Nordic Choice ‘Not at War with OTAs’ Over Blockchain
As the first guests book hotel inventory using the Winding Tree platform, should the current distribution heavyweights be alarmed?
Christian Lunden, the director of future business at Nordic Choice Hotels, is a nice guy. When the big hotel chains, OTAs, providers of revenue systems and so on ring him up to “find out what the heck we are doing,” he is happy to share knowledge. After all, if the decentralised, blockchain-based distribution platform that Nordic Choice has been working on with Winding Tree for the past 18 months is to succeed, it will need widespread industry support and buy-in. So far that hasn’t happened.
This week, however, Winding Tree and Nordic Choice announced the execution of the first ever hotel reservation on a public blockchain at the Swedish chain’s Hobo hotel in Stockholm.
The move is hardly significant if you consider that virtually nobody will remember the time when the first hotel booking was made over a global distribution system (GDS) or, for that matter, the World Wide Web! What is significant, interesting and, potentially disruptive, however, are the possibilities arising from distributing travel products and services on a public blockchain. As Winding Tree, COO, Pedro Arnaud, says: “There are many efforts by travel industry middlemen to create private permission-based blockchains, which maintains their control and does not remove any layers, but what’s the point of so-called ‘decentralised’ technology if it is regulated by an entity?
While much of the rhetoric around blockchain has been around the ‘war with the OTAs’ over high commissions this is not Nordic Choice’s main motivation. “Of course it’s a good thing if we can in some way lower our distribution costs. But we like to pay companies to help us sell our rooms and doing it this way means that no one owns the platform and can’t be too dominant in the market,” Lunden says.
So, at Hobo, Nordic Choice is playing middleman to test the platform directly with the consumer, but this B2C angle is not the main reason for the group’s blockchain efforts, and is not the recipe for succcess.
Instead, Nordic’s efforts are focused on getting its inventory in one place so that innovative start-ups can access it. Today this is not possible thanks to the market dominance of big distribution platforms in both the B2B and B2C space. However, Lunde says that when his out meeting different start-ups, “what they inevitably want is access to our inventory so they can prove their service”.