Know About Business Interruption Insurance in Hospitality Industry

Hospitality industry is one of the major service sectors and employer across many economies in the world. The hospitality industry consists of various fields such as lodging, restaurants, cruise line, and some fields within the tourism industry. It is more vulnerable to economic fluctuations when compared to other industries, as there are various risks involved in running a hospitality business. However, as with any other industry, the risk of losses from unforeseen events such as hurricanes, earthquakes, flooding, fire, etc., clearly remains.

So, it is very important for hospitality operations to take reasonable steps to protect their property, employees and financial circumstances. Many businesses in this industry are aware of such widespread losses and would never consider opening a business without buying property and liability insurance policies. But many of them, particularly small businesses, fail to think about how they would manage if any interruption occurs to their business for many days.

Importance of business interruption insurance

Let us consider this example to better understand the importance of business interruption insurance. Suppose an unforeseen event such as fire or floods makes your business place temporarily unusable, relocate your business or shut it down for a while. What would be the impact on the business? A regular commercial property insurance policy covers only the physical damage to your business. What about the profits which could have been earned during this period? How to pay rent, employees’ salaries and other important payments while your business is being rebuilt? This would definitely result in substantial financial loss.

Business interruption insurance (also known as business income coverage) helps businesses in situations like this. Many businesses without the business income coverage, shut down their business operations after their business is completely shuttered due to some unforeseen event. It covers the loss of income and helps a business return to the financial position as it was in prior to the disaster. Hence, a business in hospitality industry should understand the importance of business interruption insurance and should go for this insurance.

Critical aspects of business interruption insurance

Business owners from hospitality industry should be aware of some of the critical aspects of business interruption insurance. Here, we will take a look at some critical aspects of hotel business interruption coverage and understand why it is very useful for businesses in hospitality sector.

Business interruption period

The business interruption period is the length of period for which the benefits are payable under an insurance policy. This period is the most critical part of quantifying the business interruption loss. It covers a business from loss of income for a specified period till the damaged business property is repaired or reopened. Some hotels being aware of the losses that may persist even after repairs are done; opt for “extended period of indemnity”. As it may take some time for the hotel to regain bookings and rebuild market share.

Loss of rooms revenues

The business in the hospitality or the lodging industry may suffer financial performance as two of its main functions, occupancy percentage and average daily rate (ADR) may get affected. In simpler terms, a hotel damaged by a hurricane or fire or stuck in a deep local recession will not be able to generate any revenues because of closed rooms, especially in hotels and lodges. Business interruption insurance compensates you for lost income due to loss of rooms. It covers the profits you would have earned, based on your financial records.

Other lost revenues

Revenues from food and beverage, conferences, golf, spa, etc., can constitute a significant portion of a hotel’s income. When a business is interrupted, not only revenues through rooms are affected, some or all of these sources of income are typically interrupted. The business interruption insurance covers all the profits that would have been earned.

Ordinary payroll

Even if the business activities are temporarily stalled, operating expenses, and other costs such as rent, electricity bill, taxes, interest payable on bank loans, payroll costs etc., cannot be ignored. The business still needs to retain some employees such as accountants, front office executives etc. The business owner needs to pay salaries to them. In this kind of situations business interruption insurance is very helpful as ordinary payroll coverage is a common endorsement in many policies.

Extra expenses

Business interruption policies generally allow an Insured hotel to claim extra expenses incurred during the period of indemnity. It reimburses for reasonable expenses that allow the business to continue operation while the property is being rebuilt. Some policies also cover the extra costs required for moving the business to a different (temporary) location.

Business interruption insurance is one of the most important insurance policies that help in minimizing the adverse consequences of some unwanted events for the businesses in the hospitality industry. A well-thought out risk strategy by hotel owners or operators can make a significant difference at the most crucial times.

101 Ways to Market Your Business

From most of my involvement with churches, they seem to shun any type of ministry to business owners other than a prayer breakfast or business person’s luncheon. From what I’ve been told, the fear is that the church could become a networking place where business owners would come to get more business. And in taking that stance, they are leaving hurting people suffering.

