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Are rising hotel prices pushing travelers out the door?
Airlines are adding more red eye flights to accommodate travelers who seek to save on one night’s hotel. Company executives are sharing hotel rooms with colleagues to cut costs. President Trump has withdrawn security protection for several family members to reduce millions of dollars in US Secret Service hotel costs.
Lockchain.co is betting that travelers have reached a tipping point. The commissions of online travel deal aggregators such as Priceline and Expedia can add as much as 25% to hotel bills. The LockChain Marketplace, a hotel booking and transaction system that replaces middlemen and their expensive commissions, is offering an alternative—commission free hotel booking.
The Freemium Model
This smart booking engine has positioned itself as the Booking.com or AirBNB of the Blockchain, but without the commissions and fraud risks.
Co-founded by Nikola Alexandrov and Hristo Tenchev, LockChain has chosen a well-qualified chief advisor to democratize travel budgets. Rosen Plevneliev, the Bulgarian president who counseled nations and political leaders “to think beyond borders”, had to first travel the world and negotiate those open borders before bringing open trade and travel to Bulgaria.
How liberated is your travel budget? LockChain aims to reduce hotel costs by one-fifth.
For the average traveler paying about $85 on average for a room for a two-week vacation, that leaves $238 more in their wallet to spend on lobster dinners and shopping.
Democratizing Hotel Pricing
Travelers’ wallets are flatter owing to the rising cost of travel. In 2018 hotel prices are forecasted to rise for a fourth consecutive year, by 3.7 percent. The real price stinger is the 10 to 25 percent commission added by online travel aggregators, whose market power increases as more travelers flock to their metasearch results to compare prices. The payment processors add another 3 percent in fees.
Not even the White House travel office, which books directly with hotels, can escape the effect of the commissions on accommodation market pricing. Hotels are under pressure, and often legally contracted, not to undercut their travel aggregator partners. If they do, a common practice of megasearch aggregators is to move those hotels lower in the search rankings to secure higher revenue room bookings.
The LockChain’s freemium model facilitates the transaction directly between the hotel and guest, eliminating travel aggregator and payment processor commissions and fees. Its decentralized transaction management system, the LOC Ledger, accepts LOC tokens as currency. Since the shared ledger system transparently links each transaction , or smart contract, it can also identify any tampering with transactions.
Blocking Hotel Booking Fraud
The holiday rental nightmare of a couple from South Carolina who were confronted by the police as they tried to enter a fraudulently let summer holiday rental in the South of France is but one tale of many of rising hotel fraud. The American Hotel & Lodging Association (AHLA) estimates 55 million fraudulent hotel bookings worth $3.9 billion are made annually. In the UK, 100 holiday scams are being reported a week, defrauding the consumer of 1,200 British pounds on average.
Besides false bookings, hotel fraud includes lost reservations and hidden costs. All of these practices are difficult to conceal on the Blockchain because the transaction records are immutable and can only be changed through the retroactive alteration of all subsequent transactions.
Since the LockChain Marketplace runs on an ethereum virtual machine (VM), providing limitless application development potential (by the addition of Turing-complete scripts invented by World War II codebreaker Alan Turing), more complex cryptographic, identity management and other security enhancements can be added.
Lowering Hotel Marketing Costs
The LockChain Marketplace has already signed up 7,000 properties, and expects more hotels to see the potential for the freemium model to liberate them from the rising advertising fees of online travel aggregators. Property owners will be able to transfer their existing listings to the LockChain marketplace in a single click.
A booking model that can lower hotel costs will also provide more competition and competitive pricing in the $500 million accommodation market. Smaller hotels that have recently closed down have cited increasing internet commissions and staff costs as challenges.
Property owners may also choose to use the LockChain technology to directly service their customers. The LOC Ledger is open source and free for others to use. The company has several options for generating revenues. Value added services, such as increased exposure on the website, could be provided for a fee and/or property owners could pay a monthly subscription fee.
The Cryptocurrency – LOC Tokens
Users of the Lockchain marketplace pay for their accommodations using LOC tokens. Traditional payment methods (e.g., credit cards, PayPal) and currencies (e.g., fiat, Bitcoin, Ether, Litecoin) can also be accepted. The LOC Ledger can exchange any currency into LOC tokens while hedging out its price volatility risk. Users could also benefit from any increase in the value of LOC tokens. As more properties join the Lockchain Marketplace, the value of the LOC tokens could increase.
The Token Sale
The pre-sale of the LOC digital token will take place on September 29 at a significantly discounted price. The ICO will take place on October 29th, or if and when the pre-sale hits its hard cap of 50 million LOC, with a target of 15 million Euro and hardcap of 105 million LOC. 1ETH=1,000 LOC. The total amount of LOC in circulation will be mathematically limited to 155 million. Investors will receive the LOC tokens immediately in their digital wallets and will be able to use them to book accommodations after 1 December 2017. The first test countries, will go live with 200 to 300 properties in October 2017. The global booking marketplace will be officially launched in the first quarter of 2018.
Freedom from high hotel commissions is coming!