that the insurance industry just cannot afford it. Laura Hay, Global Head of Insurance at KPMG International, also remarked that

So, who is more likely to be going bankrupt over BII – the insurers or the businesses that believed they were protected from COVID-19? Firstly, BII is not a compulsory insurance product that legislation stipulates organisations must have. But, for those that do have a BII policy, unless they have scrutinised the small print thoroughly, they may find that it is far from being the catch-all that perhaps they believed it was.

But let’s take a step back and consider the origins of BII. It was introduced mainly as a product to leverage as much benefit out of a business contract as possible. It’s not compulsory and it comes with its own pitfalls. Currently with COVID-19 being applied to the mix, it’s the insurance industry that businesses feel is not meeting its obligations. Whichever party wins, be it the businesses or the insurers, the other will be hardest hit and met with considerable challenges in their financial viability. This could detrimentally affect the efficiency of their situations and probably progress for many companies towards bankruptcy on the losing side.

The battle is on, already resistance to paying out by the insurance industry is occurring. In the UK, Ramnath identified that:

Among other determinants of BII as identified here were, “Most business interruption policies historically derive from Victorian concerns about factories and the link to physical damage,” said Roger Franklin, a partner at law firm Edwin Coe. “Over the years, they have extended it to issues that arise from non-physical damage.” (Ralph & Vincent, 2020).

Interviewed by the BBC, Nigel Manton, owner of Fresh Skin Clinic in the UK county of Cheshire, said he had paid out £10,000 for BII, which now appears not to be valid vis-à-vis COVID cover.

Fresh Skin Clinic is one of hundreds of companies that have been denied cover from coronavirus, and the consequential result is likely to be bankruptcy. Manton told the BBC that:

As it has become such an important feature of the COVID-19 lockdown situation, the UK’s financial services regulating body, the Financial Conduct Authority (FCA), has established a test case and taken it to the High Court for judges to decide on the outcomes. Ralph & Vincent maintain that:

They go on to say that the issues have been some of the most controversial to arise from the crisis, recognising that the court’s rulings will have ramifications well beyond just the specific policies under discussion.

The intervention of the FCA will enable a relatively speedy resolution through the courts. The test case looks at 17 policy wordings from eight different insurers, and asks whether COVID-19 triggers a pay-out. As the regulator has studied other policies, it expects the court’s ruling to apply to nearly 50 insurers that sold cover to 370,000 customers (Ralph & Vincent, 2020).

The court is looking at four questions in relation to the claims:

1. What does denial of access mean?

2. Does COVID count as an ‘incident’ or an ‘emergency’?

3. Was COVID on or near the premises?

4. How much should the insurer pay?

There are expectations that whatever the judgment that is made, there will be appeals by the defeated parties, probably to the Supreme Court (again to facilitate speedy conclusion for the benefits of those appealing). All things considered, the process is still likely to take months, and in the meantime, some businesses are in great difficulty and bankruptcy is imminent. In reality, some businesses may not survive long enough to hear the court’s final ruling.

The test case is based on the premise of uncertainty in comprehending the terminology in the writings of the insurance policies and their effect in paying out to insurance policyholders. The FCA also added that:

The FCA continues by stating that whatever ruling the court hands down regarding the test case, will be legally binding on insurers. In assessing whether insurers are handling claims fairly, the FCA will also address any BII-related contractual uncertainties and ‘causation’ issues, thereby providing clarity for policyholders and insurers.

The judges further pointed out that in considering a case of this complexity, and the possible prospect of a nuanced judgement, they noted that judgment may be a more onerous task to write than anticipated and cannot be rushed, given the importance that this case will have on many different parties and individuals. The FCA’s test case called upon the court to consider the application of a representative sample of multiple policy wordings, underwritten by 8 insurers, to a set of illustrative assumed facts. It was hoped by the FCA that the court’s judgment will go on to resolve various issues in dispute between insurers and policyholders whose policies are relevantly similar.

Eight insurance companies each voluntarily agreed to act as defendants in the test case:

1. Arch Insurance (UK) Ltd.

2. Argenta Syndicate Management Ltd.

3. Ecclesiastical Insurance Office Plc.

4. MS Amlin Underwriting Ltd.

5. Hiscox Insurance Company Ltd.

6. QBE UK Ltd.

7. Royal & Sun Alliance Insurance Plc.

8. Zurich Insurance Plc.

Meanwhile in the US, the equivalent of the FCA, the Securities & Exchange Commission, has not followed a similar route as the UK. Consequently, a ‘Business Interruption Group’ (werbig.org) has been activated and mobilised representing thousands of businesses, and employing millions of Americans across every sector of the economy. It states that:

In line with the Association of British Insurers (ABI), the insurance world observed that:

Francesco Maruffi is a partner in the Dispute Resolution practice at international law firm, Baker McKenzie. He concluded that:

In the US, local states are looking at individual laws regarding managing these situations. The cohesive approach of the FCA will enable the litigation to be as speedy as possible through utilising the test cases through the civil courts processes. As Maruffi also states:

Therefore, in the US, many individual cases will have to be resolved with litigation, which could take a considerable amount of time to the detriment of the actual business in sustaining its position as an active company.

12.2 Debbie Gallimore – Nutritionist

Debbie Gallimore is a registered nutritional therapist and well-being coach based in the UK town of Sale in Cheshire.

