Case Studies

Fire at a Luxury Island Hotel Resort

J.S. Held Acquires Stapleton Group & Launches Strategic Advisory Practice

Read More close Created with Sketch.

The Situation

A substantial fire occurred at a luxury hotel resort in the northernmost atoll archipelago in the Maldives, which originated in a plant room and cut off the electricity and water supplies to the island. The hotel had to close twice. Once to initially conduct temporary repairs in December and January, causing the insured to lose out on peak Christmas and New Year trading. The second permanent repair was originally scheduled during the off-peak season, but due to delayed manufacture of the electrical board and logistical issues, it needed to be postponed until the start of the peak season, meaning a slower ramp-up of occupancy.

How We Advised

There was a dispute between the insured and the cedent’s appointed adjuster and accountant as to the value of the claim. We were appointed by the cedent’s treaty reinsurers in Singapore to review the BI claim calculations prepared by the insured’s representatives, those prepared by the local cedent’s adjuster and accountant, and those prepared by the independent adjuster appointed by the lead reinsurer in Dubai. We also provided an opinion on the actual value of the loss.

We observed the STR data used to benchmark and compare the property’s performance against its peer group, which was particularly useful in this instance as it showed the pre- and post-COVID-19 patterns and assisted in establishing the likely turnover of the subject property but for the fire damage.

We analyzed the property’s historic performance against its competitive set of high-end luxury resorts and tracked its occupancy and ADR from 2019. We also obtained Maldives tourist arrival data, which confirmed the insured’s assumptions that the occupancy would likely have ramped up quite quickly absent the fire. We also reviewed the insured analysis of transient versus agent bookings, with the mix seemingly affected by the fire even after the damage was restored. We questioned some of the assumptions made by the local insurer’s adjuster and accountant based on facts discovered during our review and agreed occupancy, rates, and savings with the insured’s claims preparers and reinsurer independent adjuster in preparation for settlement

Key Contact

Daniel Thorpe
Executive Vice President
Forensic Accounting - Insurance Services
+971 56 658 3620
[email protected]

Related Practice Areas

> Business Interruption / Lost Profits
We provide specialized expertise in the quantification of damages related to claims and disputes involving business interruption and lost profits. Our team combines their financial expertise and diverse backgrounds to effectively evaluate the insured's/claimant's operations and industry/market-specific factors, to quantify interruptions and lost profits.

> Forensic Accounting
Our Forensic Accounting Practice includes Certified Public Accountants, Certified Fraud Examiners, Certified Financial Forensics experts, and other financial experts who specialize in financial investigations, dispute resolution, and regulatory compliance. We deliver the truth behind the numbers in financial matters involving insurance claims and disputes, business interruption/lost profits, cyber damages, Delay in Start-Up (DSU) / soft costs, extra expense, family disputes, fraud, labor & employment disputes, personal injury damages, and bankruptcy/insolvency.

Our Experts