Unpredictable Weather: Understanding the Risk and Protecting Your Property

By Fran Sarmiento Executive Vice President, Venture Insurance Programs | April 28, 2013

Ocean or bay view? At some hotels and resorts, it’s a common enough question. But what if they are one and the same?

Even before “Superstorm” Sandy left the Northeast reeling, rising sea levels were altering the geographic outline of our coast. Tornadoes, a common threat in the Midwest, have wreaked havoc in more parts of the country, and wildfires, mudslides, dust storms and drought have devastated parts of the West and Southwest.

While the hotel industry has come a long way in preparing for the disasters that weather can bring, today’s new unpredictable weather has become a critical issue for hotels and resorts. Severe weather rarely threatens the existence of a business, but it can jeopardize growth and cause volatility in earnings.

You can take steps to protect your property and your guests from this ever-changing climate. Specific risk management practices and disaster preparedness plans will help reduce or eliminate the potential loss. But you also must have adequate insurance, both property insurance with the dollar limits you need, as well as business interruption coverage with protection from loss of income.

Insurance Rates and Availability

How do the recent changes in weather patterns affect your ability to get adequate property insurance? Insurance rates for commercial property coverage are likely to rise throughout 2013 due to Superstorm Sandy and several other large catastrophe losses. These increases will vary depending on location.
Deductibles are increasing as well, not only for wind and flood exposures, but also for all other perils such as fire, theft and vandalism. In fact, it is not uncommon to see property deductibles on larger hotels increasing to between $10,000 and $25,000.

Coming up in March 2018...

Human Resources: Value Creation

Businesses must evolve to stay competitive and this is also true of employment positions within those organizations. In the hotel industry, for example, the role that HR professionals perform continues to broaden and expand. Today, they are generally responsible for five key areas - government compliance; payroll and benefits; employee acquisition and retention; training and development; and organizational structure and culture. In this enlarged capacity, HR professionals are no longer seen as part of an administrative cost center, but rather as a member of the leadership team that creates strategic value within their organization. HR professionals help to define company policies and plans; enact and enforce systems of accountability; and utilize definable metrics to measure and justify outcomes. Of course, there are always new issues for HR professionals to address. Though seemingly safe for the moment, will the Affordable Care Act ultimately be repealed and replaced and, if so, what will the ramifications be? There are issues pertaining to Millennials in the workforce and women in leadership roles, as well as determining the appropriate use of social media within the organization. There are new onboarding processes and e-learning training platforms to evaluate, in addition to keeping abreast of political issues like the minimum wage hike movement, or the re-evaluation of overtime rules. Finally, there are genuine immigration and deportation issues that affect HR professionals, especially if they are located in Dreamer Cities, or employ a workforce that could be adversely impacted by federal government policies. The March Hotel Business Review will take a look at some of the issues, strategies and techniques that HR professionals are employing to create and sustain value in their organization.