Who pays for personal items stolen from a hotel? Can you be compensated?

As Australians begin to start considering their options to travel again, it is important to keep in mind what travel insurance you may require. Generally, when Australians think about domestic travel, travel insurance is not the first thing on their mind. However, one thing that may get overlooked is the possibility of items stolen from a hotel room. Who is responsible for this?


What is the relevant law?

Hotels and travel providers often quote the Innkeeper Act 1968 (NSW) to say that they have limited liability for stolen goods. Whilst it is true that hotels have limited liability, the Innkeeper Act was in fact repealed in 2019 and no longer applies. The relevant law is now found in Schedule 7 of the Fair Trading Act 1987 (NSW).

The relevant provisions uphold the common law requirement that an accommodation provider is liable to "make good damage to property" brought on to the premises by a guest. That is, at common law, the accommodation provider is akin to an "insurer" of personal property that is stolen, damaged, or disappears brought by a guest (except where the guest is negligent).

Maximum liability

However, the relevant provisions of the Fair Trading Act modify this common law protection of guests to rebalance things in favour of the inn.

Firstly, the liability of the accommodation provider is excluded if the property was a vehicle, or in a vehicle, or the traveller is not a guest. More significantly, however, is that currently the liability of the accommodation provider is capped at $300 per guest. That is, no matter how valuable the goods are that have been lost or stolen, a guest can only recover a maximum amount prescribed by the law, which is currently $300.

This cap does have two exceptions. They are when the accommodation provider was negligent, and secondly if the goods have been specifically left with an employee of the hotel for safekeeping. Historically, the Innkeepers Act required that a sign be put up to inform travellers of this cap (which historically was $100). However, this requirement has not been reintroduced in the Fair Trading Act and is no longer required.

What does this mean for you?

What this means is the guests should take care with valuables when staying in accommodation in NSW. If something is particularly valuable, leave it with an employee, take out an insurance policy, or leave it at home.

Finally, accommodation providers who have not sought legal advice since 2019 should do so to ensure that they are complying with their obligations regarding the property of hotel guests. McCabe Curwood has experience in advising commercial, including those in the travel industry, and private clients in relation to their liability and legal obligations.

The contents of this article do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.

You should seek legal advice or other professional advice in relation to any particular matters raised by this article.


Luke Dominish Associate