As soon as a guest checks into a hotel, a trail of personal information follows them. This includes ID cards, phone numbers, payment information, preferences, and feedback. This data moves between several systems, such as booking engines, property management software, CRMs, and apps made by other companies.
People in the hospitality industry have seen this sharing of guest information as normal for a long time. But now it has a lot of legal weight. The Digital Personal Data Protection (DPDP) Act, 2023, has changed the way the Indian hospitality industry must handle personal data in a big way.
Economic Laws Practice (ELP) says that “The DPDP Act, 2023, is changing how the hospitality industry handles guest data.” Hotel owners, operators, and other stakeholders must act quickly because they could face fines of up to INR 250 crores for not following the rules.
This law is more than just a list of things to do to obey the rules; it’s a change in culture. In an industry that relies on trust, service, and reputation, keeping guest data safe is just as important as making sure they are comfortable and safe. Hotel and restaurant owners who see this early will stay compliant and earn guests’ loyalty in the digital age.
1. The Real Data in Today's Hospitality
The hospitality industry is now very digital. Data now drives and often automates interactions with guests, a departure from the manual approach. Every time you book something online, check in on your phone, use a digital concierge service, sign up for a loyalty program, or log in to Wi-Fi, you create data.
Hotels often collect data at the following places:
- Online booking systems store guest names, email addresses, payment information, and preferences for their stay.
- When you check in or out, you need to show your government ID, give your contact information, and show your travel history.
- Access to Wi-Fi includes device IDs, location data, and browsing history.
- Loyalty programs take into account your personal preferences, birthdays, and past spending habits.
- POS systems keep track of purchases made at restaurants, spas, and stores.
Security systems include CCTV cameras and facial recognition in high-end homes.
Under the DPDP Act, all of these data touchpoints are considered “personal data.” This means that hotels are now legally required to keep all of this data safe, private, and correct from the time it is collected until it is deleted.
2. What the DPDP Act means for the hospitality industry
The DPDP Act, 2023, is India’s first full set of rules for protecting data. It tries to find a balance between people’s privacy and the needs of businesses. It gives citizens (data principals) power and makes organizations (data fiduciaries) responsible.
This means significant changes in how things work in the hospitality industry. Hotels are no longer able to freely share guest data between departments or partners. Every collection must have a clear purpose, be based on consent, and be handled safely.
The law says:
- Obtain clear and informed consent from guests before collecting or using their data.
- The use of data should be limited to what the guest has consented to.
- Data minimization means only gathering the information that is needed.
- Transparency means being clear about how data will be used or shared.
- Reporting data breaches means quickly letting the authorities and people who were affected know.
The DPDP Act makes protecting guest data a legal duty instead of just a best practice.
3. Who can view information about guests? Responsibility Traceability
Any number of parties may access visitor information, including booking platforms, PMS, marketing databases, and even third-party partners.
- The DPDP Act says:
The primary responsibility for the security of visitor data rests with the hotel (the Data Fiduciary). - Data processors and other third-party providers are legally obligated to adhere to the terms of their contracts.
- Visitors (data principals) are entitled to see, edit, or request deletion of their data.
After a data breach, hotels can’t claim that “the vendor was responsible” anymore. The data continues to shape the hotel’s reputation and legal standing.
Therefore, choosing providers and managing contracts becomes essential. The same privacy regulations are now in effect for all CRM partners, marketing agencies, and technology providers.
4. Changing how hotels do business to be compliant
A. Getting consent and collecting data
People who are staying with you need to know why you are collecting their information. Consent should be clearly written down, either on paper or digitally, and it should be easy to take back.
B. Minimizing Data
Collect only the information that is needed. For instance, requesting a passport from a domestic guest could now be considered excessive if it’s not legally required.
C. Data Security
Encryption is necessary, and data should only be accessible to authorized individuals. Documents containing personal information, such as identification or payment slips, should not be stored in unprotected folders or disks.
D. Training for Staff
Everyone on the team, from the front desk to marketing, needs to learn how to protect data. Many breaches happen because people make mistakes, not because the system fails.
E. Managing Vendors
Before signing any contracts with booking sites, point-of-sale providers, or cloud services, your hotel should ensure that they include clear data protection requirements.
F. Strategy for Responding to a Security Breach
Every company needs a streamlined process to detect, report, and handle data breaches as soon as they happen. The Act mandates transparency and prompt reporting.
5. Learning from examples from other countries
Data protection laws have revolutionized the method in which hospitality businesses handle information globally. The General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) have lately imposed considerable liabilities on data controllers.
