Over the past few years, Blockchain Technology has generated significant thrill and increased the intensity of enthusiasm among the people and many industries and fields. This happened because of the way blockchain stores, uses data and other different sources. So, let’s have a broader and detailed look at Blockchain and how it has impacted the travel industry.
What is Blockchain?
Blockchain is a technology that works on the fragments of data, meaning that the data gets distributed across different nodes which are part of the network each one of them has a copy of all the compiled information. It is a technology that publicly stores all the transactions that any network produces. Its called “Blockchain” because each register gets encrypted, they get accumulated in certain blocks which in turn forms a chain. When the register gets added then all the members of the blockchain have to confirm it so that they get added in the copy of each part of blockchain stores. The characteristics of blockchain are decentralized, permanent, time-stamped and unalterable nature of the recorded data which makes the data more secure, traceable and transparent.
Blockchain technology is used in various areas and industries. Let’s have a look at what can this potentially game-changing technology can do in the real world.
What all can Blockchain do?
- Payment processing and money transfers
- Monitor supply chains- it allows businesses, consumers to view how the products perform from a quality perspective
- Retail loyalty rewards programs
- Digital IDs
- Data sharing
- Copyright and royalty protection
- Digital voting
- Real estate, land, and auto title transfers
- Food safety
- Immutable data backup
- Tax regulation and compliance
- Medical recordkeeping
- Weapons tracking
- Equity trading
- Managing internet of things networks
- Expediting energy futures trading and compliance
- Securing access to belongings
- Tracking prescription drugs
According to IBM Blockchain Market growth will reach a milestone of $60 billion worldwide by 2024. Major contribution to the growth of Blockchain market is led by an increase in demand for distributed ledger technology, low total cost of ownership, increased transaction management efficiency, increased efficiency in the settlements process, rising cryptocurrencies market cap, increase in demand for simplified business process, need for immutability, need for transparency, etc. Initially, Bitcoin was termed as the backbone of blockchain technology but now its value is huge than this narrow application.
Blockchain in Travel Industry
Blockchain and the travel industry is one of the deadliest combinations in today’s time. The combination is a win-win for both the industrial corporations and travelers. Blockchain provides security as well as transparency to every critical area of the travel industry. The travel industry deals with sending of information on about booking of flights and hotels to different firms. Blockchain makes this operation more secure and transparent as the responsibility is spread across the whole network. Similarly, it happens in foreign transactions excluding third party involvement. Boarding an airplane without any glitch is what blockchain technology aims for. The travel and tourism industry is a perfect example as it has practically huge databases in them. They hold secure customer data such as passports, credit card information, etc. The most amazing usage of blockchain technology is the cryptocurrency for transaction in the travel industry. The future travelers could use IVEP to book a hotel room directly from a virtual video tour of the space. Smart contracts ensure traveler’s documentation, security and tickets are valid this will eliminate the time of standing in a queue. Blockchain and all its applications are endless and the travel industry has started its growth and success in this area.
Blockchain Applications in the Travel Industry
1. Smart Contracts
To cut out the middleman, reduce the cost and process time, the contracts are handled using blockchain technology. These are a line of code that is stored in the blockchain and is automatically executed when they meet all the terms and conditions. These contracts allow credible transaction without any involvement of third-party. It is also known as crypto contracts and it controls all the transfer of digital currency.
2. Digital IDs
This system allows the company or industry to gather or get all the information regarding an individual in one place. It gives individual total privacy and control of their personal information, while it makes the data shareable to a trusted network. It is created by using the personal information on the web and from the shadow data created by an individual’s action online.
Cryptocurrency means virtual coins that can be easily exchanged like normal currency but it is not in control of government and financial institutions. The exchange gets registered in the blockchain network. It is a medium of change like the US dollar, Indian Rupee, etc but it is in digital form. It uses encryption techniques to control the formation of monetary units and verify the transfer of funds.
4. Tracking luggage
Blockchain technology makes the tracking of luggage easy and smooth. Tracking of luggage is extremely important when there is international travel. The decentralized database makes the tracking of data between various companies makes so much easier.
5. Secure and traceable payments
One of the most important applications of blockchain in the travel industry is secure and traceable payments. Travel companies can accept payments using Bitcoins and cryptocurrencies. Blockchain’s application ranges from serving as a global ledger, simple and secure payment.
6. Customer Loyalty schemes
Many companies use customer loyalty schemes to encourage return custom. This simplifies the process, allows the customer to have access to information regarding their loyalty points. It also allows the tokens to be distributed. It is a good step to combat fraud.
Companies using Blockchain in Travel Industry
It is a direct marketplace for hotels and hospitality who are looking to rent out properties. This platform takes care of payment, property management, and various booking areas. There is no involvement of middlemen in the process.
