Is there more to blockchain than cryptocurrencies? Yes, and here are four of the 12 innovative ways it's shaping the future of travel that we'll cover in this three-part blog series.
Blockchain technology is expected to grow from 5.4 million USD to 2.3 billion USD from 2018 to 2021. Companies are piloting applications ranging from autonomous aggregation and maintenance of contracts and records, cost-effective distribution management, and secure authentication and verification for faster service delivery. Blockchain has the potential to decrease the cost of doing business for providers while improving the experience. Here are four ways blockchain is revolutionizing travel and hospitality.
Smart Travel Records and Contracts
These powerful digital records store travel data such as flight tickets, hotel reservations, and other contracts between service providers, online travel agencies (OTAs), and customers within a digital wallet. Blockchain-based platforms, like Further network , host a smart travel ecosystem where providers can use the platform's digital currency to create smart contracts for hotel rooms or airline tickets and receive real-time settlements and payments. With high complications in airline commissions, service fees, and over-ride commissions, these contracts come in handy when handling travel management company (TMC) contracts specifically. The contracts self-execute, self-verify, self-enforce, and are immutable. This brings more structured data and automation into the process, allowing providers to manage operations more effectively.
Information stored on the blockchain is available to everyone on the network. This means all travel itineraries across all participating travel providers are stored in this one smart travel record. For agents, smart travel records allow them to update room or flight availability in real time. Customer inquiries, bookings, cancelations, refunds, and claims can also all be verified, processed, or transferred via the smart record.
Distribution Management Disruption
Distribution intermediaries that do not add value to the travel network will soon disappear from the travel and hospitality ecosystem when blockchain-based platforms take the stage. Instead of consumers using online travel agency's (OTAs) such as Kayack, Priceline, and Hotels.com to find the best deal, blockchain will bring all service providers directly to the customer. The customer can then select the best deal, giving providers the opportunity to increase revenue and avoid paying a 10 30% commission fee. Direct connect programs for airlines and hotels built on API-based platforms will get disrupted by blockchain innovations. Winding Tree has already launched an open source, decentralized travel inventory distribution system. These blockchain-based platforms give agents commission-free access to multiple suppliers in one connection, and suppliers have unified infrastructure including ancillaries for all their distribution needs.
Physical Identification Management
With personally identifiable information (PII) data breaches rampant in some of the major airlines and hotel chains, protection of personal data is becoming increasingly important. We will see blockchain play a major role in keeping the network secure, protected, and trusted.
Blockchain helps to expedite the physical identification management process and ensure that the transfer of information is secure and protected. This is done through decentralized identifiers (DiDs). These are encrypted URLs stored within the blockchain ledger that contain information on an individual such as a social security number, name, birthdate, or driver's license. The DiDs act as a QR code to board customers faster and mitigate the risk of airline employees or bystanders potentially stealing sensitive customer information.
In a recent example of DiDs usage, Dubai is experimenting with a digital passport. Passengers will walk directly to baggage claim, and in the background, a three-dimensional scan of a passenger's face will instantly check him or her into the country. This biometric passport system is based on blockchain, and 20 million travelers will use it by 2020. In the US Delta opened its first biometric airport terminal in Atlanta. Facial recognition is used to check bags, go through security, and board planes. Delta cut nine minutes off the boarding process and caught 34 passengers using someone else's passport.
Loyalty Programs
The average American belongs to 29 loyalty programs with 30 percent never redeeming a single point, according to the 2017 Colloquy Loyalty Census. Blockchain brings value by liquifying the asset (the points), which make them more valuable to consumers by allowing members to trade points amongst each other, with other businesses, or turn them in for cash. This is simply another way blockchain is predicted to surprise and delight travelers and travel service providers as the technology matures and becomes incorporated into business models. Loyyal has already launched a blockchain-based loyalty platform in a SaaS model. The transactions are handled in real-time, and the redemption of loyalty points is immediate, which allows service providers to avoid complex reconciliation processes with traditional loyalty programs.
This peer-to-peer economy will change how payments are handled and processed, risk is managed, and operations will operate over the next few years. Check back soon to see the next four ways blockchain is transforming the airline industry. Until then, see how you can stay at the forefront of the technological innovations impacting travel and hospitality on our website here.