The hospitality industry continues to be a lucrative target
for hackers and cybercriminals, the most recent example being a data breach
of guests' payment cards at nearly 1,200 InterContinental Hotels Group hotels
in the U.S.
The annual cost of payment-card fraud doubled worldwide
between 2012 and 2015, to about $22 billion. It is expected to approach $32
billion by 2020, according to the Nilson Report, a newsletter covering the
payment systems industry.
The U.S. accounts for almost 40% of those losses and totals
about 13 million victims a year.
Some of the higher-profile payment-card breaches in recent
years include Target, which said that data from as many as 70 million people
had been compromised by a breach in 2013, and Home Depot, which the following
year estimated that information had been stolen from as many as 56 million
As for the hotel industry, Hilton, Hyatt and Starwood have
reported data breaches at hotels since 2015.
Brian Krebs, a Virginia-based writer of the KrebsOnSecurity
cybersecurity blog, said, "I'd be surprised if there was a credit card
used at a hotel within the last year where it wasn't somehow compromised."
From a legal standpoint, experts said that IHG is not directly
liable for the breach because it occurred at independently owned and operated
franchise properties, not through IHG's global reservation system. Still,
Ashton Mozano, chief technology officer at Boulder, Colo.-based cybersecurity
software maker Circadence, said the hotelier's reputation will take a hit
because travelers associate the breach with the brand parent.
Additionally, Mozano said, the breach illustrates how
franchise hotels, especially those in the lower end of price spectrum, are
particularly susceptible to cybercrime. About 70% of IHG's hotels are
About 770 Holiday Inn Express, 180 Holiday Inn, 120
Candlewood Suites and 50 Staybridge Suites hotels were affected by the IHG
breach. No data breach was detected at an InterContinental or Kimpton hotel.
"The upper-scale companies used to be a perfect place
to attack, but I've seen massive improvement," Mozano said. He added that
at lower-price hotels, "there are a lot of people in management positions
or franchise owners who just don't realize or appreciate the level of
vulnerability that they could be exposed to."
IHG spokesman Neil Hirsch said IHG hotels that had
implemented an IHG encryption payment acceptance program called Secure Payment
Solution (SPS) prior to last Sept. 29 were not impacted by the malware, and
hotels that adopted SPS since then were able to put a stop to the malware's
Both Krebs and Mozano said that the proliferation of chip-and-pin
cards and the resulting growing number of businesses that can process them
without a magnetic-card swipe could reduce the frequency of such cyberattacks.
"With a data-chip card, you can't take that data and
make it into its own card, or at least not cheaply," said Krebs.
Still, the scale of the IHG breach reflects how many
cybercriminals continue to stay a step ahead of both customers and businesses,
and some are figuring out ways to pull information off of chip-and-pin cards as
"If this was the case in 2001 or 2002, you could
understand [the IHG breach]," said Mozano. "But this was 2016.
Business owners must be more proactive."