Rebounding from a Natural Disaster

The odds are good that you’ll never experience a thousand-year flood firsthand in your lifetime. With only a 0.1 percent chance of happening in any given year, these cataclysmic weather events—which often lead to major damage and loss of life—are not something that most people are prepared for when they do arrive. However, there have been at least four such events so far in 2016, including the floods that hit The Greenbrier, a National Historic Landmark and resort in White Sulphur Springs, W.Va., in late June.

“We had about 12 inches of rainfall in a very short period of time. The grounds of the resort were completely underwater and many of the buildings had flooded,” describes Elmer Coppoolse, the property’s COO. Making the situation more difficult, the roads surrounding The Greenbrier washed away and were closed off for safety reasons. “We couldn’t get to the property to take inventory until the water started to recede,” Coppoolse says.

Despite the extensive damage and the loss of 23 lives, The Greenbrier instantly started rebuilding. “It was imperative that we got back up and running immediately, not because we wanted to accommodate guests, but because the surrounding community was devastated by the flood,” Coppoolse explains. “Our CEO, Jim Justice, opened the hotel up to people who were displaced. We had over 700 flood victims staying at the hotel for over two weeks. We were also a FEMA distribution point. We helped them set up in the area to take care of that community.”

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The flooding was doubly devastating because the surrounding community relied heavily on The Greenbrier as one of its main employers. “Fixing the damage was important, yes, but helping out our community was most important to us. The real challenge was to get people back to work as quickly as possible,” says Coppoolse.

Restoration teams worked night and day to reopen the property, and fewer than three weeks later, The Greenbrier was back to accommodating guests. “We’re still encountering setbacks, but the best thing for us will be getting our occupancy back up following the interruption. The more guests we have, the more hours our employees get, and the easier it is for them to rebuild their own lives,” says Coppoolse. “It’s almost too simple, but that’s how it seems to be working for us and the community.”

While The Greenbrier was able to start bouncing back relatively quickly, that isn’t always the case for hotels that experience a natural disaster. To reopen, a property requires that hoteliers are well-organized from an insurance and procedural standpoint, says Jake Parsons, managing director at financial advisory and management consulting firm the Claro Group. “So many properties are just not prepared for a loss from a weather event,” he explains. “This means having a really good insurance policy in place before anything ever happens.”

Parsons recommends that every hotel work to develop an individualized insurance plan that covers their high risk areas. “For example, if your property is in a high flood zone, you should probably pay a little bit extra to have flood insurance as a part of your policy,” he says. In fact, there are a number of specialized policies that cover not just natural disasters, but protect against liability in the case of a crime or pollution. “Pollution liability insurance is actually very important for hotels,” says Parsons. “Certain infectious diseases can be spread via standard equipment like ice machines. If an outbreak occurs, general property insurance won’t protect the hotel, but a pollution policy will. You need specific coverage.”

On the procedural side, Parsons says that every property should have a disaster response plan that is widely shared throughout the organization. “Everybody needs to be on the same page in terms of procedure if an event occurs,” he explains. This includes being conscious of weather events that may impact your property, such as a hurricane or blizzard. “Having check-in calls with owners, managers, and staff in the immediate hours before a storm is paramount,” he says. “As is touching base afterwards to discuss any damages or lack thereof.”

It can be difficult for a hotelier to switch gears to manage recovery efforts along with the day-to-day responsibilities of running a property. In many cases, it helps enormously to hire outside help to ensure that a hotel is recovering financially, as well as hitting reconstruction benchmarks. “If you’re not a dedicated risk manager, there are things that will likely slip through the cracks,” Parsons says. “Some insurance programs even cover the cost of an engineer or a specialist to come and assess structural damage, as well as a forensic accountant who can assist in preparing the financial details necessary to submit a claim.” He also notes that there are many different kinds of insurance available to hotel owners—property, general liability, disaster, crime, and cyber crime, among others—so it helps to have someone who is able to break everything down into understandable terms.

Coppoolse agrees that hoteliers should seek the experience of experts. “One of my greatest takeaways after what happened to The Greenbrier was that any hotel facing damages after a disaster should hire a public adjuster to handle your insurance claims,” he says. “One of the hardest parts was getting our insurance company to understand and keep up with the speed we required to get our doors open and back in business.”