Figure 30: Debbie Gallimore – Nutritional therapy & wellness therapy

She is passionate about food and health, and genuinely believes that we are meant to feel great, stay healthy, and live long and successful lives.

She helps clients to choose the right foods and habits to transform their bodies for optimal health. With a tailored nutrition plan and motivational health coaching, Debbie believes that her clients will be living life to the full again in no time.

This is Debbie’s story.

12.3 A taste of ‘Mustard’

Owned by husband and wife team, Gavin and Jane, ‘Mustard’ is a popular American-themed diner based in the town of Sale, Cheshire, UK. Normally one would be managing the diner while the other was at home with their children.

In the early evenings you would normally have found it absolutely packed out. Tables couldn’t be reserved as the diner operated a first come, first served policy. One disappointed customer found herself faced with the prospect of an hours’ wait for a table. She walked out and left a derogatory ‘1-star’ rated comment on TripAdvisor because the restaurant was full, even though she never actually ate there (Clark, 2018, p 71). If nothing else, in her frustration she was actually telling the world how popular the restaurant was, for which Mustard’s management team very much appreciated the great publicity.

Then came the pandemic, and with it the inevitable lockdown being enforced across the UK. Like all other restaurants, Mustard was forced to close its doors.

After two days of sitting at home considering their apparent very limited options, came that ‘lightbulb’ moment. The front of the diner had windows that could be opened like a serving hatch. Switching to take-out and, in addition to offering a delivery service via specialist companies such as Deliveroo and Uber Eats, the ‘hatch’ enabled customers to collect their orders without needing to go into the restaurant. Moreover, by only taking orders on the phone, along with just a card payment option, handling of potentially contaminated cash was unnecessary. Social distancing was observed, the local populace fed, Mustard survived, and the risk of any COVID-19 cross infection was minimised.

Figure 31: Mustard diner switched to take-outs during lockdown

As the coronavirus gloom briefly receded between pandemic waves, the diner found itself once again a popular eating venue. Despite the resurrected desire for eating at a table, the demand for take-away food continued more or less undiminished. The husband and wife team found it impossible for just one person to manage the logistical challenge of acting as Maître D’, plus overseeing the take-away orders. Moreover, few of the restaurant staff seemed able to step up and deal with the demands of the take-away orders, leaving the business in danger of becoming a victim of its own success. A solution was ultimately found. One of the diner’s staff would be asked to babysit the couple’s children, leaving Jane and Gavin free to share the extra load between them.

Mustard’s popularity was not limited to the food it served, it extended to its hot punch and the craft beers on offer, too. Then came the night the police came to call, necessitating the management to appeal to customers via its Facebook page:

Mustard 31 December 2020 at 10:41

“TIER 4 & THE HATCH

In the light of a recent visit from the police, we need to make you all aware of the following ...

Trafford has a no drinking in the street policy and our popular craft beers & hot punches are attracting quite the crowd! Which is great for us! But the police are checking that we are making you aware (which we are) to consume them indoors.

Also the police are visiting us nightly to remind us to remind you that alcohol should be pre ordered, you can do so on 0161 973 0927 ahead of your visit to the hatch.

They would also like us to disperse any crowds quickly. Please help us to keep it moving.

As always, we are forever grateful for your support and we thank you in advance for helping us to follow the guidelines & remain operating.”

The local community response was an immediate outpouring of support and gratitude for the Mustard team. Positive customer feedback became a regular feature as they queued in an orderly and socially distanced fashion outside the diner while their orders were prepared.

12.4 From a cancelled gin festival to jam making

May 2020 was to be the month that entrepreneurs Mark Scarborough, his son Jack and friend Dave MacAskill had planned to hold their chilli and gin festival. The venue was to be Fort Purbrook, which is one of several fortifications built in the mid-nineteenth century to protect the naval city of Portsmouth from an attack by the French.

But like so many others, the festival became a victim of COVID-19 and was cancelled, leaving the trio awash with 100 different varieties of chilli plants, amounting to around 3,000 in total.

Over the years, Mark had enjoyed making a variety of jams and chutneys. Rather than waste them, he decided to try out the chillies as ingredients for his preserves. Local farms and health shops quickly showed interest in the products and so, from their base at Widley, just north of Portsmouth, the trio have set up a business called Chillies from Widley (Barber, 2020).³¹

Not to be deterred by the pandemic, as I write, the ‘boys’ have confirmed the dates for their next chilli and gin festival – 21st and 22nd May 2022.

12.5 RESULTS inc Gymnasium

Figure 32: RESULTS inc Gymnasium

This is the only gymnasium I have come across that had given any thought to pandemic planning. As we welcomed the New Year 2020, it was operating from locations at Cheadle, Didsbury and Sale in Cheshire, UK. The company has never traded on space or equipment but has focused on building relationships with its members. For many years, its motto was ‘Exercise that works, delivered by people who care’, although as part of its recent rebranding exercise, its tagline has become ‘Fit Together’.

With warning signs that a pandemic seemed imminent, based on events in other countries, it was assumed that it was just a matter of time before the UK went into lockdown. Owner, Joe Lightfoot takes up the story.

Frequent podcasts were prepared and each of the coaches would be regularly reaching out to members to ensure they were OK. Joe was determined that members would be getting good value for their monthly membership.

