Jamaica’s Recovery Waits on Insurers
A year after Hurricane Melissa, about 20 Jamaican hotels remain closed and six in 10 tourism insurance claims are unpaid. Confirm every winter booking against current reopening status.
Nearly a year after Category 5 Hurricane Melissa, Jamaica’s hotel recovery is being held back by insurance payouts, not by builders. About 20 hotels remain closed as the winter season approaches, the Associated Press reported on 1 October. For advisors booking Jamaica for December to April, that means checking reopening dates and outlet status property by property, not relying on the island’s general recovery.
The survey
The Jamaica Hotel and Tourist Association (JHTA) surveyed members on their Melissa claims. According to the Jamaica Gleaner’s 28 September report:
- 61% of tourism insurance claims are still unresolved; 39% are fully settled and paid.
- 70% of claimants reported deductions above what they understood their average clause to be.
- About one-third saw deductions of more than 40% of claim value.
- 67% expect to recover less than 75% of their losses; only 10% expect full compensation.
- 28% of respondents’ hotels had not yet reopened.
The AP reports that more than 80% of JHTA members filed property or business-interruption claims. The survey’s sample size was not published.
“Our members did their part. They held cover, declared their exposure, and filed in good faith. The issue is not access to cover. It is cash,” JHTA president O’Brian Heron said, as quoted by the Gleaner. He told the AP that claims “are being paid slowly and settled short, and that leaves a working-capital hole” across the sector.
The wider damage
The AP puts total damage at an estimated $12 billion, concentrated in the island’s northwest, which includes the Montego Bay and Negril resort areas. It projects $2.2 billion to $4.2 billion in private insured losses, mostly commercial claims. The AP also reports a 17% drop in visitor arrivals, an 18% fall in tourism revenue and about $550 million in earnings lost to reduced room availability. Tourism accounts for up to 35% of Jamaica’s GDP and more than half its foreign exchange earnings.
Prime Minister Andrew Holness has warned of possible legislation to speed settlements. “Paying up the insurance is critical to the national recovery,” he said, according to the AP. Everton McFarlane of the Insurance Association of Jamaica said insurers “derive no benefit from prolonged and unsettled claims.”
For advisors
- Verify each property. Before quoting winter Jamaica, get written confirmation from the resort or your BDM of its opening date, room count in service, and which restaurants, spas and beach areas are operating.
- Expect tighter inventory in the northwest. With about 20 hotels still closed, open Montego Bay and Negril properties may fill earlier at peak dates. Book holidays and February break now.
- Protect the booking. Choose suppliers with clear rebooking terms if a reopening slips, and recommend insurance that covers supplier failure as well as weather.
- Watch the legislation. If Kingston forces faster settlements, closed hotels could set reopening dates quickly. Ask partners for updates in November.