How BlockChain Technology Will Shake Up the Travel Industry
BlockChain Technology is behind Cryptocurrencies such as BitCoin, and BlockChain Technology, which have taken the world by storm. People are scrambling left and right to get dibs on what some people call “the next best thing after compound interest”.
To stay ahead in such a highly competitive industry, it is vital to be aware of new trends. Particularly trends which are being driven by potential customers. As an example, having a range of online payment options, to include cryptocurrency, makes good business sense.
But it is the BlockChain Technology, behind Cryptocurrencies, which is particularly relevant to the Travel and Hospitality Industry and not just for payment options.
BlockChain Technology has the potential to revolutionize the Industry and it’s pretty mind-blowing.
What is BlockChain?
BlockChain is, effectively an open, online record (or Ledger) of date-stamped, digital transactions of value, which form “Blocks” and “BlockChains”. The Value might be money (Cryptocurrency), property or other forms of data; a whole host of things that can be verified by an online community. You can read more here from PixelPrivacy.com
Each new transaction or piece of data which gets added, forms a new Block within the Chain.
As each Block has its own Hash ID, any new Blocks include a reference to the previous Blocks Hash code; identifying them as part of the Chain.
It is relatively easy to add a new Block to a Chain and everyone in that ‘community’ will check the Block and verify it; in a “proof-of-work” system.
What is difficult is changing the data within an existing Block. If data is changed a new Hash ID is automatically made for that Block, breaking the links to the following Blocks and causing anomalies in the Ledger. Everyone with a copy of that Ledger, will be alerted to the changes and work to verify or reject the changes. This makes Blocks unalterable and impossible for Hackers to manipulate, as they would have to access every following Block in the Chain to change the Hash ID, and in every users copy of the Ledger.
Watch this animated video which helps to explain how BlockChains work.
Because Blocks in a BlockChain are de-centralised, nothing is lost if you suddenly go offline. Cyberhackers can’t remove or alter the data, if your computer system is attacked, because it isn’t held on your computer or in a computer database. Such technology protects your information and that of your guests.
What does that have to do with your travel or hotel business?
The obvious is offering guests a new Payment Gateway option, with Cryptocurrency.
Secure Payments – BlockChain technology offers a well-secured system, protected by not just one security agency, but by a full network of investors, programmers and “miners”. These networks are reward-driven to maintain the integrity of the said system. This is good for a travel business which thrives on assuring its customers that their payments are safe. And as a business owner, you won’t have to invest extra into security measures. Everything is taken care of by the BlockChain system itself.
Reduced Cancellations – For the hotel an added bonus is that any guests paying with Cryptocurrency are a guaranteed guest; they’re unlikely to cancel and request a refund because it is nigh on impossible to refund a payment made with Cryptocurrency.
No Service Charge – Cryptocurrency transactions are instant and without any service charges for the guest or the hotel. Unlike PayPal or Credit Card Payments. Guests also don’t face an added Currency Conversion Fee applied to their account, as cryptocurrency is not considered a Global Payment Transaction. A range of payment options is always attractive.
One draw back with Cryptocurrency for payment though is the issue of evaluation; the value of ‘coins’ changes at a much faster and signficant rate than standard currency. What could be worth the price of a Premiere Room at the point of booking today, may only be worth the price of a Standard Room tomorrow. However, on that same note, what could be worth the price of a Standard Room today, could be the price of a Presidential Suite Room tomorrow.
Secure Client Data – Most Payment Gateways require credit card information, personal data, addresses and other forms of sensitive information that your guests may prefer to keep to themselves. Although this is rarely held or collected by the hotel itself, but by Third Parties. With that being said, you’re still going to ask them for some of these details because these are things a hotel needs to confirm a room booking in their system. With BlockChain technology, you won’t have to ask for valuable information. Cryptocurrency users each have a “wallet”. These wallets are electronically-secure accounts that serve as online bank accounts for a Cryptocurrency user. These people only need to log-in to access and use their money.
The same system will carry over to your business when you start to adopt Cryptocurrency. Instead of running credit checks and double-checking card numbers, your customers will use their wallet and the BlockChain system will take care of the rest.
But BlockChain Technology can be adapted to provide more than just the background support to cryptocurrency.
No Overbooking Guarantee – There are few hotels today, which don’t also rely on OTA’s for bookings. For those hotels without a Channel Manager App to manage bookings from a range of OTA’s, over-booking can be a logistical nightmare, resulting in bad feelings and poor reviews from disappointed guests. In theory, because of the BlockChain technology which prevents ‘double spending’, if you operate a BlockChain system with your OTA’s, Double Bookings would be eliminated.
Revenue Management – Hotels have started to use BlockChain technology to manage the distribution of hotel inventory, as well as for internal processes, with the added benefits of the information being held in a way that it can neither be hacked or become unavailable if a computer ‘goes down’, or becomes corrupted by a virus.
More Flexible Rewards & Loyalty Programs – With an increase in travel in general, and people traveling for work, the amount of frequent flyer miles and Loyalty Rewards Points issued is astounding.
And the majority of AirMiles, Points, and other Loyalty Program collectibles don’t get redeemed as much as you would think. Many customers (loyal customers) can only really use these points for more work travel or hotel necessities. The points/miles stay where they are, collecting cyber-dust and defeating the purpose of the Loyalty Programs.
If hotels could offer Cryptocurrencies or Tokens as reward points, guests would have a globally-usable token that can be redeemed and enjoyed in an infinite number of ways! As long as a Restaurant, Hotel, Lounge, Coffee Shop or local Cinema accepts Cryptocurrency, the rewards are infinitely more usable!
So, if other businesses local to you have also adopted cryptocurrencies for their Rewards Programs, their loyal customers can become YOUR loyal customers.
Whilst all the above will be very useful to the Travel Industry, there are others looking to use the Technology to really shake things up.
BlockChain: Revolutionizing the Travel Industry
Several companies are already developing BlockChain platforms specifically for the Hotel/Tourism Industry, to include Reward and Token programs, which encourage guests to directly engage with hotels and businesses.
TravelChain is one of them. Guests using the App build up a range of data about themselves, their travel and experiences in a Traveller Passport (Block). The Guest then chooses how much of that information about themselves they share, when looking at their next destination. Guests are rewarded with ‘Tokens’ for each Permission-to-Share agreement they give. These Tokens can be exchanged for money or used in the resort, towards a meal or service.
Hotels using this App will receive the agreed information from a guests Traveller Passport, their past travels and experiences. This helps the hotel to send a targeted offer to that guest. This targeted offer may include key information about restaurants or attractions local to their hotel, which the hotel knows will appeal to the guest, and encourage to book with them.
Imagine; instead of spending money on Mass Advertising for different demographics, to attract guests to your hotel, you can go direct to that guest with a personalised offer. TravelChain gives an example on their home page as follows:
Because the Hotel is engaging directly with the guest, avoiding OTA Commission Fees, and Payment Gateway Service charges, they can offer the guest the best value booking. This could be the difference between a Standard Room via Agoda, and a Premium Deluxe Room with extras, offered directly to the guest by the hotel.
In addition the Hotel is able to identify guests with Social Media Accounts, with lots of followers, so they can make the very best hotel or package offer. This will most likely result in favourable Reviews and, in turn, more bookings.
The creators behind TravelChain first created Mapala, using BlockChain technology, aimed at Travel Bloggers. Bloggers contribute to the Mapala knowledge base and receive Reward Points in return, to use when travelling.
One thing is for certain; BlockChain Technology is here. Based on the demand and buzz that it is creating, it looks like it’s going to be here for a very long time. The question is how long will it take for you to take notice and take action on its growing influence.