While some sensible cuts were made on the expenditure side, none of the staff were furloughed or made redundant. Even the cleaner was still paid, even though for a time she had no gyms to clean. But from a business perspective, with some members having to or wanting to cancel their memberships, revenue did suffer. However, the revenue slide was bolstered when the company picked up a corporate client. With the newfound responsibility of looking after the new client’s nine-hundred home-based employees, Joe found himself producing livestreamed workouts every day from his own home.

As the pandemic kicked-off, the lease for the Cheadle gym’s premises had 18 months to run and, at that time, the intent was to renew the lease. However, during the first lockdown, the percentage of Cheadle members cancelling their memberships was far higher than the other two gyms. Moreover, when the lockdown restrictions were eased, while there was quite a nice surge of returning and new members at the Didsbury and Sale gyms, the corresponding numbers at Cheadle were disappointingly low.

By September 2020, with less than a year left on the lease, two of the company’s team members opted to move on. As this coincided with the fall off of membership, it was decided after much thought to close Cheadle. While the gym could have recruited and trained new staff, Joe always felt that there would be another pandemic wave just over the horizon. The final catalyst in the decision-making process was another business being prepared to take over the lease for the Cheadle premises.

Being only two miles (3.2 km) from the Didsbury gym, with the decision being made to close Cheadle, attempts were made to persuade the now ‘homeless’ members to transfer to Didsbury – some did, others didn’t. In hindsight, it is quite possible that the decision to close Cheadle may have happened anyway. However, what is clear is that COVID-19 most definitely both expedited and influenced the decision-making process.

In considering the challenge that his business has had to face from the pandemic crisis, Joe believes that it has taught him a lot about himself and his team. He concluded by saying:

12.6 From The London Kitchen to COVID testing centre

Figure 33: The London Kitchen

Entrepreneur Damian Clarkson is the founder and Managing Director of the award-winning The London Kitchen, which was specially created in 2009 as an event catering business. Damian and his small but talented team have catered for some ground-breaking and highly prestigious events, including London Fashion Week and BMW’s Rolls Royce UK Centenary celebrations. With the arrival of the pandemic, the events industry all but closed down. Damian offered to work at one of three new COVID testing centres in London’s Fulham area. With his application accepted, he expected to be working in a high visibility vest or in a windy car park, but he found himself in a brand-new, yet to be opened, community centre. Writing on his Facebook page, Damian takes up the story:

12.7 From hairdressing to ladies’ lingerie

Like some of the businesses featured in this book, hairdressing salons became a victim of the lockdown. It has come to my notice that some hairdressers resumed working by visiting clients in their homes to continue the service. That said, I believe that this was strictly under the radar, especially as in the UK at least they would have been under the government’s furlough compensation scheme. Furthermore, by going into their clients’ homes, in certain instances they would have been breaking lockdown regulations. There are, of course, those members of the public that observed lockdown restrictions by opting for the ‘coronacut’ – i.e. a haircut at home in desperation, often using nail scissors.

One hairdresser, who has requested anonymity, decided not to beat a path to her clients’ front doors, but chose to diversify her business interests instead. While looking for inspiration in terms of what exactly she could do, when that ‘eureka’ moment came, it took her in the direction of selling ladies lingerie online.

This could have been heavy on the setup costs. However, her initial business model involved offering a niche range of products on Amazon and eBay, while using a drop shipping company to dispatch the products to the customers. So, she did not need to set up an eCommerce website along with potentially expensive Search Engine Optimisation (SEO) to drive customers to her site. Moreover, by using a drop shipper, she never actually had to buy stock or handle the products. Consequently, the initial outlay was very low.

After three months of lockdown, she was able to reopen her salon. The first week witnessed unusually long-haired customers queuing up six-deep while waiting in line for their much overdue coiffuring. Since then, business has gone very quiet. It has been said that the coronavirus has acted as a massive agent of change, and just maybe that has encompassed hairdressing. It seems that many customers have taken a liking to having their hair cut at home, rather than at the traditional hairdressing salon. Although it seems her diversified business activities are initially showing much promise, if the demand for hairdressing continues to disappoint, ‘our girl’ may have to rethink her business strategy in that respect.

On a slightly different ladies lingerie tack, several years ago, one of my work colleagues, Barbara was explaining that she had been looking into the business of selling women’s used underwear. I must admit that my initial response was that ‘she was having a laugh’ – except she wasn’t. She was being incredibly serious about it.

Here my naivety came to the fore as I never realised that there was a demand for such products. But, apparently there is money to be made from such a venture, and there are even online marketplaces where you can buy and sell such items. I also learned that even the US provider of stock photography, Shutterstock, has a section of pictures entitled ‘used underwear images’. But despite of all her research and preparation, she never took the plunge – that was until now.

Moving on to January 2020, in a situation completely unrelated to the pandemic, she was made redundant from her role in marketing. With the pandemic bearing down on us, it was not a good time to be job hunting. So, having already done all the research and initial preparation, she opted to launch her business. Even in the middle of a pandemic, I am pleased to report that her business is booming.

12.8 The Seed Co-operative, Spalding, Lincolnshire, UK

From the heart of Lincolnshire in the UK, the community owned Spalding based Seed Co-operative supplies close to 400 different kinds of fruit and vegetable seeds. With the entire country entering lockdown, many individuals chose to pass the time by taking on varying degrees of gardening initiatives. Some were large ambitious projects, while others were just small, window box size ventures. But regardless of size, most had one thing in common – they needed seeds.