I believe that the church should meet practical as well as spiritual needs of business owners and people who want to go into business. Jesus met the practical needs of people and then was able to address the spiritual needs because the people he ministered to were now open to what He had to say.

There is no reason that the church shouldn’t follow that model. And in many areas the church is meeting the practical needs of people who are suffering, but the business person is being left out.

For most of my business and professional career I have struggled to answer questions in my business or about starting business that would have been easily answered by a seasoned Christian business owner.

As I walked through church I would see business owners who were successful and would wish that one of them would sit down with me and help me get answers to the questions that I had about going into business or advice on challenges I was facing in my business. But that never happened. I struggled and suffered in silence when there was a very good possibility that some other business person had the answers I needed or could at least offer encouragement to me if they didn’t.

And especially in this economy, business owners are suffering quietly while all multiple other groups are being supported, encouraged and edified by the church.

It has been my experience that business people, in general, have a stronger walk with the Lord than others who have a job. I know this is going to ruffle feathers of other Christians that aren’t business people, but this site is for business owners and those who want to go into business so I’m not going to be concerned about that.

Before I started my industrial construction business, I always wondered why many of the leaders of the church were business owners or top-level executives.

After I had been in business for a little while, I realized that business people had nobody else to rely on but God. And because they only had God to rely on, their walk with the Lord was strong and consistent. Now this is just my observation, but I’ve seen it over and over again in different churches so I’m going on the assumption that it is the same for most churches.

I think it’s a travesty that the church is not supporting business owners in these tough times and I’m proposing to start a ministry designed to create a friendly open environment where business owners and business leaders can meet, share ideas and edify each other. I’m trusting God to fill in all of the details, but this is what He has put on my heart at this time.

101 Ways to Market Your Business

For any business to survive and achieve profitability, it needs customers. To get enough customers, effective and strategic marketing is very important. Let us therefore examine this text entitled “101 Ways to Market Your Business” written by Andrew Griffiths.

Griffiths is a professional marketing consultant, as well as a director of an Australian company called The Marketing Professionals. Griffiths is an accomplished trainer and a reputable public speaker. He specialises in trouble-shooting for companies that are in dire need of professional advice on marketing and customer-related issues.

According to him, this book will show you how to take the hard work out of marketing your business. He says it will show you how to achieve dramatic improvement in your business without investing a lot of time and money. This trainer assures you that these 101 practical marketing strategies will offer you guide on how to realise the full potential of your business. He reflects that each strategy is based on proven marketing techniques employed by successful businesses the world over.

According to this marketing consultant, these 101 ideas are simple, affordable and quick to implement. Griffiths stresses that many of them take less than 30 minutes to implement and will bring results fast. Choose and apply a new idea each week or use this book as a source of inspiration for new ways to market your services, your products and your business, submits Griffiths.

He says in this book, there are ideas to help you find new customers, increase the loyalty of the existing customers, create great promotional material and make your business stand out from the competing crowd.

This book is segmented into 13 basic sections of 101 strategies. Additionally, there are 20 bonus ideas that constitute a kind of textual appendage to the major 101 strategies. Section one is entitled “Getting started” and constitutes a kind of conceptual preamble of the book.

According to Griffiths here, people generally start a small business or buy a small business for different reasons. Sometimes it is because they are good at their chosen profession and feel that they can make a better living working for themselves, sometimes it is a lifestyle change and sometimes it is simply a lifelong dream.

This author says running a business requires many skills that take time to develop. Griffiths stresses that though marketing ideas are important for success in your business, he also believes that having the right attitude is essential. “I have been fortunate enough to work with a lot of very successful business operators. They all have similar attitudes and thoughts on doing business and I believe that is what sets them apart from those businesses that always seem to struggle,” submits the author.

Section two is interrogatively entitled “Does your business stand out from the crowd?” and contains the first nine strategies of marketing your business. These strategies are how to promote your business from the outside in; how to put your message on the company car; turning your invoice into a sales tool; selling yourself even when you are not there and using the internet in such a way as to be noticed. Griffiths also reflects that a good uniform impresses everyone and tells you how to make the most of packaging in your business. He advises you not underestimate the importance of a business card, asking you if your business has a memorable name.

