Will Inadequate Staffing Cause a Rise in Hotel Claims?

During the height of the pandemic, the hotel industry, as with other sectors, was forced to lay off and furlough thousands of employees as a result of government-ordered lockdowns and record-low vacancy rates. As the travel industry recovers, hotels are still struggling to recruit workers back to their properties. According to the latest U.S. jobs report, the hospitality (hotels and restaurants) sector is down by 1.5 million workers, or 9%, from February 2020.

COVID Impact on Staffing

Some employees have left the hotel industry altogether while COVID variants (Delta, Omicron) continue to impede management’s ability to get staffing levels to where they were before the pandemic. Hoteliers are trying to find the right staffing balance to meet their guests’ needs amid a difficult labor market, while at the same time the majority of properties are still not operating at full capacity.

To address the labor shortage, some hotels have pivoted with new initiatives like opt-in housekeeping where rooms are cleaned during a guest’s stay only if specifically requested, while others are offering fewer menu items or amenities. Others have increased wages and are offering sign-up and retention bonuses to attract and recruit workers.

At the same time, during the pandemic, capital investment in hotel projects came to a standstill. Hotels put off investing in property maintenance, such as replacing carpeting or getting a new roof. Hoteliers were forced to take a hard look at expenses to determine how they could operate as lean as possible amid dramatically reduced occupancy levels.

Keeping an Eye on Safety amid Reduced Staffing

The combination of staff shortages, particularly in housekeeping and security, and tight cash flow that delayed much-needed property upgrades may result in a rise in liability claims.

For example, old carpeting that is frayed or lifting in the corners could cause more guests to trip and fall. The lack of sufficient security in the parking lot and on the grounds poses greater liability exposure for hotels.

A labor shortage also means employers are frequently forced to schedule fewer staff members, are increasingly relying on overworked current employees, and hire less skilled candidates. Exhausted and underqualified workers are more likely to cut safety corners or make careless errors during their daily tasks, which increases the risk of accidents.

For example, spills in the restaurant or restrooms may not be attended to as quickly as they would have been before with a full staff, leaving the hotel with greater liability risks.

The hotel industry is working hard to getting staffing back on track. It is important not only to the success of their properties but also to keeping their guests safe and secure. Talk with your insureds about how critical it is to keep up with their safety and security protocols even in the face of a reduced staff.

About Distinguished Programs
Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Real Estate, Community Associations, Hotels, and Restaurants. Property and liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished Programs’ high-limit umbrella programs remain the clear choice in its areas of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.

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