Unless you’ve been hiding under a rock, you already know that real estate values have taken a mighty hit. What once was up has indeed come down, which may not be all bad news for your hotel business. At a time when occupancy is lagging and costs are increasing, wouldn’t it be nice to catch a break?

That break could be in the form of a tax reassessment. In general, local governments (usually county entities) assess taxes on a set schedule. The last time your hotel received an assessment could have been prior to the dip in the real estate market. In essence, you could be paying more than you’re hotel is worth.

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Of all the risks a hotelier faces, who would have ever considered the risk of a guest tampering with another guest’s room? Yet that’s exactly what happened to ESPN’s Erin Andrews, who was the victim of an alleged peeping tom – a man who reportedly stalked the woman in a most unusual way. The case against the man states he tampered with the peep hole in Ms. Andrews’ hotel door, then proceeded to watch her movements in her hotel room.

What’s equally disturbing is the alleged perpetrator’s actions prior to the incident and the hotel’s response. According to police records, the man requested a room adjacent to the victim’s room, a request the hotel chain honored. That move has turned the industry upside down in an effort to redefine hotel policies and guest security procedures.

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If you’re relying on a generic commercial general liability insurance policy to cover your hotel business, oh, the gaps you’ve created. Oh sure, the general liability policy is going to cover your building and grounds, but it doesn’t begin to address the specific risks that hotels face. And while many general liability policies give you additional coverages that are useful – such as employer’s liability coverage – it falls far short of giving your hotel business the comprehensive protection that a hotel insurance policy would give you.

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Defaults on loans are not limited to the residential housing market. In fact, the hotel industry is suffering the same bleeding as its Main Street counterparts. In San Francisco this past July, two famous high-end hotels defaulted on large-scale loans, a sign of the blight that is creeping into the hotel industry. High unemployment, low occupancy, and an aversion by the masses to paying more for a hotel stay than pre-recession are all contributing factors in this market.

For owners of the 97-year-old Renaissance Stanford Court hotel in Nob Hill, the $89 million loan was more than it could bear. Within a few short weeks, the Four Seasons Hotel on Market Street came up short in its repayment of a $90 million loan. To date, seven California-based hotels are in default.

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No one needs to tell you the changing nature of the hotel industry. Between government regulatory change and health and safety issues, it’s all you can do to stay ahead of an evolving, growing industry. So how do you think that hotel insurance policy package you bought is doing?

 If it’s been more than a few years since you purchased your hotel insurance package, it’s almost a given that something in your current business practices is not covered by that insurance package. But how can you know? (more…)