How Blockchain Could Disrupt Hotel Distribution And Loyalty

Hype surrounding blockchain technology continues to climb, despite the volatility in related cryptocurrencies like Bitcoin seen earlier this year. While it’s still too early to know how these distributed-ledger technologies might change the hospitality industry, experts are starting to share details of what could be effective use cases in distribution and hotel loyalty.

The interest in blockchain that seemed to burst on to the scene last year has continued in 2018. LockChain launched in January as perhaps the first blockchain-based marketplace for hotels and private accommodations. Singapore Airlines, TUI Group, citizenM Hotels and JetBlue are all experimenting with blockchain-based platforms.

So far, some high-level benefits of such platforms have emerged as near- to medium-term goals in hospitality, including more efficient handling of payments, traveler verification and greater interoperability of loyalty programs. For example, blockchain could be used to authenticate “known travelers” for travel screening and security, as Canada and the Netherlands are currently testing.

Is Blockchain Really Worth the Hype as an OTA Killer?

While hardly anybody can say for sure what concrete benefits the travel industry can expect from blockchain technology, Skift recently made a convincing argument that its spinoff effects could nonetheless produce positive unintended consequences.

Many people are looking to distributed-ledger technology as a possible alternative to online travel agencies. If an immutable, decentralized record of hotel availability, rates and inventory could replace the OTAs — with their high commissions — as gatekeepers, hotels could finally exert some downward pressure on acquisition costs, the thinking goes.

Perhaps other annoyances of hotel distribution could be mitigated, as some speculate. Hotels and casinos would like to cut down on huge integration fees and not have to deal with the minimum volumes required to distribute on the big OTAs. If unalterable blocks in the blockchain become the norm in distribution, could that prevent wholesalers from slashing prices and causing rate parity headaches for hotels?

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