Unique hospitality venues: A call to action for brokers

A 120-room floating hotel? It sounds like the stuff of fantasy, but that is exactly what is coming to Cardiff Bay, and follows in the footsteps of London and Edinburgh, which already boast floating hotels of their own.

What is also very much a reality, however, is the risks these venues pose.

Angela Irvine, ACII, sales director at Bletchley believes that with unique venues, risk needs to be a consideration from the start: “We have to understand all the risk assessments and the materials and what the exposures are likely to be. These experiences and these venues, they're popping up all over, so I don't think It's going to go away anytime soon.”

The growing allure of unique hospitality venues

According to Verified Market Research’s ‘United Kingdom Hospitality Market’ report: “Experience-driven tourism is gaining popularity in the UK hospitality market, with 44% of tourists seeking immersive experiences like adventure tourism, cultural activities, and wellness retreats.”

The report added: “38% of travellers now preferring personalized recommendations for accommodations, dining, and activities.”

McKinsey’s 2024 survey data also echoes how experiences are a priority when travellers select destinations. “Survey respondents cited the range and quality of local activities on offer at a rate that trailed only the rates of their citations of essential needs, such as safety, navigability, cost, and accommodation range and quality,” it said.

Considerations for insurance brokers

When it comes to insuring these types of venues, it is about viewing risk through the lens of the experience type. “With hospitality, I think the bulk of the claims will tend to be slip trips and falls, and maybe issues with food and drink… so those elements are still going to be there, but then there's the additional aspects around the uniqueness of the particular venue…that could be anything,” Irvine said.

These types of venues may not always be insured through standard insurance. “That's the thing,” Irvine said. “I think there’s not always going to be an appetite for most insurers. So you're probably going to have to look at specialist markets … whether we'd need additional covers, over and above what you normally do for a hospitality venue.”

It is ultimately about insuring the whole risk of the venue, Irvine added: “There will always be markets that will look to provide cover, whether it's in its entirety, or whether it's syndicated, so that a number of insurers are picking up the whole risk.”

The broker’s role in risk prevention

According to Irvine, brokers should be the first port of call from the project outset. “I think, given the complexity, quite often, what the underwriter will do is bring a risk surveyor on board early on in the process,” she explained. “And I think that's what the client should understand… they should, even at planning stage, be bringing the broker to the table, as they can then bring the underwriter and a risk surveyor to the table. They can all be involved along the way and have input on what measures they would want to see to make it a better overall risk.”

Irvine believes that for brokers in these scenarios, it’s about a balance between underwriting and education. “Yes, underwriting needs to be kind of adjusted for these kind of unique situations but it is all about having the dialogue really early,” she said.

“Quite often, with even the most standard of risks, we're often involved too late in the day.. you could have a client who's spending a lot of money doing a place out, ready to open to the public, and then they'll try and get the insurance quotes quite late in the process. I think the earlier we can get involved, the better for everyone, because then you're not having to do additional risk improvement retrospectively.”

Risks and mitigation techniques for floating hotels

Here are seven of the typical risks associated with floating hotels and how they can be addressed:

1. Weather and sea conditions

• Risk: Storms, rough seas, tsunamis, and hurricanes can damage structures and endanger guests and staff.
• Mitigation:
  • Install early warning and real-time weather monitoring systems.
  • Build to withstand marine weather events (reinforced structures, waterproof materials).
  • Develop and train staff on emergency evacuation and storm preparedness protocols.

2. Stability and structural integrity

• Risk: Floating platforms can become unstable or deteriorate due to saltwater corrosion, marine growth, and wave action.
• Mitigation:
  • Regular inspections and maintenance of hulls, pontoons, and mooring systems.
  • Use corrosion-resistant materials (marine-grade steel, treated wood, composites).
  • Employ marine engineers for structural assessments.

3. Limited emergency response access

• Risk: Difficulty accessing emergency medical services, fire departments, or rescue personnel.
• Mitigation:
  • Onboard first responders, including trained medical staff and firefighting crew.
  • Stock emergency supplies, defibrillators, and trauma kits.
  • Establish protocols for rapid evacuation via boats or helicopters.
  • Maintain communication links with coast guard or local authorities.

4. Environmental impact and compliance

• Risk: Pollution (e.g., wastewater discharge, fuel leaks) can harm marine ecosystems and result in regulatory fines.
• Mitigation:
  • Use closed-loop wastewater treatment systems.
  • Implement fuel spill containment and prevention plans.
  • Comply with MARPOL and other international maritime environmental regulations.
  • Partner with marine biologists for sustainable operations.

5. Guest safety and overboard incidents

• Risk: Risk of slips, falls, or guests falling overboard.
• Mitigation:
  • Install high, secure railings and anti-slip surfaces.
  • Use surveillance cameras and motion sensors near edges.
  • Train staff in man-overboard response.
  • Inform guests of safety protocols during check-in.

6. Logistical and supply chain challenges

• Risk: Difficulties in resupplying food, water, fuel, and other essentials.
• Mitigation:
  • Establish redundant supply chains with local and offshore vendors.
  • Store surplus stock of critical items onboard.
  • Use automated inventory tracking systems.

7. Cybersecurity and navigation systems

• Risk: Floating venues rely heavily on technology for operations, and they are vulnerable to hacking or GPS spoofing.
• Mitigation:
  • Regular cybersecurity audits.
  • Use encrypted communication and navigation systems.
  • Staff training on cyber hygiene and response protocols.