The Life-Cycle of Hotels and Corresponding Risks

By Alexandra Glickman Area Vice Chairman & Managing Director, Gallagher Real Estate & Hospitality Services | November 11, 2018

Atlantis, a luxurious hotel in Dubai, is one of the most unique hotels in the region, with actual underwater suites featuring floor to ceiling panoramic views of life below the water. The Icehotel in Sweden is unique in its own way, as it is the world's first hotel to be made of ice and snow. Each year, ice from the frozen Torne River is fused with snow to remake the hotel.

To hotel architects and guests alike, hotels such as the Atlantis and Icehotel are architectural marvels and should be celebrated for their bold designs and features. Yet, to insurers and risk managers, each one-of-a-kind hotel feature presents an individual risk that may harm guests and ultimately cost the hotel an expensive claim.

In an increasingly competitive business environment, hotels strive to distinguish themselves through the uniqueness of their buildings and amenities. However, interior designers and architects often leave risk managers out of the development process when they are designing attributes of the building or accessories. While the hotel and corresponding furnishings may be aesthetically pleasing, it is important for designers and architects to consult with operations and risk management personnel to ensure that the unique designs are logical and will not have an unnecessary negative impact in the form of claims or lawsuits against the hotel.

The Life-Cycle of Hotels and Corresponding Risks

Every hotel, regardless of individual unique features, has the same life cycle-design stage, development stage, procurement stage, operational stage and post-loss stage. Each segment of a hotel's life cycle presents a different set of risks that hotel owners and managers need to account for, and subsequently, be prepared for.

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Coming up in March 2019...

Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.