Cybersecurity in Hospitality Industry: Risks & Solutions

Key Takeaways

• Cyberattacks are a growing concern in the hospitality industry, with major hotel chains regularly targeted.
• Common cyber threats include phishing, malware, ransomware, and POS system breaches.
• Preventing attacks requires a multi-layered approach, including strong network security, employee training, and regular audits.

Cybersecurity has become a top priority for the hospitality industry as cyberattacks grow more frequent. With an increasing shift toward online bookings and digital payments, the risk of data breaches continues to rise—along with the potential for severe financial and reputational damage. As a result, cybersecurity in the hospitality industry is no longer optional; it's vital for protecting both guests and business operations.

Why Cybersecurity Is Critical for the Hospitality Industry

The hospitality industry heavily relies on guest data, including personal details, credit cards, and booking history, to manage reservations, process payments, and provide personalized services. This and the widespread usage of digital and IoT systems, such as online booking platforms, point-of-sale (POS) systems, and smart room devices, make the industry a prime target for cybercriminals.

Hotels and travel companies face constant threats from hackers seeking to exploit this valuable information or disrupt operations, with 31% of hospitality businesses experiencing data breaches and 89% of them being targeted more than once within a year.

In 2022, for example, Shangri-La Group experienced a data breach affecting eight of its hotels across Asia, including properties in Singapore, Hong Kong, Chiang Mai, Taipei, and Tokyo. The breach was very detrimental, exposing key guest information such as names, email addresses, phone numbers, postal addresses, and reservation details.

The rise of generative AI has further increased the sophistication of cyberattacks, making cybersecurity a necessity for protecting guest trust and business stability.

Common Cybersecurity Threats in Hospitality

The hospitality industry faces constant cyber threats, including phishing scams, ransomware attacks, and data breaches targeting guest information. Hackers exploit weak payment systems, unsecured Wi-Fi networks, and outdated software to steal credit card details and personal data. Insider threats and AI-powered fraud also pose growing risks, making cybersecurity a critical concern for the industry.

Phishing attacks

Phishing attacks trick hotel employees or guests into revealing sensitive information through scam emails or text messages with malicious links. Clicking on these links is all it takes for attackers to achieve their goals and enter the system undetected.

Hackers tend to get creative with their tactics. A common one involves fake booking confirmation emails asking guests to verify payment details. Attackers also impersonate suppliers, sending fraudulent invoices to trick staff into wiring money. Some phishing scams target hotel employees directly, using fake internal emails that appear to come from management requesting login credentials or system access.

The risks from such attacks are huge. If a hacker gets access, they can steal guest information, commit credit card fraud, or install harmful software to take control of hotel systems. This can lead to financial loss, legal trouble, and a damaged reputation.

Given the high volume of email communication in hospitality, phishing remains a persistent and dangerous threat.

Malware and ransomware

Malware is harmful software that sneaks into hotel systems through fake emails, 'infected' websites, or even compromised USB devices used by staff. It can steal sensitive data, spy on hotel operations, or disrupt important services.

Ransomware is even worse—it locks hotel files or systems until the business pays the hacker to unlock them, leading to canceled bookings, frustrated guests, and significant financial losses. Some hotels feel pressured to pay the ransom, but there is no guarantee that hackers will actually return access. Even if they do, recovering from an attack is costly and time-consuming.

Point-of-sale system attack

In hospitality, POS systems represent the tools hotels, restaurants, and resorts use to process guest payments. These systems handle large amounts of credit card transactions daily, making them attractive targets for hackers.

Hackers often infect old payment systems with harmful software or steal credit card details by taking advantage of weak network security. Once inside, they can steal credit card numbers in real time whenever a guest swipes or inserts their card.

The consequences of POS system attacks are serious. Stolen payment data can lead to fraud, chargebacks, and financial losses for both the hotel and its guests. A security breach can also result in fines if the hotel fails to meet payment security regulations.

