When Mother Nature or Terrorists Force A Hotel Evacuation
The month of May brought with it some serious issues for hotel owners in both Nashville and Manhattan. Flooding forced hotels to evacuate guests in the Nashville area while a bombing attempt emptied hotels in the Times Square vicinity. Proof once again that you can’t pre-plan for the unexpected soon enough.
In the Opryland Hotel, 1,500 guests had to be evacuated to a nearby high school as flood waters surprised nearly everyone in the area. In Manhattan, the SUV in the failed bomb attempt was parked beside the Marriott Marquis hotel, forcing the evacuation of the south wing of that hotel and that of The Edison hotel.
Location, location, location – those are the top three attributes of good real estate. The same is true for your hotel business. If you’ve got the location, you’ve got a head start. But what if that location changes – namely what if the neighbors move out?
No one needed to tell those of us in the hotel insurance industry that insurance rates were increasing steadily. So it comes as no surprise that an August 2009 study by PKF Hospitality Research reports that insurance costs are the fastest growing expense for hoteliers. Over the last ten years, rates have gone up 4.4% annually. From an average $265 per room in 1999 to $558 in 2004 (the latest PKF Hospitality study examined today’s recessionary period with that of the 2001-2003 period). It’s not likely to get better, either. PKF also predicted an estimated 5.3% drop in net operating income and a 1.1% decline in RevPAR for 2010.
No doubt about it – 2009 was full of the bizarre news involving hotels. From peeping Tom perps to hotel-based drug operations, hoteliers faced a overabundance of risks well beyond the predictable. With hope of putting the weirdness behind them, hotel owners are looking at 2010 with a slightly jaundiced eye, not sure what risks are still lurking. How has your 2010 been so far?