We’re starting a new block “Guess posts”, where we welcome everyone from the travel industry to share their expert opinion about how blockchain is shaping our traveling future.
Current state
In recent years technology has had a huge impact in everything that happens within the travel industry. OTA giants like Expedia and Priceline have used upcoming technologies such as AI to further strengthen their positions as market leaders.
Blockchain is the next technological ‘superhero’ that will change how the travel industry operates in the near future. Today, most people know blockchain technology because of Bitcoin and other cryptocurrency, but there are many other ways it can contribute to how business is done within the industry.
“A blockchain is a magic computer that anyone can upload programs to and leave the programs to self-execute, where the current and all previous states of every program are always publicly visible, and which carries a very strong crypto-economically secured guarantee that programs running on the chain will continue to execute in exactly the way that the blockchain protocol specifies.”
Vitalic Buterin, Ethereum.org
Bad news for OTA’s?
The power of Blockchain technology can be used to build a public platform that could decrease the market share of the huge OTA’s that run the game in today’s travel space. Sharing of information between companies is made much easier because blockchain run applications can interact extremely fast without these companies or users losing control over their own applications.
Smart Contracts are hardcore agreements between two different parties into a self-executing blockchain program. The code on the blockchain can have a ‘command’ written, to pay a commission fee to a party when ‘x’ has been reached. Hotels, Tour-operators and Travel Agents might use this example of a Smart Contract for commission payment automization.
Theoretically this would mean that even as a customer you could deal directly with the accommodation of your choice, by paying through a blockchain system of contracts, which would totally cut out the (cost of) OTA middlemen.
Customs and Baggage. Connected systems
Blockchain can help create streamlined processes because of inter-communication between different parties. An application built on blockchain can easily and efficiently use the data produced by another application (for example in security checks and baggage handling).
So if you are traveling from France to Colombia with a layover in Spain, your passport check at customs in Paris would be the only one of the entire trip. Your permission for entering the country in Bogota could easily be granted and communicated on the blockchain shortly after your take off in Paris.
“Enterprise companies will benefit from blockchains in areas such as reservation systems, payment processing, and data sharing. However, it is good to note that it is easy to over-architect a solution using a blockchain.”
— Amadeus
Although the adoption of blockchain in the travel industry is still in the early stages, things might start changing really soon. Start-up company Winding Tree is working on an open source public blockchain platform.
For travelers, blockchain can play a big part in cutting costs. Less OTA commissions for hotels means lower prices. All other transaction fees that are made during a (international) trip such as exchange fees and fees on credit card payments would also drastically decrease.
Another way this would be possible is because of personalization, with loyalty programs. The amount of various loyalty programs is ridiculous. Each brand offers their own loyalty points, but there is no way to connect all existing points for a traveler, thus traveler ending up forgetting about them. With blockchain, we’re seeing an ability to not just collect points, but to also interchange them between different networks in a matter of seconds. For example: you have a crypto points in from accommodation marketplace, you can exchange them with experiences marketplace and enjoy free adventures around.
This article is written by @freddy1gomes as an expert from www.simplydealstravel.com
Nice innovation :)