Risk example: Hotels
Overcrowded hotel ballrooms, bars, lounges, and restaurants present predictable risk
Overcrowding is a large risk in a hotel. Overcrowded hotel ballrooms, bars, lounges, and restaurants constitute conditions for slip, trip, and fall risk. Overcrowding can also violate OSHA standards for exit routes and fire marshal rules for occupancy limits. Just as a poor FICO score can signal risky driving habits, violation of crowding standards can signal risky property management habits.
When a hotel applies for property & casualty insurance, it will report its estimate for occupancy, typically as average and maximum numbers. Generally, these numbers are approximated and not based on any actual measurement. Measurement is hard and actual occupancy will ebb and flow in ways that are hard to predict. Estimates by one risk manager in one hotel won’t be comparable to estimates by other managers in other hotels. Establishing a baseline for occupancy will be practically impossible.
The occupancy of ballrooms, in particular, can depend on the policies of the banquet sales staff–unbeknownst to hotel general management. Sales people anxious to meet food and beverage quotas might not be attentive to limits imposed by fire marshals. Even banquet management may not be aware of overcrowding in standing-only events.
BlueZoo sensors make it practical to measure occupancy accurately, and to track occupancy rates over time. Delivering an accurate, and auditable, measurement of occupancy means that insurers can establish a meaningful baseline for hotel operations and accurately identify outliers. This real time measurement can also be a tool to prevent risk. When a ballroom is overcrowded, BlueZoo alerts can warn hotel staff to investigate and remediate any problem. Logs of these warnings can be provided to both chain management and the insurer.
Insurers will easily be able to correlate poor claims experience with actual behavior (presence and movement of people), and then identify properties that are more likely to experience claims in the future. Ultimately the insurer can assign risk values to frequency and severity of ‘violations’ and therefore reduce the frequency and severity of claims.
In addition to ballrooms, all common areas are candidates for overcrowding. This includes restaurants, lounges, meeting rooms, gyms, and even parking lots. Insurers need to look for patterns of overcrowding. While visits by risk analysts are unlikely to coincide with overcrowding, risk analysts can be directed to hotels that show repeated crowding events in order to investigate. Rather than send risk analysts to properties at random, better to have them focus on property where behavior on-the-ground doesn’t correspond to expected behavior.
