In a Hotel Data Breach, Immediate Response is the New Normal

By Kurt Meister Senior Vice President , Distinguished Programs | April 01, 2018

If you haven't heard about the latest data breach to hit a major hotel chain, just do a quick internet search. In 2017, the number of U.S. data breaches hit an all-time high of 1,579, up 45 percent from 2016, according to the Identity Theft Resource Center.   And hotels are a prime target. Verizon's 2017 Data Breach Investigations Report ranks accommodations (hotels and restaurants) as the top industry for point-of-sale (POS) intrusions.

Each data breach creates its own unique set of headaches. One is financial cost. From 2014-17, the average costs of POS-related investigations averaged $735,000 and grew larger (as high as $17 million) based on the size of the organization, according to NetDiligence.  

Reputation damage is equally concerning. Consumers expect hotels – and all businesses – to protect their data no matter what. And when a data breach occurs, they expect immediate action, often faster than the six-to-eight weeks allowed under most U.S. laws.

For many hotels, the question is no longer if a data breach will occur, but when. That's why hotel owners, operators and franchises must be protected and prepared.

Evaluate Your Risks

Because the U.S. hospitality industry attracts millions of guests each night – and because those customers pay for almost everything with a credit card – cybercriminals see hotels as a potential windfall.

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Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.