ONLINE HOTEL BOOKING TREND 8 – 2017: According to the Harvard Business Review “Blockchains ensure integrity and trust between strangers. They make it difficult to cheat”.
“In other words, it’s the first native digital medium for value, just as the internet was the first native digital medium for information. And this has big implications for business and the corporation.”
Blockchain technology is often confused with cryptocurrencies like bitcoin. However, blockchain technology is really the enabler and not the currency. If you would like to get up to speed on blockchain, this video is a good starting point.
The consumer need
The discussion on minimising distribution costs for hotels has so far focused mainly on the OTA and GDS costs.
Channelling direct bookings through the hotel’s own website has always been the holy grail.
At the same time, the financial costs of processing each payment directly has been rather a constant and marginally impacted by volume. What if that could change? And if there were to be little or no cost to almost all your transactions?
What is driving change?
The most well-known product of blockchain technology, bitcoin has had mixed success. However, adoption of blockchain technology more widely including by a consortium of nine of the world’s biggest banks including Barclays and Goldman Sachs has made it more mainstream.
Emerging customer expectations
This article explains why “Travel loyalty programmes belong on the Blockchain” and the thinking behind loyyal, a universal loyalty and rewards platform.
“Imagine paying for your morning Starbucks with the American Airlines miles you earned from last night’s flight. Or paying for your Panera bagel with your Starwood points. Or how about a free Uber ride with your dinner tonight?”
Webjet and Microsoft have today announced the creation of a new blockchain proof-of-concept [PoC] solution that they believe will transform the travel industry. They believe that the solution has the potential to change the way online payments are processed and managed for hotel bookings. The size of that market globally – a million transactions a day in a $100 billion industry. The total savings if the model worked could run into billions of dollars.
Are they delivering on expectations?
Brian Chesky, CEO of Airbnb, asked the Airbnb community through social media which applications or platforms its users would like to see launched in 2017. Most of the users responded with Bitcoin payment integration, providing the success of Expedia as an example.
The story of Felix Weis who travelled to 27 countries with bitcoin is a good read to understand where we stand today with the payment side of blockchain technology.
FT reports that stock exchanges and start-ups are making their first moves to implement the technology.
Businesses applying this trend
Hotelgo24.com an online booking service gives away Bitcoins as cashback on every reservation.
Loyyal has developed a universal loyalty and rewards platform, built with blockchain and smart contract technology.
In the U.K., Curve has combined a payment card and loyalty card combined into one digital wallet. Curve Rewards are different from other loyalty schemes in that consumers can earn Curve Rewards with any card they select via the Curve app.
The points are applied to the Curve Rewards account instantly, which is different than other rewards programs.
HotelP2P aims to eliminate commissions completely. Just as Bitcoin has eliminated the middlemen in banking, HOTELP2P eliminates the middlemen – in this case the OTAs – from hotel distribution, delivering enhanced services to customers and reducing distribution costs to hoteliers.
Dublin and London-based Circle –which enables peer-to-peer payments for consumers via mobile devices using a platform built on blockchain, which is licensed through Barclays – went live in 2016.
Slock is bringing the virtual nature of block chain technology to physical applications in day to day life!
Mobile wallet services like Android Pay and Apple Pay and Ali Pay are building connected services. Alipay offers a “discovery feature” that alerts users to the merchants that surround them in general and pinpoints the merchants that specifically accept Alipay.
Trend potential and takeaway
It is very early days yet for blockchain technology applications in travel and hotels and for that matter in other industries.
However, the fact that leading global banks are investing time and effort into developing solutions using blockchain technology is promising.
While the saving implications in terms of booking transaction costs are tremendous, I am equally excited at the possibility of a robust loyalty programme – one that allows easy exchange and use of rewards based on context and location rather than one that is unusable.
Hotels have been working long and hard on assembling a single profile for each guest. However, it has proved to be challenging with the wide variety of systems and processes in use – what if blockchain can deliver that experience?