Agents and brokers who are trying to win, or simply renew, clientele in the luxury hotel and resort segment are finding it more challenging than ever–but not because of rates, which remain relatively competitive and affordable for now. Instead, the challenges come from the changing profile of the high-end hospitality industry and a still-sputtering international economy. Meeting these challenges requires the broker to be well-prepared, adaptable, and able to work with experts and specialists committed to the segment.

Consider some of the changes that have taken place at resort properties in recent years. There has been a steady increase in dual-income professional couples who are more inclined to choose a destination resort and bring their children with them on vacation. Once on site, they are looking for entertaining activities and amenities for all ages, as well as increased care options–including child care centers, in-room babysitting and day camps–each of which is likely to prompt detailed supplemental underwriting.

Another change is in the variety of water sports available at resorts near the water. While a little snorkeling or surfing might have been promoted in the past, it is now common to see resorts advertising boogie boarding, kayaking, deep-sea fishing, seasonal whale-watching, canoe rides, and stand-up paddle boards. How familiar are you with the risks of laser sailing, for example? Complicating matters, many of these activities are promoted by the hotel, but not controlled by them. We are familiar with the case of a third-party vendor who got referrals through a hotel, and casually wore one of their shirts while instructing. When one of his customers, a recent med-school graduate, was seriously injured in a fall from his surfboard, the plaintiff's attorney successfully argued vicarious liability and won a multi-million-dollar award from the hotel. The vendor, who was underinsured, paid a minor portion of the award. The broker for resorts must constantly review third-party contracts for appropriate hold-harmless language, indemnification and proof of adequate insurance.