IoT device vulnerabilities

Hotels use IoT (Internet of Things) devices to improve guest experience and regulate operations. These include smart locks, thermostats, security cameras, keycard systems, voice assistants, and even connected minibars.

While these devices make hotel stays more comfortable, they often lack strong security protections. Many come with default passwords that are easy to guess, outdated software, or weak encryption, making them vulnerable to hackers.

Once cybercriminals gain access to IoT devices, they can cause serious damage, such as controlling security cameras to spy on guests, unlocking smart doors remotely, or tampering with temperature controls. In some cases, they use IoT devices as entry points to access larger hotel networks, potentially stealing sensitive guest information or shutting down critical hotel systems.

Best Practices for Cybersecurity in Hospitality

Hotels can stay cyber-safe by using strong passwords, updating software regularly, and training staff to spot scams. Guest Wi-Fi should be separate from hotel systems, and payment information should be encrypted to keep it safe. Regular security checks help find problems before hackers do. Most importantly, hotels should back up their data—losing access without a backup can be a disaster.

Securing guest data

In the hospitality industry, securing guest data is essential due to the large amounts of sensitive personal and financial information hotels manage. Encrypting guest data both at rest (when stored) and in transit (while being sent across networks) is critical in preventing unauthorized access.

For example, in the Accommodation and Food Services sector, 45% of breaches were caused by compromised credentials, highlighting the importance of encryption to keep data safe from cybercriminals. When hotels use encryption, they protect their guests from identity theft and financial fraud. Without proper encryption, hackers can steal credit card details, booking history, or personal information, leading to significant financial losses and damage to the hotel's reputation.

Limiting data access to authorized personnel only ensures that just those who need the information can view it, reducing the risk of internal breaches. Safe payments and data backup are equally important. Using safe payment systems that are PCI-compliant helps protect credit card details from theft and fraud, and regularly backing up data prevents information loss in the event of a cyberattack or system failure.

Hotels must comply with data protection laws such as the General Data Protection Regulation (GDPR), essential for maintaining guest trust and ensuring long-term business success.

Network security

Protecting hotel networks is essential to keeping guest and operational data safe. Creating separate networks for guests, hotel operations, and IoT devices helps limit the impact of potential breaches. For example, if a guest's network is compromised, the hotel's main systems remain protected, reducing the risk of widespread damage.

Additionally, firewalls and security systems help protect hotel networks by blocking hackers and keeping guest data safe. They act like digital security guards, stopping unauthorized access. To stay effective, these tools need regular updates to defend against new threats.

Hotels can also use Virtual Private Networks (VPNs) to keep remote connections secure. A VPN scrambles data sent between different hotel locations, making sure sensitive information stays private, even when shared over the internet.

Keeping guest Wi-Fi secure is also of critical importance. Hotels should use the latest encryption, like WPA3, and set strong passwords to keep hackers out of their networks.

Employee training

Since phishing attacks and malware often target staff, proper training can prevent costly security breaches. Employees should learn to recognize suspicious emails and links to avoid falling for scams that could compromise guest and company data.

Training should also cover the safe handling of guest information, ensuring employees securely process and store sensitive details. Strong password policies are essential; staff should use complex passwords and update them regularly to prevent unauthorized access.

Another important factor is instructing employees to lock devices when unattended and report lost or stolen devices immediately. A single compromised laptop or phone can give hackers access to critical hotel systems.

A well-trained staff is one of the best defenses against cyberattacks. By making cybersecurity training a regular practice, hotels can strengthen their overall security and reduce the risk of human error leading to data breaches.

Regular security audits

A security audit is like a hotel's routine health check but for its digital safety. It helps find weak spots before cybercriminals do. Regular security audits keep hotel systems safe, prevent costly breaches, and build guest trust.

