Current standard-issue American credit cards store personal information in a magnetic stripe on the back of the card. EMV cards, however, store information on a secure computer chip,which generates a one-time-use security code for every transaction, making counterfeiting virtually impossible, according to the EMV Migration Forum, a consortium of industry players that support EMV chip implementation across the United States.
Credit card security is a topic top of mind for any business that processes consumer payment data, and this October the stakes for U.S. businesses—including hotels—to comply with the latest wave of payment security will get higher.
It’s all part of a continuing wave for the United States to widely adopt EMV chip credit cards, which reduce counterfeiting and card fraud, but which require hardware and software upgrades on the part of the party processing the payment.
Beginning in October, new compliance language will shift the burden of liability for some types of fraudulent credit card transactions away from banks and ultimately on to merchants. Hoteliers who know these new liability burdens and are actively implementing technology upgrades to read these new cards will come out ahead, legal and technology sources said.
Knowing the reasons behind the change and the implications of noncompliance will help hoteliers make a seamless transition, sources said.
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“Regardless of the content of the call, hoteliers should be ensuring that they are using automatic disclosures—in order to obtain consumer consent—if using an automatic recording system. If an operator becomes the target of one of these consumer privacy class actions, taking an aggressive approach and attacking these claims as incongruent with the legislative purpose and intent behind the respective statute is a recommended.”
In the past few years, class action plaintiffs have recovered billions of dollars in punitive damages by exploiting strict liability laws that punish businesses for failing to properly notify customers when a phone call is being recorded.
Under the Federal Telephone Consumer Protection Act and similar state statutes, businesses including hotels are prohibited from using certain tactics when telemarketing or making calls to solicit potential guests or customers. Hotels and other businesses are precluded from making calls or using any kind of prerecorded message, unless the caller has obtained a recipient’s prior express consent in writing or electronically.
Additionally, hoteliers are prohibited from making calls to residences before 8 a.m. and after 9 p.m., and a future hotel guest calling to confirm a reservation also must be notified if the call is recorded. Hence, under these laws, if a hotel receptionist in Montana receives a call from a California resident to confirm a reservation but never notifies the recipient that the call is being recorded, it could result in damages ranging from $500 to $5,000 per call under federal and state laws.
This seemingly innocuous business practice of recording customer service calls without providing some variation of the oft-heard disclosure, “This call may be monitored or recorded for quality assurance purposes” has the potential to financially cripple a business.
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While low cost and minimal fees are an appealing draw, rental websites are a classic example of a scenario in which one gets what one pays for, but in this case, possibly even less since the ownership of the site and what hoteliers are putting funds toward is not theirs at the end of the day. This doesn’t even take into account the additional shortcomings seen from rented hotel websites such as no search engine optimization, little service or support following the initial set-up, a limited number of site pages, photos or content and so on.
The hospitality industry has seen a number of agencies offering hoteliers a low-cost, low-budget website that they can rent. It has been widely noted that these agencies, which promise all of the bells and whistles associated with investing thousands of dollars and development resources, often leave hoteliers in the lurch after the deal is done.
Why? A number of reasons, but perhaps the most important is that agencies that rent hotel websites do not provide hoteliers with true ownership of their content which becomes problematic as explained below.
It should come as no surprise that a hotel’s digital assets should be owned by the property, however, the subject of digital ownership seems to be overlooked by hoteliers doing business with rental agencies. Hoteliers’ ownership should reach past the physical ownership of their property to include their digital content and here is why:
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“That’s particularly true when hoteliers begin marking their competitive differentiation on price—the average price of an Airbnb listing in NYC hovers slightly above $200/night and is well below the average cost of a hotel room in, say, Manhattan.”
“Is anyone worried about Airbnb?”
Nary a hand was raised when Mark Woodworth asked that question from the main stage at the Hunter Hotel Conference. The head of PKF Hospitality Research had to peer into the sea of some 1,200 attendees, hand above his squinted eyes like a sailor gazing into a foggy horizon, to find any. There were maybe five in all.
“Well, I’m going to talk about it anyway,” Woodworth said.
He was right to do so. The peer-to-peer accommodations platform is a threat to both demand and rate. We’ve documented that fact time and time again. Hoteliers just don’t want to hear it.
This dismissive attitude is based on the fact that it takes a lot of Airbnb supply to truly steal share. To reach that mass, Airbnb needs a strong concentration of willing hosts in high-demand markets such as New York City and San Francisco.
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