In 2018, Marriott International had one of the worst data breaches in the hospitality industry. At first, information from as many as 500 million passenger accounts was made public. Following forensic research, the figure was dropped to around 383 million. (Source: Marriott Press Release, Nov 30, 2018)
Similar to many other laws worldwide, the DPDP Act in India tailors itself to better meet India’s unique needs.
For Indian hotels catering to international travelers, adherence to global privacy standards is essential in establishing trust and credibility. A hotel that complies with the DPDP can legitimately identify itself as a “privacy-conscious brand,” akin to the way eco-friendly or sustainable hotels are currently recognized.
6. Making Compliance a Competitive Advantage
Some operators see the DPDP Act as a hassle for their business, but hotels that are ahead of the curve see it as a way to improve their brand.
People who travel today care about their privacy. They expect careful handling of their private information. A hotel that is open about how it keeps guest data safe stands out from the rest.
A simple way to build trust is to send guests a message after they book that explains how their information will be used and deleted after they check out. Adding a “Privacy Assured” badge to booking pages can also help increase conversions.
When you discuss compliance clearly, it becomes a story of trust. It communicates to guests that their safety extends beyond our physical presence and encompasses their data.
Hotels that start thinking this way early will have a long-term edge over their competitors in terms of brand reputation, customer loyalty, and partnerships.
7. How AI and technology help with compliance
AI-powered chatbots, mobile apps, virtual agents, and smart room systems are just a few examples of how technology is changing the way we stay in hotels. These applications, nonetheless, collect and structure guest data, including names, contact details, and individual preferences.
The Digital Personal Data Protection Act, 2023 (DPDP Act), mandates adherence to data protection regulations for all systems and organizations processing personal data. These rules include obtaining permission, restricting the purpose, and ensuring data security.
All of these tools are regulated under the DPDP Act. Any AI or analytics system must ensure that:
- Anonymizing data for training algorithms.
- Personalization based on consent, not profiling based on assumptions.
- Audit trails to ensure that data is used fairly.
- Hotels should implement privacy-by-design systems to ensure protection at all levels.
- Hotels should spend money on:
- Systems for managing consent automatically
Ways to store and send data that are encrypted
- Regular checks for security holes and audits
- When used wisely, technology can help with compliance, not hurt it.
8. Problems on the Way to Compliance
Because the hospitality industry is so divided, it is difficult to obey the rules.
Some of the biggest problems are:
- Old systems that don’t have encryption or audit trails.
- Several vendors with different data standards.
- Staff members are generally unfamiliar with privacy laws.
- There are no standard ways for getting consent across properties.
- Small and mid-tier hotels have limited resources.
Industry groups like FHRAI and HAI can help fill in these gaps by providing shared training, templates, and policy frameworks. To get the whole sector ready, everyone will need to work together.
9. Steps for Hospitality Leaders to Get Ready for the Future
Locate every system that receives and transmits visitor data by mapping your data flow.
- Make your privacy policies easy to read, easy to find, and available in more than one language.
- Make the consent forms clear, specific, and easy to change.
- Give your employees training on a regular basis. Everyone, from the receptionist to the IT department, should know what their job is.
- Check contracts with other parties to make sure everyone knows what they are in charge of.
- For big hotel chains, it’s a good idea to hire a DPO (Data Protection Officer).
- Make a plan for how to respond to a breach. It’s important to be quick and clear.
- Do audits regularly. Privacy is something that happens all the time, not just once.
These steps change compliance from something you have to do by law into something that is good for your business.
9. The Change in Culture: From Policy to Promise
Delivering exceptional guest service now includes protecting their digital identities.
The Digital Personal Data Protection Act stipulates that organizations must substitute “privacy policies” with “privacy promises.” This shift transcends mere procedural adjustments; it underscores the importance of fostering trust.
A hotel that respects your personal information sends a strong message: we care about both your comfort and your privacy.
The most trusted brands, not just the most expensive ones, will lead the next era of hospitality.
End note
The Digital Personal Data Protection Act marks a significant milestone for India’s hospitality industry. The company prioritizes guest privacy, viewing it as essential to both hospitality and convenience services. For a long time, hotels have known how to make guests feel important in person. Now, they need to learn how to make them feel safe online.
This law isn’t just a compliance challenge; it’s an invitation to rebuild hospitality around digital trust. From the time a guest books a room until they check out, every click, consent, and stored preference is part of a silent promise: your data is safe with us.
People who see privacy as an integral part of their brand experience, rather than a legal burden, will lead the next generation of hospitality. They will draw in not only bookings but also faith. They will get customers to stay loyal not by giving them discounts, but by building trust.
Comfort might get you a stay in the dynamic world of hospitality, but trust will make you a lifelong guest.
