Mr. Welty

Insurance

Addressing Hotel Guest Discrimination Claims

By John Welty, Practice Leader, SUITELIFE, Venture Insurance Programs

Discrimination has been a hot topic in the news lately. The "Hate Has No Home Here" campaign, women's marches, LGBTQ issues and Black Lives Matter protests are just a few examples of how Americans have been turning up the heat on what some view as existing but emerging threats to their race, gender, age, religion, or lifestyle.

On the corporate side, the discrimination issue has left virtually no industry untouched. In this article, we will examine the impact of the topic of discrimination as it continues to gain steam in the hospitality industry, in particular. We will also discuss examples, insurance coverages available as well as risk management tips.

With so many homeowners providing room rentals across the globe, it is not hard to imagine the variety of issues that can arise daily. A recent article in the New York Times, stated that Airbnb, the well-known home-sharing and short-term rental website, had seen numerous claims of discrimination by those renting out their homes - discrimination claims involving age, race, gender, and more. A Harvard University study found that the accusations stemmed from reports that those with "African-American sounding names" had a more difficult time securing rentals on the site.

Whether it may relate to gender identity, race, or even physical attributes, hairstyle, tattoos or political affiliation - it's fair to say the repercussions related to accusations of discrimination are more prevalent today. Discrimination may be an age-old global problem, but people are fighting it more vocally now than ever before thanks to social progress and technology. Consider the power of the civil rights marches in the 1960s and multiply that by technical advancements that help people share information, and the result is a quickly growing movement with much less time and expense than in years past.

Discrimination: The Facts

Gender identity alone encompasses self-image, appearance, behavior or expression, which is far different from what has traditionally been recognized more simply as one's legal sex documented on his or her birth certificate. When one considers this along with discrimination claims related to race, religion, age, and gender, there is no doubt discrimination is taking on a broader prevalence almost on a daily basis.

For the purposes of this article we will stay focused on guest discrimination. Guest complaints and how to handle them has been an ongoing discussion among hospitality leaders. Numerous articles, books and corporate policies have been written on general guest complaints. But discrimination complaints deserve specific analysis.

Discrimination can be defined as the unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age or sex. Synonyms are prejudice, bias, intolerance, narrowmindedness, unfairness, inequity, favoritism, one-sidedness, partisanship-the list goes on and on.

Anti-discrimination statutes are in place to prevent a hotel from refusing to serve a guest. There are a number of protected classes that fall under anti-discrimination laws, statutes and guidelines. Under federal law, a hotel cannot discriminate against or segregate guests upon race, color, religion or national origin. The Americans with Disabilities Act includes those with disabilities as a protected class. In addition, individual states may have further defined laws and regulations against discrimination. For example, Delaware anti-discrimination law protects individuals discriminated against for their age, marital status, creed, sex, sexual orientation and gender identity.

As a hotelier providing services to the public, you are required to serve the public - our guests - without discriminating and can only refuse to provide services on reasonable grounds. However, what constitutes reasonable grounds is a bit of a gray area. Each possible scenario rests upon its own individual circumstances. As a hotelier, it would be reasonable to refuse to provide a room to a guest or guests engaging in bad behavior or illicit activities. Admission of these guests could interfere with the operation of a hotel.

In incidents like these, hoteliers can ask a guest to leave due to his or her behavior and activities. Although not the best image booster for the hotelier, it is almost better to refund the guest for his or her stay, rather than risking danger to other guests, or physical or reputational damage to the hotel resulting from their stay. In these situations, hotels should consider providing the guest a full refund, as the impending guest complaint would not include "but they took my money for the room anyway" statements.

Direct Discrimination, Indirect Discrimination, Sexual Harassment and Vilification

Direct and indirect discrimination each have their own meanings and consequences. Direct discrimination means that the treatment is unfair or unequal. An example here would be if a hotelier refused to rent a room to a Native American in ceremonial dress.

Indirect discrimination can occur when a requirement, rule, policy or practice is seen as the same for everyone, but ends up being unfair to a particular group or protected class.

