Preparing Hotels for Natural Disasters and the Steps to Recovery
By Amy King
Natural disasters occur more frequently and with more force than ever before. According to the National Oceanic and Atmospheric Administration, from 1980-2024, the U.S. experienced an average of nine natural disasters with losses exceeding $1 billion per year. But in just the past four years, that number skyrocketed to an average of 23 disasters per year. In 2024 alone, there were 27 natural disasters with over $1 billion in losses – seventeen of those were severe storms.
Whether it be hurricanes, tornadoes, wildfires, floods, hailstorms, or earthquakes, hoteliers must be ready with emergency plans, trained personnel, and reliable communication strategies. By proactively addressing potential risks, hotels can safeguard their guests and assets while demonstrating leadership and resilience in times of crisis.
“It used to be we thought natural disasters only happened in certain areas, like hurricanes near the gulf,” said John Houghtaling II, managing partner at Gauthier Murphy & Houghtaling (GMH), a law firm that processes insurance claims for property owners and an AAHOA Club Blue Industry Partner. “Now, with weather pattern changes and global warming, we are seeing more forest fires and even large hailstorms destroying hotel roofs.”
Stay Informed, Be Prepared, and Get Connected
Staying informed, prepared, and connected when disaster strikes is critical to protecting lives, continuing operations, and minimizing financial loss. First and foremost, hoteliers must follow state and local directives, including evacuations. Each community maintains its own rules for disasters, so owners with hotels in multiple areas need to be aware of a distinct municipality’s orders. By working with local leaders, hoteliers receive safeguards and media coverage to connect displaced survivors and recovery teams with available hotels.
Prior to an event, hoteliers should provide frequent training to keep staff informed of emergency procedures. On site, owners must have property evacuation plans that identify building exits and points of contact. In addition, hoteliers should back up files online, take photos of their property, and create copies of all insurance policies. A command center equipped with security cameras to monitor conditions is beneficial for owners staying off site. Internal communications such as automated emails, WhatsApp channels, and social media can keep staff connected during a weather event.
As for supplies, hoteliers should have enough to last three days for guests and staff, including water, non-perishables, first aid kits, ready-to-eat meals, batteries, flashlights, weather radios, and non-flammable candles.
In the event of a natural disaster, hotels can lose power for between seven and 10 days. Generators, including small, hand-crank generators that can charge cell phones without gas, prove useful. Generators and electronics should be stored at least one to two feet above ground level in case of flooding or storm surge. If evacuating, hoteliers must have documentation showing proof of ownership if a curfew is issued.
Government resources like Ready.gov and apps from FEMA and state emergency management departments have comprehensive preparation steps and videos for all types of natural disasters. App users can receive alerts, view evacuation routes, locate open shelters, find disaster assistance, and upload photos to first responders.
“The best thing to do is be prepared before a disaster happens,” said Houghtaling. “It can happen to you. You can work your whole life and lose everything.”
In the Eye of the Storm
Hoteliers must choose to remain open if their property isn’t in a mandatory evacuation or flood zone – and if their insurance policy allows them to weather the storm. A staff member is required to stay on site throughout the disaster for guest safety, too.
Hotels that continue operations often serve as shelters for the community and recovery teams. When acting as shelters, hotels typically see utilities restored faster and receive support from legislators. If closing, hoteliers can expect to be shuttered for a few weeks to a couple months.
It is critical for hoteliers to keep their staff and guests informed of conditions and procedures, whether through social media, paper notices, emails, or group texts. Instructional signage should be placed throughout the property, and occupied rooms should receive information sheets. During hurricanes, owners and operators must check hallways for wind coming into the building through open windows to ensure the roof does not blow off.
“We do our best to stay in touch with our guests, so they know we are with them, and we know where they are,” said AAHOA Vice Chairman Rahul Patel, who owns multiple Florida hotels that have been affected by hurricanes. “We hunker down because there is not much we can do until the storm passes.”
Some storms can last as long as six to 14 hours. During that time, emergency personnel cannot respond to 911 calls until it is safe to do so.
“It’s a terrible experience because you know no one is coming to help you,” said Patel. “It is the innkeeper’s responsibility to keep everyone safe.”
Following a natural disaster, hotels that have minimal damage or that reopen quickly can join FEMA’s Emergency Lodging Assistance program, which provides temporary accommodations to displaced survivors. Hotels that house applicants obtain payment on behalf of FEMA. FEMA also offers a business guide that provides steps for emergency planning, response, and recovery for businesses of all sizes.
