Blockchain is by far the most disruptive technology the world has seen in recent years. After being first mentioned way back in 1982, it shook the world in 2008 with the publication of “Bitcoin: a peer-to-peer electronic cash system” by someone disguised as ‘Satoshi Nakamoto’. No one still knows for sure whether it is a person or a group of people. But once Bitcoin was launched, cryptocurrencies – the very first practical implementation of blockchain technology – took the entire financial world by storm and still remain in the spotlight today.
As for travel and tourism, there have been lots of talks and plenty of analysis regarding practical use of blockchain in this sphere. But are there really any feasible prospects or practical achievements?
We’ve done a little research that we are happy to share with our readers. But before we proceed…
In a nutshell, blockchain represents a growing list of public records (also called a publicly distributed ledger) that contains a constantly updated list of transactions taking place between the parties. The content of every single record, or a ‘block’, within this ledger is protected by encryption. Individual blocks within the ledger are arranged as an uninterrupted chain that is bound together using unique blockchain keys, or ‘hashes’, for every block. Every new block contains a hash from the previous block to refer to it. The same happens with all the subsequent ones in the chain.
Blockchain utilizes decentralized data storage. In practice, it means that the transaction ledger it contains is shared across all the members of a public peer-to-peer network, with anyone allowed to join. Each individual block within the ledger contains specific transaction information that is marked with a timestamp. In addition, all ledger blocks remain permanent. They can only be altered or tampered with based on approval from the entire network. As a result, blockchain produces decentralized, stable, time-stamped, and unalterable data. All activities and info are secure and traceable, while the network preserves full transparency. In other words, blockchain-based environments are secure and trustworthy by design.
Here is a nicely done explanatory video unveiling the essence of blockchain bit by bit:
When it comes to the travel industry, secure and trustworthy transactions are also a vital topic here. It is especially relevant for the numerous overseas transactions taking place between various bodies within the industry every day. Blockchain adoption could make the transaction more secure and trustworthy. Besides, blockchain-powered payments could become much faster thanks to the lack of intermediaries in the process.
Furthermore, global travel can benefit from the decentralized nature of blockchain. It can establish an infrastructure with no unified data storage. Such a system is unlikely to go down because of hardware malfunctions or malicious attacks. The nature of blockchain makes the process of accessing and saving critical data easier and more reliable thanks to the lack of any single point of storage. Any company can benefit from it – a tour operator, a travel agent, business travel providers, OTAs, etc.
Below we’ve summed up some of the most promising uses for blockchain in the travel industry:
Alongside ongoing discussions and analysis of potential uses, there have been a number of blockchain companies that launched their products into the real world. Here is an overview of what companies are using blockchain in travel to date:
LockTrip took off with an idea to build a direct marketplace between hotels and hospitality entities that seek to rent out the property. The core benefit was the idea of making a contract excluding the middlemen which add and earn a large surplus on the prices.
As of 2021 the platform offers flight and private accommodation bookings in addition to hotels, covers payments, property management, and various other aspects of the booking process. Locktrip clients can cut down up to 60% on the booking costs by excluding intermediaries. The company reported record growth of 259% in Q2 of 2021.
The concept behind this non-profit project is similar to the previous one and also lies in the development of an open decentralized marketplace that can secure fair prices by excluding middlemen from transactions. The marketplace has a powerful API that can be integrated into any POS of a travel company for streamlined onboarding. It also features its own LiF token cryptocurrency that can be used to execute fair and transparent transactions.
As of October 2021, the project is still active. The current price and market volume of LiF tokens can be found here.
One of the most innovative current blockchains is the BeeToken or Beenest – a travel startup representing a home-sharing platform. Here, the technology is used to put customers in touch with hosts, so that they can arrange and pay for stays. Again, there is no commission, while payment, reputation, and arbitration protocols are all in place, keeping users safe.
TUI has launched its own in-house blockchain project, which it refers to as ‘Bed-Swap’. Using this technology, the company is able to move inventories between different points of sale and flex selling margins, in real-time, based on the level of demand that is present at that time.
In truth, blockchain technology is less complicated to come to terms with than it may initially seem. Nevertheless, the process of learning about it can still seem daunting or overwhelming, especially to people with limited knowledge of digital technology, encryption, cryptocurrencies, and peer-to-peer networking.
However, its huge potential and capacity to transform the travel industry makes learning about it important. As testified by the cases above, the work to apply blockchain for the needs of travel is progressing at a great pace. Although it is not possible to say there are projects that truly disrupted the world of travel, some blockchain startups like LockTrip and Winding Tree show good progress. And we are most likely to see more projects in the near future. Just as with many breakthrough innovations, Blockchain needs its time to mature.