Consider This Example

A hotel restaurant only accepts a state-issued driver's license as identification for service of alcohol. However, one guest orders a drink but does not have a state issued driver's license due to a medical condition, though he could provide a passport that verifies his or her age. In this instance, the server would be following the house rules, but may not be aware that other forms of identification are as acceptable as a driver's license.

In the hotel industry, sexual harassment may more commonly be thought of as a human resources problem. But this may also be a problem in interactions between employees and guests. We need to be cognizant of the language a hotel employee uses or intrusive questions he or she asks that may be viewed as offensive, humiliating or intimidating by a guest.

Regardless of the hotel employee's side of the story, when a guest claims he or she has been a victim of discrimination, it is best to listen to their comments and have hotel management directly assist the guest.

As protest groups form outside hotels, vilification is re-emerging as an issue for the hospitality industry. "Vilification" means any public act that could incite or encourage hatred, ridicule a group or show serious contempt toward an individual or a group. This was a significant issue from the 1950s through the 1980s. Though less common in the last three decades, we are seeing an increase in this area of concern related to the current political divide. This is another issue of which hotel staff must be aware and attentive.

Risk Management Tips and Coverage Options

Trying to stay ahead of all discrimination claims can be daunting to a hotelier and our industry. Understanding your insurance can be one step to help protect the business from falling victim to a discrimination claim.

Consider a General Liability policy. Each policy defines discrimination differently and may have various terms and exclusions related to discrimination. Some general liability policies cover certain "mental injuries" through their definition of "bodily injury." However-and it is a big however-these injuries are typically covered only if they result from a physical injury. General liability policies cover injuries or damages that result from an accidental event or other occurrence. Most discrimination claims are the result of intentional acts committed by employees. In cases like these, the act did not result from an accident and would therefore not be covered.

Discrimination exclusions vary by carrier on general liability and umbrella policies. Careful reviews of these are recommended and are part and parcel of your ongoing conversations with a broker or agent.

So, what are some of the ways we can address guest complaints?

  • Always listen with concern and empathy
  • Pull the guest to the side, if possible, so that other guests won't overhear or possibly record the situation

  • Show a personal interest in the guest's complaint

  • Remain calm and avoid arguing with a guest(s)

  • Personalize the situation by using the guest's name frequently to provide a sense that you are genuinely interested in him or her

  • Concentrate on the problem by providing your undivided attention. There is nothing worse than being distracted

  • Take notes, write down the facts, and get it right. Then, review those notes with the guest for accuracy. This will give you some insight to their thoughts on the situation and can be helpful in de-escalating the situation

  • If there is an action step related to your discussions, make sure you follow up

Hotel managers can be proactive in recognizing when an employee is in an uncomfortable situation with a guest. Providing support to the employee and getting involved with the guest may assist in minimizing the matter at hand. Unfortunately, as professional as hotel employees are, some guests seem to settle down more quickly when a manager is involved. The feeling that their voices are being heard by someone who has the authority to act can be a simple way to de-escalate the situation.

Repercussions stemming from alleged incidents of discrimination are on the rise and will likely continue to escalate in the current political climate. To prevent and reduce incidents within their hotels, hoteliers should be alert, aware and responsive to customer complaints. Remember that even simple guest complaints, such as "My room is too cold," can quickly rise to a discrimination situation if the guest feels the heat in his or her room has been turned down intentionally. While incidents like these are largely unavoidable, by following the tips listed above, hotels can take action to quash some claims of discrimination before the guest leaves the hotel or respond quickly when the potential for an incident to escalate rears its ugly head.

John Welty is the practice leader for SUITELIFE, an all-lines insurance and risk program for upscale hotels and resort properties administered by Venture Insurance Programs. Venture is a national program administrator for select industries, including the hotel, hotel resort, hotel management and luxury boutiques industries. At Venture, Mr. Welty is responsible for managing SUITELIFE’s underwriting team and maintaining the company’s top-tier carrier relationships. He is responsible for pro-actively and strategically managing the retention and growth of the SUITELIFE through disciplined underwriting, managing program profitability, and program expansion and development. Mr. Welty has worked in the insurance industry for more than 30 years, specializing in commercial risks. Mr. Welty can be contacted at 800-282-6247 ext. 276 or JWelty@ventureprograms.com. Please visit http://ventureprograms.com for more information. Extended Bio...

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