Summer brings a welcome surge in travel, with millions of people booking hotels, redeeming loyalty rewards, and flocking to vacation destinations. But as transaction volumes rise, so do fraud risks and many hospitality brands find themselves unprepared for the scale, speed, and sophistication of these attacks.
Fraud isn’t just a financial problem. It disrupts day-to-day operations and chips away at guest trust. Over time, it can quietly drain revenue, distort business forecasts, and leave properties with empty rooms that were expected to be filled.
Why Fraud Peaks During the Summer
Just as retailers brace for fraud spikes during the holiday shopping season, the hospitality industry is uniquely vulnerable during peak travel months. The sheer volume of last-minute bookings, anonymous website visitors, and rapid digital transactions makes it easier for fraudulent activity to slip through undetected.
Many travel and hotel companies have fraud prevention processes in place, but they often rely heavily on manual review. This creates a time gap: by the time fraud teams investigate suspicious activity, the fraud has already occurred and similar fraudulent transactions may have passed through undetected.
This delay can be costly. One hotel operator I spoke with uncovered a surge of fraudulent summer bookings – but not until the week of check-in, when the cancellations hit all at once. As a result, properties were left with empty rooms and overstated revenue forecasts, hurting both profitability and guest satisfaction.
The Hidden Risks of Loyalty Fraud and False Identities
The fraud problem extends beyond room bookings. Loyalty programs, in particular, have become a major target. Fraudsters use schemes to accumulate and exploit rewards points, create fake accounts, and engineer last-minute cancellations to cash in on card bonuses.
The fragmentation of customer identities across platforms only amplifies the risk. Many hotel systems still struggle to link mobile app activity with web sessions, digital check-ins often fail, and inconsistent identity data creates gaps that fraudsters can easily exploit.
In many cases, hospitality companies are monitoring fraud only after users authenticate or log in. This misses a crucial window because bad actors are often most active while browsing anonymously. Waiting until a guest logs in is simply too late.
Closing the Gaps: Identity Signals and Behavioral Patterns
Fraud detection doesn’t have to be reactive. By improving how they collect and connect customer data in real time, hospitality brands can start recognizing fraudulent behavior early, without introducing friction into the guest experience.
Fraudulent transactions often follow identifiable patterns. They may originate from certain devices, specific locations, or occur at unusual times of day. Fraudsters tend to move quickly through the booking process, often pasting information into forms instead of typing it manually. When these behavioral signals are recognized and connected across platforms, brands can intervene before the transaction is complete.
To do this effectively, travel and hotel companies need better data and faster automation. It’s not enough to rely on “closed box” fraud solutions that simply assign a risk score based on proprietary models. Fraud is evolving too quickly to trust a static score alone. Brands need transparency, ownership of their data, and systems that can adapt to new threats in real time.
Building an Evidence-Based Fraud Prevention Strategy
Fraudsters are intelligent and increasingly targeted in their attacks. They understand the thresholds that will block a transaction and continuously probe for weaknesses. Brands that fail to evolve their defenses become easy marks.
Leading hospitality companies are shifting toward smarter, evidence-based fraud strategies; these approaches combine real-time identity signals with faster, cross-team collaboration. Here’s what that looks like in practice:
- Building behavioral profiles: Brands should develop evidence-based profiles of their typical guests, capturing the devices they use, the locations they book from, and how they move through the booking process.
- Tightening feedback loops: Fraud prevention cannot be siloed. Payment fraud, account takeover attempts, and loyalty fraud all share common signals. Marketing, customer experience, and fraud teams need to collaborate and share data quickly to close the gaps.
- Auditing identity systems: Many hotels and travel companies still operate disconnected systems web platforms, mobile apps, and digital check-ins don’t always sync. Aligning these systems is crucial to recognizing guests across channels and stopping fraud without degrading the guest experience.
- Focusing on speed: Timely data is key. Fraudsters exploit delays between when a transaction is flagged and when a team can act. Companies must examine whether their current fraud data is fresh and whether their processes are fast enough to intervene in real time.
Moving Beyond Reactive Models
Many fraud detection tools still rely on slow, post-transaction monitoring or outdated threat models. For today’s hospitality brands, that simply isn’t fast enough.
Fraud is no longer a problem you can outsource, hand off, or solve with static scores. It demands real-time visibility, faster decision-making, and systems that can evolve as quickly as fraudsters do.
It’s time to broaden the focus. Limiting fraud detection to logged-in users leaves a critical blind spot – much of the damage is done during anonymous sessions, well before a user ever authenticates.
Summer should be a season of growth, not recovery. By modernizing fraud defenses, improving identity recognition, and closing collaboration gaps, hospitality brands can stay one step ahead. Fraudsters may not take a vacation, but they don’t have to take the win, either.
