The Financial Impact of Bedbugs in the Hospitality Industry

All hotel owners know that even a simple rumor can have a devastating effect on their business if it attracts the right kind of media attention, a simple accusation can instantly damage your hotel's hard-earned reputation.

Legal experts have noticed a rising trend in bed bug litigation whereby guests sue hotels for millions of dollars, the financial impact of a bed bug lawsuit can be detrimental to your business. This does not only give your hotel a bad reputation but also makes you lose out on a lot of income. A recent example of failure to find bed bugs occurred in 2006 whereby a couple from Chicago sued a Catskills resort for about 20 million, stating that they were mentally and physically scarred after suffering from more than 500 bug bites.

Here are 8 ways how bed bugs can affect your business:

  • Lowers the Value of Accommodation   Similar Studies indicate that a single report of bed bugs can lead to the value of your hotel room dropping significantly in both the cases of business and leisure travelers. The other detrimental effects of a bed bug infestation are that your hotel's reputation gets tarnished, especially if the news of the infestation gets social media attention, higher operational expenses are required to treat the infestation which lowers your hotel's operating efficiency.

A recently conducted report on the economic impact of bed bugs on the hotel industry discovered that bed bug reports or the presence of bed bugs can reduce the value of your hotel room by $21 for leisure travelers and $38 for business travelers as the presence of bed bugs is usually at the top of people's concerns when choosing a hotel and also the main reason that drives them away.

  • Cost of Remediation and Litigation

Bed bug infestations should not be taken lightly as they tend to garner a lot of negative publicity which can tarnish your reputation and increase the losses of your business.

The total cost of bed bug infestations involves the replacement of soft products, treatment and business losses experienced. The report states that almost half of all hotels have had to undergo litigation due to bed bug infestations which can cost about $17,177 per incident and can go as high as $23,560 in terms of the remediation and litigation costs.

  • Brand Degradation and Negative Online Image

News of a bed bug infestation can tarnish your hard-earned reputation as well as creating a negative online image of your hotel and its services. Travelers tend to share their staying experiences online on various travel sites which can further damage the reputation of your establishment. This is bound to hurt your business as the majority of travelers consider online reviews before visiting certain places.

  • Lower Stakeholder Value

This can become pretty prominent if a bed bug infestation makes headlines or gets social media traction which can lead to lower stakeholder value as your business takes a hit which lowers the amount of people that visit it which in turn leads to lower hotel operating efficiency.

  • Increased Operational Expenses

Bed bug infestation can increase your establishment's operational expenses due to negative publicity as well as the extra operational expenses that are required to treat the infestation and increase your establishment's operating efficiency. A scenario of this can occur whereby you may find yourself with a lawsuit on your hands.

  • Cost of Replacement of Your Inventory

Bed bugs can cause some serious damage to your mattresses, sheets, towels and furniture. It is usually advised that you should replace your furniture and soft goods if a bed bug infestation gets out of control on your premises which can be pretty costly.

  • Lowers Your Customer Trust and Causes Loss of Income

Your guests will find it hard to trust your services and facilities again as they would have seen the online reports and testimonials and won't want to take anymore chances with their health. This negative publicity can hurt your business and its income in the long-term so it is best to take the necessary preventative treatment in time.

  • Increases Medical Costs due to Allergic Reactions

Bed bugs are not usually considered dangerous but the effect of their bites can vary from small bite marks to itchy red welts to severe allergic reactions that need medical attention. Excessive scratching of the bite marks can lead to further inflammation.

The best way to avoid this is by hiring a trained and qualified workforce to regularly inspect your rooms along with timely pest control inspections. If you have a slight doubt about the presence of bed bugs in your hotel then investing in bed bug protection is the minimal cost that you should pay in comparison to what you would have to shell out if you have a full-fledged bed bug infestation. Don't delay take bed bug precautions today!

Source: https://www.hospitalitynet.org/news/4087431.html
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