United States: GDPR And The Hospitality Industry

Last Updated: July 16 2018
Article by Todd E. Soloway and Bryan Mohler

The hospitality industry is always working to leverage technology to improve the customer experience. The industry's embrace of new technology is seen at each step of the hotel booking process, from researching hotel options using online review sites such as TripAdvisor, to booking a reservation using an online travel agency such as Expedia, to using the hotel operator's mobile app to check into a hotel before you even arrive.

At each step, potential guests provide a variety of detailed personal information, from their address and phone number to individual room preferences. Most consumers have limited knowledge of how their personal data is stored, used, analyzed or shared. Even where guests agree to terms of service when providing personal data, those terms are often voluminous and difficult to understand. With society's increasing reliance on technology comes the constant risk of data breaches and theft of personal data, thus it is especially important that the personal data of individuals be protected.

In an effort to address these burgeoning concerns, the European Union (EU) recently implemented a new regulation known as General Data Protection Regulation (Regulation (EU) 2016/679) (GDPR). The GDPR, which became effective on May 25, 2018, seeks to empower consumers by requiring companies to offer greater transparency in how they collect, store, process and share their customers' personal data. Every organization around the world that processes personal data of EU residents will be affected by the GDPR. This article focuses on the implications of the GDPR on the various players in the hospitality industry, including owners, operators, brands and management companies, addresses who may be liable in the event of GDPR violations, and offers advice on how companies in the hospitality industry can ensure GDPR compliance and better oversee the management of personal data.

The GDPR Explained

The GDPR establishes extensive rules protecting the personal data of individuals, and regulates how companies manage, store, use, and share that personal data. GDPR rules apply to any entity that exists in the EU, does business in the EU, or collects any personal data of individuals located in the EU, even if the entity has no physical footprint in the EU. The GDPR is intended to give "data subjects" commonly understood to include all EU residents– greater control over their personal data, regardless of what entity collects that data, and a fuller understanding of how that data is collected and stored, what security measures are in place to protect that data, and for what purpose that data may be or is being used.

Overall, the GDPR requires companies to become significantly more transparent as it concerns personal data collection. Anytime a company obtains personal data on an EU resident, the company will need a legal basis for the collection of the data, and explicit "opt-in" consent from the individual. Individuals will be able to revoke consent, and companies must ensure there is a methodology in place for doing so. The GDPR also grants data subjects a right of access to their personal data (Article 15) and a right of erasure (Article 17) whereby the individual may request the erasure of their personal data on various grounds.

The consequences of non-compliance are extreme. Violations may subject the offending entity to a fine of up to €20 million or 4 percent of the annual worldwide turnover of the entity for the preceding financial year, whichever is greater. Beyond the financial impact on an offending entity, the violation may also be detrimental to the entity's reputation.

Hospitality Industry Particularly Susceptible

Given the inherently global and data-intensive nature of the hospitality industry, hotel owners, operators, brands and management companies are inordinately impacted by the GDPR. Not only does the GDPR apply to any of these parties with a hotel property or other business presence in the EU, but also to any party that collects personal data from residents of the EU, even when concerning hotel stays in non-EU countries.

Moreover, hospitality companies process immense amounts of personal data on a constant basis. Seeking to anticipate each guest's desires, these entities gather volumes of personal data, including names, birthdays, business credentials, entertainment, food and lodging preferences, travel plans, and in some instances biometrics, health status, or sex life or sexual orientation (which may be disclosed by way of certain guest requests) among others. They also receive personal data from third parties such as travel agencies (which also must ensure their own GDPR compliance). Further, by processing payments from guests, additional sensitive personal data is collected, including credit card information, banking information, and spending preferences. In addition, the hospitality industry cycles through large amounts of staff members, and for those staff qualifying as a "data subject" pursuant to the GDPR, their personal data must be safeguarded in the same fashion.

Additionally, the hospitality industry frequently employs digital marketing campaigns, which also implicate the GDPR as these methods of engaging potential guests involve collecting personal data.

Liability Risks And Recommendations

To ensure compliance with the GDPR, hospitality companies must understand their data collection, usage and storage practices. As it is difficult to know where data is stored (which can be housed, for example, locally at the hotel level, more removed at the management or brand level, or remotely on cloud-based storage), companies should establish an organizational system for personal data that is carefully followed. Entities should also consider creating a position for a data protection officer if one is does not exist already. That individual would over see data gathering, storage and protection procedures, and compliance with the GDPR. Entities should also carefully review their data collection forms and privacy notices on their websites to ensure they conform to GDPR requirements.

Establishing such safeguards is highly recommended given that liability for non-compliance as between hotel owners and operators (as well as brands and management companies) is uncertain. Collection of personal data occurs all the way from the hotel level to the corporate/ brand level. Generally, hotel operators, rather than hotel owners, are the entities that gather and store guests' personal data. When booking a hotel, guests frequently book through brand websites and loyalty programs, some of which direct guests to hotel specific websites (which are often brand-hosted). But this does not guarantee with any certainty that penalties for GDPR violations will fall on the operator and not the owner.

Hotel management agreements usually contain broad indemnification provisions whereby owners indemnify operators for various potential issues. But the scope of that indemnity is defined by the specific language and parameters of the respective contract. Liability language, drafted years or decades before the GDPR's passage, likely will not provide comfort as to how liability for GDPR violations will be treated. Hotel management agreements also sometimes contemplate who among the hotel owner and operator is the owner of guest profile data, including guest preferences. That ownership, while historically desired, may also now bring a presumption of GDPR liability.

In the event of a violation of the GDPR, it is a near certainty that operators will take the stance that liability falls on the owner. Thus, it is critical for owners to carefully consider the implications of liability for GDPR violations when entering into hotel management agreements, and to review the language of their existing agreements, to understand their exposure and potential liability. Additionally, new hotel management agreements should specifically contemplate and address liability for GDPR violations.


The GDPR has immediate implications for the hospitality industry. Since compliance is mandatory and penalties are severe, hotel owners and operators, in addition to other industry players such as online travel agencies, are well served not only by seeking to comply with the GDPR's numerous requirements, but also by ensuring that their agreements adequately delineate liability for any violations of the GDPR.

Previously published in New York Law Journal, Wednesday, July 11, 2018.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Practice Guides
by Mondaq Advice Centers
Relevancy Powered by MondaqAI
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions