When Hurricanes Threaten, Planning Makes the Diference

Juan Mascaro and Jay Taylor

Business Descriptor When Hurricanes Threaten, Planning Makes the Difference

Companies who When it comes to vacations, coastal and and guests, minimize property damage, subtropical resorts often top the list for make their operations more resilient and implement clear hurricane related exposures. That puts expedite recovery after the storm passes. many of the hospitality industry’s most actionable plans, popular and valuable properties at the greatest risk from hurricanes and tropical help to protect storms. Major windstorms can jeopardize Risks to Guests and Staf lives, cause signifcant damage to their staf and buildings and property, disrupt customer The prime concern of any hotel or resort services and stife revenue streams, but is the safety of its guests and staf. A storm guests, minimize proper planning can help limit losses and that knocks out power to a wide area can speed recovery. strand guests in buildings without power, property damage, with dwindling supplies of food and fresh From Florida’s Key West, north to Cape water, and limited sanitation facilities. make their Cod and west to Corpus Christi, many of The hotel may be responsible for the most popular resort areas are at risk evacuating guests, including those with operations more every year from potentially dangerous physical limitations, and for providing storms. In Florida, for instance, tourism is transportation. If evacuation is not resilient, and the leading industry, now drawing more possible or not advised, the property may than 100 million visitors annually who have to care for guests for an extended expedite recovery spend tens of billions of dollars.1 Severe period of time while local services remain hurricanes can have a major impact severely disrupted. after the storm on tourism. After Hurricane Katrina devastated New Orleans in 2005, tourist passes. visits dropped by nearly two-thirds and took a decade to bounce back to near Property Exposures pre-storm levels.2 Together, Hurricanes Katrina, Rita and Wilma caused roughly Powerful hurricanes can cause extensive $68 billion in insured losses in 2015 damage to roofs, doors and windows and dollars.3 Hurricane Sandy ravaged New destroy smaller structures. Near coastal Jersey’s shore vacation areas in 2012, and areas, the lower foors of buildings may caused a total of $18.75 billion in insured be at risk of signifcant damage from property losses along the East Coast, fooding. Besides the immediate damage excluding federal food claims. caused by the storm, water intrusion due to torrential winds may lead to conditions It’s not just the East and Gulf Coasts. that promote mold, particularly during is heavily dependent on tourism, power outages that shut down air which accounts for roughly a ffth of the conditioning systems in hot, humid state’s economy.4 When , weather. Hawaii’s costliest hurricane, slammed into the island of in 1992, it caused To avoid structural damage that leads to $2.7 billion in insured losses in 2014 water intrusion, the roof should be rated dollars.5 This year, Hawaii had a close for hurricanes, and the windows for fying brush in July with , which objects. Hotel and resort buildings, along hit the state as a tropical storm bringing with other structures on the property, heavy rainfall and fooding. should meet all local building code requirements and be able to withstand While hotels and resorts have no control the potential strength of windstorms for over the weather, taking the proper their area. Structures that meet or exceed steps before a hurricane can lessen the the appropriate requirements help to impact. Companies that implement clear, protect guests, staf and property. 2 actionable plans help to protect their staf Environmental Exposures

Hurricanes can give rise to a variety of environmental exposures, of which mold is a major concern. Whether through a broken window or leaking roof, once water gets into a building it can lead to mold growth on wet dry wall and other surfaces. The lack of adequate ventilation due to power outages can accelerate mold growth. This may require extensive remediation that necessitates shutting down portions or all of a building. Coastal properties may be at risk for other environmental problems. For example, a category 3 hurricane or higher may dislodge above-ground fuel tanks, causing leaks or spills.

