Last month in our blog, in our discussion on cyber risk management, we cited that hotels and motels accounted for 9% of all data breaches last year. This figure is according to data made available in Trustwave’s 2013 Global Security Report. With the rise in mobile use for hotel bookings, increased implementation of cloud computing, and apps designed around social media bookings, this is expected to jump along with the general across-the-board spike anticipated in data breaches.

Just take a look at the direction that travel planning is taking: Mobile bookings in the United States, according to a report released by global travel research company PhoCusWright, will almost double in 2014, to $24.3 billion, from $12.3 billion in 2013. As a result, mobile bookings –both smartphone and tablets (but not reservations made under the “click-to-call” function) – will account for 18% of the online travel market, up from 10% this year. In all, about $1 out of every $12 worth of travel bookings will be generated via mobile, PhoCusWright predicted.

With the travel segment, hotels will continue to be the most penetrated when it comes to mobile bookings, with almost a quarter of all online hotel bookings being made via smartphone or tablet. In fact, Orbitz CEO Barney Harford, speaking at the annual PhoCusWright conference in November, put that figure at 27%.

Moreover, it seems that smartphones are the device of choice as the faster-growing booking channel. In the third quarter of 2013, U.S. hotel bookings on smartphones jumped 86% from a year earlier, whereas tablet bookings were up 57%, according to HEbS Digital, while desktop bookings fell 6%.

Mobile is no longer a novelty or nice-to-have for any hotel competing for bookings from global business travelers,” according to David Millili, CEO of Pegasus Solutions, which aids hotels in transforming brand websites into mobile sites. “It has become a must for generating revenue.”

In the year ahead, the mobile experience will also shift from simply making reservations to providing mobile apps that offer so-called “inspirational” results, including images of various excursions. “There is a vast amount of mobile innovation in hospitality,” said Alex Alt, president of Sabre Hospitality Solutions, speaking at the PhoCusWright conference. He added that, “whereas mobile until now has primarily been centered on reservations procurement, future apps will target the entire guest experience.” We can expect, for example, hoteliers to give prospective guests the chance to book rooms via social media sites. Loews Hotels & Resorts just started allowing guests to book reservations at 16 of its hotels via “conversations” on Twitter, and other hoteliers are likely to follow.

This is all great news for consumers looking for ease in booking hotels and vacations and a more informed way of deciding where to stay. It’s also great news for hotels and motels that are addressing consumer demands by leveraging technology to tap into today’s customer and his and her needs. Along with these opportunities, however, come increased risks, particularly in the area of privacy issues and consumer data, which is why it’s critical that all hotels, no matter what the size, secure Cyber Liability insurance. In fact, smaller operations may be more vulnerable to data breaches due to insecure practices. They may not have the proper encryption in place and the latest software to protect their systems. Additionally, numerous breaches are caused by insiders where an employee steals consumer data or carelessly opens a link and infects his or her organization’s systems.

IPOA offers Data Breach (Cyber Liability) coverage to limited- and full-service hotel clients. As an IPOA agency partner, simply visit our website for a quick on-line premium indication to provide to your hotel clients. The Data Breach coverage, available with our HotelPro program, includes: breach notification and credit monitoring services with separate coverage limits for third-party claims; breach response coverage for forensic and legal assistance, and notification costs; bureau credit monitoring services; and crisis management sublimit for public relations; a separate limit of liability for privacy, network security and media claims; and more. It also includes a $100,000 PCI sublimit. Please give us a call at 877.653-IPOA (4762) for more information about HotelPro or visit our website.

Sources: Travel Weekly, Trustwave, Experian