A guest at a luxury boutique hotel might, over the course of their stay, lie out by the pool, grab drinks at the lounge, or book a massage at the hotel’s spa. Whatever their itinerary might look like, their safety and satisfaction with their stay are of utmost importance, especially in the world of online reviews where a few comments can quickly tarnish a boutique hotel’s reputation among the high-end clients it hopes to attract.
Insurance professionals working with these hospitality businesses need to have the same mindset when crafting insurance programs.
“When we speak to a client or a broker who we work with, our focus is really on how does our program enhance either directly or indirectly the guest experience in that hotel because we all know that a bad social media review can be crippling,” said John Welty (pictured), practice leader for SuiteLife, an all-lines insurance and risk management program aimed at four and five-star hotels and resorts, at Venture Insurance Programs.
“Most hotel owners are not insurance savvy [with] the terms that we use in insurance, so we try to place everything in a guest experience – how do our coverages provide for a better or improved guest experience, and how can we avoid a negative guest experience in the coverages that we’re providing or the risk management services or the loss control services that we’re providing to that hotel?”
Take a boutique hotel that has an outdoor swimming pool. From an insurance standpoint, the focus might be on depth markers, railings, steps that lead into the water, the number of diving boards, and whether chlorine is added or not. However, a guest is likely taking stock of that pool in other ways.
“From a guest experience, we really try to impose upon the general manager or the hotel owner as to what are we doing in a pool scenario that really enhances a guest experience, and that could be how the floor may be wet from people getting in and out of the pool, to the towels that we’re providing, to the posted rules around a pool,” said Welty. “It still focuses on pool depth markers, and on rules and regulations, but we try to explain that to a hotel as a guest having these things and the proper procedures that really enhance the guest experience.”
As hotels modernize and implement technology, cyber threats also become a concern, which is why cyber risk and privacy liability is a line of business covered in the SuiteLife program. You only have to look at the Marriott breach and the estimated $200 million to $600 million in losses coming out of the incident, to realize the degree of danger that cyberattackers pose to hotels.
“Cyber has always been an issue for hotels, although most hotels don’t see the real need for the cyber coverage. We have started making a much more concerted effort to offer cyber coverage through four different carriers on each and every hotel,” Welty told Insurance Business. “We look at three or four areas that maybe the hotel hasn’t recognized as a cyber threat. It could be the reservation system – does it include the guest names or any personal private information, such as the credit card information, and what if that reservation system was hacked, either through an outside entity or some other way? You’re not worried about that day’s clientele – you’re really worried about all the clientele that are in your reservation system.”
Electronic guest keys are also a concern. While being able to register online for a hotel stay and making an electronic key available on a guest’s phone is convenient, since it cuts out having to check in at the front desk and potentially losing a physical key during a stay, phones can be hacked and cloned through a third-party tool, like Bluetooth.
“If someone is actively trying to hack in and clone your phone, knowing that you’re staying at a hotel, and you’re using the electronic key feature that the hotel provides, they know where you are and when you are not at the hotel,” said Welty. “When you’re not at your hotel, they can then use your cloned phone and actually go into your room because now they have the electronic key, so that is a concern from a cyber standpoint.”
If a guest connects to the hotel’s network through their smartphone or other devices, they can likewise be exposed, should a hacker gain access to that network.
“We see cyber as a growing threat and growing concern for our hotels,” Welty told Insurance Business. “We are selling more and more of the cyber product to our hotels, and that really comes from educating the hotel as to how cyber can directly impact that guest experience. The last thing any hotel wants is to have a guest hacked.”