A good security audit should cover the following:

• Firewalls, networks, and Wi-Fi settings – Think of these as digital security guards. They need to be checked regularly to keep hackers out.
• Guest data storage and encryption – Guest details should be locked up tight, both when stored and when sent over networks.
• Outdated software and IoT risks – Unpatched systems are a hacker's favorite target, responsible for 60% of all data breaches. Regularly updating everything reduces risk.
• Compliance with laws – Keeping up with security rules like PCI DSS and GDPR isn't just about avoiding fines—it's about protecting guests.

Examples of Cyber Attacks in the Hospitality Industry

The hospitality industry has faced several significant cyberattacks over the years, with some of the most prominent being:

• Marriott International Data Breach (2018): This one is regarded as one of the biggest data breaches in history. Hackers infiltrated Marriott's Starwood reservation system, compromising the personal information of approximately 500 million guests and gaining unauthorized access to names, addresses, passport numbers, and payment details. Investigations suggested the attack was part of a Chinese intelligence-gathering effort.
• MGM Resorts Cyberattack (2023): In September 2023, MGM Resorts experienced a cyberattack that disrupted operations for nearly a week. The incident affected properties like the Bellagio and Mandalay Bay, leading to system outages and financial losses. The attack was reportedly initiated through social engineering tactics, highlighting vulnerabilities in employee cybersecurity awareness.
• Otelier Data Breach (2024): A cyberattack on Otelier, a cloud-based hotel management platform, exposed 7.8 terabytes of data from major hotel brands, including Marriott, Hilton, and Hyatt. Hackers gained access to unprotected cloud storage, exposing guest bookings, contact details, and private hotel documents. This raised concerns about the security of hotel systems managed by outside companies.

Such incidents highlight the critical importance of cybersecurity measures in the hospitality sector to protect guest information and maintain operational integrity. Failing to do so can lead to financial losses and long-term damage to a hotel's reputation.

Emerging Cybersecurity Technologies for the Hospitality Industry

New cybersecurity technologies are helping hotels be a step ahead of hackers. Some of the most promising advancements include:

• AI and machine learning for threat detection – These systems can spot suspicious activity in real time, helping hotels detect and stop cyber threats before they cause damage. AI can analyze patterns, flag unusual behavior, and prevent attacks like phishing and malware, making it a powerful fraud detection tool in hospitality.
• Zero trust architecture – The logic behind this approach is to trust no one. Instead of automatically trusting users inside the network, this approach verifies everyone, even employees and devices, before granting access. This limits the damage if hackers breach one part of the system.
• Blockchain for secure transactions – Blockchain technology makes payment processing more secure by creating a secure and unchangeable record of transactions. This helps prevent fraud and protects customer payment data.
• Biometric authentication – This technology has existed for a while and has been used in different industries. Recently, it has become more popular in the hospitality sector. Fingerprint scans, facial recognition, and other biometric tools add an extra layer of security to hotel systems, reducing the risk of stolen passwords and unauthorized access.

Building Digital Walls in the Hospitality Industry

Keeping guest data safe is paramount for hotels. Cyber threats like phishing, ransomware, and payment system hacks can cause major operational and financial damages, which is why a strong security plan is key. Using secure networks, training employees, running regular security checks, and trying new tech like AI and blockchain can help prevent attacks before they happen.

To learn how to manage your hospitality business and defend against cyberattacks, sign up for the Hospitality Business Management BA program at César Ritz Colleges Switzerland. Gain valuable insights from professionals and build the skills needed to manage your business and keep it safe in today's digital world. Cyber risks aren't going away, so staying prepared is essential!

Frequently Asked Questions (FAQs)

What should hotels do after experiencing a data breach?

Hotels should immediately notify affected guests, work with cybersecurity experts to contain the breach, and offer identity protection services to those impacted.

How can guests protect their own data when staying at hotels?

Guests should use strong, unique passwords, avoid using public Wi-Fi for sensitive transactions, and request that their personal information be securely stored or deleted after check-out.