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Navigating the 2025 insurance landscape: A guide for South African hospitality stakeholders

Navigating the insurance landscape in 2025 will, like 2024, be filled with challenges. We are no strangers to this, however, having overcome many obstacles as an industry over the last few years. Like many others, the South African hospitality industry is facing an arduous operating environment.

By Robyn van der Walt, senior account executive of SATIB Insurance Brokers

A confluence of factors, including economic uncertainty, geopolitical tensions, climate change, and increased competition, are reshaping the risks insurers must manage. In more detail, some of these include: Economic uncertainty: fluctuating exchange rates, rising inflation, and potential recessions can impact consumer spending and travel patterns.

Geopolitical tensions: global conflicts and instability can disrupt travel routes, deter tourists, and increase security concerns.

Climate change: changing weather patterns, more frequent and severe droughts, floods, and storms pose significant risks to hospitality infrastructure and operations.

Increased competition: the rise of online booking platforms and alternative accommodations has intensified competition within the hospitality industry.

Heightened client expectations: today’s guests have higher expectations for personalised experiences, value, and sustainability.

These challenges have far-reaching implications for hospitality insurance, such as:

• Increased claims: Natural disasters, property damage, and other claims have risen due to climate change and operational risks.

• Risk assessment challenges: The evolving landscape requires insurers to assess and adapt their risk assessment methodologies continuously.

• Increased cost of insurance: South Africa’s insurance market faces rising costs due to the need for international reinsurance coverage. This is influenced by global reinsurers’ perception of South Africa as a high-risk market, which translates into higher pricing. To mitigate this, as SATIB we prioritise placements with A-rated reinsurers. This ensures financial stability and the confidence that claims will be handled effectively, providing peace of mind for policyholders.

• Product innovation: SATIB continues to work with our insurance partners to develop innovative products that address the specific needs and risks of hospitality businesses in a changing environment. Here’s what you need to know about the various roles and responsibilities you may have as a stakeholder when it comes to hospitality insurance:

1) Guests/travellers:

Travel insurance such as our SATIBGo product: While not mandatory, travel insurance is highly recommended for covering unexpected events such as cancellations, medical emergencies, and evacuations. For example, if a guest’s flight is cancelled due to unforeseen circumstances, travel insurance can reimburse them for non-refundable deposits and expenses.

Indemnity agreements: Guests should carefully review indemnity agreements and adhere to the rules and regulations set by the lodge or tour operator. This helps protect both the guest and the business from liability.

2) Tour operators/direct management companies:

Public liability: Essential for covering liability arising from equipment malfunctions, accidents during guided tours, or injuries caused by negligence. For instance, if a kayak rented by a tour operator develops a hole and causes an injury, public liability insurance would cover the resulting claims.

Passenger liability: Passenger liability insurance is crucial to protect against accidents if employees or agents drive guests. This is especially important for transfers to and from airports or other destinations.

Medical evacuation: Advising clients to have travel insurance with medical evacuation coverage is a responsible practice. This ensures that guests can receive critical medical care, even in the most remote locations.

3) Lodge owners/hotel owners/bed and breakfasts:

Public liability: Covers accidents and injuries on the property, including wildlife encounters. For example, if a guest is injured by a wild animal on the property, public liability insurance would cover the medical expenses and potential legal claims.

Passenger liability: Protects against accidents involving vehicles owned or operated by the business. This is essential for lodges offering transportation services to guests and/or game viewers on safari game drives.

Medical evacuation: Essential for both guests and staff, especially in remote locations. Medical evacuation insurance ensures that individuals can be transported to a facility with appropriate medical care in case of an emergency.

To navigate these challenges successfully, all stakeholders in our industry should consider the following:

Embrace risk management: Implement robust risk management strategies to identify, assess, and mitigate potential risks, such as fire response plans and medical emergency protocols.

Partner with their brokers: Collaborate with us to develop tailored insurance solutions that address your specific industry and business needs. We are specialists for a reason and understand this industry.

Focus on sustainability: Incorporate sustainability practices into operations to reduce environmental risks and attract eco-conscious travellers.

By proactively addressing these challenges, the South African hospitality industry can build resilience and ensure a sustainable future, with each stakeholder taking ownership of their role.