Eyjafjallajökull, Iceland

Who knew a volcano could help increase rates and occupancy at European hotels? Yet many hotels in European hotspots, such as Amsterdam, London, and Paris, have seen a significant spike in the number of occupied rooms thanks to Iceland’s cantankerous volcano spewing airline-grounding ash across Europe. Early reports were that airport hotel rates climbed to almost double than usual thanks to high demand from stranded visitors.

The volcano’s impact has reached into several industries, crippling the airline and tourism industries in particular. And while hotels are seeing opportunity rising from those ashes, they’re also suffering through cancellations from travelers unable to make it into their countries.  And the new Armani Hotel set to open in Dubai had to push back its debut from April 21st to April 27th.

All this ash and soot in Europe could spell immediate good news for US hotel operations, which could see a rise in occupancy thanks to altered vacation plans. But as travelers opt for domestic locations, are US hotels ready for a spike in occupancy?

There are five things to consider as your hotel faces a potential rise in occupancy rates:

1) What are the current policy conditions on your occupancy? Have you changed or dropped coverage in the last six months?

2) What is the insurance policy language regarding occupancy and damage limits? What does that exclude?

3) What will a temporary increase in occupancy do to your coverage limits? Do you have adequate coverage limits to address the additional occupancy?

4) Are all your facilities up to date and insured for adequate amounts? Have you examined your risk exposures in each area of the operation?

5) Do you have enough coverage for natural disasters or perils? If an event similar to that of the Iceland volcano were to happen, would your insurance coverage respond to any business interruption claims?

If you’re unsure if your current policy has enough coverage for unexpected occupancy increases, contact us. We’ll walk you through your hotel insurance policy language and help you understand what’s available and where potential areas of risk may exist.

Flickr photo credit: orvaratli