As the luxury hotel sector is anticipated to grow at a CAGR of 10.10% over the next seven years, the report cautions that these establishments are facing escalating threats from natural disasters, guest liability claims, cyber breaches, and operational failures.
“Luxury hotels represent more than mere service—they embody brands founded on trust and experience. A single crisis can dismantle years of reputation; thus, standard measures are insufficient,” stated Sajja Praveen Chowdary, Head of Policybazaar for Business.
The report presents real-life instances of financial repercussions, ranging from the 26/11 attacks on iconic venues like the Taj and Oberoi to contemporary threats such as cyberattacks and ₹2 crore guest compensation claims.
Key insights from the report include:
Operational and legal risks are on the rise: Hotels are facing lawsuits over incidents like pool accidents, falling coconuts, and fire safety violations. Social media can amplify reputational damage almost instantly.
Climate volatility is an increasing concern: India faced 27 cyclones from 2019 to 2024. Flooding in popular tourist areas like Himachal Pradesh is making geography an essential factor in underwriting.
Assets require dynamic protection: Properties featuring heritage architecture, fine art, and luxurious interiors necessitate specialized valuation and insurance.
Brand value is at risk: Service interruptions or slow recoveries from incidents can undermine guest trust and adversely affect long-term revenue.
First Published: Jun 17, 2025 5:32 PM IST
