Insurance payout delays, soaring premiums pressure Queensland tourism operators post-Yasi

Queensland tourism experts say operators have made good progress recovering from Cyclone Yasi, but long waits to receive insurance payouts and soaring premiums have been too much for some operators to bear.

Speaking after news the boutique resort Elandra Mission Beach has closed its doors to customers to focus instead on conferences and events, David Gschwind of the Queensland Tourism Industry Council says for some businesses, premium rises are a “bridge too far”.

“Even owner-operators are unwilling to stump up the money when even until a few months ago the market was very soft,” Gschwind says.

“It’s a genuine issue and it’s not something we can control.”

Last year was a record year for catastrophes, with insurance giant QBE yesterday becoming the third in the sector to cut its earnings on the recent disasters. The Insurance Council of Australia says reinsurance costs have risen by 50% and QBE is quoted saying yesterday that average premiums would rise by 15%.

Gschwind says the premium increase for his Brisbane property – which is on a hill – was 80%, and he’s heard of three-digit rises across the state.

According to financial comparison site Canstar Cannex, the median cost of premiums for home and contents insurance in Queensland increased by 14%, or just under $1,200. It said in October that 31% of Queensland policies had increased by more than 20%, with an increase of up to 41% in one flood-affected regional postcode and up to 36% in a similarly affected Brisbane postcode also observed.

Richard Blanchette, tourism industry recovery officer with Tourism Tropical North Queensland, says the Cassowary Coast – hardest hit by Cyclone Yasi – had come a long way through 2011, but long waits for insurance payouts had delayed the recovery process.

With January and February a quiet trading time time, Blanchette expects local businesses to start the year with some tough decisions.

“For a lot of them post cyclone, their decisions are based on survival,” he says. Beyond business-to-business problems, Blanchette says waiting for infrastructure such as walking tracks had weighed on some businesses.

The closure of Elandra Mission Beach to guests follows the sale of the Bedarra Island Resort in Far North Queensland late last year to the Charlton Hotel Group, which plans to refurbish the battered resort.

Dunk Island Resort has also been sold to Peter Bond, the chief executive of gas company Linc Energy. Linc said this morning that it intends to reopen Dunk Island as a five-star resort.

It’s believed that a buyer for Club Med’s only Australian resort on Queensland’s Lindeman Island will emerge soon.