In the hospitality industry, there is yet another obstacle that operators really need to worry about. We all know that guest trust is the cornerstone of success but what if we breach that trust and not even on purpose? While we can go the extra mile with personalized check-ins to seamless bookings through an app, operators can thrive by creating seamless tech solutions but also can fall prey if those systems ever get hacked.
The digital tools that power these services also expose operators to a growing threat: data privacy breaches. High-profile incidents like the Marriott International breach and the recent Otelier cyberattack reveal the devastating risks for hoteliers and their guests. For an industry expert in hospitality but new to data privacy, understanding these risks and how to mitigate them is critical to protecting your brand and guests. Let the Marriott and Otelier cases be cautionary tales so that you don’t have to endure these headaches and use our practical steps to safeguard your operations and data governance practices.
Why Data Privacy Matters in Hospitality
Hotels handle a treasure trove of sensitive guest information: names, addresses, phone numbers, credit card details, passport numbers, and travel plans. This data fuels loyalty programs, marketing campaigns, and operational efficiency, but it also makes hotels prime targets for cybercriminals. A single breach can lead to financial losses, legal penalties, and permanent brand damage that erases years of goodwill. Unlike a physical security issue, like a broken lock, data breaches are invisible until the damage is done, often lingering undetected for months or years and costing millions of dollars as the big hotel brands can attest to.
The hospitality industry’s reliance on third-party vendors like reservation platforms, cloud services, and property management systems amplifies the risk even if hospitality teams think they’re protected because they are not the ones collecting. These partners often store or process guest data, creating vulnerabilities beyond a hotel’s direct control. With global privacy laws tightening, such as the General Data Protection Regulation (GDPR) in Europe and the Connecticut Data Privacy Act (CTDPA) in the U.S., non-compliance can trigger hefty fines and lawsuits, even for unintentional lapses.
The Marriott Breach Was One Costly Lesson
Marriott International, faced one of the largest data breaches in history, announced in 2018. Hackers accessed the reservation system of its Starwood brand, compromising the data of up to 500 million guests. The breach, which began in 2014 and went undetected for four years, exposed names, email addresses, passport numbers, credit card details, and travel histories. The fallout was staggering:
- Financial Impact: Marriott paid a $52 million settlement to 50 U.S. states in 2024 and faced a £18.4 million fine from the UK’s data watchdog for GDPR violations.
- Reputational Damage: Guest trust eroded, with media coverage highlighting Marriott’s failure to secure Starwood’s legacy systems post-acquisition.
- Operational Lessons: The breach exposed vulnerabilities in integrating third-party systems and the need for proactive cybersecurity audits.
The Marriott case underscores a harsh reality: even industry leaders are vulnerable. For hotel operators, it’s a reminder that outdated systems, inadequate vendor oversight, and delayed breach detection can turn guest data into a liability.
The Otelier Breach: A Supply Chain Wake-Up Call
In 2024, Otelier, a cloud-based hotel management platform used by over 10,000 hotels, including Marriott, Hilton, and Hyatt, suffered a massive data breach. Hackers exploited an employee’s stolen credentials to access Otelier’s Amazon S3 cloud storage, exfiltrating 7.8 terabytes of data for those that don’t understand that is a TON of data and super sensitive. This included millions of guest records: names, addresses, phone numbers, email addresses, booking details, and partial credit card information (last 4 digits in most cases) along with internal hotel reports and accounting data.
The breach, active from July to October 2024, exposed the fragility of supply chain security:
- Scope of Impact: Over 437,000 unique email addresses were compromised, with Marriott confirming its guest data was affected. The hackers initially tried to extort Marriott, mistakenly believing the data belonged solely to them.
- Cause of the Breach: The attack began with infostealer malware that snagged an employee’s Atlassian login credentials, granting access to sensitive systems.
- Industry Fallout: Marriott suspended Otelier’s automated services, disrupting operations, while affected hotels faced heightened risks of phishing scams targeting guests.
