Blockchain is one of the young digital technology innovations of recent times. It has brought about a drastic change in the way organizations store and access information or data.
Due to the efficacy of improving transparency and security in transactions and other benefits, Blockchain has begun to show its presence in the tourism and travel industry.
William Mougayar, a Toronto-based investor and the best-selling author of the book ‘The Business Blockchain’, stated that”You have to think of the Blockchain as a new utility. It is a new utility network for moving value, moving assets.”
What is Blockchain?
Blockchain is a transparent, decentralized digital ledger that records financial transactions, physical assets and so on. Anything and everything that holds a value can be tracked and traded securely with the blockchain network.
The idea behind Blockchain dates back to 1991, where Stuart Haber and W. Scott Stornetta, two researchers envisioned to develop a system that timestamps the documents and eliminates the risk of data tampering.
In simple terms, Blockchain is a linear chain of blocks that holds immutable records of data (financial transactions, physical assets, supply chain information), where each block contains information chronologically in the form of coding.
Every information in the block is time stamped that makes all the data entries traceable, enhancing blockchain transparency.
The decentralized feature makes it a democratic way of processing data where no entity has complete control over the network. All the information in the blocks is open for everyone in the network to see.
However, no one has the authority to edit a block except the one who owns it. And if any individual block undergoes changes, all other blocks in the chain gets updated and syncs in real-time.
Benefits of Blockchain in Travel and Tourism Industry
While travelling, we know that our luggage shifts hands multiple times over the course of our journey. And many of us might have faced problems tracking the location of our luggage, and also it might take a long time for the concerned companies to come up with an answer, making the situation worse. The scenario becomes even more complicated when it comes to international travel.
Blockchain is the perfect solution to avoid such problems. The decentralized blockchain database allows companies to easily share the data internally, without delay and track the exact location of the customers’ luggage.
Easy, Traceable Transaction
The overseas transaction is one of the major issues that customers face during international travel. Customers have to deal with various matters- from currency conversions to ATM withdrawal fees.
Here, Blockchain serves as a global ledger allowing companies to accept payment using Bitcoins and other crypto currencies, making the whole transaction process simple, secure and easily traceable.
It’s centralized nature eliminates the intermediaries, hence making the payment quick without any intervention.
If you have ever booked any sort of travel online, you might know the significance of online travel agencies to provide the best services you need. But have you ever thought about the end providers in the travel and tourism industry? The service providers such as hotel and transportation businesses have to pay at least 15% in commission to these middlemen for their services.
It is a well-known fact that when more people are involved in a process, it takes more time and additional expenses to complete the process. The decentralized system through blockchain technology will empower the service providers to access the data at any time and connect directly to the customers. This will eliminate the middlemen, creating transparency in price and potential fees, hence improving customer experience.
In the current digital scenario, it has become common to ensure the product’s quality before purchasing it. The same thing applies to tourism also, where customers check forums and user reviews before travelling. But are all these reviews accurate and reliable? Without any doubt, the answer is NO.
Due to increased competition, businesses put up fake reviews for themselves and also for their competitors. This will result in the worst customer experience.
Since all the Blockchain data is verified, time-stamped and immutable, customers can rely on such reviews or information. This results in greater transparency and increase of customer trust.
Some Examples of Blockchain Usage in Travel
Leveraged by Blockchain technology, Winding Tree is taking travel and tourism industry in a different direction, creating a decentralized network. The vision is to eliminate the middlemen and split the billions of dollars they take between the customers and the service providers.
Created in 2017, Trippki introduced a payment system that reduces the commission paid by hotels to acquire customers by eliminating the third party involvement.
They also reward the customers with ‘TRIP’ token for staying at particular hotels, and these tokens do not expire and can be redeemed, or exchanged for cash.
Atlas is a blockchain-driven, decentralized smart contract infrastructure envisioned to connect customers and businesses. Its hotel partners include Shangri-La and Hyatt, and its Airline partners are Cathay Pacific and Qatar Airways.
Blockchain technology adds significant value to the tourism and travel industry. It’s transparent and secure flow of information and easy access to data, without any tampering, reduces the costs and time involved over the course of the journey.
Despite being at the nascent stage, early adopters of blockchain technology in the tourism industry are far ahead of their competitors, in the race to gain more customers.