The Top 3 Security Issues Facing Hotel CIOs Today

As the hotel industry becomes more integrated with technology, Chief Information Officers (CIOs) are facing a progressively complex, ever-evolving security landscape. From bolstering an all-encompassing infrastructure to ward off menacing cybercriminals to safeguarding sensitive guest data, hotel CIOs need to navigate a minefield of risks to ensure the safety and integrity of their operations. The consequences of a successful attack can be severe, impacting the hotel’s reputation, losing customer trust, incurring a steep cost of damages, and potentially leading to legal ramifications.  

In this article, we’ll delve into the top three security risks that are keeping CIOs up at night: booking and loyalty fraud, ransomware and phishing attacks and payment and guest data privacy. 

Booking and Loyalty Fraud

Booking and loyalty fraud are becoming more prevalent in the hospitality industry and pose a significant risk to their operations. Cybercriminals exploit vulnerabilities in booking systems and loyalty programs to access guest data and carry out numerous types of fraud, including taking over accounts, fake bookings and loyalty point redemption fraud. 

These fraudulent tactics range from credit card fraud to a more sophisticated method with bots and script-based attacks. A common tactic known as ghosting booking happens when bad actors make a reservation with stolen credit card details and cancel or no-show after the hotel property has processed the payment. 

A rising scheme is fake conference bookings, where scammers will impersonate an organization or large group and inquire about scheduling a conference event at the hotel and solicit bookings. But once money has been exchanged, the company, or the scammers, disappear and can no longer be contacted by phone and email. 

Account Takeover: When bad actors gain access, they can make unauthorized bookings or redeem loyalty points by stealing credentials obtained from phishing attacks or data breaches to overtake guest accounts.

Booking Fraud: Cybercriminals may use stolen credit cards or create fake reservations, which can lead to substantial revenue loss and reputation damage to the hotel.

Loyalty Program Fraud: Scammers love loyalty points as much as anyone. Loyalty program fraud is an emerging risk where hackers steal valuable points and rewards that can be sold on the dark web or used in other illicit methods. 

Hotel CIOs and operators can implement robust fraud detection measures and protocols to safeguard their systems and revenue streams. 

Ransomware and Phishing Attacks 

The hotel industry has become a lucrative target for ransomware and phishing attacks. The consequences of these attacks can cripple a hotel’s operations, hinder customer service and lead to significant financial losses and brand reputation. 

While technology has advanced, so have cybercriminals and their tactics. A highly sophisticated tactic, ransomware is a kind of malware that encrypts files and locks the computer systems, then demands ransom payments in exchange for their data back. Equally savvy, phishing attacks include tricking employees into sharing confidential login information or downloading malware onto their computers through links. 

Ransomware attacks can lead to data breaches, exposing sensitive guest information such as names, credit card details, passport numbers, and addresses. These attacks also derail hotel operations by encrypting critical infrastructure, like reservation databases, POS terminals and keycard systems. 

Like phishing attacks, social engineering tactics exploit human vulnerabilities, making it difficult for legacy security systems to detect and prevent them. To mitigate these devious methods, CIOs must prioritize and maintain cybersecurity awareness training and best practices for employees, as well as invest in endpoint protection and backup solutions. 

Payment and Guest Data Privacy

Hotels have a vast amount of sensitive guest data, from personal information to travel preferences and payment details. If a data breach occurs, it can not only result in hefty financial losses and regulatory fines but also diminish customer trust and tarnish the brand. Making payment and guest data privacy paramount are concerns for CIOs, given the delicate nature of the information collected during booking and check-in processes. 

Having access to endless guest information requires hotels to comply with a variety of regulations to ensure it is safe and secure. The General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) require hotels to safeguard this data and maintain guest trust under these data protection regulations. In addition to those, properties must adhere to the Payment Card Industry Data Security Standard (PCI DSS) to protect payment card sensitive information from unauthorized access, fraud and theft. If a hotel fails to comply with any of these regulations, it can result in steep fines, legal penalties and brand damage.

Hotels rely on third-party vendors and providers for services like payment processing, reservation systems and guest communications. But these integrations can bring in additional security risks and vulnerabilities if overlooked and not incorporated into the operation’s security measures. 

It is critical for CIOs to ensure compliance with data privacy regulations and information throughout the data lifecycle, and they can do so by implementing data encryption software, best practices protocols, tokenization, and access controls. Hotel operators and CIOs must stay vigilant against emerging threats and conduct regular security assessments and compliance audits to help recognize vulnerabilities and adhere to industry standards.

Hotels are seen as lucrative targets for bad actors, but by investing in and adopting a proactive and multi-layered approach with technical security controls, strong cybersecurity policies and a security-aware hotel workforce, it can dramatically improve the defensive cybersecurity posture of the hospitality sector. 

CIOs are faced with a myriad of security challenges as technology continues to advance and are constantly seeking innovative solutions to mitigate new risks. By implementing advanced technology, fostering a security aware workforce and collaborating with industry partners, CIOs can safeguard their organization and property, ensure brand loyalty and trust and protect guest data in an increasingly digital world.

About the Author

Suzie Squier is the president of the Retail & Hospitality Information Sharing and Analysis Center (RH-ISAC), a global, non-profit organization whose mission is to build a collaborative sharing community that enables consumer-facing organizations to strengthen information security capabilities and defend against cyber threats. Prior to joining the RH-ISAC, Squier was senior executive vice president of member services for the Retail Industry Leaders Association (RILA) where she established the RH-ISAC (then named the Retail Cyber Intelligence Sharing Center) in 2014. She has spent her career working in non-profit membership organizations. She is a member of the National Council of ISACs and a graduate of the University of Maryland.