One of the beneficiaries was the Seed Co-operative. As the first total lockdown commenced in the UK, orders were around 600% up on normal for the time of year, and the company attempted to deal with hundreds and hundreds of orders every day. By the morning of 24 March 2020, the company had to turn off the till on its website, as they could no longer guarantee to deliver product orders.

A combination of hard work and dedication from the Co-operative’s team, along with a good harvest of seeds, enabled it to successfully navigate these challenging times. Peter Brinch, the chairperson, said in his introduction to the Co-operative’s 2020 annual report:

12.9 Pub desks

The hospitality industry was always going to be one of the first to suffer from the negative effects of the pandemic. Having to contend with a variety of business-constraining pandemic countermeasures, including complete lockdowns, there are many venues that are simply going to struggle to survive.

In the UK, some public houses have started offering desks as an alternative to WFH. With a constant supply of hot or cold beverages, plus food when required, this provides the customer with an often much needed change of scenery, and for pub landlords, it generates some much needed alternative income.

Providing local country legislation, social distancing protocols and appropriate COVID-19 related safety measures can be observed, there is no reason why other hospitality outlets could not consider a similar initiative.

12.10 Louis’ Steak House – Hong Kong

This is the tale of six crises, including having to deal with the economic fall-out from SARS. All businesses can expect to periodically have to deal with a serious crisis that may even threaten their existence. Those that have embraced business continuity principles will be more resilient and better positioned to survive such challenges, while other unprepared companies might fail to recover. This study examines the case of Louis’ Steak House in Hong Kong, and considers how many major crises is it reasonable to expect a business to encounter and yet survive. Louis’ Steak House first opened in 1974, while Hong Kong was still under British colonial rule. History has demonstrated that tourism and hospitality are fragile industries (Feeney, 2014). Even so, in the 40 or so years since its inauguration, Louis’ Steak House has arguably experienced more than its fair share of crises, none of which were of its own making.

The Yeung brothers’ venture opened in 1974 at a most inopportune moment in time when the world was reeling from a financial crisis and stock market crash. However, the brothers were very creative in meeting this initial challenge, as William Yeung explained:

The restaurant prospered and became renowned for its signature dishes of ‘Tomahawk Steak’ and ‘Fish Maw’. On 4 June 1989, Beijing witnessed the Tiananmen Square massacre, which had a big knock-on effect on business in Hong Kong (Carvalho, 2015). Other changes were on the horizon. In 1997, Hong Kong was decolonised and handed back to China by the departing British. Many of Louis’ patrons came from the British armed forces, police and civil servants who returned to the UK.

In 2003, Louis’ was challenged again when Hong Kong was hit by a novel virus called Severe Acute Respiratory Syndrome (SARS). Although it is now known to have originated in China’s Guangdong province, to the world it appeared that Hong Kong was the source. The virus proliferated rapidly from Hong Kong and quickly established footholds in Toronto, Singapore, Vietnam and Taiwan.

On the ground in Hong Kong, most restaurants, bars and cinemas remained empty, while the wearing of protective face masks became the norm. Airlines cancelled flights to and from the territory, as passenger numbers plummeted by as much as 77% in April 2003. Between March and May 2003, hotel occupancy rates dropped from 79% to 18%. Moreover, the World Travel and Tourism Council has estimated that the devastation to Asian tourism from the SARS outbreak resulted in up to three million people in the industry losing their jobs (Feeney, 2014). Reuters’ Gary Ling also remarked that:

Despite relatively few human fatalities, SARS was an economic tsunami creating US$30 to $50 billion in losses over a period of just a few months (TASW, 2011).

In the face of a deadly virus that ultimately spread to 26 countries, Louis’ managed to survive with an average of only four customers per night. It went on to prosper again and celebrated its 40^th anniversary in 2014 with US consul-general Clifford Hart and Cardinal John Tong Hon among the guests who attended the party (Ejinsight, 2015).

It was in the last quarter of 2014, that many businesses, including Louis’, were also affected by civil unrest (Cheung, 2015). Sometimes referred to as ‘Occupy Central’ or the ‘Umbrella Revolution’, the protesters were demanding universal suffrage and had set up four camps. Three were on Hong Kong Island at Causeway Bay, Admiralty and Central, plus a fourth in the Mong Kok District of Kowloon.

The protesters camps were all blocking major arterial roads and completely disrupting the traffic flow in these areas, a situation that local authorities surprisingly tolerated for over two months. These sites remained permanently manned during the protests, until police forcibly removed them. Those shops and businesses in the affected areas that managed to open, in some cases reported a drop in sales of up to 90%, where customers were deterred by the presence of the demonstrators (Clark, 2016, pp 79-81).

After 41 years, Louis’ has now finally closed its doors for the last time. However, any one of the crises it faced during its time in business could have been enough to jeopardise its survival chances along the way:

• Opening in 1974 during a financial crisis and stock market crash.

• Knock-on effect of the Tiananmen Square massacre on Hong Kong businesses.

• Permanent loss of regular clientele when the British handed Hong Kong back to China in 1997.

• The SARS pandemic in 2003, which turned Hong Kong into a pariah location.

• Global financial crisis of 2008 that saw Lehman Brothers file for bankruptcy.

• The 2014 Hong Kong’s Occupy Central civil disorder protests.

If nothing else, like Louis’, both large and small organisations need to appreciate that they can find themselves facing multiple crises. Apart from choosing to open during a financial crisis and stock market crash, none of the crises were within Louis’ control.