Section three of this marketing text is based on making the most of the customers you already have, and contains six of the strategies, that is, strategies ten to fifteen. This author tells you in this section to send out reminder notices; stay in touch with your customers; remember important dates; ask your customers for referrals; say “thank you” to generate more business; and use a loyalty programme to your advantage.

In section four containing four of the strategies, that is, strategies 16 to 19, Griffiths teaches you how to write press releases, stressing that everybody loves a winner. He says you should call the local radio station and ask your customers to tell their friends about you.

Section five is interrogatively tagged “Are you willing to try a few unusual ideas?” and covers 15 of the strategies, that is, strategies 20 to 34. In this section, Griffiths tells you to get behind a wacky promotion; enjoy the benefits of brainstorming; use inflatable toys to build your business; remember the good old bumper sticker; use a spruiker to draw in the crowds; offer prizes in competitions; and get your business in the Guinness Book of Records.

This author also advises you to use the local pizza company to generate business; take ownership of an event; think differently about marketing your business; use industry publications to collect ideas; start a marketing-idea box; take your message on the road with a mobile billboard; and use a blackboard to get attention.

Section six is based on the need to encourage your staff, and contains four of the 101 strategies, that is, strategies 35 to 38. According to Griffiths here, good staff are the backbone of any successful business. “Unfortunately, most of the time all I ever hear are people complaining about problems with their staff, not their good points. From my experience staff are as good as the training and encouragement they receive,” stresses the author.

He says one of the greatest tragedies that he witnesses in most businesses he visits is that the people serving do not know how to sell, adding that very few businesses have well-trained sales staff.

According to Griffiths in section seven that is based on how to make it easy for people to buy from you, and contains strategies 39 to 42, “I can never understand why some businesses seem to make it hard to buy things from them.”

He says freecall numbers (where you pay for the incoming calls) are not expensive, thus suggesting that any business aspiring to expand into a larger geographical region should arrange for this service immediately.

The author stresses that once you have your free-call number, you should give it to your customers and have it printed on your business cards. He also discusses the perfect gift for the customers; how to make it easy for people to give you money; and the need to make life easy for parents and cater for their kids.

Section eight is based on the need for you to have smart and hard-hitting promotional material, and contains strategies 43 to 50. In this section, Griffiths discusses the concepts of making your first brochure and making up an information booklet to give customers.

He says you should always be prepared to hand out a brochure; build credibility with testimonials from happy customers; start your own newsletter; deploy clever promotional materials that cost no more; and always be under your customers.

In sections nine to 12, Griffiths X-rays the concepts of how to daily make advertising works for your business; building credibility into your business; going out to chase business; and thinking like a customer. These four sections cover strategies 51 to 97 of the 101 strategies for marketing your business.

By way of segmentation, section nine contains 19 strategies (51to 69); section 10, five strategies (70 to 74); section 11, 14 strategies (75 to 88); and section 12, nine strategies (89 to 97).

In these four sections, Griffiths advises you to work with other businesses and promote each other; use cheap classified advertisements to generate business; get your suppliers to help you with advertising; tap into large-based organisations; sponsor a courier and be seen all over the town; never underestimate the intelligence of your customers; support a local team and scan the newspapers for goodwill messages.

He says you should always try to sell to the decision-maker, not the assistant; always make a follow-up call after the sale; ask your customers how they heard about your business; offer free delivery to have a competitive edge, etc.

Section 13, the last section is interrogatively christened “Is your business promoted in as many places as possible?” and contains the remaining four strategies, that is, strategies 98 to 101. Here, Griffiths shows you an easy way for customers to keep your number handy; the power of the local convenience store; the need to put your company flyer or business card in the corner whenever you visit the local shopping centre, etc. In addition to these basic 101 strategies, this trainer also offers you 20 bonus ideas.

On style, Griffiths’ efforts are commendable in this book. He presents the ideas in a simple language. By segmenting the 101 strategies into 13 sections, he makes the study of this text easy. However, some strategies are repetitive in the book. It is better to make necessary adjustments and avoid the attendant conceptual redundancy.