What hotel owners need to know about data privacy protection
On the surface, the hospitality industry is simple. You put beds in the room and offer fine dining. A hotel is set up. However, to attract customers to their business, owners require customer data. This will help them understand their guests a lot better. Gathering and assessing such data is risky. This creates an obligation. Blatantly speaking, the obligation is to protect and store the customer information securely using hotel tech appropriate firewalls and encryption. Customer information consists of their complete names, addresses, and credit card information. These are all very sensitive information that must be protected.
The obligation arises when the hotel collects information directly from guests or focus groups using interviews or questionnaires or third-party businesses built to collect data to forecast spending patterns. It is the hotel’s responsibility and other parties involved to protect this information. There needs to be renewed in the data protection policy so a checkered track record can be maintained to identify discrepancies.
Importance of data protection
The customers do not trust the companies to handle their personal information. Let’s call it as it is. Almost 60 percent of the customers believe their personal information is vulnerable to hotels and other businesses. In a Salesforce report, customers even believe the companies do not have any interest in protecting their private information. They are only in the business for profit-maximization.
Allow customers to experience transparency in data collection, handling said data, and asking their consent in plain, straightforward terms improves trust level. The customers are then likely to cooperate more, spend more money at the franchise, and even share their experiences which leads to a more extensive and loyal customer clientele.
Not to mention that a simple data breach can negatively harm a business. Data security, if given a low priority, can ruin the hotel business. The demand for their services may decline sharply. Thus, it is essential for hotel owners to protect their guests’ data using hotel technology tools and equipment.
This goes beyond a reputational risk. If the hotel owner does not comply with the GDPR and CCPA compliances, the hotel may face severe penalties as a legal identity as well as personal penalties on behalf of the owner for non-compliance. The strict compliance and commitment to data protection can also lead to future legislation that protects the customers’ interests.
Data protection laws
Before you ask what GDPR is, it is a regulation policy that was set into place in May 2018. It intended to introduce strict protocols and limitations on business operations covering hotels that use or manage the customers’ personal information. This legislation applies throughout the European Union that collects data of the EU residents. This even includes online bookings.
The penalties in GDPR are very severe. The maximum fine is calculated at four percent of the hotel’s global revenue. The fine on the lower extreme is calculated at a rate of two percent. This is all set in place to warn the hotels against data breaches that publicize customer’s sensitive information.
Mirroring the GDPR, California introduced the California Consumer Privacy Act. This has been introduced into practice since January of the previous year. This binds all hotels to protect the data of customers that are based in California. The location of the hotel does not matter. You must manage and protect the data of the Californian customers from wherever the hotel is based. The criteria to comply with this legislation are as follows:
- The annual hotel revenue exceeds 25 million dollars.
- The data is collected from more than 50,000 California-based residents.
- More than half of the revenue is collected from Californian guests.
Recommendations regarding data protection
The first step is to comprehend the data the hoteliers collect, why it is collected, and where it is stored. The hotel also needs to decide who handles the data and whether it hires external or internal resources to access the data. The hotel must hire a professional who must be accountable for data protection and assessment.
The hotel must also continue to upgrade its IT infrastructure. The security systems must be built to minimize the risk of a data breach. The hotel tech IT instruments are built to alarm the hotels in case of external hacking. The hotels must remove security risks. This is in their best interest.
The hotels must place clear policies regarding data protection. The hotel owners must communicate them to guests to make sure the customers and staff understand them. The amount of unnecessary data must be minimized. Procedures can be revised, so the guests are more cooperative to willingly contribute to data collection. An option for the customers to walk away with a copy of collected data is suggested. The data can also be deleted at their request.
The hotel owners must take control as cybersecurity does not relate to a single party, operators, or brands. It is a collective effort. Even when the party assumes responsibility, all parties must conduct the matter professionally. Security guidelines must be strictly complied with at all times, so the risks need to be avoided and minimized. Risk assessment can help identify risk locations as well.
Hotel owners must also prepare for emergencies. Data breach gives no warning, and hotels must install back-up programs. Damages must be mitigated. That involves purchasing and installing effective cybersecurity protocols.
Perhaps the most challenging step would be to restructure the organization from top to bottom. Hence, the entire organization is protective against data breaches. Recent legislation in Europe and the USA legally binds the hotels to protect the customer’s information. The hotels must disclose third-party affiliates and other disclosures when it comes to data protection.
The hotel and hospitality are continually facing challenges regarding data protection. They continue to battle the legal landscape with perseverance and patience. Companies, regardless of their industry, must recognize the greatness and success an explicitly disclosed data protection policy can impact their business’s growth. A comprehensive approach that confronts data breaches but does not hurt the brand is suggested.