Travel Blockchains and Cryptocurrencies are definitely the two hottest topics this year, and possibly the ones bringing the most confusion in their interpretation. While Blockchain has been mainly associated with the technology behind the cryptocurrencies, its potential goes way beyond that. Blockchain represents a giant secure digital ledger that keeps track of every single transaction of any particular asset – cryptocurrencies being only one of them . The main pillars on which this technology is built are trust, immutability, disintermediation and decentralization.
As for the crypto world, we could comment that the ecstatic growth of Bitcoin, the first decentralised cryptocurrency, provoked the rise of now 1500+ cryptocurrencies. TOA Coin, JIO Token, Travel Coin, BitAir, Lif, PallyCoin are just a few cryptocurrencies active in the travel industry .
Other than the buzz, the volatility of the cryptocurrencies raises the question of whether they are mature enough for advance customer payments for travel products. Daniel Scott, Co-founder of CoinCorner, is optimistic and believes cryptocurrencies will stay and stabilise in the future. However, there are many thought leaders like Warren Buffet and Robert Herjavec who believe this to be another bubble waiting to explode .
While for the cryptocurrencies we will have to wait and see whether they will remain in the game, the situation with Blockchain technology is slightly different. From the Oracle claiming it to be today’s most disruptive emerging technology to Skift naming it ‘the travel industry’s Space Race’, it will undoubtedly disrupt the travel industry. Starting from loyalty programs, automation in billing processes, to hotel inventory, it will be a dynamic journey for travel businesses.
Even though the blockchain technology is still in its infant phase, the benefits that it brings to the table are opening up so many opportunity windows that could completely change how the travel industry operates.
Winding Tree, the travel distribution platform that caught the attention of many investors is changing the role of middleman in the travel market. According to COO & Founder Pedro Anderson, the idea behind Winding Tree technology is decentralising the complex travel distribution. With their platform, all innovators would be able to build in the travel booking space without having to deal with gatekeepers and intermediaries, complex legacy systems and double marginalisation.
If we take a closer look at the hospitality market, hotels are the most dependable on intermediaries, hence paying quite high fees. Blockchain platforms will be a game changer by providing a new place to list their inventory and reach mass exposure without paying high intermediary fees. Following the example of Lufthansa Group and Air New Zealand, Nordic Hotel Groups is testing the Winding Tree platform and looking to be the first company in the hospitality industry to experience the benefits of this technology .
Another important area where blockchain technology will have a significant impact is the loyalty programs. The challenge for all travel businesses when it comes to loyalty programs is to maintain high consumer engagement. The reason behind it is the complexity and diversity of the loyalty programs. Every travel business has its own loyalty scheme with different features and conditions. Therefore, consumers are required to visit each platform and get familiar with all different conditions in order to receive their prize.
Blockchain technology opens up the opportunity to simplify the process and store all loyalty programs in one place. Few companies that use blockchain technology to create blockchain based programs are Travelkoin, Loyal and Trippki . Following the behavioural changes in consumers, seeking simplicity and instant rewards, these start-ups recognise the benefits of seamless and customised loyalty programs .