The travel industry is constantly changing because of an increasingly connected world, globalization of services, and the ease with which people can travel. The internet was a major catalyst for travel as services that once took days and even weeks to meet demand suddenly were able to do so in minutes. However, the early promise shown by online travel has been derailed by a variety of factors that limit how effective services can be.
The ease with which major online travel agencies (OTAs) and other intermediaries have entrenched themselves around services including hotel bookings, car rentals, and flights means that barriers to entry are disproportionately high. The result is a system that extracts value, adds costs, and passes those consequences onto consumers with few alternatives. As the size of the travel market increases, however, finding a viable solution will help stakeholders sustain their success into the future.
Blockchain has started to disrupt this status quo by injecting many of its inherent advantages into the conversation. Already, there are several companies in different sectors of the travel industry which are showing that platforms don’t have to extract value to be useful and profitable. These emerging solutions have created their own tokens, coins, and in some cases introduced blockchains to build systems that benefit every stakeholder in the equation.
An Accommodating Blockchain
The hotel industry has slowly been subsumed into the mammoths that are OTAs. Whereas once they focused on travel almost exclusively, websites like Kayak and Orbitz have now absorbed these services and offer full package travel planning. This convenience comes with heavy strings attached. For one, OTAs tend to charge high fees and commissions from hotels looking to list on their sites—costs that are passed directly to consumers. Moreover, they command large portions of hotels and B&Bs’ inventory.
Enter blockchain-based platforms like GOeureka. The company’s platform seeks to decentralize and disintermediate the booking process for hotels with blockchain’s decentralized ledger and their own token. The goal of platforms like GOeureka’s is to create a more direct link between travelers and hotels, allowing for P2P interaction that dispenses with commissions, fees, and other costs associated with intermediaries and OTAs. By enabling direct access, users can also access better prices, hotels can better manage their inventories while offering more transparent services to their clients.
Fly Decentralized Air
Air travel has also not reached the potential it showed in the early days of the internet. Despite adopting more modern technologies across their services, reality dictates that air travel is still complicated and inconvenient for most people. Between a lack of connection between airline systems, long waits and delays without information, and a deficiency of accuracy when measuring departure and arrival times, the industry makes it exceedingly difficult for consumers.
The problem stems from data silos created by companies themselves. Airlines do not share information regarding travel with each other, and airports must make due with several sets of disparate data to display to travelers. These gaps in data result in missed flights, unexpected delays, losses of baggage, and other seemingly small irritants which can add up to millions in losses for companies.
This complication works to increase costs across the board, as companies can’t provide accurate estimates, create unnecessary bottlenecks, and increase prices for reasons that aren’t always transparent. In this sector, blockchain’s biggest focus is streamlining the travel process. FlightChain, for instance, is a platform developed by SITA and other air travel stakeholders to simplify the process from end to end. The way this platform (and others like it) work is by unifying flight information across the board. Instead of disparate sources and data inputs, all information would be placed on the distributed ledger, removing the data silos hindering in the industry. This unification would mean more accurate details, better planning, and simplified travel for consumers.
We’ve Arrived, Now What?
Another less-discussed aspect of travel is what happens when travelers reach their destination. Even here, intermediaries and gatekeepers have raised costs and complicated matters for users. Companies like TripAdvisor and Yelp have been proven to be unreliable at best as they can easily be gamed to distort public opinion. Consumers looking for local experiences and other fun activities may be disappointed having to overpay for false promises, or simply be left without a clue of what to do.
Here, blockchain’s ability to connect people directly comes into play. With a company like Chozun, which offers events and recommendations for travelers using blockchain, users can forgo the complex process of wading through reviews and trying to verify them. Instead, they can instantly connect to locals on platforms that let service providers monetize on their own terms, and travelers know that they are getting what they are paying for.
How to De-Stratify Travel
The travel industry is increasingly defined by stratification in several ways. The number of steps required to plan a trip (dealing with airlines, booking hotels, finding activities, navigating airports) makes it inconvenient at best, and infuriating at worst. By implementing blockchain, however, the industry can begin to remove unnecessary hurdles and choke points, streamlining the travel process and offering greater value to everyone involved, from consumers to companies themselves.
Last modified: March 4, 2021 5:06 PM