Otelier responded by hiring cybersecurity experts, disabling compromised accounts, and enhancing protocols, but the damage was done. For hotel operators, the Otelier breach highlights the dangers of relying on third-party platforms without rigorous vendor vetting and continuous monitoring.
The Risks for Hotel Operators
For hospitality professionals, the Marriott and Otelier breaches reveal three key risks:
- Guest Trust Erosion: A breach can shatter the confidence guests have in your brand, leading to lost bookings and negative reviews. In an industry where loyalty is hard-won, this is a devastating blow.
- Legal and Financial Penalties: Privacy laws like GDPR and CTDPA impose strict rules on data handling. Violations can result in fines (e.g., Marriott’s $52 million settlement) and class-action lawsuits, as seen in Marriott’s ongoing litigation. CCPA in California provides a private right of action in the case of a data breach.
- Operational Disruption: Breaches often force hotels to suspend services, as Marriott did with Otelier, causing delays in reservations and invoicing that frustrate guests and staff.
These risks are compounded by the hospitality industry’s unique challenges: high guest turnover, diverse data touchpoints (e.g., booking platforms, Wi-Fi networks, point-of-sale systems), and reliance on vendors. Without a clear grasp of data privacy, operators may unknowingly expose their businesses to cyberattacks or regulatory scrutiny.
Practical Steps to Protect Your Hotel
You don’t need to be a cybersecurity expert to strengthen your data privacy defenses. Here are actionable steps tailored for hotel operators courtesy of Captain Compliance:
- Conduct a Data Audit: Map out where guest data is collected, stored, and shared. Identify every system and vendor involved, from reservation platforms to loyalty programs. The technical industry term for this is “Data Mapping”.
- Vet Third-Party Vendors: Ensure partners like Otelier have robust security measures. Ask for certifications, review their privacy policies, and include data protection clauses in contracts. The technical term for this is “Third Party Risk Management”.
- Implement Strong Access Controls: Limit employee access to sensitive systems and use multi-factor authentication. The Otelier breach started with stolen credentials—don’t let this happen to you. The technical term for this is “Access Based Controls”.
- Train Your Staff: Educate employees on recognizing phishing emails and securing login credentials. Regular training can prevent malware-driven attacks like Otelier’s.
- Comply with Privacy Laws: Update privacy notices to clearly explain how guest data is used and provide opt-out options, as required by laws like CCPA, CTDPA, VDPA, and the other 15+ comprehensive laws. Tools from companies like CaptainCompliance.com can automate compliance with state and global regulations, simplifying the process with cookie consent banners and adaptive privacy notices.
- Invest in Cybersecurity: Use encryption for guest data, deploy firewalls, and conduct regular security audits. Consider a risk assessment audit, as recommended post-Marriott, to identify vulnerabilities.
The Path Forward: Prioritizing Guest Privacy
The Marriott and Otelier breaches are not anomalies—they’re warnings. Data privacy is no longer a technical afterthought; it’s a core component of guest trust and operational success. With cybercriminals growing bolder and privacy laws tightening, hotel operators must act decisively. The hospitality industry thrives on creating safe, welcoming experiences, and that now includes safeguarding guest data with the same care as their physical comfort.
Oregon regulators said at the recent International Association of Privacy Professionals Global Privacy Summit that they are going to be more aggressive in coming after violators. Connecticut’s aggressive enforcement of its Data Privacy Act, with dozens of warning letters issued in 2024, shows that regulators are serious about protecting consumers. Hoteliers ignoring these trends risk not only breaches but also legal and reputational fallout. By auditing data practices, securing vendor relationships, and leveraging tools that automate the compliance requirements, operators can stay ahead of risks and build a reputation as trusted stewards of guest information. In hospitality, privacy isn’t just compliance—it’s a promise to every guest who walks through your doors.
Richart Ruddie
Founder of Captain Compliance
Captain Compliance
