The hotel renewal is also a cash-flow decision.

1. Bring the operating budget into the review

AHLA's 2026 industry report describes an operating environment under continued cost pressure. That context matters because an insurance retention competes for the same cash as staffing, maintenance and capital improvements.

Use monthly figures for rooms, food and beverage, events and other material revenue. Separate expenses that continue during a closure from those that genuinely stop. A flat annual estimate can obscure a seasonal property's most important period.

Source: AHLA: 2026 State of the Hotel Industry (January 27, 2026)

2. Model a partial closure, not only a total loss

Consider a hypothetical water leak that takes 12 rooms out of service across two floors of a 120-room hotel. There may be repair costs, disrupted room revenue and additional operating expense, even while the rest of the property stays open.

Coverage depends on the cause of loss and the policy's terms, including how it treats a partial suspension. Do not assume every relocation, cleaning or guest-service cost is insured. Chubb's hospitality water-damage guide is a useful operational reference for prevention and response, rather than a statement of coverage.

Source: Chubb: Protecting hospitality businesses from water damage (2020 risk-control guide)

3. Separate rebuilding from income recovery

Travelers explains the core business income concept: income lost and qualifying continuing expenses during a covered interruption. The policy's restoration period, waiting period and limit are important to that calculation.

An extended business income provision addresses a different question: what happens to income after operations resume? It does not automatically lengthen the rebuilding period. Review the actual wording, time limit and triggers. A general decline in demand is not automatically an insured interruption.

Source: Travelers: Understanding business income coverage

4. Check the franchise and lender documents

Brand and financing requirements may address limits, deductibles, insurer ratings, endorsements and evidence. Marriott's 2026 Westin disclosure document is one brand-specific example, not a rule for all hotels.

Match the current agreements to the proposed program and identify any approval needed. Planned property-improvement work should also be disclosed. An obligation to renovate is not, by itself, an insured loss.

Source: Marriott: 2026 Westin Franchise Disclosure Document, Section 15 (March 31, 2026)

5. Compare the cash the owner keeps at risk

Put the premium beside the deductible, uninsured items, expected continuing expense and available working capital. Ask what happens if the loss occurs during peak season or while a major renovation is already using cash.

Our view: the renewal discussion should end with a clear picture of what is insured, what the hotel retains and what would support reopening. Favor a defensible recovery plan over a headline premium reduction.

• Current policies, schedules and loss history
• Monthly operating figures and seasonality
• Franchise, management and lender insurance requirements
• Water-damage controls and planned capital work