New research published today by Adyen, the global financial technology platform of choice for leading businesses, has found that one in 10 hotel guests have been a victim of payment fraud when booking a hotel or as a consequence of staying at the accommodation.   

Published ahead of Blue Monday, Adyen’s Hospitality Report finds that concern over fraudulent activity could be discouraging people from booking stays, with 71% of travellers worrying about the risks of scams. Of those who fell victim to a fraudulent attack, £564.08 was the average amount lost per guest in 2024.  

The hospitality industry is particularly vulnerable to payment fraud with legacy practices, such as over-the-phone payments, still widely available and less common in other sectors. Almost half of hotels (47%) offer manual, over-the-phone payments options, and the majority of business leaders Adyen polled (51%) claimed that it remains a popular option for guests.  

But in reality, just 11% of travellers said they prefer to pay over the phone, and 26% said that they wouldn’t book with a hotel again if their credit card details were requested in this way. When asked what measures would make travellers feel more comfortable providing payment information when booking a stay, the top answers were being able to pay at check-in (43%) and booking directly with the hotel online (36%). 

The cost to business 

Over a third (38%) of businesses said that they had experienced an increase in fraudulent attacks in 2024, and 7% said they’d fallen victim 15 – 20 times. Of those affected, the average loss due to fraud and chargeback-related costs totalled £845,111.06. These figures underscore the urgent need for investment in technology to combat the rising threat of fraud, protecting both the business and traveller from falling victim. 

Nicole Olbe, Managing Director at Adyen, comments: “Many hotels offer payments over the phone for convenience, providing a personal touch to last-minute bookings. Nonetheless, some accommodation providers, particularly independent or boutique businesses, still rely on outdated systems that haven’t integrated modern, secure payment options yet. 

“January is a key month for holiday bookings, and we’re warning travellers and hotel owners alike to be vigilant this Blue Monday. Fraudsters are professional con artists, and can impersonate hotel staff over the phone, online and on social media sites, tempting bookers with deals too good to be true with the lure of sunshine escapes. Travellers should be wary of offering payment details over the phone and the industry needs to modernise and prioritise safer alternatives without compromising service quality.”  

Five ways to respond to rising cases of fraud 

To protect their businesses and their guests from payment fraud, using technologies like encryption and network tokenization is essential. Here’s how these tools enhance security and improve guest trust: 

1. Network tokenization preferred for data security: Network tokens replace sensitive cardholder data with a randomised string of characters. Because tokens and cryptograms are bound to their requestor, stolen tokens are useless to fraudsters. Tokenization also allows businesses to securely store payment details for future transactions, enabling convenient features like one-click bookings while minimising fraud risks​.  
2. End-to-end encryption: By encrypting payment data from the moment of capture to the point of processing, hotels can protect sensitive guest information during transactions.  
3. Integrated payment systems: Using unified platforms that combine payment processing and fraud prevention enables real-time fraud monitoring and reduces vulnerabilities from disjointed systems. These systems can flag suspicious activities and provide insights into transaction anomalies, helping businesses proactively combat fraud​. 
4. Use machine learning in fraud protection: Advanced fraud detection tools employ machine learning to identify patterns of suspicious behaviour. By continuously adapting to emerging threats, these systems can significantly reduce the risk of fraud while ensuring genuine transactions are not falsely declined​. 
5. Empowering Secure Payment Choices: Providing guests with secure options, such as paying at check-in or through online platforms that support encrypted transactions (which includes digital wallets), can discourage less secure methods like over-the-phone payments. This enhances guest confidence and reduces the avenues for potential fraud​. 

Implementing these measures not only mitigates financial loss but also builds trust with guests, creating a competitive advantage in a highly sensitive area for the hospitality industry.