A Hotelier's Guide: Managing U.S. Lawsuits from the Caribbean

By Bruce Liebman Co-Managing Partner, Kaufman Dolowich & Voluck LLP | August 12, 2018

Co-authored by Michel A. Morgan, Associate, Kaufman Dolowich & Voluck LLP

Resorts in the Caribbean Travel and Tourism industry should become increasingly aware and concerned about exposure to lawsuits outside of their jurisdictions as the significant growth in this industry and region continues to be statistically undeniable.

Indeed, according to the 2017 World Travel & Tourism Council (WTTC) Economic Impact Report for the Caribbean, notwithstanding terrorism concerns, political instability, health epidemics, and natural disasters, Travel & Tourism growth has generated 10.2% of the global GDP, and by 2027 the Travel and Tourism Sector is expected to support 380 million jobs and make a total direct contribution to the global GDP of USD83.3 billion- 17.7%.

According to the WTTC, most of the projected growth in the Caribbean region is expected to come from foreign visitor spending.  Consistently, the most recently available 2016 Jamaica Tourist Board Annual Travel Statistics Report confirms that the United States has remained the most important supplier of tourists to the Caribbean region, with over 14 million Americans visiting the region most of which travelled to the Dominican Republic, Puerto Rico, Jamaica and The Bahamas. 

However, Caribbean resorts face a challenge when these foreign visitors return to the United States and bring lawsuits against the resort in their resident states.  When that happens, the resort is forced to defend these lawsuits throughout the entire United States, which is financially and logistically burdensome.  The exposure to these lawsuits that resorts in the region face is even more heightened as many resorts have developed to not only offer accommodation services, but now also offer transportation, entertainment and excursion services-all of which carry significant tort liability.  Whether the resort offers these additional services directly, or through affiliates, the high risk of exposure remains the same as it will likely still be named in a potential lawsuit filed in the United States.

In light of these realities and projections, it is important for resorts in the Caribbean region to develop best practices to protect against lawsuits brought in the United States.  These practices may involve the use of a forum-selection clause or, strategically governing business affairs based on United States jurisdiction principles.  The ultimate goal is to more conveniently and cost-effectively resolve these lawsuits in the Caribbean region.  While competent counsel should be engaged to create preemptive measures and present legal defenses addressing these claims, Caribbean resorts should conceptually understand the principles of these measures in order to govern their business affairs accordingly and ultimately succeed in dismissing these cases from the United States. 

Choose a Social Network!

The social network you are looking for is not available.


Hotel Newswire Headlines Feed  

Don Willingham
Susie Ross
R.J. Friedlander
Elaine Fenard
Peter Goldmann
Marcus Nicolls
Larry K. Kimball
Roger G. Hill
Paul van Meerendonk
Stephen Barth
Coming up in May 2019...

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.