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How to protect your hotel for potential losses

Disruption has been a constant theme for hotel owners thanks to online booking platforms, home-sharing, Airbnb, and, more recently, the pandemic. So, how can you bolster your business against the risks of potential losses?

First, hotel ownership opens a broad and deep range of risks, including:

  • Damage or destruction of your premises, its fittings and furnishings
  • Breakdown of equipment, such as heating and cooling, computer systems
  • Theft of funds or valuables from your hotel or your guests (you could be liable if it’s the latter)
  • Accidents that staff, guests, contractors or other site visitors suffer – consider slips, trips and falls on wet floors, your exercise equipment or near pools
  • If anyone becomes ill who eats food prepared or served in your hotel
  • Drunkenness of guests, particularly if you serve or sell alcohol
  • Computer crimes that compromise the security of personal data of your guests or staff
  • Business interruption such as due to fires, cybercrime, damage or natural disasters, etc
  • Vehicle accidents from valet parking, collisions, or mechanical faults, for example.

The risk to your brand

A major economic risk to hotels, particularly international hotel chains, is brand-jacking where another company assumes or acquires your online brand identity. Others may gazump your brand name on pay-per-click Google Adwords, for example. Effectively, it means competitors can intercept online traffic to your hotel website, meaning less business for you.

As well, online global travel agencies could ask you to pay inflated or unnecessary commission payments, or you risk losing about 40% of your bookings. If a scammer has duplicated your website and unsuspecting customers book through there, you can reduce your risks before that happens. Do this by bidding on your hotel brand, ensuring your SEO campaign uses your official website as the landing page. Another option is to file a trademark infringement complaint to Google.

Public & products liability

Here are other ways your hotel business could suffer potential losses. If your operations or staff, for example, cause injury to or damage the property of a third party, that could give rise to a public liability claim. Meanwhile, if products you distribute (such as the food that is sold or served), supply or manufacture cause injury or damage, there’s a risk of a product liability claim. You can limit your exposure to these risks with a robust risk assessment strategy plus combined insurance called public and products liability cover.

Managing your risks

You’ll need to prepare by keeping revenue reports such as profit and loss statements, forecasts, reservations, as well as your historical performance. When you claim a disaster, bring out your cancellations reports, independent market forecasts, and, if needed, hire a forensic accountant or hotel consultant for a deeper dive into your figures. That way, you’ll have real, verifiable data to back your claim for lost revenue.

Speaking of your data, it could be exposed to cyber-attacks such as phishing, malware and ransomware and major privacy issues about your customers’ information. Small businesses account for 43% of all cybercrime targets, and the cost to the economy is $1 billion per year. Here’s the Australian Government’s advice about how to protect your business.

We can draw on our insights into the hotel sector to advise you on managing your risk profile more efficiently. We can help you customise an insurance package to your needs, so your business can access multi-policy discounts and save time otherwise spent sourcing cover.


Article supplied by OneAffiniti

Photo by Nik Lanús on Unsplash