A leading banker called on the US government to insure hotel businesses rebuilding properties in disaster zones, or risk leaving affected areas derelict, at the Global Travel and Tourism Summit in Washington last week.
Henrick Barti, managing director of Aareal Bank said that following Hurricane Katrina insurance companies had withdrawn their cover of properties in affected areas for events such as the levee breaking.
He warned: "This could severely hinder the redevelopment of properties in risky areas. The government needs to intervene and provide coverage before the private sector will cover these eventualities again."
The expectation, he added, had been that insurance companies would demand higher excesses. But, because of the high risk of further hurricanes and natural disasters in the region, companies had begun excluding these eventualities from their cover.
"It becomes very difficult to get investors into areas insurance companies won't cover," Barti said.
Michelle White, manager of environmental affairs at Fairmont Hotels and Resorts, added: "With the environmental changes we will get more hurricanes and it is creating a new working environment. This is becoming more of an issue."
By Emily Manson
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