Guest Data: An Asset or a Liability in the Age of Cybersecurity?

By Tara K. Gorman Partner, Perkins Coie LLP | June 18, 2017

When guests check into a hotel, there are plenty of mechanisms to protect their physical “stuff”, but how can they be so sure that their personal information is protected? This is the question that hotel owners and operators alike are keenly focused on in the aftermath of cybersecurity breaches in the hospitality industry - and in other industries as well. One of the key negotiating points between owners and operators during the initial negotiation of the hotel licensing and management agreements is “which party owns the guest data?” - each party fighting to win the battle and have the right to walk away with the guest data when the relationship ends.

This article will explore whether guest data is an asset or a liability in the age of cybersecurity by exploring the rules and regulations that govern privacy and security, steps that hotel operators and owners can take to ensure that they are in compliance with privacy and security requirements for guest data, and privacy considerations. For ease, we will use the term “hotel operations” when discussing the obligations of the hotel owner and hotel operator in connection with guest data.

What is Guest Data?

The bell hop takes the suitcases and places them in the guestroom, or in a locked and guarded closet. The guest has the option to park her car in a protected garage. And there is a safe deposit box in the guest room to protect the guest’s valuables. But what is the first thing that the guest is asked at check in - “may I see your driver’s license and credit card, please?” And this question is often asked after the guest has registered online or through the hotel’s registration procedures, at which time even more personal information was obtained by the “hotel”. That personal information is called guest data.

Name, address, email address, phone number, credit card number, driver’s license number, make/model and license plate number of vehicle ( if parking at the hotel ), and in some cases even social security number. In an effort to make the guest’s stay more pleasurable and to give personalized service, boutique hotels and even some of the larger hotel brands keep track of even more intimate personal information, such as food and beverage preferences, which newspapers or periodicals the guest reads, types of activities that the guest enjoys when staying at the hotel and the like. Thanks - that’s a nice touch, but a bit creepy too.

So now that the hotel operations have collected all this guest data, what are they going to do with it? And is all that information an asset or a liability? Fred Fedynyshyn, a privacy and security compliance attorney at Perkins Coie, marveled at how times have changed: “For years, companies collected as much data as they possibly could, thinking that they could worry about how to monetize it later. Now, they are beginning to realize that this information is a liability, not an asset, unless they are collecting, storing, and using it properly."

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Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.