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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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.