The 2017 Hurricane Season That Was: What We Learned

By John Welty Practice Leader, SUITELIFE, Venture Insurance Programs | June 24, 2018

Seventeen named storms, 10 hurricanes, and six Category 3 or stronger hurricanes swept through the Atlantic Basin in 2017, well above the 30-year average of 12 storms, six hurricanes and two major hurricanes, Weather Channel data show. This placed 2017 among the top 10 most active Atlantic hurricane seasons on record, according to Dr. Phil Klotzbach, tropical scientist at Colorado State University.

Three devastating hurricanes – Harvey, Irma and Maria – hit Texas, Florida, Puerto Rico and the surrounding Caribbean so hard that the impact of the storms is expected to be felt for many years to come. Harvey, alone, dumped 50 inches of water along the eastern coast of Texas and brought the region to a complete standstill along with catastrophic losses worth $75 billion. Tourist haven the Florida Keys took a direct hit from Irma, a storm so strong that at least 25 percent of the homes there were destroyed. Its losses could reach $83 billion. Maria, meanwhile, was the strongest hurricane to hit Puerto Rico in 85 years. Dubbed a $95 billion storm, it resulted in hundreds of deaths and devastated the island's already fragile economy.

Hotels in the eye of all three of those hurricanes (and other storms) are back in business thanks to the savvy response by hoteliers and, in part, to insurance coverage secured well before the tempests ever hit. Hotels, though, weren't affected equally. Some never closed at all while others took months to deal with damages that rendered them inoperable. It's one thing for a hotel to reopen after calling in a crew do deal with a felled palm tree. It's a whole other matter when a roof is ripped away, nearby roads and bridges are ruined or in-house technical and operations systems have been destroyed.

Preparing to make the best of a bad situation

For the most part, the hotel industry was ready for the storms. Many of them, thanks to years of planning and an understanding of what each hurricane season may bring, were poised to put their emergency efforts into action days before the storms made landfall. They took proactive measures like procuring extra food, bringing in more generators and even having employees set up rooms in their homes for evacuees who couldn't find a spot at hotels or shelters.

The bulk of hotel properties in hurricane zones know the importance of establishing a successful working relationship with a trusted insurance partner to understand the best lines of coverage, not only to help keep the business up and running but to recover from property damages. The hotels that fared the best after the 2017 hurricanes understood their policies, coverages and deductibles before the storms ever made landfall. Their insurance agent was just a call away when the recovery work had to begin. Yet experts say there still are too many hotels that are unaware of what their policies cover or even exclude. Some specialty hotel insurers are able to hone in on the unique needs of a lodging business to offer solutions such as an all-lines insurance and risk management program for independent and boutique properties with added catastrophic capacity.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.