Battle lines have been drawn in a David and Goliath clash between distressed tourism and hospitality businesses and insurance giants over the non-payment of Covid-19 business interruption insurance claims.
The hotel, which was established by his father 81 years ago, currently employs some 200 people. But he said it is now in a “dire financial position” in the wake of the impact of the Covid-19 pandemic, which has seen the hotel not being operational for just over three months. He said that the hotel’s monthly overheads are between R800 000 to R1 million. Following the Covid-19 outbreak and restrictions, the business is facing a growing debt pile of more than R7 million.
The 5-star boutique hotel was established in 2000 and today employs around 30 staff. However, Fargher said the property had a broader economic impact on the local community, supporting several small businesses. Fargher said that this has been “the most devastating time” for the business. The situation “killed some of the joy” she had when she started off in tourism.
“We think insurers should at least payout somewhere between 40% to 50% of this… If they payout quickly, the affected policyholders are even willing to accept term payments over several months,” said Woolley.