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 January 2019...

Mobile Technology: The Future is Now

Mobile Technology continues to advance at a relentless pace and the hotel industry continues to adapt. Hotel guests have shown a strong preference for mobile self-service - from checking-in/out at a hotel kiosk, to ordering room service, making dinner reservations, booking spa treatments, and managing laundry/dry cleaning services. And they also enjoy the convenience of paying for these services with smart phone mobile payments. In addition, some hotels have adopted a “concierge in your pocket” concept. Through a proprietary hotel app, guests can access useful information such as local entertainment venues, tourist attractions, event calendars, and medical facilities and services. In-room entertainment continues to be a key factor, as guests insist on the capacity to plug in their own mobile devices to customize their entertainment choices. Mobile technology also allows for greater marketing opportunities. For example, many hotels have adopted the use of “push notifications” - sending promotions, discounts and special event messages to guests based on their property location, purchase history, profiles, etc. Near field communication (NFC) technology is also being utilized to support applications such as opening room doors, earning loyalty points, renting a bike, accessing a rental car, and more. Finally, some hotels have adopted more futuristic technology. Robots are in use that have the ability to move between floors to deliver room service requests for all kinds of items - food, beverages, towels, toothbrushes, chargers and snacks. And infrared scanners are being used by housekeeping staff that can detect body heat within a room, alerting staff that the room is occupied and they should come back at a later time. The January Hotel Business Review will report on what some hotels are doing to maximize their opportunities in this exciting mobile technology space.