Hotels, resorts, and hospitality businesses collect a significant amount of personal data as part of everyday operations. From the moment a guest makes a reservation to the time they check out and receive follow-up emails, personal information is constantly being collected, stored, and used.

This includes reservation details, payment information, loyalty program activity, and marketing preferences. Because this data can reveal where people travel, how they spend their money, and how frequently they stay at certain properties, federal regulators consider it sensitive.

In 2026, hospitality businesses are expected to manage guest data responsibly, secure it properly, and clearly explain how it is used. This article explains how federal privacy expectations apply to the hospitality industry, where common compliance risks arise, and what can happen when businesses fail to protect guest data.

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WHY FEDERAL PRIVACY MATTERS IN THE HOSPITALITY INDUSTRY

Hospitality businesses routinely collect personal data such as:
• Guest names and contact information
• Payment and billing details
• Travel dates and locations
• Loyalty program activity
• Marketing preferences

Hospitality companies often rely on multiple systems and vendors to manage this information. Booking platforms, property management systems, payment processors, loyalty program providers, and marketing tools all play a role in handling guest data.

While there is no single federal privacy law written specifically for hotels or resorts, multiple federal laws apply depending on how guest data is collected, stored, shared, and used. Federal agencies expect hospitality businesses to take responsibility for protecting consumer data across all systems.

Federal regulators also expect businesses to avoid unfair or deceptive practices, especially when guests are not clearly informed about how their personal data is handled.

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KEY FEDERAL PRIVACY LAWS AFFECTING HOSPITALITY BUSINESSES

FEDERAL TRADE COMMISSION ACT

Hotels, booking platforms, and hospitality brands are regulated under the Federal Trade Commission Act. This law prohibits unfair or deceptive acts or practices, including failures to protect personal data or making misleading statements about privacy and security practices.

For hospitality businesses, this means privacy policies, loyalty program disclosures, and marketing statements must accurately reflect what actually happens to guest data.

Hospitality businesses are expected to:
• Be honest and transparent about data collection and use
• Implement reasonable data security measures
• Avoid using or sharing guest data in unexpected ways

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CAN-SPAM ACT AND HOSPITALITY MARKETING

Email marketing plays a major role in the hospitality industry. Reservation confirmations, promotional offers, loyalty rewards, and seasonal campaigns are often sent to guests by email.

Hospitality businesses that send marketing emails must comply with the Controlling the Assault of Non-Solicited Pornography And Marketing Act (CAN-SPAM Act).

This law requires businesses to:
• Clearly identify marketing messages
• Use accurate sender information
• Provide a working and timely opt-out option

Failing to honor unsubscribe requests or sending promotional emails without proper controls can create regulatory risk and damage guest trust.

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PAYMENT DATA AND FINANCIAL INFORMATION

Hotels and resorts process payment card information and billing data every day. This includes credit card numbers, transaction details, and billing addresses.

While industry standards such as the Payment Card Industry Data Security Standard are not federal laws, federal regulators still expect businesses to protect sensitive financial information using reasonable security measures.

The Federal Trade Commission has stated that failure to protect sensitive consumer and financial information may be treated as an unfair practice under federal law.

For hospitality businesses, this means payment data must be secured across reservation systems, front-desk operations, and third-party payment processors.

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LOYALTY PROGRAMS AND CONSENT RISKS

Loyalty programs are widely used in the hospitality industry to encourage repeat bookings and personalize guest experiences. These programs often collect ongoing personal data, including:
• Stay history
• Spending patterns
• Preferences and behavior

Because loyalty programs track guests over time, they can reveal detailed information about travel habits and consumer behavior. If hospitality businesses fail to clearly explain how this data is used or shared, or if disclosures are unclear or misleading, this may raise concerns under federal consumer protection laws.

In recent enforcement actions, the Federal Trade Commission has taken action against companies for misleading consumers about how personal data is collected, used, and shared.

Transparency and meaningful consent are especially important when loyalty data is used for analytics, personalization, or targeted marketing.

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REASONABLE SECURITY EXPECTATIONS FOR HOSPITALITY BUSINESSES

Federal regulators expect hospitality companies to implement reasonable security measures that reflect the risks involved.

Common expectations include:
• Limiting employee access to guest data
• Securing reservation and booking systems
• Monitoring vendors and third-party platforms
• Updating systems and software regularly

The Federal Trade Commission has emphasized that businesses must take proactive steps to protect personal data.

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REAL-LIFE SCENARIO 1: HOTEL LOYALTY PROGRAM DATA EXPOSURE

A hotel chain operates a loyalty program that stores guest names, email addresses, stay history, and reward points. The program is managed by a third-party service provider.

Due to weak security controls at the vendor level, a breach exposes thousands of guest accounts.

What went wrong:
Hospitality companies may be held accountable when inadequate data security practices result in the exposure of guest and loyalty program data.

In a real-world example, Marriott International faced regulatory scrutiny and settlements following data breaches that exposed guest and loyalty program information.

Possible consequences:
• Federal investigations
• Required improvements to security programs
• Long-term compliance monitoring
• Loss of guest trust and brand reputation

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REAL-LIFE SCENARIO 2: RESORT MARKETING WITHOUT PROPER CONSENT

A resort sends promotional emails to past guests who never opted in to receive marketing messages. Some guests attempt to unsubscribe but continue receiving emails.

What went wrong:
Failure to honor opt-out requests may violate federal email marketing requirements.

Possible consequences:
• Regulatory complaints
• Enforcement action
• Required changes to marketing practices
• Reputational damage

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WHY GUEST PRIVACY MATTERS TO ORDINARY PEOPLE

Guests trust hospitality businesses with personal and financial information during travel and vacations.

They expect businesses to protect:
• Their identity and contact information
• Their payment details
• Their travel history and location data

When hospitality companies fail to protect guest data, individuals may face identity theft, fraud, unwanted marketing, and loss of trust. Privacy is part of the guest experience.

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HOW THE DATA PRIVACY LAWYER CAN HELP

Hospitality businesses often rely on complex systems and third-party vendors to manage guest data. This increases privacy risk.

The Data Privacy Lawyer helps hospitality organizations:
• Identify which federal privacy laws apply
• Review loyalty programs and marketing practices
• Assess vendor and booking platform risks
• Improve data security and consent practices

Strong privacy practices help protect guests, reduce regulatory risk, and support long-term brand trust.

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CONTACT INFORMATION

If you have questions about hospitality privacy obligations or managing guest data, our team is here to help.

Website: www.thedataprivacylawyer.com
Email: info@thedataprivacylawyer.com
Phone: +1 (202) 946-5970

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LEGAL DISCLAIMER

The information provided in this blog is for general informational and educational purposes only. It does not constitute legal advice, legal opinion, or a substitute for professional legal counsel.

Reading or using this content does not create an attorney–client relationship between you and The Data Privacy Lawyer PLLC. Laws and regulations may change, and how they apply can vary based on specific facts and circumstances.

If you need legal advice tailored to your situation, please contact a qualified attorney directly.