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Hospitality Risk

What the Vegas Shooting Means for Hotel Security

Hospitality may eventually be compelled to adopt airport-style security measures, but for now training is key to prevention.
By: | October 19, 2017 • 6 min read

Movie theaters, schools, nightclubs, work functions… these are places where no one expects violence to break out, but where mass shooters chose to carry out their crimes. With the shooting in Las Vegas, executed from a suite in the Mandalay Bay Resort and Casino, the hotel industry now joins that list.

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The hospitality sector has long been acknowledged as a soft target, relatively unprotected from shootings, terror attacks and other types of violence. To some degree, that’s not likely to change. Hotels face unique challenges in crafting security plans. They need to have enough visible security to make guests feel safe, but not alarmed. They need to identify and investigate suspicious behavior while respecting patrons’ privacy.

“There’s a fine balance between having security onsite at a hotel and invading guests’ personal space or causing concern,” said Christian Ryan, U.S. Hospitality and Gaming Practice leader, Marsh.

However, some believe that the latest incident, which claimed 59 lives, will spark a culture change. Guests may become more comfortable with and even expect armed guards and metal detectors. They may not mind having their bags scanned if they recognize it could prevent another attack.

Lance Ewing, EVP, Global Risk Management at Cotton Holdings Inc., said that Americans tend to see safety as a right and often take it for granted.

“People in other countries don’t necessarily take safety for granted. In some European, Middle Eastern, and Asian countries, hotels are already using armed guards and metal detectors. Some have bomb-sniffing dogs in the lobby. Some take your bags when you arrive, scan them and deliver them right to your room so you don’t even touch them once you enter the building,” he said.

“Are we ready for those measures in the U.S.?”

Ryan said that scanning luggage could be the “next evolution” of hotel security.

“People in other countries don’t necessarily take safety for granted. In some European, Middle Eastern, and Asian countries, hotels are already using armed guards and metal detectors. Some have bomb-sniffing dogs in the lobby.” — Lance Ewing, EVP, Global Risk Management, Cotton Holdings Inc.

“Some propositions are in the works for hotels to start scanning bags, though it’s not likely in the near future,” he said. “The public may demand some extra security in light of the events in Las Vegas, and there could be legislation down the road.”

Christian Ryan
U.S. Hospitality and Gaming Practice Leader, Marsh

Advanced technology like facial recognition software may also play a larger role in threat identification. So far, development of that technology has focused on making the travel experience more pleasant for hotel guests. Recognizing and keeping tabs on a guest tips the hotel off to his or her particular preferences — what type of drink does he like; what kind of amenities might she be interested in?

But it could also be used to “cross-reference databases to conduct background checks and look for criminal histories,” Ryan said. That could help to counteract the fact that express and mobile
check-in capabilities — also a product of technological advancement — reduce interaction between hotel staff and guests, making it tougher to spot suspicious behavior.

Of course, not every person looking to cause harm will have a criminal history, or at least not one that will raise red flags at the front desk.

Bo Mitchell, founder and president of 911 Consulting, said that often the perpetrators of mass shootings and other high-profile attacks “look like your uncle, your cousin, your sibling,” and that facial recognition software “can’t recognize crazy.”

“You can’t stop these attacks committed by unstable people. Your obligation is to respond to them,” he said.

Adoption of tougher security will depend on a hotel’s type, location, and clientele. Resorts and casinos that aim to entertain as much as to provide accommodation will draw larger crowds than simpler hotels that primarily serve business travelers, airport layovers or people en route to somewhere else.

Current Practices and Challenges

None of this should suggest, however, that hospitality companies haven’t already invested heavily in security and crisis management.

“Safety and security have always been a linchpin of hospitality, and the majority of hotels are extremely safe places,” Ewing said.

Most security planning is and will continue to be focused on training staff to identify suspicious behavior and respond appropriately — though it may be kicked up a notch.

Bo Mitchell, founder and president, 911 Consulting

Housekeeping staff plays a key role in noticing anything suspicious in a guest’s room, including weapons, drugs, extra wires, signs of human trafficking, or an unusually large amount of luggage. They can also keep tabs on how long a guest has kept their ‘do not disturb’ sign on the doorknob.

“How long can someone leave up a ‘do not disturb’ sign? If they’re staying for a week and no one’s been in the room, that should be a red flag,” Ryan said.

Active shooter training is also a mainstay of hospitality risk management, and has been since Columbine put mass shooting on everyone’s radar.

“Chances are if someone notices something suspicious, other people have too. But you can’t put those pieces of the puzzle together if you haven’t trained employees to say something.” — Michelle Colosimo, director, BlackSwan Solutions

High turnover rates make it difficult to get that training to stick, however, and hotels have to continually bring new employees up to speed. Ewing also noted that at some franchise hotels owned by flagship hospitality companies, training doesn’t always “trickle down” to the housekeeping and food and beverage staff as it should. Mitchell has also observed a lack of emergency training among hotels employees, even though such training is required by OSHA.

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“The leadership level might know what to look for and what actions to take, but that needs to be pushed down through the ranks,” said Michelle Colosimo, director, BlackSwan Solutions. “And people need to comfortable airing their concerns, without worrying if they’ll be perceived as overreacting or be retaliated against. Chances are if someone notices something suspicious, other people have too. But you can’t put those pieces of the puzzle together if you haven’t trained employees to say something.”

Hotels typically work closely with local police departments, who in many cases will provide active shooter training for free if requested, Marsh’s Ryan said.

“The magnitude of people that come in and out of the casinos and hotels in Las Vegas requires a robust security force, and heads of security are in close contact with police,” he said.

Open carry laws that vary state by state have always posed a challenge, but could complicate security policies going forward.

What Lies Ahead

Las Vegas police have generally been credited with good instincts and fast response in locating the shooter on the 32nd floor. But other reports cite slow communication between hotel staff and officers. Could better planning have prevented loss of life?

Michelle Colosimo, director, Black Swan Solutions

“Security in some ways runs counter to the culture of a hotel. They want to embrace, nourish and nurture their guests. No one wants to think about bullets and bodies,” Mitchell said.

“Active shooter scenarios are not necessarily the types of events venues are preparing for. It’s a risk you take on that you expect to be small, but that can have huge implications,” Black Swan’s Colosimo said.

High profile locations with casinos and entertainment venues, or those close to concert halls, arenas, parades or other gathering places will need to expand their security scope to include non-traditional threats.

Hospitality companies can look to other sectors for lessons learned. Universities, for example, have been targeted in several shootings.

“They have the job of training students, staff and security police, but it’s not invasive. You don’t see armed guards standing at the entrance of every lecture hall. They’ve developed some best practices that could be introduced into the hospitality space,” Ryan said.

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One of those best practices is a mass alert or notification system. Universities can notify students and staff of everything from a school closing to active shooter or shelter-in place situation via text message. Likewise, hotels could employ such a system to remind employees what to do in the event of an emergency – whether they should shelter-in-place or evacuate and where to go.

“You don’t think as clearly in a crisis situation as you do when you’re calm. Having that alert that tells you what to do or where to go can help you make a decision,” Colosimo said. “You can also segment those messages to send different communications specifically to your crisis response team if you want to. Managing your communication channels is key.”

Some industry experts compared upcoming changes in hospitality risk management to the response by airports after the 9/11 attacks. Security got noticeably tighter, and has become a fact of life. But the changes were not always made quickly, and it took time for the public to adjust. &

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Insurtech

Kiss Your Annual Renewal Goodbye; On-Demand Insurance Challenges the Traditional Policy

Gig workers' unique insurance needs drive delivery of on-demand coverage.
By: | September 14, 2018 • 6 min read

The gig economy is growing. Nearly six million Americans, or 3.8 percent of the U.S. workforce, now have “contingent” work arrangements, with a further 10.6 million in categories such as independent contractors, on-call workers or temporary help agency staff and for-contract firms, often with well-known names such as Uber, Lyft and Airbnb.

Scott Walchek, founding chairman and CEO, Trōv

The number of Americans owning a drone is also increasing — one recent survey suggested as much as one in 12 of the population — sparking vigorous debate on how regulation should apply to where and when the devices operate.

Add to this other 21st century societal changes, such as consumers’ appetite for other electronic gadgets and the advent of autonomous vehicles. It’s clear that the cover offered by the annually renewable traditional insurance policy is often not fit for purpose. Helped by the sophistication of insurance technology, the response has been an expanding range of ‘on-demand’ covers.

The term ‘on-demand’ is open to various interpretations. For Scott Walchek, founding chairman and CEO of pioneering on-demand insurance platform Trōv, it’s about “giving people agency over the items they own and enabling them to turn on insurance cover whenever they want for whatever they want — often for just a single item.”

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“On-demand represents a whole new behavior and attitude towards insurance, which for years has very much been a case of ‘get it and forget it,’ ” said Walchek.

Trōv’s mobile app enables users to insure just a single item, such as a laptop, whenever they wish and to also select the period of cover required. When ready to buy insurance, they then snap a picture of the sales receipt or product code of the item they want covered.

Welcoming Trōv: A New On-Demand Arrival

While Walchek, who set up Trōv in 2012, stressed it’s a technology company and not an insurance company, it has attracted industry giants such as AXA and Munich Re as partners. Trōv began the U.S. roll-out of its on-demand personal property products this summer by launching in Arizona, having already established itself in Australia and the United Kingdom.

“Australia and the UK were great testing grounds, thanks to their single regulatory authorities,” said Walchek. “Trōv is already approved in 45 states, and we expect to complete the process in all by November.

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group.” – Scott Walchek, founding chairman and CEO, Trōv

“On-demand products have a particular appeal to millennials who love the idea of having control via their smart devices and have embraced the concept of an unbundling of experiences: 75 percent of our users are in the 18 to 35 age group,” he added.