Organisations need to appreciate that they can end up suffering from collateral damage from someone else’s catastrophe, and their crisis management plans should reflect this. Moreover, it is not beyond the bounds of probability that organisations could find themselves facing multiple crises simultaneously.

The final crisis that sounded the death knell for Louis’ in 2015 was rising rents. Like many other companies in Hong Kong. Louis’ was being squeezed out by rents that were twice as high as New York.

Albeit two years later, CBRE has established that, as of September 2017, Hong Kong (Central) has the most expensive business rental rates in the world and weighs in at one and half times more expensive than second placed Beijing’s Finance Street (Putzier, 2017).

Yeung explained that “over the past few years, the rent has gone up 20 percent at every contract renewal … the landlord also reduced the duration of the contract from three to two years”.

(Cheung, 2015).

Other restaurants and small retail outlets have also fallen foul of massive rent increases. Some may have the flexibility to change their business model and move to cheaper premises or trade online. For example, in the hospitality sector, this might suit a food ‘take-away’ operation that can deliver food, but for a traditional restaurant this would simply be impractical, especially if it depends upon premises with a high footfall.

Maybe the last word should be given to the BBC’s Kate Hunt who reported on the effect of extreme rent rises on small businesses in Hong Kong. She maintains that a two- or three-year lease is the norm in Hong Kong, compared to five- to ten-year tenancies in the UK. Hunt also featured the plight of a shoe shop called Shoegirl, owned by Jennifer Cheung, which was forced to close, again a victim of rising rents. Over a period approaching nine years, the annual rent had risen from HK$360,000 to around HK$1 million. Cheung has since successfully relaunched her business online.

12.11 Concentrations of risk

The first concentrations of risk to hit the headlines were cruise ships, and in particular the Diamond Princess. Likened by some to floating ‘petri dishes’, one professor of bioethics said on the subject:

Care homes for the elderly and people with special health needs have found themselves in the frontline in the fight against COVID-19 infections. Likewise, prison communities which, unless locked down before an infection finds its way in, are also an area of serious potential exposure. Food processing plants have not had a good press either, with many proving to be infection hotspots.

12.11.1 Cruise ships

In 2019, the combined gross income generated by the cruise industry was £120 billion (Billion Pound Cruises - All at Sea, 2020), having enjoyed an average annual growth rate of 5.4% since 2009 (Micallef, 2020). By the beginning of 2020, the cruise industry’s passenger capacity was around 32 million annually. Close to 300 cruise ships were expected to be in operation, in addition to the anticipated debuts of a further 19 during the year (CLIA, 2020, p 13).

With the pandemic gathering momentum, from the moment the plight of the passengers and crew aboard the Diamond Princess became headline news, any appeal for people to go cruising started fading. But, it was to be another five weeks after the Diamond Princess story first broke before cruising was finally halted, with an initial one-month suspension. A statement from the Cruise Lines International Association (CLIA) read:

The CDC Director issued a ‘No Sail Order’ for cruise ships on 14 March 2020, and commended the CLIA for its willingness to voluntary suspend cruise ship operations (CDC, 2020).

Before docking back in Yokohama, passengers were informed that an elderly gentleman who had left the ship in Hong Kong on 25 January 2020, had been hospitalised after being diagnosed with COVID-19. The world looked on as the ship was quarantined in Yokohama, Japan on 4 February 2020, in what initially became the largest concentration of COVID-19 infections outside of China (BBC Our World – Coronavirus Cruising, 2020).

There has been some disagreement over the identity of ‘patient zero’, the original person who spread the infection throughout the Diamond Princess. Identifying the Hong Kong patient only by his surname ‘Wu’, the South China Morning Post claims that Japanese health authorities have also released data on the number of infections on the ship. This showed there were two confirmed passengers whose symptoms first presented on 20 January, three days earlier than Wu’s case (Zhang, 2020).

What is clear is that Mr ‘Wu’ was not the first case to have been diagnosed in Hong Kong. This was recorded as a 39-year-old man whose COVID-19 infection was confirmed on 23 January 2020 (Hong Kong CHP, 2020), two days before Mr ‘Wu’ disembarked from the Diamond Princess.

Initial testing by Japanese authorities revealed more than 700 passengers and crew tested positive for COVID-19, of which around half were asymptomatic. Writing in the BMJ, Chris Baraniuk reported that Japanese authority records suggested that infections actually fell among passengers after the introduction of quarantine measures onboard the Diamond Princess. This leads us to conclude that the majority of cross infection occurred before the ship returned to Yokohama. Unfortunately, infection among the crew who were having regular contact with both their colleagues and the passengers continued to rise (Baraniuk, 2020).

The way in which the Japanese authorities handled the quarantining of the ship, plus the subsequent disembarkation and transit of passengers has not been without criticism. Some passengers were permitted to travel who later tested positive for COVID-19. Even so, it should be remembered that what the Japanese were facing was a world-first, and they certainly did not have a proven set of procedures to follow.

In addition to the Diamond Princess, other ships have been caught up in the coronavirus outbreak. The Holland America owned ‘MS Westerdam’ was refused entry by Taiwan, Guam, the Philippines and Japan, before finally being granted permission to dock and disembark passengers by Cambodia (McCurry, 2020). The ship had also attempted to dock in Bangkok, but was denied permission. It was subsequently escorted out of Thailand’s territorial waters by a Thai Navy frigate HTMS Bhumibol (Bangkok Post, 2020).

