How Blockchain Is Changing the Hotel Industry
What can a blockchain platform do for the hotel industry? Quite a bit, according to several startups and entrepreneurs who are building platforms that use distributed ledgers and cryptocurrencies to improve hotel booking systems, review websites and more.
While a blockchain can’t resolve every challenge facing the hotel industry, blockchain-based platforms do offer promising solutions for three particular areas of difficulty in the industry.
Blockchain-Based Hotel Booking Platforms
The first involves hotel bookings. The role of online travel agencies (OTAs), such as Travelocity and Priceline, in facilitating hotel reservations has steadily increased in recent years.
It’s easy to understand why: OTAs make it easy for consumers to shop a range of hotels in a given location and find the best price. They sometimes offer other advantages as well, such as the ability to bundle related services with a hotel reservation and receive a discount.
For hotels, however, this trend is a problem. OTAs typically charge hotels commissions of 15 to 20 percent when customers use their websites to make reservations, significantly reducing hotels’ revenue. And while OTAs often feel like a benefit to consumers, the commissions indirectly harm them, too, by pushing hotels to raise prices in order to offset commissions fees.
Blockchain technology can help to solve this problem in two ways. Firstly and most significantly, blockchain technology could form the foundation for a decentralized platform that connects consumers to hotels without requiring large commission fees.
This is the solution envisioned by startups like Concierge.io, which uses the NEO blockchain as the backbone of a commission-free hotel booking platform. The company says that its solution will save consumers as much as 45 percent on traditional booking fees. For now, Concierge.io remains in development. Only hotels based in Vietnam are currently available for booking, but the company says that it will eventually list 10,000 international properties.
LockTrip is building a similar platform, with plans to roll out its decentralized applications in the spring of 2018.
A secondary benefit of blockchain-based booking systems is that they can eliminate or significantly reduce payment transaction fees by allowing consumers to pay with cryptocurrencies. While transaction fees for credit and debit card payments do not contribute as significantly to online hotel booking costs as OTA commissions do, they are still a factor.
Transparency and Hotel Reviews Via the Blockchain
A second significant challenge facing hotels and consumers is fake or unfair online hotel reviews. Given that, on most online review platforms, anyone can write a review of a hotel without having to confirm that he or she even stayed there, it is difficult for consumers to know how accurate online reviews are. For hotels, meanwhile, inaccurate or unfair reviews can be hard to identify and address.