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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Coming up in December 2018...

Hotel Law: New Administration - New Policies

In a business as large as a hotel and in a field as broad as the law, there are innumerable legal issues which affect every area of a hotel's operation. For a hotel, the primary legal focus includes their restaurant, bar, meeting, convention and spa areas of their business, as well as employee relations. Hotels are also expected to protect their guests from criminal harm and to ensure the confidentiality of their personal identity information. These are a few of the daily legal matters hotels are concerned with, but on a national scale, there are also a number of pressing issues that the industry at large must address. For example, with a new presidential administration, there could be new policies on minimum wage and overtime rules, and a revised standard for determining joint employer status. There could also be legal issues surrounding new immigration policies like the H-2B guest-worker program (used by some hotels and resorts for seasonal staffing), as well as the uncertain legal status of some employees who fall under the DACA program. There are also major legal implications surrounding the online gaming industry. With the growing popularity of internet gambling and daily fantasy sports betting, more traditional resort casinos are also seeking the legal right to offer online gambling. Finally, the legal status of home-sharing companies like Airbnb continues to make news. Local jurisdictions are still trying to determine how to regulate the short-term apartment rental market, and the outcome will have consequences for the hotel industry. The December issue of Hotel Business Review will examine these and other critical issues pertaining to hotel law and how some companies are adapting to them.