Business Interruption Considerations For Hotel Losses

Irrespective of the industry in which an Insured operates, the basic intent of business interruption ("BI") coverage is to place the Insured back into the same position they would have been in had the insured peril not occurred.

Those of us who are already familiar with hotel industry losses will already know that all of the basic BI calculation mechanisms apply when calculating hotel losses. However, let us examine some of the ways in which basic BI concepts apply specifically to the hotel industry.

Standard Turnover

It is arguable that the projection of Standard Turnover is more of an art than a science: in the absence of a crystal ball, a significant degree of professional judgement and knowledge of the industry is required. A forensic accountant may rely on a number of sources and techniques when projecting Standard Turnover, such as: