Adventure Travel: African Lodges Experience in Focus

The African hospitality and tourism industry provides a market valuation of USD 70 billion and employs a workforce of over 25 million, tourism is a significant contributor to the continent’s economy. but what about insurance for those epic, Instagrammable experiences? Glad you asked, here’s some info from Crawford Dougall Brokers;

Super-luxury lodges account for a significant portion of those numbers. These lodges, in territories like South Africa, Zambia, Namibia, Zimbabwe, Tanzania, Kenya, and Uganda, are renowned for their impeccable tourism track records. There are over 800 such lodges in these countries. These establishments command rates exceeding USD 1000 per person per night.

What makes these risks attractive to underwriters? Simon Dougall, CEO of Crawford Dougall Insurance Brokers, explains the allure: “These lodges present a unique set of attractive risk factors for underwriters to consider.”

Dougall lists these as follows:

·      Geographical isolation: Most lodges are strategically situated far from local communities, reducing liability concerns significantly.

·      Spatial spread: Buildings and rooms are generally spread out within each lodge, and lodges are often located several miles from each other, minimising fire risk.

·      Remote safety: Remote locations translate to reduced crime risks.

·      Political Stability: Geographical isolation further insulates against losses from political unrest or riots.

·      Eco-Resilience: Super luxury lodges are eco-conscious and self-reliant, equipped with solar power and water backup systems.

·      Government oversight: Situated in areas of natural beauty, World Heritage Sites, and national reserves, these lodges benefit from government-mandated safety and risk standards.

·      Proven Industry: African tourism and safaris boast a well-established industry with a proven track record backed by verifiable data.

·      Modern Design: Many lodges have moved away from traditional thatch roofing to thatch facades that sit on fire-resistant concrete.

·      Competent management: Qualified and dedicated teams ensure these lodges are well-managed and equipped to handle inherent risks.

Despite these compelling advantages, there remains a degree of resistance from underwriters to engage in this sector.

Dougall says: “We have insured luxury lodges throughout Africa for 35 years. If you look at our loss ratios over the past 10 years, underwriters are making extremely attractive returns from our book. In light of the recent global data on natural catastrophe losses, and with sub-Saharan Africa offering a relatively low-risk profile compared to regions like the USA, Europe, and Asia, global insurers are encouraged to reconsider their risk appetite for the hospitality sector in sub-Saharan Africa, especially when evaluating luxury and super-luxury hospitality risks.”