It was claimed by cruise company, Holland America, that no one aboard the Westerdam had tested positive for COVID-19 before the ship docked in Cambodia (Holland America, 2020). However, one 83-year-old woman left the ship and flew to Malaysia, where she was subsequently diagnosed with COVID-19 (BBC News, 2020).

Another cruise ship from the Holland America fleet, the ‘MS Zaandam’ had a similar experience with South American ports. Although the voyage was planned to end in Buenos Aires, Argentina, the cruise was cancelled, and it returned to its home port of Miami (Billion Pound Cruises – All at Sea, 2020).

The Grand Princess, which was known to have COVID-19 patients onboard, was initially refused permission to dock in Oakland, California, although the authorities relented four days later. Even so, strict procedures were enforced before passengers were permitted to disembark and enter local quarantine, but crew had to remain onboard (Luscombe, 2020).

Managing the norovirus threat

Cruise ships are well rehearsed in dealing with common viruses, such as norovirus, which can proliferate rapidly through a tightly packed vessel. I have witnessed first-hand how efficiently and effectively crews manage such eventualities. For example:

• Conducting considerable extra cleaning throughout the ships.

• Closing the self-service buffets.

• Encouraging passengers to regularly wash their hands and make frequent use of the hand cleaning sanitising gels found around the ships. This is also standard practice when passengers are urged to use the sanitising hand gel as they enter restaurants.

• Persuading passengers to use the toilets in their cabins rather than public facilities.

• Quarantining infected passengers in the cabins for at least 48 hours after they have stopped presenting symptoms.

Now, while this highly infectious norovirus stomach bug that causes vomiting and diarrhoea is very unpleasant, it cannot be realistically compared with coronavirus, which of course can be fatal. In effect, what the cruise ships were facing with COVID-19 was unprecedented. Speaking about coronavirus in relation to cruise ships, former Public Health England Infectious Diseases expert, Dr Bharat Pankhania, expressed his concern when he observed:

By contrast, in his BMJ article, Baraniuk reported that no evidence was found to suggest that the air conditioning or wastewater systems played any part in the spread of COVID-19 onboard the Diamond Princess (Baraniuk, 2020).

Taylor Dolven of the Miami Herald claimed the publication had created a database that shows that as of 2 May 2020, at least 2,700 cruise ship passengers across the global fleet had caught COVID-19, of whom 74 had died.

With countries around the world banning cruising in their territorial waters, there are hundreds of ships at a standstill. Some are moored in their home ports, while others are moored at various safe anchorage points around the world.

Most cruise ships have left skeleton crews on board, which include officers and deck hands. The logistical problem of crew getting home initially proved challenging, especially with many countries closing their borders. This caused psychological issues among some crew members, often around the uncertainty of how long they would be stuck for.

A hotly debated issue has considered whether the cruising industry was just a victim of the pandemic, or even part of the cause of its rapid proliferation. One estimate calculated that one in every five cruise ships were known to have passengers or crew infected by COVID-19. Moreover, as former cruise ship doctor, Kate Bunyan, remarked:

With cruises calling into ports that, in retrospect, we now know that the coronavirus was already doing its worst, and it was perhaps almost inevitable that passengers who went ashore would carry the virus back onboard the ships.

Australia conducted a criminal enquiry into the spread of COVID-19 around the country, which was believed to have originated from the Ruby Princess. New South Wales Police Commissioner Mike Fuller announced the launching of a criminal investigation into the Ruby Princess cruise ship (Ship Technology, 2020). However, state officials have since apologised following the conclusion of that investigation. The findings ruled that the local authorities made ‘serious errors’ in allowing the 2,650 passengers to disembark in Sydney. The ship was ultimately linked to at least 900 cases of COVID-9 and 28 deaths (BBC News, 2020).

What is clear is that much anger has been expressed after authorities permitted the Ruby Princess’s passengers to disembark on 19 March 2020, before COVID-19 test results were returned. One rather weak reason given was that it was permitted out of concern for passengers and their flights – both internal and international (Noyes, 2020). Hundreds of passengers later tested positive and 15 died, which represented more than a quarter of the fatalities recorded in Australia at the time. Police also boarded the ship and seized its ‘black box’ as part of the ongoing investigation (Sky News, 2020).

As the pandemic gathered momentum, this was reflected by a sharp fall in the cruise industry’s share prices. In fact, market confidence in the cruise industry was already falling in the five weeks leading up to the WHO’s declaration of a pandemic on 11 March 2020. The following table compares the effect on the share values of the three largest cruising corporations.

In May 2020, Royal Caribbean revealed that the pandemic was costing it around $150 million per month (Parker, B. 2020). while Carnival’s monthly loss was closer to $1 billion (Hancock, 2020). Norwegian announced an average monthly loss of $633 million for the first quarter of 2020 (Sharpe, 2020), although these figures do not cover an entire month since the suspension of cruising.

The stand-out statistic is the share values of each dropped more than 80% in the two months from 17 January to 18 March 2020.

