AUSTIN, Texas — While the insurance market is not at the crisis levels seen in recent years, it's still difficult to manage for hoteliers, and experts say taking steps to mitigate risks at a hotel can help reduce both costs and headaches.
Ryan Fulton, managing director of Aon Risk Solutions, said hoteliers should be celebrating the fact insurance rates seem to be coming down as insurance adjusters get a better handle on the storms and climate issues that have changed the landscape in recent years.
"I think the property market is [more] stable, and the underwriters understand what they have in their portfolios," he said at the 2025 Fall meeting of the Hospitality Asset Managers Association.
Marsha Bonner, executive vice president of risk management for Highgate Hotels, said being proactive can help hoteliers manage costs and not rely on the whims of the insurance market or weather.
"The best thing that we can do is prevent the loss, whether the property market is going up or down or whether the liability market is going up or down," she said.
Hotel companies should be doing self inspections regularly to create checklists of potential risk exposures they can address, which Bonner said isn't work many people get excited about doing, but it must be done.
"Is there excitement around that? No. Does anybody want to spend a lot of time doing that by itself? No. So what are we doing? We're incentivizing it," she said.
Bonner said Highgate has turned the self inspection process into a competition, awarding hotels that turn in their inspections completed and on time and allowing corporate to respond quickly with remediation measures. She added the costs of the reward structure are significantly less than the alternative.
"We never have to convert to how many rooms we missed during that month because we paid the loss from the hotel operations," she said. "We didn't have a disruption, potentially, in staffing, because the employee never got hurt. They didn't have to stay home, and we didn't have to defend the workers' compensation case."
Bonner stressed the importance of having plans in place for natural disasters, including informing on-property teams of what's required of them in situations like hurricanes before you're in the middle of dealing with one.
"When you're dealing with the overall impact of a lot of different emotions and a lot of moving pieces during a natural disaster or something significant enough to shut down a hotel, you aren't thinking as clearly as you believe you would," she said. "So what we're trying to do is prepare in advance for the details of what does this scenario look like."
Developing relationships with important contact people in an emergency is key for the business, Bonner said. That includes knowing exactly who to reach out to at the power company and having local contractors ready to jump to work at your property to get it back online as quickly as possible.
"Prepare for the time between need and action or response to be as short as possible," Bonner said. "You're going to win in that game."
Fulton agreed that being proactive and prepared is key. He said one hotel he works with in a flood zone makes sure to have buckets and barriers ready to go, but even properties less likely to see major weather events need to be prepared for more specific problems such as kitchen fires and knowing who to contact in the event there are damages.
In addition to being prepared ahead of time, Fulton said it's also important to be as detailed after an emergency because that will also help with insurance payouts.
"We've had some clients in the Caribbean that were down for two or three years before they got back up and running and [the takeaway] is track everything," he said. "Track every expense. Like Marsha said, insurance is there to make you whole, not to make you profitable."