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The high cost of cybercrime on the hospitality industry.

Posted 3/11/2019

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According to the Ponemon Institute’s 2017 report, in the US:

  • Average data breach cost: $144 per record
  • Average data breach size: 24,000 records
  • Average cost to an individual organization: $3.4 million

These figures do not include the cost of preventative measures such as anti-virus and firewalls—just direct costs of responding to, mitigating, and cleaning up after an attack.

Information theft remains the most expensive consequence of a cybercrime.

  • At 43%, information loss represents the largest cost of a data breach.
  • The cost of business disruption comes in at 33%. This can include diminished employee productivity and business process failures following a cyberattack.
  • Revenue losses: 21%
  • Equipment damages: 3%

LOSS OF COMPANY ASSETS:

Exclusive information, such as product designs, customer records, company strategies or employee information, is often compromised or stolen outright. All of these assets have incalculable value to a business, and thus can inflict crippling losses.

BUSINESS DISRUPTION:

A security breach often means shutting down electronic operations for some period of time. Corrective action often depends on a service provider's responsiveness: a frustrating, time-consuming, and costly affair. Costs are likely to result in total revenue losses for at least several days.

DAMAGED REPUTATION:

When a company falls victim to a security breach, especially if it involves exposure of customer/client data, the cost to future business due to a damaged reputation is impossible to measure. Some consequences of a damaged reputation include:

Loss of customers: 80% of customers won’t buy from a company with a damaged reputation or negative reviews.

Market shares drop: The negative publicity associated with a breach also adds to the costs. Remember the Target breach of 2013? As a result of this second-largest data breach in history, Target’s fourth quarter net income decreased by 46% when compared with the year prior.

LITIGATION:

Lawsuits can cost a company millions. If you’re not covered with the proper limits and right coverage, a high-cost claim could potentially wipe out a business.

PROTECTION COSTS :

The most important cost of cybercrime should also be the first outlay: prevention. Businesses of any size need to implement a strategy to protect against the reality of cybercrime.

Where many of these businesses used to treat cybersecurity like an afterthought—something to purchase and implement after their operating systems had been established—they are now beginning to make cybersecurity a 24/7 priority.

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