By Pádraig Hoare
Over four-fifths of hotel owners have said rising insurance costs are negatively impacting business, according to a report from the Irish Hotels Federation.
The cost of insurance for hotels has risen to €60m annually, the IHF’s annual conference in Cavan heard.
The situation is as grave as Brexit and needs addressing as a matter of urgency, said IHF president Joe Dolan.
He said rising premiums and a “growing compensation culture” were having a detrimental impact on cost competitiveness.
“It is costing the equivalent of €1,000 per room annually. This is unsustainable, especially for the tourism and hospitality sector, which is so price-sensitive,” he said.
The IHF said it welcomed the report of the Cost of Insurance Working Group on employer and public liability insurance costs, which recommended increased transparency, a review of compensation levels, and improving the personal injury litigation process.
Mr Dolan said capping damages would “significantly help in ensuring consistency” in awards made while giving some certainty as to the likely claim costs.
“Currently it’s like writing a blank cheque. We believe a cap would encourage insurance companies to take more cases to court, rather than settling them quickly, as happens too often now and to the detriment of our members,” he said.
Mr Dolan said hoteliers were concerned about the increasing fraudulent and exaggerated insurance claims as well as rising premiums.
The IHF survey found over half its members believe a fraudulent claim was made against their property in the past three years.
Mr Dolan said “strong deterrents” were needed to eliminate fraud.
“We have no issue whatsoever with genuine accidents where guests are rightly and properly compensated. However, we are concerned at the increasing number of opportunistic and fake claims. All too often such claims are viewed as a victimless crime when the reality is that every single guest pays the price,” he said.
The IHF represents almost 1,000 hotels and guesthouses nationwide, employing more than 60,000 people.
Its annual conference at the Slieve Russell Hotel in Ballyconnell, Co Cavan, continues today.