Significant exposure
Hospitality providers present extremely tempting targets for identity thieves. Publicly available wireless networks, physical point of sale devices within hotel restaurants and bars, and a multitude of employees with access to guest information all increase the risk. Smaller, independent organizations may be challenged to allocate sufficient resources to network security in a world in which hacking and malware threats evolve very rapidly. For larger franchise operations the biggest risk may be interconnectivity: if franchisees and the franchisor share a single hospitality management system, one small mistake or vulnerability can lead to a breach that results in significant and lasting reputational damage.
Payment Card Industry (PCI)
Commerce without credit and debit card payments has become virtually unimaginable. Whether at the point-of-sale, online, or through a call center, the hospitality industry processes a staggering amount of credit card transactions. A breach of credit card information, which the card brands frequently detect before the organization even suspects any foul play, can result in fines, penalties, mandated computer forensic costs, legal fees, and worst of all, the inability to process payments.
Class action lawsuits
The publicity and customer dissatisfaction that surround a cyber breach have incentivized a wave of class action complaints against hospitality companies big and small. Enterprising plaintiffs’ lawyers relying on a variety of privacy laws have filed complaints seeking billions of dollars in damages. The specter of such annihilating damages, and the sizeable costs of litigation, often push organizations to settle even in the absence of any clear harm to the plaintiffs.
Regulatory investigations and penalties
State and federal regulators have made one point fundamentally clear: a significant breach of customer information will result in monetary penalties, onerous corrective action plans, and on-going audits. Whether from the Federal Trade Commission or state attorneys general, the regulatory landscape for the hospitality industry carries an immense amount of risk.