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Data Breach Cost Marriott $28 Million So Far

The massive data breach disclosed by Marriott last year has cost the company $28 million to date, most of which has been covered by insurance, the hotel giant revealed last week in its earnings report for the last quarter of 2018.

The massive data breach disclosed by Marriott last year has cost the company $28 million to date, most of which has been covered by insurance, the hotel giant revealed last week in its earnings report for the last quarter of 2018.

According to Marriott, $25 million of the $28 million expenses incurred as a result of the security incident has been covered by insurance.

During an earnings call, Arne Sorenson, CEO and president of Marriott, said there had not been any RevPAR (revenue per available room) impact from the breach and it does not appear that customer loyalty has been affected. He also noted that the number of calls received by Marriott’s dedicated call centers dropped from roughly 40,000 in December to less than 3,000 in February.

Sorenson said the forensic investigation into this incident has been completed. American Express reported that there had not been any spike in credit card fraud as a result of the breach.

Marriott reported a net income of $2.2 billion for 2018.

News of the breach broke on November 30, when Marriott informed the public that the details of roughly 500 million customers had been compromised after malicious actors breached its Starwood network. The attackers gained access to names, addresses, dates of birth, phone numbers, email addresses, passport numbers, reservation details and, in some cases, payment card information.

Later in its investigation, the company said the actual number of affected individuals was approximately 383 million, but also revealed that the attackers, which had access to Starwood systems since as early as 2014, may have also stolen over 25 million passport numbers.

Some believe that the cyberattack was the work of the Chinese government and the goal was likely espionage, rather than financial gain.

Unsurprisingly, several lawsuits have been filed against Marriott by both customers and investors in response to the breach. The company may have only paid a relatively small amount so far, but class actions resulting from cybersecurity incidents have been known to cost major firms tens of millions of dollars.

Companies can also end up paying millions to settle charges brought by US authorities.

Related: Wendy’s Reaches $50 Million Settlement With Banks Over Data Breach

Related: Home Depot to Pay Banks $25 Million for 2014 Breach

Related: Insurer Anthem Will Pay Record $16M for Massive Data Breach

Written By

Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.

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