Figure 34: Top three cruise corporations share price comparison
(Source: NYSE, 2020)

The cruise industry got a lot of bad press in the early days of the pandemic, and passenger confidence will have been damaged. Consequently, some ‘fences will need to be mended’ with regard to health and safety. So, where does the industry go from here? Several things need to come together before passengers can confidently start boarding cruise ships again. Going forward, cruising operators can be sure that they will be under scrutiny from the public, the media and health authorities. Even if just one ship has one single case of COVID-19, it will almost undoubtedly become a big story that could have ramifications across the entire cruise industry.

Some cruise operators relaunched their offerings by adopting the model of catering for single fully vaccinated nationalists. In the outset, these were short cruises of three to five days, without an itinerary, so there would be no port visits. This avoided the problem experienced by several cruise ships with various countries closing their borders and banning ships from docking. So, for example, Aida would take Germans, Costa would focus on Italians and P&O would be for Brits, while Carnival would be for the US market. A final word of optimism for the cruise industry comes from Lucy Huxley, Editor of Travel Weekly who told the BBC:

In fact, my own pandemic cruising experience is also worth recording here as cruising operators took their first tentative new steps. In August 2021, my wife and I embarked on the P&O cruise ship Britannia for what was described as a 4-night ‘seacation’. The ship sailed from Southampton for a cruise along the English Channel and Irish Sea before returning to its home port.

Every passenger had to be a UK resident and prove that they had been double vaccinated. Furthermore, they each had to have a negative result from a COVID-19 lateral flow test taken immediately before boarding. Anyone failing to meet this no-nonsense criteria simply were not permitted to sail.

The Britannia has a capacity of circa 3,600 passengers but sailed only 60% full. Regular sanitising, social distancing and face mask wearing protocols, especially in public areas, were pro-actively encouraged. Frequent cleaning of common touch points (e.g. handrails and elevator buttons etc.) were conducted by the crew. In what would normally be the self-service restaurant, passengers were served by crew members to reduce the risk of cross contamination.

For contingency purposes, an area of the ship was off limits where a number of cabins had been allocated for passenger isolation purposes should they be needed. It wasn’t.

We have since embarked on two back-to-back cruises aboard the Regal Princess spending a total of 14 days at sea. While the first stayed in UK waters, the second visited ports in France and Spain.

In my opinion, both P&O and Princess Cruises had made every effort to protect both passengers and crew from the coronavirus. As passengers, we felt completely safe.

Yet, year end 2021 witnessed a significant rise in the number of COVID-19 cases associated with cruising. The CDC issued a warning to avoid cruise ship travel regardless of vaccination status but stopped short of issuing an outright banning order (Lee, 2021).

12.11.2 Care homes

While there are a few notable exceptions, in many countries, the residents of care homes proved to be particularly vulnerable to COVID-19. Some because of their age, while others because of underlying health conditions. There were those unfortunate individuals that ticked both boxes. When countries declared their new COVID-19 case and fatality rates each day, sadly care home residents often featured in these statistics for the wrong reasons. Once it had gained a foothold in a home, the virus would invariably spread quickly and do its worst.

It would be easy to say that countries had no plan in place regarding the managing of these homes in a pandemic. However, although I believe there may be some truth in that statement, I feel that saying that would be just too ‘black and white’.

But, to begin with, we need to acknowledge the missed learning opportunities that the Diamond Princess presented the world. With the ship in quarantine in Yokohama, Japan, passengers were confined to their cabins while crew members moved freely about the ship carrying out their duties. This included not only working alongside their fellow crew members, but at the very least, also visiting cabins to deliver food to passengers, although in some instances they would have taken the virus with them, too.

Many experts considered the Diamond Princess situation to be similar to an apparent common practice of care staff working across multiple homes. If they were infected, even if they were asymptomatic, they would take the virus with them wherever they went. Certainly in the UK, where there are in excess of 15,000 care homes, some are affiliated to a branded chains of providers where it is not uncommon for staff to work in more than one place.

As previously mentioned, PPE was initially in very short supply globally, and primary hospitals and, in particular, critical care unit staff were seen as the priority. Consequently, care home workers were often being asked to work without the PPE they really needed.

Not every care home was infected, and there were those that took drastic measures to protect the residents in their care. Initially, some homes banned visitors and allowed only ‘window’ visits. Others reduced visitor numbers and looked for creative ways to enable safe visits with relatives. Instead of going home themselves at the end of each shift, some staff even elected to move into their care homes and live with their elderly patients, often in fairly rudimentary conditions. There are reports of dedicated staff leaving their own families and doing this in some cases for several weeks at a time. Very commendable.

Eventually, repeat testing for COVID-19 for both staff and residents was widely introduced, although one cannot help thinking that this was tantamount to shutting the stable door after the horse had bolted.

But, let us consider a couple of success stories – Germany and Hong Kong.

12.11.2.1 The German approach

Upon realising that the pandemic was heading in its direction, the UK’s NHS activated its pandemic plan and cleared as many hospitals’ beds as possible in preparation for receiving COVID-19 patients. This required discharging most fit, elderly patients and seeing them placed into care homes. In hindsight, while no evidence has yet been presented, it is possible that some of these discharged patients had already been infected by the virus and thus took it with them to care homes.

The UK was not alone in this respect, and Germany followed a similar path, but with one very notable difference. Care homes were legally not permitted to receive patients from hospitals unless they could quarantine them for at least two weeks.

A survey conducted by the International Long-Term Care Policy Network had responses from 824 German care homes. They represented 64,772 residents between them (approximately 8% of the total number of German care home residents). The survey reported that 80% of all homes had remained COVID-19 free (Rothgang, et al., 2020).

