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There have been plenty of high-profile insiders from all sorts of industries heralding the major changes that blockchain will bring to their respective spheres, from Elon Musk to Commodity Futures Trading Commission chairman J. Christopher Giancarlo. Among them is the CEO of the largest leisure, travel and tourism company in the world (TUI Group), Friedrich Joussen. Joussen was effusive in his praise for these possibilities, with this to say:
“It will be very difficult for intermediaries [such as Airbnb and Expedia] to have sustainable business cases. These platforms build reach by spending billions on advertising, and then they create monopolistic margins on top of what they have as sales and marketing. They do offer great sales and marketing. Booking.com is a great brand, but they create superior margins because they have monopolistic structures. Blockchain destroys this.”
This is pretty strong praise for the possibilities of crypto technology in this area. There are several ways in which the industry is currently lacking, and among the blockchain projects in the travel sector is Concierge.io which has its sights set on blockchain-backed hotel bookings, tour bookings and other travel related areas.
Concierge started with the insight that much of the work done by hotel platforms is purely a middleman role in nature and provides not a lot of added value from the customer’s perspective. Furthermore, this constitutes a not inconsiderable amount of value that is siphoned off in the process of the whole transaction from service provider to end-user.
There are a range of specific challenges in this chain of hotel transactions that Concierge want to address, and their blockchain-based solution might hit the right notes to please both customers and investors alike.
Too many middlemen
The crux of the deficiencies of the current centralised hotel industry online comes down to one familiar issue: money. Sites like Booking.com brought a big advantage to users by allowing easy comparison between hotels and eliminating the need for travel agents. Airbnb brought this one step further by allowing private individuals to rent their properties, further releasing economic dynamics in favour of the customer’s pocket. Despite these steps forward, this has come at a disadvantage: centralisation.
Centralisation means that these new market behemoths like Airbnb and Booking.com can almost set their price regarding how much fee they charge on transactions. In many cases this is from 15% to as high as 45% of the value of the transaction, along with another 3% of transaction processing fees into the bargain.
This is a considerable amount to charge for an online platform, far higher than the likes of what eBay charge. But the reason for the existence of these platforms could not be avoided; the risk of fraud, failure in transaction, or lack of information necessitated a middleman processor.
Enter the blockchain ledger
Anyone who has followed the advent of cryptotechnology will recognise some of these issues as fundamental to what the industry is trying to solve in many different contexts. The capabilities of blockchains as a means to guarantee trust and efficient processing of financial transactions are well established. What Concierge want to do is to use these for automating as much of the hotel stay as possible.
Users on the platform can purchase the CGE token for fiat via a web platform or mobile app and use this to book with one of the hotels listed on the decentralized platform marketplace. This makes it possible to drastically reduce costs and generate ancillary benefits, as the Concierge whitepaper explains: “With this module, it enables Concierge.io to offer lower costs, increased customer satisfaction and develops long-term data for the purpose of analyzing consumer trends.”
Also packages with this functionality is the ability to book other services on the platform, like guided tours. These services currently suffer from the same issues associated with that of hotel booking like untrustworthy reviews and siloed information. By bringing a neutral and transparent platform to these service providers it should drive even more users to the Concierge platform.
The CGE token which underpins the platform will go on sale at the end of March (31st). It is based on the NEO blockchain protocol.