The word “blockchain” has been floating around industry conferences and technology suppliers press releases for a few years now. But few hotel operators understand what the technology is, how it can be used or why they ought to even care. Blockchain has been heralded as the second coming in some domains such as the world of cryptocurrency and while its uses may not seem readily apparent today the technology already is impacting travel.
Over the past decade, the booking and reservations industry for travel and hospitality has migrated online. The internet has revolutionized the way in which people travel, with instant price comparison websites, cheap web-based airlines and shared accommodation apps like Airbnb. Blockchain technology is that the next logical step in the
Potential Use Cases in Hospitality
There are many disparate private databases in travel distribution that must be incrementally and endlessly synced in close to real-time. Property management systems, central reservation systems, and others serve as the first stop for all property-level data.
If availability and rate information was available in a public data source such as a blockchain, suppliers would be able to quickly and easily update information. Consumer-facing sales outlets would be able to access it with full confidence in its accuracy, without the use of redundant intermediaries. Fees for technology services underpinning the travel industry would decrease, enabling more inventory online, at lower costs to hotels.
Because hotels and their distributors are challenged to keep descriptive content up-to-date. As they, refurbish, rebrand or open new facilities, text descriptions, photos, videos, and other content are constantly updated by them. A blockchain could provide a unified location where all hotels could register and/or store their rich content.
2. Payments for Bookings
The idea of using blockchain for payment is very natural. Blockchain was initially introduced as Bitcoin within the financial. Other blockchains are gaining traction among banks for international currency settlement. Payments are an important aspect of travel distribution as well and certain kinds of transactions may lend themselves to blockchain solutions.
Blockchain can be used as a cryptocurrency instead of a credit card. It can eliminate the credit card fee in those cases where:
- The buyer can reasonably be expected to have or to acquire the cryptocurrency.
- Where the consumer protections are not very useful.
3. Coordination across Multiple Suppliers
Travelers often reserve a hotel stay, an airline flight and ground transportation in a single transaction. Smart contracts could handle payments and commissions to each and could also enable coordination during the trip. For example, if the traveler does not check-in for the flight, the hotel and rental car supplier could know that and take appropriate action, such as releasing inventory for sale to someone else.
4. Innovation Through Apps
Blockchain technology could rapidly increase the pace of innovation in travel technology, through the use of open APIs. A new application would no longer need to separately contract with dozens to hundreds of companies, each with their own private databases of availability, rates, tours, content, etc., just to assess the feasibility and potential demand for the new service. By lowering the barriers to entry in this way, new services can come to the market faster than today
Blockchain as a technology has immense possibilities in the hospitality industry. This technology is constantly evolving and I expect integration and interoperability standards to emerge soon as the ecosystem matures. As a lot of enterprises embrace the technology, I expect to see the emergence of larger Blockchain networks and formations of widespread consortiums. Eventually, for years to come back, this landscape can get saturated enough to realize the crucial mass that successively can fuel current innovations.