Terrorism Insurance: The What-ifs for Hotels

The hotel industry is fortunate. The federal government’s terrorism insurance backstop has been in place since 2002 with no disruption in coverage. In fact, in 2007, Congress approved the Terrorism Risk Insurance Act (TRIA), which extends the coverage through 2014. However, the language in both acts has made it clear – federally backed terrorism insurance is only temporary.
That’s because the government does not want to assume the role of insurer, and insurers would agree. Yet the much-needed coverage does provide coverage that lenders require. Should it become privatized once more, the costs could become prohibitive. Read the rest of this entry »



That 2009 wasn’t the best of years for the hotel industry is an understatement. According to at least one published report, it was the worst since 1932 in terms of revenue decline. And the expenses are still there, if not mounting. The largest price tag to hotels – labor costs. They take up nearly 33 percent of revenue and nearly 46 percent of operating costs.
As oil from the Gulf of Mexico’s spill inched toward land, hotels along the Gulf became increasingly nervous. By the beginning of June, hotels were already reporting higher cancellation rates and more vacancies during peak season than ever. Amid increasing media coverage and high speculation on not if, but when the oil would make landfall, two hotels in Key West made a pre-emptive move – they are offering guests a clean beach guarantee.
On a recent trip, a friend stayed at a large hotel chain in a metro area. Her stays at this hotel chain have always been good, so she was confident in her choice.
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.