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5 Ways Blockchain Will Disrupt the Travel Industry.

The potential benefits of blockchain have generated huge interest from global financial services companies and supply chain organisations. However the travel industry has also been looking at what benefits blockchain can offer them. Here are 5 areas where blockchain technology could provide benefits and cost savings.

Data:

The world’s largest tourism company, TUI, recently announced it plans to move all its data to the blockchain. It would use blockchain to track internal contracts and launched an application- BedSwap- to maintain real-time records of hotel inventories. It could move its hotel inventory to different points of sale depending on the demand, adjusting selling margins accordingly.

Destinations:

The government of Aruba is working with startup Winding Tree, to connect tourists directly with travel suppliers on an ethereum based platform. Cutting out the big ‘middle men’ would mean destinations could keep more revenues locally, a significant benefit to smaller economies. Maksim Izmaylov, founder of Winding Tree. “We are building a platform for travel distribution without middle-men and blockchain is the tool that allows for it. We want to give the distribution power back to the individual hotels and airlines.” Dubai has launched a government backed strategy- Smart Dubai- to make the country the blockchain capital of the world . It is working with Loyyal on how it can incentivise visitor behaviour by ‘gamifying’ their visit, helping them discover new places and rewarding them with loyalty points. The management of the ‘customer experience’ is becoming a major focus for destinations, tracking the visitor’s experience at all touch points and, where necessary, streamlining processes to improve the customer journey. Blockchain allied to AI could be a major play in this.

Identity:

One of the most talked about potential uses of the blockchain is to provide a digital ‘identity’ for individuals . This could then verify you as being who you say you are. In one transaction you could book your ticket, clear customs, and have your loyalty points added to one central loyalty points ‘bank’ that could, for example, pay for your taxi on arrival at your destination. No more lost or delayed baggage would be another real world benefit for travellers and airlines.

Payment Settlement:

Blockchain’s offering of a single, secure, transparent global ledger, could drastically reduce costs for airlines, hotels and travel agencies by streamlining bank payments and settlements. Initially this is probably the ‘killer process’ that the travel industry will use blockchain for. Money talks!

Vacation Rentals:

The global vacation rental/ short term let market is estimated at $500 billion and growing 10% annually. Airbnb has disrupted this market and gained market share of about 7%. However, Airbnb is a middleman- taking up to 20% commission- and could itself be disrupted by a new blockchain startup. In Europe, CryptoCribs is another start up in this space that has been getting attention. The aim, according to co founder Erasmus Elsner, was to develop an open source, peer-to-peer sharing community. It is aimed at the ‘crypto tribe’ and early Airbnb adopters right now, but as crypto and tokens become more accepted it could scale rapidly.

Fritz Joussen, CEO of TUI Group, says “It will be very difficult for intermediaries to have sustainable business cases. These platforms [travel intermediaries] build reach by spending billions on advertising, and then they create monopolistic margins on top of what they have as sales and marketing. They do offer great sales and marketing. Booking.com is a great brand, but they create superior margins because they have monopolistic structures. Blockchain destroys this.”

Conclusion:

The travel industry is notably disjointed, with governments, travel agencies and credit card companies running differing legacy systems, all of which would have to be migrated to the blockchain. Blockchain presents data security and privacy implications that would need to be addressed.

Some of the current ‘big player’ moves into blockchain are really little more than a sop to the markets to be seen to be ‘doing something’ with blockchain. Some of the startups could be massively disruptive. Only time will tell.

However, digital disruption is a business reality in today’s world. Any orginization that ignores, what could be a revolutionary technology like blockchain, may end up in the same graveyard as those companies that did not adapt quickly enough to previous digital disruptions.

About the author: Paul Henderson has set up profitable digital travel businesses around the world. He is founder of Blockheads.co, a content strategy consultancy for blockchain startups.

This story is published in The Startup, Medium’s largest entrepreneurship publication followed by 281,454+ people.

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