“But a mass of tectonic societal shifts is also impacting older generations — on-demand cover fits the new ways in which they work, particularly the ‘untethered’ who aren’t always in the same workplace or using the same device. So we see on-demand going into societal lifestyle changes.”

Wooing Baby Boomers

In addition to its backing for Trōv, across the Atlantic, AXA has partnered with Insurtech start-up By Miles, launching a pay-as-you-go car insurance policy in the UK. The product is promoted as low-cost car insurance for drivers who travel no more than 140 miles per week, or 7,000 miles annually.

“Due to the growing need for these products, companies such as Marmalade — cover for learner drivers — and Cuvva — cover for part-time drivers — have also increased in popularity, and we expect to see more enter the market in the near future,” said AXA UK’s head of telematics, Katy Simpson.

Simpson confirmed that the new products’ initial appeal is to younger motorists, who are more regular users of new technology, while older drivers are warier about sharing too much personal information. However, she expects this to change as on-demand products become more prevalent.

“Looking at mileage-based insurance, such as By Miles specifically, it’s actually older generations who are most likely to save money, as the use of their vehicles tends to decline. Our job is therefore to not only create more customer-centric products but also highlight their benefits to everyone.”

Another Insurtech ready to partner with long-established names is New York-based Slice Labs, which in the UK is working with Legal & General to enter the homeshare insurance market, recently announcing that XL Catlin will use its insurance cloud services platform to create the world’s first on-demand cyber insurance solution.

“For our cyber product, we were looking for a partner on the fintech side, which dovetailed perfectly with what Slice was trying to do,” said John Coletti, head of XL Catlin’s cyber insurance team.

“The premise of selling cyber insurance to small businesses needs a platform such as that provided by Slice — we can get to customers in a discrete, seamless manner, and the partnership offers potential to open up other products.”

Slice Labs’ CEO Tim Attia added: “You can roll up on-demand cover in many different areas, ranging from contract workers to vacation rentals.

“The next leap forward will be provided by the new economy, which will create a range of new risks for on-demand insurance to respond to. McKinsey forecasts that by 2025, ecosystems will account for 30 percent of global premium revenue.

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“When you’re a start-up, you can innovate and question long-held assumptions, but you don’t have the scale that an insurer can provide,” said Attia. “Our platform works well in getting new products out to the market and is scalable.”

Slice Labs is now reviewing the emerging markets, which aren’t hampered by “old, outdated infrastructures,” and plans to test the water via a hackathon in southeast Asia.

Collaboration Vs Competition

Insurtech-insurer collaborations suggest that the industry noted the banking sector’s experience, which names the tech disruptors before deciding partnerships, made greater sense commercially.

“It’s an interesting correlation,” said Slice’s managing director for marketing, Emily Kosick.

“I believe the trend worth calling out is that the window for insurers to innovate is much shorter, thanks to the banking sector’s efforts to offer omni-channel banking, incorporating mobile devices and, more recently, intelligent assistants like Alexa for personal banking.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.”

As with fintechs in banking, Insurtechs initially focused on the retail segment, with 75 percent of business in personal lines and the remainder in the commercial segment.

“Banks have bought into the value of these technology partnerships but had the benefit of consumer expectations changing slowly with them. This compares to insurers who are in an ever-increasing on-demand world where the risk is high for laggards to be left behind.” — Emily Kosick, managing director, marketing, Slice

Those proportions may be set to change, with innovations such as digital commercial insurance brokerage Embroker’s recent launch of the first digital D&O liability insurance policy, designed for venture capital-backed tech start-ups and reinsured by Munich Re.

Embroker said coverage that formerly took weeks to obtain is now available instantly.

“We focus on three main issues in developing new digital business — what is the customer’s pain point, what is the expense ratio and does it lend itself to algorithmic underwriting?” said CEO Matt Miller. “Workers’ compensation is another obvious class of insurance that can benefit from this approach.”

Jason Griswold, co-founder and chief operating officer of Insurtech REIN, highlighted further opportunities: “I’d add a third category to personal and business lines and that’s business-to-business-to-consumer. It’s there we see the biggest opportunities for partnering with major ecosystems generating large numbers of insureds and also big volumes of data.”

For now, insurers are accommodating Insurtech disruption. Will that change?

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“Insurtechs have focused on products that regulators can understand easily and for which there is clear existing legislation, with consumer protection and insurer solvency the two issues of paramount importance,” noted Shawn Hanson, litigation partner at law firm Akin Gump.

“In time, we could see the disruptors partner with reinsurers rather than primary carriers. Another possibility is the likes of Amazon, Alphabet, Facebook and Apple, with their massive balance sheets, deciding to link up with a reinsurer,” he said.

“You can imagine one of them finding a good Insurtech and buying it, much as Amazon’s purchase of Whole Foods gave it entry into the retail sector.” &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at riskletters.com.