There’s been a lot of buzz about blockchain in recent years—a topic we summarized in our booking trends for 2018 post. Yet despite the hype, the majority of people don’t really seem to understand what blockchain is actually all about.
With huge potential and growing levels of investment, it’s a topic that demands closer attention. In the travel sector, blockchain technology shows a serious amount of promise, from revolutionizing loyalty programs and increasing security, to breaking up the reliance hotels have on OTAs.
All round, the applications are tantalizing, if not a little confusing. So to shed some light on the subject, the following post will take a closer look at what blockchain is and explore some of its core benefits to the travel sector.
What is blockchain?
According to the Harvard Business Review definition, blockchain is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”
The technology basically offers a tamper-proof way of recording transactions, agreements and contracts. So rather than a single organization (such as a bank or broker) acting as a middleman, every transaction that takes place is shared and authenticated by multiple parties across multiple computers.
These transactions grow in a linear fashion as linked “blocks” (hence blockchain) and each transaction requires approval by all other users in the network. Once that approval happens, the transaction is then fixed and immutably recorded. It can’t be changed, and acts as a permanent record.
With that in mind, how can this be of use to the travel sector?
Applications in travel
In theory, all businesses can benefit from some of blockchain’s applications. But there are some fascinating possibilities being explored by various travel groups, hotels and airlines.
Below, we’ve outlined three key areas where blockchain may have a profound impact.
Guest loyalty programs and distribution
According to the 2015 Colloquy Loyalty Census, the average U.S. household participates in 29 different loyalty programs. But in reality, many consumers just aren’t engaged with these programs.
It’s not surprising. Trying to track and manage multiple loyalty schemes from different companies (all with unique incentives and conditions) is pretty arduous. The trouble is that engaging with all of these loyalty programs requires independently visiting each company’s own platform, which can be a major hassle.
But blockchain could change all that.
