With the luxury hotel segment expected 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 providers—they are brands founded on trust and experiences. A single crisis has the potential to obliterate years of reputation; thus, standard practices are inadequate,” stated Sajja Praveen Chowdary, Head of Policybazaar for Business.
The report references real-world cases of financial loss, from the 26/11 attacks on renowned venues like the Taj and Oberoi to contemporary threats such as cyberattacks and ₹2 crore compensation claims from guests.
Key insights from the report include:
Operational and legal risks are increasing: Hotels are confronting lawsuits resulting from pool accidents, falling coconuts, and fire safety violations. Social media can rapidly amplify reputational setbacks.
Climate volatility is an escalating worry: India witnessed 27 cyclones between 2019 and 2024. Flooding in tourist hotspots such as Himachal Pradesh makes geography a vital underwriting consideration.
Assets demand dynamic protection: Properties with historical architecture, fine art, and luxurious interiors require specialized valuation and insurance.
Brand value is under threat: Interruptions in service or delays in recovery from incidents diminish guest trust and long-term revenue.
First Published: Jun 17, 2025 5:32 PM IST
