Heads in the sand and empty pockets

April 11th, 2006 by Steve Bridger filed under Cancún, Hotel groups, News, Sustainable tourism

Much ducking and weaving, much passing of the buck in evidence today as most of the local newspapers on sale in Cancún carried a story on the post-Wilma squabbling between hotel reps and insurers. I covered some of the background in January.

Insurance salesmen would probably squeeze their way into the top five in most polls of the least respected, least trusted professions – certainly where I come from. They are the perennial bad guys.

Now, I am not about to leap to their defence, but, all the same, while hoteliers may baulk as premiums skyrocket and insurers drag their feet to settle their dues, I believe they should share the blame as the cycle of build and bust in such a vulnerable location shows no sign of letting up.

On March 28th, I flagged Sean Mattson’s well-timed questioning of building standards in hurricane-prone cities, like Cancún.

Cancún’s Hotel Zone is a narrow sandspit and everyone wants to squeeze the most out of their multi-million dollar investment in real estate, so they go as close to the ocean as possible, and as high as regulations allow.

In a move calculated to put the wind up the current, largely Mexican insurers, the Cancún Hotel Association announced it may try some fancy footwork of its own and enter into negotiations with foreign insurance companies on behalf of its fed up members. 

But it’s a similar story in other Wilma-affected areas. Residents in the Florida Keys for example, faced with spiralling insurance costs, are also kicking up a stink.

I certainly do have some sympathy for restaurateurs. According to Kit Bing Wong Ho, representative of the sector in Cancún, after a lean six months, and with this year’s hurricane season looming, as few as 10 per cent of bars and restuarants in the resort will be able to afford the hike in premiums demanded by insurers. So most small businesses will be without cover come the start of the hurricane season on June 1st.

Before Wilma, the policy for a small restaurant cost about $30,000 pesos (approx. $2,700 US dollars) a year. It now costs something like $210,000 ($19,000 US dollars).

This year, an "average-sized" hotel in Cancún will need to fork out $2 million US dollars for cover.

Insurance companies said they relied on established disaster recovery plans in response to last year’s record hurricane season. But what about the longer term? Little has been said about where hotels were stacked in the first place – and continue to be built: right on top of the dunes.

Just as King Canute commanded the waves to "go back", so as to demonstrate to his overly deferential courtiers the limits of a king’s powers, surely hotel developers must take remedial action.

Wilma only speeded up a process that had been taking place for years. The back-to-back construction of dozens of hotels right on the high water mark of Cancún’s flagship beach left a fragile ecosystem dangerously out of balance. The changing intensity of tropical storms makes the whole region still more vulnerable.

Shortly after Hurricane Wilma, the Financial Times quoted Andres Chacon, an environmental engineer sent to Cancún by the government’s environment ministry in the wake of the storm.

"It was a bad idea to build the hotels on the coastal sand dunes," Chacon said.

Now that the sand has been put back (the beach recovery project is almost complete), the next step ought to be to stimulate the regeneration of the dunes to prevent the beach from continuing to drift away. But who knows whether this will happen.

Can we learn from past lessons? Maybe.

Then again, there’s a saying in the Spanish-speaking world: el hombre es el único animal que tropieza dos veces con la misma piedra ("man is the only animal to trip twice over the same stone").

High premiums or even the phased withdrawal of insurance for properties built in high-risk areas may ensure that only the foolish would then build their house on sand.

Or would it? Discuss…


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One Response to “Heads in the sand and empty pockets”

  1. Tony Says:

    Regarding your last article. Everyone is to blame in the wake of Wilma. In 1996 I stayed at the Fiesta Americana Cancun – to the right of the property was an abandoned building that most likely was the beginnings of a hotel project. When I asked about the building, I was told the project was abandoned because there was a moratorium on the construciton of new hotels.

    That same space is now home to a very large Riu property… As long as there is money to be made in Cancun, hotel owners will build, and they will build large. Common sense must be used when developing properties in vulnerable areas, and Cancun is very vulnerable.