12.11.2.2 Hong Kong took a lesson from SARS

Around 16% of Hong Kong’s 7.5 million population are 65 years and above. In fact, it has one of the highest percentages per capita of elderly citizens in the world who are 80 years old and over and living in care homes.

During the 2002-2003 SARS outbreak, more than 70% of all care home residents who became infected actually died, compared to an average global mortality rate of around 6%. Preparations for the next epidemic had started in 2004 with the creation of the Centre for Health Protection and a three-tier emergency response system was developed the following year. Two opportunities to gain experience in using this system afforded themselves in 2009 and 2010 with outbreaks of swine and avian influenza. Second level emergencies also presented themselves in 2012 and 2013 by way of further avian influenza outbreaks, and then again in 2015 for MERS.

Whenever there is an outbreak of influenza, all care home staff are expected routinely to wear face masks, something not widely practiced in the west. This naturally applies to emerging infectious diseases, such as COVID-19. Should any staff become asymptomatic, the face mask wearing culture substantially reduces the risk to residents. This risk is further reduced when residents wear face masks, too.

Hospitals were also responsible for not discharging elderly patients into care homes until they were virus free. At least two tests had to be returned negative before such a transfer could be actioned.

With the virus beginning to spread globally, in line with its emergency response protocols, Hong Kong care homes went into lockdown. Visitors were banned from entering care homes in early February 2020. Contact with family members was maintained by the use of video calls and ‘window’ visits, a practice followed in many other countries. However, it was noted that these lockdown measures did cause loneliness among the residents and psychological suffering for both them and their families.

Six months into the pandemic and Hong Kong’s COVID-19 case count was approaching a comparatively modest 5,000 infections and 99 deaths. Of that 5,000, only 132 were care home residents who were located across 16 homes. Compared with the number of care home residents infected in other countries, Hong Kong’s approached has clearly been a success.

12.11.3 Prisons

In early July 2020, Ghislaine Maxwell was apprehended by the FBI and arraigned on charges relating to the late disgraced financier Jeffrey Epstein. She was detained in the Metropolitan Detention Centre, a Brooklyn jail. On 10 July 2020, appearing before the US District Court in Manhattan, she requested bail. She cited her justification as being the high risk of being infected by COVID-19 while in the detention centre. The month before her arrest, some 55 inmates and staff had tested positive for COVID-19 (Stempel, 2020). Her request was denied.

Shortly after the pandemic was declared in March 2020, one high-profile prisoner to have tested positive for COVID-19 was convict Harvey Weinstein, although he has since recovered (Freifield, 2020). Out of a total population in excess of 6 million prisoners (US Department of Justice, 2021), by the end of June 2020, throughout the US, more than 68,000 cases of COVID-19 had been diagnosed throughout the country’s correction institutions. The New York Times reported that deaths in prisons attributed to COVID-19 had risen by 73% in the six weeks ending 30 June 2020.

12.11.4 Food processing plants

So, what pandemic-linked dubious record do the US, the UK, Germany, France, Spain and Portugal, among others, all have in common? With respect to this section, it relates to the high number of COVID-19 infections detected in some of their food processing plants and abattoirs. In some cases, the discovery of hundreds of infected workers has been followed by the closure of the plants, although others have controversially remained open. There are also instances where local communities have registered new COVID-19 case spikes, which were subsequently traced back to the plants.

Although some unions have pointed the finger at poor working conditions, there does not seem to be one single confirmed factor identified as the cause. However, some theories have been presented:

• In some plants, the very nature of their design makes it difficult to observe social distancing. It is also entirely possible that the maximisation of production output of some plants depends upon not introducing social distancing measures. In other words, the economic aspect of the business is in direct conflict with the health and safety of the workers.

• The wearing of face masks and goggles is mandatory in some food processing premises, in others it has not been enforced. Recommendations have been made by various health bodies, including the CDC, that indoor food production line workers should wear full protective PPE.

• Employees are working indoors, which we now know is more conducive to cross-infection than being outdoors. Moreover, the circulation of fresh air by leaving doors and windows open is not always possible. This is especially true during warmer months, as these plants need to be maintained at low temperatures in the interest of food hygiene.

• It has been suggested that cold and damp indoor environments are akin to petri dishes, as the coronavirus can survive and spread.

• Work in the plants can be physically demanding, and some might consider it as being similar to having a workout. But, this can result in people breathing more heavily, which can facilitate the spread of the disease.

• It is known that the virus can be transmitted when people talk. In the plants, there is noisy machinery that necessitates workers having to shout to be heard. This can intensify the spread of infected droplets.

• Migrant workers, who may not be entitled to sick pay, are often used in plants. Some have been reluctant to report any COVID-19 symptoms in case they lose money.

• There are those workers who do not live locally, and some plants provide accommodation in dormitories. But, such conditions are also favourable for the spread of the virus. Ironically, some market gardeners who employ seasonal workers have also had cases of COVID-19 infections believed to have stemmed from the accommodation provided for the workers.

Although this section focuses on the food production industry because it has had a bad press, many of the points raised above could just as equally apply to other factory environments outside of the food industry.

³¹ As I write, there is no website yet, but Chillies from Widley does have a Facebook page if you would like more information.

³² Norwegian’s posted figures for January to March 2020 include the two months leading up to the pandemic shutdown in March.