The hospitality industry collects and manages large quantities of sensitive guest information, from basic contact details to payment details and personal preferences. As digital transformation accelerates and global operations expand, understanding and complying with data residency requirements has become essential for hospitality businesses. This report examines the complexities of data residency in the hospitality sector, the regulatory landscape, and strategies for effective compliance management.
Understanding data residency in the hospitality context
Data residency refers to the physical or geographic location where an organization chooses to store or process regulated data. It establishes how businesses control and secure personal data that is stored across multiple countries, regions, or states. For the hospitality industry, which routinely collects sensitive guest information including names, credit card details, passport information, and sometimes health data, proper data residency practices are crucial for maintaining regulatory compliance and customer trust.
Organizations may choose specific locations for data storage for various reasons, including providing greater transparency to customers about where their data is stored, maintaining compliance with a country’s regulatory requirements, or taking advantage of more beneficial tax regimes in certain jurisdictions. With more than 130 countries now having established data privacy legislation, hospitality businesses operating globally face a complex patchwork of requirements affecting how they manage data residency.
The regulatory landscape for hospitality data
Hospitality businesses face a complex array of regulations governing data management, with requirements varying significantly across jurisdictions. These regulations determine where guest data can be stored, how it can be processed, and under what circumstances it can cross borders.
Global regulatory frameworks
In China, data sovereignty for hotels is governed by three major pieces of legislation: the Cybersecurity Law, Data Security Law, and Personal Information Protection Law. As China rapidly reopens post-pandemic, global hotel chains operating there must navigate these regulations while implementing technologies like IoT, big data, and cloud computing to meet guest expectations.
Key requirements for China – Personal Information Protection Law (PIPL)
Localization Requirement: Critical Information Infrastructure Operators (CIIOs) and companies processing large volumes of personal data must store data locally in China.
Cross-Border Transfers:
- Subject to security assessments by the Cyberspace Administration of China (CAC)
- Must obtain individual consent for overseas transfers
- Must conduct personal information protection impact assessments
Hotels operating in China or handling Chinese citizens’ data must localize their servers or partner with local cloud providers.
Key requirements for Brazil – Lei Geral de Proteção de Dados (LGPD)
Data Transfer: International data transfers are allowed if:
- The receiving country provides an adequate level of protection
- There are contractual safeguards (e.g., Standard Contractual Clauses)
- The data subject gives explicit consent.
Hotels must ensure valid legal basis for collecting and using customer data. For international chains, data transfer mechanisms must be compliant with LGPD. Guest-facing systems must allow easy access to privacy rights.
In other countries, like Australia (Privacy Act), Cross-border disclosures must ensure equivalent protection abroad, also hospitality businesses must know about additional rules for sensitive information.
The European Union and the United Kingdom maintain strict requirements for cross-border data transfers, creating significant compliance challenges for global hotel brands operating in these regions. The General Data Protection Regulation (GDPR) has established a comprehensive framework that impacts how hospitality businesses handle European guests’ data, regardless of where the business is headquartered.
In addition to regional regulations, industry-specific standards also apply. Hotels handling payment information must comply with the Payment Card Industry Data Security Standard (PCI DSS) requirements to ensure secure transactions. Non-compliance with these standards can result in substantial financial penalties and damage to customer trust.
The India Digital Personal Data Protection Act (DPDPA 2023) – a consent-based model. Data transfer permitted to countries notified by the government.
Australia – Privacy Act Cross-border disclosures must ensure equivalent protection abroad and additional rules for sensitive information.
Impact on hospitality operations
These regulatory frameworks significantly impact how hospitality businesses operate. Hotels must ensure that all guest data—ranging from basic contact information for reservations to sensitive details about age, gender, and food allergies—is handled in compliance with applicable laws. This extends beyond guest data to employee information and service provider contracts.
The hospitality industry’s increasing reliance on advanced technologies complicates compliance further. Implementations of facial recognition, artificial intelligence, and biometric systems face additional obstacles when residency requirements restrict data flow. These technological innovations, while potentially enhancing guest experiences, must be deployed with careful attention to data residency obligations.
Data residency is not merely a technical issue—it’s a strategic imperative for hospitality brands in the digital era. As regulatory landscapes continue to evolve, staying compliant requires a combination of legal expertise, technical execution, and operational foresight. Hotels must adopt a proactive, regionally informed data strategy to build guest trust, avoid penalties, and ensure long-term success.
How InCountry can help hospitality business
InCountry offers a comprehensive Data Residency-as-a-Service platform that enables hotels to operate compliantly across multiple jurisdictions by addressing the complexities of data localization and sovereignty. Here’s how it supports the hospitality industry:
Global Data Residency Compliance
InCountry facilitates compliance with local data protection laws by storing sensitive data—such as guest profiles, payment information, and employee records—within the country of origin. This approach helps hotels adhere to regulations like China’s Personal Information Protection Law (PIPL), which mandates local storage of personal data collected within the country.
Seamless Integration with Existing Systems
The platform integrates with existing hotel applications, including CRM systems and property management software, without requiring significant modifications. InCountry’s web services proxy can automatically manage the redaction and reinsertion of personal information, ensuring that data remains localized while maintaining system functionality.
Support for Major SaaS Platforms
InCountry provides specialized solutions for popular SaaS platforms like Salesforce and ServiceNow, enabling hotels to maintain a unified global system while ensuring that regulated data complies with local residency requirements.
Extend Identity Access Management globally with profile data residency
Hotels are increasingly adopting Customer Identity and Access Management (CIAM) systems to enhance guest services and streamline digital interactions. InCounty offers Profile Data Residency to fully isolate identity profiles within countries. That helps avoid regulatory barriers and the the cost of cross-border data transfers.