It is a home-sharing platform. This technology connects the customers with the host of the property and that they can arrange for the stays. The company uses its native cryptocurrency and transaction happens through smart contracts. The guests and hosts are verified on Blockchain via Know your customer(KYC) to ensure there is no fraudulent.
3. Winding Tree
It is a platform that is responsible for the baggage tracking and booking process. There is no third party involvement. The company connects the customers directly to airlines, hotels and travel guides using smart contracts. As everything is managed on a single platform, therefore, it omits a high price from the third party. The transactions are made through smart contracts, therefore, there are no additional fees and the benefits are passed down to the customers.
It is a collaborative project by ShoCard & SITA. It is used in terms of identity management. The project is still in its nascent stage, therefore it is hoped that it will make the path for a decentralized ID database, which will allow the company to verify the customer’s identity quickly.
It is a perfect example of a customer loyalty reward system. On this platform, the customers, hotels, and hospitality companies are put in direct contact. The eligible customers are given “TRIP” tokens which the customers can use for staying in hotels.
6. TUI Bed-Swap
TUI had its in-house blockchain project known as “Bed-Swap”. The company moves the inventories between different points of sale and flex-selling margins based on real-time demand.
7. Cool Cousin
This company offers to provide a better alternative for tourists. The company incentivizes the local guides to monetize their local knowledge to provide an accountable and authentic tour. The company was founded in 2016 in Tel Aviv, currently used by 5,00,000 travelers. Due to trustworthy content and transparency in blockchain-based systems, the system feedback and ratings are more reliable. It helps the travelers narrow down their search with on-demand guidance.
It is a prominent online travel agency which reduces the stress of the customers when they experience inaccurate or lost bookings. The company records all the entries of the customer on blockchain’s immutable ledger which omits the chance of lost bookings. It provides greater supply gain efficiency, high protection, low cost with transparency and accountability.
The company provides travelers with the liberty to create their loyalty points/tokens which can be easily exchanged not just for brand-specific rewards but also like real coins. These loyalty tokens help create a marketplace for loyalty tokens. To retain its customers, the company designs various incentives that are in the form of money or kind.
Accenture in collaboration with the World Economic Forum has developed the Known Traveler Digital Identity System. With the volume of air travelers to increase 50% in the next 10 years, it will also increase the congestion and increase the time in queue for customs checks. Therefore, it allows frequent international travelers smooth clearance at airports The company collects the information of frequent international travelers which enables the free flow of data between customs and travelers. It helps the customer gain control over their digital identity and to better security.
Challenges faced in the Travel Industry
1. Business and stakeholder buy-in
Businesses are still transforming themselves on digital platforms, adopting and considering blockchain would be another reorientation in their process, which would disrupt infrastructure alignments and business model. Therefore this will result in slower adoption of blockchain technology.
2. Use case prioritization
In response to the lack of standards and domain-specific protocols, blockchain tends to be slower and more resource-intensive in a few of the processes. It’s hard for the developers to build their system when the technology of blockchain is still in its nascent stage. Therefore, the company will rely on a network effect to make the investment worthwhile.
3. Regulatory buy-in
The smart contracts are still not recognized as legal contracts in a court of law, therefore, the companies need to maintain redundant legal contracts and prove compliance. One of the areas where the regulators need to accept a record on the distributed ledger is Financial Auditing. To maximize the benefits of blockchain the companies might wait for good regulatory buy-in.
4. Increase in Security Awareness
Blockchain technology requires its internal and external learning. For example, if there is some hacking incident and it is not detected in time then its implications would be harsh. It can be a threat to all the data and transactions that have occurred. Therefore, the companies need to teach and invest in its employees on norms leading to the blockchain using applications
Job prospects for Travel and Blockchain enthusiasts
- Security Architect- Bachelor’s degree in a computer-related field and should have the curiosity to know and learn analytical skills, expected to salary $92,600 per year.
- Research Analyst- Should have strong data analysis, good communication skills, strategic skills and knowledge regarding the area they are working in, the expected salary of $62,560 per year.
- Marketing Manager- Self-starters who enjoy promoting products, creative and analytical and bachelor’s degree, expected to salary $127,560 per year.
- Business development representative– Understanding your passion and your companies passion, knowledge regarding blockchain, sales experience, and good communication skills, the expected salary of $45,619 per year.
- Technical Writer- Social media and digital marketing experience, basic English knowledge and knowledge regarding blockchain, expected salary is $69,850 per year.
Blockchain is one of the trending technology in today’s scenario. It has managed to make lives easy for everyone mostly for the people of love traveling. With so many fraudulent and security issues blockchain is like a savior for many industries, travel, and tourism industry being at the center of them.