October 4, 2022
Holiday Inn bookings tank after security breach: Franchisees

A suspected ransomware attack on Holiday Inn has crippled the hotel giant’s ability to book reservations online, resulting in sharp occupancy drops leading to legal threats from franchisees, The Post has learned.

Intercontinental Hotels Group, which owns Holiday Inn as well as 15 other brands including Crowne Plaza, said hackers breached its system on Monday, forcing it to shut down its online reservation booking portal.

In response to the hack, which barred many customers from booking Holiday Inn rooms on third-party sites like Expedia and Booking.com, IHG said it was able to resume “intermittent” service on Wednesday.

However, some franchises told The Post that significant disruptions continued to affect the system since early Friday. Customers who are trying to book rooms can simply log in to the Holiday Inn’s site and make reservations for half the time, according to Vimal Patel, a franchisee that specializes in Holiday Inn in Laplace, LA and Donaldsville, LA. The Inn Express operates the hotel.

Holiday Inn exterior
Intercontinental Hotels Group, which owns the Holiday Inn, said hackers breached its system, forcing it to shut down its online reservation booking portal.
EPA
Keith Barr, CEO of Intercontinental Hotels
IHG chief executive Keith Barr said the hack had “significantly disrupted” the company’s online bookings as well as its customer service centers and internal communications.
Bloomberg via Getty Images

As a result, Patel said this week his hotels are running at less than 50% occupancy, estimating that they would be around 75% if the IHG national reservation system was not compromised. For the next week, about 20% of their rooms are currently reserved – half the normal rate for mid-September, he said.

“Next week is when things are going to move very fast,” Patel said, noting that their locations primarily serve business customers.

Rich Gandhi, a Holiday Inn franchisee in Exton, PA, reported a similar drop in bookings, claiming he had sent several emails to the IHG operations team and received no response. Accordingly, Gandhi said he plans to file a class-action lawsuit against IHG on behalf of the Holiday Inn franchise in the coming days.

“The franchise is getting murdered here and IHG doesn’t care,” Gandhi said.

On Tuesday, IHG chief executive Keith Barr said the Monday hack had “significantly disrupted” the company’s online bookings, as well as its customer service centers and internal communications. A day later, Barr said the company’s web and mobile portals had been reactivated, but warned that “services will be intermittent as we work to ensure the stability of our systems and we continue to Looking forward to disruption.”

Representatives for the Holiday Inn did not respond to requests for further comment from the Post.

Gandhi believes that according to IHG’s 2021 annual report, the company’s franchisees – whose hotels account for 71% of its 880,000 rooms worldwide – pay technical fees to IHG equal to about 2% of gross revenue .

“Why are they charging us technical fees if their computer system is bad?” Gandhi asked.

Patel said he asked IHG this week about reimbursement for his losses. In response, he says he was told that franchises are on the hook for any damages from security breaches.

“IHG stated that the franchisees will not be compensated in any shape or form,” Patel said. “This risk is part of our franchise agreement.”

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