Source: Hotel News Now
by Terence Baker
March 4, 2020
GLOBAL REPORT— The spread of the coronavirus (COVID-19) outbreak is leading to significant monetary losses stemming from business interruption.
In the hotel industry, this manifests via hotel closures or partial closures, canceled events and conventions, and fewer guestrooms occupied on weekdays by business travelers and leisure guests choosing alternate destinations or deciding to stop traveling altogether.
Sources from the insurance world said that there is not much hoteliers—be they independent or part of global chains—can do to offset losses via insurance policies.
Tony Gibbs, a director and owner at Reading, England-based chartered insurance broker and financial advisor Macbeth, said if business-interruption coverage can be obtained, its scope would be “very, very limited.”
Gibbs said he thought possible recompense at its maximum end would be approximately £100,000 ($127,711), maybe approximately £250,000 ($319,277).
“What I am telling my clients is that now is a good time to have a review of their policies, but that in any event, coverage is limited,” Gibbs said.
Sources said companies should also be reviewing their procedures such as working from home, business continuity, travel and other business-related aspects.
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There have been attempts to help cover markets and businesses from losses stemming from global virus outbreaks, but any initiatives come at high expense due to the potentially very high financial exposure, sources said
The World Bank devised two such bonds, but critics have said as they trade on open markets, in the case of coronavirus the bonds’ worth inevitably falls and they become worthless, while in a period where no pandemics exist, it is only investors who benefit.
