How Blockchain Could Soon Shake Up the Travel, Hospitality World
Since the advent of the internet, the hospitality industry has yet to see a game changing technology like the blockchain. But in order to understand how this emerging space will totally disrupt the status quo of hospitality and tourism, the industry must first understand what blockchain technology is and a simple view of how it works.
The blockchain is a decentralized immutable digital ledger recording transactions of value, which is available to view by anyone. Transactions are pooled together into “blocks,” then verified by the majority of the network and appended to the chain of all previous transactions.
A major implication of this technology is the concept of self-sovereign identity (SSID), or the ability to own your personal information in the digital age. This concept will lead to advances in self-check-in and verified consumer platforms. Eventually, hotels will allow travelers to simply use SSID private keys in tandem with the near field communication and biometric technology already integrated in mobile devices to check-in and access hotel rooms without the need of seeing a concierge at the front desk. Hotel managers will then be able to verify that a traveler has checked into their room, if they have consumed items from the mini bar or even ordered specific services within the hotel. The same concept can be utilized for airline check-in and TSA verification.
Self-sovereign identity will also lead to advanced rewards programs across multiple brands and categories within travel and hospitality. Imagine a platform where consumers can choose to barter their consumption behavior data throughout their travel experience in exchange for rewards which are easy to access and use. In turn, businesses can then use this rich data set to create highly targeted campaigns that will lead to higher engagement rates with desired customers.
Let’s take a local hotel as an example. This hotel will be able to target a traveler looking to visit the city in which the hotel is located. This hotel will be able aggregate promotions from other local businesses the traveler would enjoy visiting based on their past behavior. These promotions can then be bundled into a single offering for the traveler to consume. The traveler in turn can capitalize on this packaged offering, and instantly be rewarded for each portion of the promotion as services are consumed. The traveler gains instant gratification, has a great experience and is more likely to return. The hotel and local businesses benefit in the form of patronage from the traveler, and the increased likelihood of her recommending these same experiences to her personal network. That’s a win-win!
Blockchain technology can also be applied to the hospitality industry to provide insurance contracts for travel plans. Hotels and airlines will be able to issue insurance smart contracts which will be executed if a specific event takes place. As an example, in the event a hurricane hits the gulf coast of Florida, travelers can be immediately reimbursed for their flight and hotel reservations through the blockchain. This eliminates the need of having to jump through the typically burdensome process of filing a claim with an insurance company and waiting for the claim process to pay out the claim. This also creates an extra revenue stream for airlines and hotels without the need of running a high overhead division.
Finally, blockchain technology will lead to decentralized supply & demand platforms for hotels and airlines. These platforms will be able to access open seats on flights and vacant hotel rooms across various operators and assist in dynamic pricing based on current and anticipated demand. This in turn will reduce vacancies and unpurchased airline seats.
It is obvious that blockchain technology shows huge potential for the hospitality and travel industry. Some very interesting projects are currently in development and a handful are already live. As more of these projects show real success, the industry as a whole will begin to adopt the technology, operational efficiencies will increase, and the experience for the end consumer will be radically improved. As the technology evolves and becomes more sophisticated there will be massive breakthroughs for hospitality and travel providers.