What Happens to My Information If I Make a Hotel Booking Online: An Analysis of On-Line Privacy Policy Use, Content and Compliance by the International Hotel Companies

Article excerpt

Consumer privacy concerns are thought to be stalling the growth of e-commerce. Although regulatory philosophies differ between Europe and the US, internationally there is a general agreement on certain global privacy protection principles, namely notice, choice, onward transfer, access, security, integrity and enforcement. A content analysis of the privacy policies of the 30 largest international hotel brands revealed that 25% fully complied with these guidelines, 69% partially complied and only 7% failed to include a policy of any kind. Omissions most often occurred in terms of Choice, Security and Integrity, indicating an unsophisticated approach to the management of consumer information on the part of some hotel companies. However, follow up research revealed that those hotel companies that actually displayed a policy in general complied with the promises made in their privacy disclosures.

INTRODUCTION

One of the major benefits of using the Web as an e-commerce medium is its ability to individually tailor sales and marketing messages to the customer. To facilitate this process, many websites encourage users to register, define preferences, and then subsequently add value by providing content specifically tailored to these needs (Metz 2001). Some e-commerce sites go a step further by tracking user actions - how often they visit the site, what pages they view, what products they buy - and using this "click-stream" data to refine such profiles based on actual behaviour rather than stated preferences (Weber, 2000). According to Internet & American Life (2000), nearly seventy-five percent of users find it useful when websites remember basic information about them and use it to provide better service.

However, from the consumer perspective such personalised service comes at a price - a threat to privacy (Weber, 2000). As Andy Grove (1998), Chairman of Intel pointed out "At the heart of the Internet culture is a force that wants to find out everything about you. And once it has found out everything about you and two hundred million others, that's a very valuable asset, and people will be tempted to trade and do commerce with that asset". Completing a retail transaction on the web requires the consumer to divulge a variety of personal data (for example, their name, address and billing information). However, as consumers increasingly use the web for commercial purposes, they have also become more wary of who will have access to their data once the transaction is completed and what they will do with such data (Lourosa-Ricardo, 2001). Some websites try to reassure potential customers by publishing privacy policies - statements outlining what the site owners propose to do (or more importantly, not do) with personal data. Other websites have gone further and had their privacy policies "certified" by external organisations in an effort to add credibility and build trust (Gilbert, 2001). Such "privacy seals" do not prevent data being shared and merely validate that the company is conforming to its stated privacy policy (Crowell, 2000). Government organisations are also acting to protect consumer privacy, For example, the European Union has introduced legislation that regulates the collection, storage and use of personal data. Recent proposals not only attempt to ban unsolicited commercial email (spam), but also prevent websites from monitoring user actions without the user's express permission (Mitchener, 2001). In short, the issue of privacy as it relates to customer data has become a major commercial and political concern. A recent Forrester Research survey found that worries over privacy continue to inhibit nearly 100 million people from shopping online (Gilbert, 2001). Given the potential of hotel websites to collect personal data (either when visitors register, join loyalty / frequent guest clubs or simply when making reservations) concerns over privacy must also be limiting the growth of hotel e-commerce. …