Blockchain can resolve a lot issues, for consumers, travel merchants, and for governments who are obviously deeply involved in security aspects of travel
Bitcoin hit the currency market with a bang. And once it did hit, other cryptocurrencies soon followed. In fact, during 2017, the crypto-currency market reached $150 billion. It’s a hot disruptor in the financial services industry.
But what may be more important in the long run is the technology behind cryptocurrency – blockchain. And a lot of tech startups are based around this technology, because it promises to disrupt many other industries – banking, healthcare, education, and, yes, travel. In 2017, in fact, about $1.8 billion was invested in blockchain startups.
Blockchain in the Travel Industry
Anyone who travels has faced a myriad of inconveniences – from long security lines, to digging out identity documents and having them at the ready, to being asked to volunteer to give up our seat because of overbooking, etc.
Even in making our travel arrangements, we face the endless form fields and again providing all of our personal and credit card information. And then there is the fraud factor, and it is significant. Travel merchants lose up to 0.44% a year; and 4% of airline bookings result in rejections because of suspected fraud. All of this tops out at about a $4.8 billion annual problem for the travel industry.
Blockchain can resolve a lot of these issues, for consumers, for travel merchants, and for governments who are obviously deeply involved in security aspects of travel. Here are just a few uses for blockchain in the travel industry.
1. Identity Management
It is estimated that up to 40 million travel documents are now recorded as lost or stolen in recent years. But, through biometrics and blockchain, identities and travel documents can be recorded and permanently stored and accessible with a simple click. This eliminates having to produce these documents at several checkpoints during one’s travel. And credit card information can be stored just as easily. Flight, hotel, and transport is immediately streamlined for the traveler, and government agencies have much greater security as they process travelers.
2. Smart Contracts
Blockchain is already being used to solidify and immutably record contracts between businesses, so that neither party can change the terms. There is a huge space for smart contracts within the travel industry. Travelers and travel merchants will record all transactions in a block; loyalty programs and traveler “points” can be stored in blocks; commission agreements between airlines, hotels and booking agents leave no doubt about who is to be paid what and when; and corporate agreements with travel merchants can be permanently recorded, leaving no room for doubt or hidden fees.
And travel entrepreneurs are turning to both crypto and blockchain as they serve consumers. One exciting example is Cool Cousin. The popular app connecting travelers with locals that could be their “cool cousins” around the city and suggest the best things to do, neighborhoods to stay at etc. is now launching an ICO to create the first P2P travel agency. Their plan is to create a decentralized ecosystem of local and travelers, powered by the platform’s token – CUZ. This will allow cousins to monetize their unique knowledge and expertise, while maintaining the fees low enough for all users. Travelers can then get fully personalized concierge services based upon their specific vacation desires. The age of personalization in travel is upon us.
3. Fraud Prevention
Last year, 55 million of consumers made hotel bookings through websites they thought to belong to the hotel, yet which actually were operated by fraudsters. The total cost of such misleading bookings was $6 billion.
Blockchain can be leveraged to avoid such pitiful scenarios and help consumers verify the properties and vice versa. Also, with documents and identities stored in blocks, travel merchants will not have to manually check bookings that are flagged for potential fraud. Traveler information is securely accessible through a blockchain, and losses to fraud significantly reduced.
4. Overbooking
This has become a major “thorn” for travelers who can even face being kicked off a plane because not enough volunteers agreed to give up their seats. Governments are even taking regulatory steps to punish and fine airlines who engage in this practice. With blockchain, passengers have greater security -their reservations are securely stored in a block, and airlines will be forced to drop the practice of “double-booking.”
It is Coming
Those in the travel industry who want to stay competitive and provide both governments and consumers with secure, hacker-free, and streamlined methods of travel will look to establish blockchain technology within their niches. The time is now.
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