Hotels collectively lost $111.8 billion in room revenue over the past two years, according to the 2022 State of the Hotel Industry Report produced by the American Hotel & Lodging Association (AHLA). However, the outlook for the industry's recovery is positive.

But as hotels return to normal capacity, they may need to brace themselves for what Peter Kern, group chief executive officer of Expedia, is predicting will be “the busiest travel season ever." As the hard-hit industry emerges from the pandemic, independent agents can provide valuable assistance to ensure their hotel and motel clients secure quality coverage at a fair price.

Here are four ways agents can help:

1) Consult with clients on a regular basis. “As hotel business increases, many hotel owners and managers will be focusing more on marketing their hotel and making sure they have the proper staff so they can operate their hotel efficiently and effectively," says Greg Wetherwax, commercial lines product and profitability consulting underwriter, Westfield. “Insurance and risk management practices might not be as high on their agenda at first. So, it is the job and responsibility for agents, along with an insurance carrier's risk control and underwriting departments, to make time and consult with their hotel owners and management team on a regular basis."

Working with clients on their risk mitigation and risk management plans can also help soften the blow of the hard market. “There are many aspects and factors within a risk management program where the insured can lower their insurance premium by assuming risks they can control and manage," Wetherwax says.

2) Review safety programs and staff training. Hoteliers have many things to consider when reopening their business to full capacity, but at the top of the list is the safety of guests and staff.

“Hoteliers should ensure staff is trained frequently and aware of their role and responsibilities," says John Welty, president, SUITELIFE Underwriting Managers. “Agents might suggest hoteliers create an emergency action plan (EAP) that employees can refer to and study. Having an EAP is a good start, but simply having the plan is not enough—hoteliers should conduct various drills, review what worked and what didn't, and make necessary adjustments."

While hotels saw a decline in the number of general liability and workers compensation claims over the past two years, it is anticipated that there will be an increase in the number of slip and fall claims as customers return.

“The hope is that hotels provide best practices to keep common areas clear of any debris and also maintain sidewalks," says Sarah Wirtz, area senior vice president/casualty manager, national environmental practice leader, Risk Placement Services. “This is increasingly important in geographic locations prone to snow and ice as that can lead to serious and costly claims."

3) Review property values. Agents have a role to play in ensuring hotel and motel properties are appraised, particularly in light of increasing inflation and supply chain issues that may be causing increases in repair and rebuilding costs.

Since the pandemic, one impact has been “an increase in property-related claims as building maintenance and capital improvements have slowed down due to less maintenance staff and lesser financing," Wetherwax says.

Agents can assist clients as “hoteliers will want to be sure their property was recently assessed and adequately valued to make sure they have adequate coverage for repairs or to rebuild," Welty says. “Agents should regularly check in with their insureds to encourage them to obtain an independent appraisal, as well as have an insurance to value (ITV) calculation run on the property to verify the building's coverage limit is adequate for the risk."

4) Present comprehensive information. When looking for competitive coverage with a reputable insurer, agents should “present comprehensive information to the carrier when requesting a quote and at the time of renewal," Welty says. “They will want to present their client as a good risk: a hotel that takes risk mitigation seriously and regularly assesses its risk."

Understanding the capacity levels in the marketplace is essential in finding competitive rates and coverage. “There is diminished property capacity in areas of the country that are vulnerable to catastrophic events like wind, hail, flood and storm surge," Wetherwax says. “In those areas of the country, the number of carriers willing to underwrite the property is reduced and reinsurers are more likely to be involved, which can dictate much of the terms, conditions and rates."

There are many considerations to make as hotels and motels become busy again—and agents can play a key role.

Olivia Overman is IA content editor.