The pandemic continues to hurt Canada’s hotel industry as COVID-19 both reduced the number of guests they could serve and raised their insurance costs to exorbitant levels.
According to Alberta Hotel and Lodging Association president and CEO Dave Kaiser, association members in the past year have reported insurance increases from 100% to as much as 300%. He also noted that although most of the association’s member hotels had pooled their resources to stabilize rates by forming a group, they failed to find an insurer willing to cover them.
When the group finally turned to traditional insurance, it found that premiums had gone up. Kaiser also told CBC News that in some cases, hotels failed to stay in the group, or were unable to find any insurance at all.
Kaiser additionally noted that he is aware of some hotels that have forgone property insurance altogether due to the steep costs, and have decided to pay only for liability insurance.
Michael Mazepa – part of an ownership group for the St. Albert Inn and Suites, the Continental Inn and Suites in west Edmonton, and a Best Western in BC – said that two of the hotels saw their rates double, with insurance for each priced at over $135,000 annually.
"It's a lot of money and you don't have the money rolling in," Mazepa told CBC News.
Another hotel owner, Jay Deol of Westgate Motor Inn in west Edmonton, reported that his insurance rate jumped four times from about $8,6000 to $34,000 – despite having never made a claim.
Experts say that the skyrocketing increases are due to the pandemic, especially since COVID-19 forced the closures and suspensions of businesses.
"The lower the interest rates, the higher the insurance premiums because insurance companies can't make money on the investment behind the scenes," said CMB Insurance Brokers marketing director Brett Kanuka in a statement to CBC News.
To address the hospitality industry’s coverage concerns, insurers have launched initiatives to aid the sector. The Insurance Bureau of Canada unveiled a business insurance action team late last year to connect hospitality businesses in Ontario with insurers. Meanwhile, insurers like Echelon have expanded their commercial insurance offerings for small and medium-sized hospitality businesses.