Before the Storm

Preparation and planning ahead of time are the most important steps to protect relocation plans should be established many new hotels do not open. Guests may guests and property. Contingency well beforehand. Within the property, be endangered by rising temperatures in planning that encompasses prevention, planning should cover how to safely a sealed building. emergency response, evacuation criteria move guests to lower foors when a loss and disaster recovery is essential. The of power shuts down elevators. Staf may When a hurricane is imminent, everyone plan should designate an emergency have to provide additional assistance to in the area will be seeking the same coordinator and response team, and it guests who are not physically able to walk supplies. For that reason, hotels and should be reviewed with local authorities. down many fights of stairs. resorts should preposition stocks of The staf should be familiar with the plywood to cover windows and doors. plan, including communication protocols The potential for extended loss of utilities Emergency lighting, battery-powered and the proper procedures for shutting that afect water supplies, sanitation pumps to remove water, replacement down systems within the facility, such as and ventilation should be addressed. batteries and back-up generators are natural gas supplies, or the entire facility. Local city water pressure is generally also advisable. Emergency lighting Companies may wish to contract with only sufcient for sanitation needs on is particularly crucial for stairwells. disaster restoration vendors ahead of time lower foors of a building, and pumps are Emergency supplies should include sand so that they can restore their operations required to move water to higher foors. If bags and storm barriers. quickly. Property managers also should the toilets aren’t working on upper foors, review their insurance policies to make guests will have to be moved to lower In addition, property managers need to sure that wind and food coverage are foors or relocated to another facility. The consider how to protect their data when adequate. lack of water pressure also afects fre a storm knocks out power or severely protection systems. Unless fre pumps damages a building. Crucial records and Plans should cover provisions for staf and are provided with electrical power, or are documents need to be backed up or guests who need to evacuate, relocate diesel powered in order to pump water removed and taken to another location. or shelter in place. Guests may have to to higher foors, sprinkler systems may Local property managers should follow be relocated from a shorefront property not be efective. Separately, ventilation corporate procedures for backing up data to one located further inland. The is a serious concern because windows in and securing documents.

3 When Hurricanes Threaten, Planning Makes the Difference

Before a hurricane arrives, hotels and After the Storm resorts should review their coverage to When the storm has passed, hotel managers should account for all guests make sure that both their windstorm and employees. If anyone needs rescuing, managers should rely on professionals and food coverage are sufcient to with the proper equipment. Everyone should avoid driving in fooded areas as cover potential expected losses. foodwaters may be contaminated or may be deep enough to carry away people and cars. Standing water may pose a danger if it is electrically charged from downed power lines.

Storm Warnings During the Storm When it is safe to do so, managers should conduct a preliminary inspection before A hurricane watch indicates that storm Should emergency ofcials advise guests entering fooded or wind-damaged conditions may arise within the next 36 to shelter in place, the hotel will be buildings. Professionals should check hours. This notifcation should trigger responsible for providing adequate and gas, water and electric utilities for the facility’s emergency action plan and safe food and water. Properties should damage. Any damage to buildings and protective measures. A hurricane warning maintain sufcient supplies of bottled equipment should be photographed and means that sustained winds of at least water and staf should be alert to local documented. Temporary repairs can 74 mph are expected within the next 24 warnings to boil or otherwise treat city- be made to protect buildings and their hours. By the time a warning is issued, supplied water. Without electrical power, contents. protective actions should be nearly the property’s kitchen may not be able to complete and personnel moved to a safe operate. Loss of refrigeration can quickly At this point, the disaster restoration location. lead to food spoilage and the increased part of the emergency plan can be threat of salmonella contamination. implemented. Managers should When a storm threatens, managers To address those concerns, hotels coordinate closely with local authorities should reach out to guests that haven’t should maintain adequate stores of who may block of certain areas for arrived yet and advise them not to come. non-perishable food. In addition, hotels safety reasons. As soon as it is permitted, The more individuals on the site, the should stock housekeeping supplies, disaster recovery vendors can begin the more people the resort will have to care medical supplies and spare blankets. process of restoring the property. for. When a warning is issued, properties should take the appropriate steps, for Along with guest safety, the property Hurricanes provide a major test of a instance, deciding whether to shut down should have a means of securing the property’s emergency plan. Managers certain facilities and ensuring that the property itself as well as any valuables should review how staf performed to supplies on hand will be adequate for that guests have brought with them. fnd any shortcomings in their plans guests and staf on site. Vehicles should be fueled, and where and revise as needed. This post-incident the proper facilities exist, sufcient fuel review can provide crucial lessons for the Property managers will have to work should be kept on hand for transportation future. with local authorities when it comes vehicles. Managers should be prepared to evacuation plans, which apply to to handle disruption of communications hospitality properties as well as local locally and have on hand sufcient residents. Guests at a coastal property battery-powered radios to keep track of may have to evacuate while those weather updates, ofcial announcements further inland may be able to shelter in and any evacuation orders. This also place. As part of their evacuation plans, includes preparations to deal with the the hotel also may need to arrange for shutdown of computer and record- transportation for guests and employees. keeping systems on site.