The Poison Pill of Insurance Policies
Often, dealing with insurance companies can be worse than the disaster itself. Having a team of expert insurance consultants in place prior to an emergency can be a hotelier’s greatest asset. These professionals conduct pre-loss risk assessments and insurance coverage reviews at no charge.
“Firms like ours do a free policy review because there is a lot of fine print in contracts,” said Houghtaling. “It doesn’t obligate hoteliers to use us, but it is a resource that is available.”
Many policyholders assume their policy has disaster coverage within the countless pages of fine print. However, half of today’s policies have an arbitration clause, which does not penalize the insurance company for not paying.
“You think you have insurance, but you really don’t,” said Houghtaling. “If there is no penalty for not paying, then insurance won’t pay. I used to see this loophole in 5 percent of policies. Now I see it in half. It is buried deep in the fine print and is very dangerous.”
Claims firms can find arbitration clauses in policies and negotiate them out, but brokers typically do not know how. Brokers sell insurance, but they do not use it, so it is always better to have a claims firm review the policy.
“It’s business life or death if it’s in there,” said Houghtaling. “The insurance company is putting a poison pill in the policy, and they are insulated from bad faith and late payments. The insurance companies are your adversary when it comes time to use their policies. They cheat all the time, and it’s happening more.
“This isn’t a bad apple out of the bunch. This is the bunch. You have to be careful when buying and using them. There are procedural pitfalls when you make a claim. Knowing how to navigate the claims process can go faster and maximize benefits.”
Navigating the Claims Process
Following a catastrophe, once hoteliers call in a claim with their insurance company, a claim number is issued, and the insurer will dispatch an adjuster. The claim number is a bank account through the insurance company to determine how much money they expect to pay out.
If the insurance company has minimal information about potential costs and loss, they won’t put much money in the account. The more information they have about damages sustained by a disaster like a hurricane or wildfire – and the earlier they receive that information – the more accurate the reserve is from the beginning. If the claim reserve is low, it can result in delays and denials, but when it is high, it can provide maximum benefits and a reduction in recovery time.
Hoteliers should provide insurance companies with a detailed cost estimate and repair time, as well as the cost per day the hotel is losing from closure. When hoteliers set the reserve instead of an adjuster or insurance company, the claim can be paid quickly and fully. If done correctly, properties can be back up and running and reach 100 percent occupancy, which increases the cap rate and value of the asset.
“In general, the insurance company does not owe you any money on a claim until they have proof of what they owe,” said Houghtaling. “If they drag their feet with adjusters, and adjusters take forever with reports, then they don’t pay. If reports are delayed, they can keep kicking the can down the road.”
Firms that conduct the claims process for clients will review the policy, report the claim, and have their own contractors on hand to provide estimates instead of relying on adjusters hired by insurance companies. Having a trusted contractor who is willing to start work immediately drives insurance companies to approve the work.
“A public adjuster is good but can’t do the work,” said Houghtaling. “We represent the best interest of the property owner. If you hire a claims professional from the beginning, then the fees can be a third of the cost compared to hiring later. Several law firms charge the same fees as public adjusters, but the firms are on your side, so you come out on top. Do not wait for the insurance company to tell you how much your claim is worth. You need to be the one doing it.”
When Hurricane Ian struck southwest Florida in 2022, Patel gathered hoteliers together for GMH to meet them in one location. This helped speed up the process, taking it from weeks to days.
“It’s important to work with knowledgeable companies like GMH,” said Patel. “They are your best bet in making sure your claims are properly filed. There are too many loopholes, and your claim can fail if it is not studied correctly.”
Storm Season Is Here. Are You Prepared?
At the heart of hospitality is a promise of security and preparedness. As tornado season winds down, hurricane and wildfire season picks up – is your hotel ready to weather the storm?
Natural disasters can strike with little warning, leaving destruction in their wake. For hoteliers, the stakes are high: Your property, your staff, your guests, and your community all rely on your readiness. From power outages and property damage to displaced guests and operational downtime, the impact of severe weather can be devastating if not properly planned for.
AAHOA is here to help. The Disaster Preparedness Resource Hub provides the tools and information you need to get ahead of catastrophes. From checklists and response templates to expert advice and recovery guidance, we’ve curated resources designed specifically for hotel owners and operators.
Your guests are counting on you, and so is your team. Don’t wait for a storm to put your readiness to the test – prepare now.
Image: nibelheim/stock.adobe.com
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