Ed Brock is an award-winning journalist who has worked for various U.S. newspapers and magazines, including with American City & County magazine, a national publication based in Atlanta focused on city and county government issues. He is currently senior editor at Asian Hospitality magazine, the top U.S. publication for Asian American hoteliers. Originally from Mobile, Alabama, Ed began his career in journalism in the early 1990s as a reporter for a chain of weekly newspapers in Baldwin County, Alabama. After a stint teaching English in Japan, Ed returned to the U.S. and moved to the Atlanta area where he returned to journalism, coming to work at Asian Hospitality in 2016.
A FORMER AAHOA chairman and California hotelier has filed suit against his insurance company, for denying coverage on his business interruption insurance policy in connection with losses incurred from the COVID-19 pandemic. It’s a situation in which many other hotel owners with similar policies find themselves, Tarun Patel and his attorneys said.
Patel is head of Pacific Lodging Group, plaintiff in the lawsuit against Sequoia Insurance Co. The lawsuit, filed in Superior Court of the State of California in Santa Clara, California, claims Sequoia has not issued a coverage determination even though Patel filed his claim several months ago. The insurance company also has not issued a denial letter or request for information or taken any other action on the claim related to losses at Patel’s Bodega Coast Inn & Suites in Bodega Bay, California.
“We consistently paid a costly premium for comprehensive insurance from Sequoia for years,” Patel said. “Now we need Sequoia to step up and fulfill their obligation so that we can recover. Insurance companies must honor their contracts and do their part to help the country recover from this disaster, just like everyone else. I am hopeful that the courts will agree.”
Patel, who served as AAHOA chairman from 2009 to 2010 and who currently serves on the board of the American Hotel and Lodging Association, said the pandemic related travel and activity prohibitions have been particularly hard on hotels, particularly small, family-owned hotels.
“Across the country, many businesses that thought they were being responsible by securing and paying premiums for business interruption coverage are now facing mounting costs resulting from their insurance company’s failure to cover losses arising from COVID-19,” said as statement from the law firms representing Patel and Pacific Lodging Group, Cohen Milstein Sellers & Toll and Gibbs Law Group.
The firms are reviewing potential claims from hotels, restaurants and small business owners across the country that have been affected by insurance companies’ refusal to pay.
“Once again, we see another insurer ignoring their financial responsibility and refusing to pay their contractually agreed-upon coverage,” said Geoffrey Graber, partner at Cohen Milstein Sellers & Toll and a member of the firm’s COVID-19 Business Interruption Insurance Coverage Task Force. “Bodega Coast Inn & Suites is the type of small business that we need to protect during this challenging time. Sequoia’s failure to honor its obligations have put the livelihoods of so many people at risk for their own benefit.”
Sequoia is not the only insurance company denying claims related to the pandemic, said Eric Gibbs, a partner at Gibbs Law Group and also a member of the task force.
“Sequoia is falling in line behind other insurance providers in allowing their policyholders to be financially decimated, while continuing to grow their profit margins,” Gibbs said. “We seek to prevent the demise of the hotel industry and other small businesses who paid Sequoia’s premiums yet are being denied coverage.”
Current business interruption insurance policies may not cover a pandemic, Rahul Patel, managing partner at the Patel|Gaines law firm in San Antonio, Texas, said previously.
“I think that there are probably some strong legal provisions that state that your insurance should or does cover this type of situation. But the flip side to that is, whether it says that or not, or whether it’s covered or not, isn’t really the situation. The situation is how long is it going to take for you to find relief under that?” he said. “Do you believe that insurance companies are going to bend over and say ‘Hey, $20,000, let’s just pay the claim.’ No, because there’s going to be thousands of claims. I told someone that it might not be a bad angle to pursue, but if you’re relying on that to come in next month then you’ve got a problem.”
Sonesta launched Americas Best Value Studios, an extended-stay version of ABVI.
The model targets owners seeking limited front desk and housekeeping.
The brand meets demand for longer-term, value-focused stays.
SONESTA INTERNATIONAL HOTELS Corp. launched Americas Best Value Studios by Sonesta, an extended-stay version of its franchised brand, Americas Best Value Inn. The model targets owners seeking limited front desk and housekeeping, optional fitness center and lobby market along with standard brand requirements.
The brand aims to address the growing demand for longer-term, value-driven accommodations, Sonesta said in a statement.
"Americas Best Value Studios by Sonesta represents a strategic evolution of our trusted Americas Best Value Inn brand," Keith Pierce, Sonesta’s executive vice president and president of franchise development, said. "We are expanding our offerings to directly address the increasing demand within the extended-stay segment, providing a practical solution for travelers seeking longer-term lodging at value. This new brand type allows our local franchised owner-operators to tap into a growing market while maintaining the community-focused experience that Americas Best Value Inn is known for."
ABVI has a majority presence in secondary and tertiary markets, the statement said.
The extended-stay brand’s operational model features a front desk, bi-weekly housekeeping, on-site laundry and pet-friendly accommodations, Sonesta said. Guests can also earn or redeem points through the Sonesta Travel Pass loyalty program.
In August, Sonesta named Stayntouch its preferred property management system after a two-year review of its ability to support the company’s franchise model. The company operates more than 1,100 properties with more than 100,000 rooms across 13 brands on three continents.
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