4 guest liability issues. He has as spoken at regional and national conferences on a variety of topics to include slip trip and fall issues and the aging population, and management best practices concerning contractual liability. Prior to joining Chubb, served as an ofcer in the US Army.

Endnotes

1. Florida tourism generated $89.1 billion in economic impact in 2015, VisitFlorida, April 28, 2016, see: http:// www.visitforidablog.org/?p=15486 2. New Orleans tourism booms 10 years after Hurricane Katrina, CNBC, Aug. Weathering Storms About the Authors 28. 2015, see: http://www.cnbc. com/2015/08/28/new-orleans-tourism­ As part of their overall emergency plan, Juan C. Mascaro, Vice President, booms-10-years-after-hurricane­ hospitality properties should ensure they Hospitality Segment Leader of Real Estate katrina.html have the adequate insurance in place to and Hospitality Division of Chubb Major 3. Hurricanes, Insurance Information withstand the fnancial impact of a major Accounts in New York City. In this role Institute, see: http://www.iii.org/fact­ storm and get business back to normal since 2009, he has been responsible for statistic/hurricanes as soon as possible. Before a hurricane the underwriting strategy, growth, and 4. Hawaii’s $14 billion tourism industry arrives, hotels and resorts should review proftability of the hospitality segment. back to pre-recession levels, their coverage to make sure that both Joined Chubb in 1999 and has held Washington Post, Sept. 27, 2013, see: their windstorm and food coverage are several positions in the Internal Audit https://www.washingtonpost.com/ sufcient to cover potential expected department, with responsibility for blogs/govbeat/wp/2013/09/27/hawaiis­ losses. operational and fnancial audits for the 14-billion-tourism-industry-back-to­ corporation. In 2003, he transitioned to pre-recession-levels/ Hospitality companies may want to work the Department of Financial Institutions 5. Hawaii Hurricane Insurance: Fact with an insurer that has experience in in New York City, and in 2005, moved File, Insurance Information Institute, the industry and that can provide risk to the Real Estate Practice as a property see: http://www.iii.org/article/hawaii­ engineering support, including health, and casualty underwriter in the Southern hurricane-insurance-fact-fle safety and environmental consulting. The Zone. insurer should be fnancially strong and able to provide a broad range of coverages Jay Taylor, CSP,ARM is Vice President, to match the company’s needs. within Chubb’s Risk Engineering Department. Mr Taylor has more than Hurricanes can pose a major challenge 26 years of experience in the casualty for the hospitality industry. By taking risk engineering feld. Most recently, has the appropriate steps ahead of time and been embedded in the Chubb Real Estate working with the right insurer, hospitality and Hospitality practice services and companies can help to ensure that they consultation to real estate and hospitality can weather any storm. industry clients in the areas of slip, trip and fall, employee ergonomics, and

5 When Hurricanes Threaten, Planning Makes the Difference

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