Blockchain technology is going to disrupt the travel industry in ways most of us are just now starting to fathom. Beyond the familiar applications in the financial space, it holds immense potential for transforming how we plan, book, and experience travel.
Smart Contracts and Travel Insurance
Smart contracts can dramatically simplify complex and time-consuming processes of travel insurance claims. A recent research investigated how such self-executing contracts might automate a claims process. Through blockchain, which offers an avenue to transparency, immutability, and automation, insurers will be better placed in fast-tracking claim audits. Since information is stored securely and accessibly on the blockchain, the verification process is quicker. Moreover, smart contracts can directly pay the insurance benefit to the bank account of the policyholder once the claim is validated, thereby avoiding delay.
Uses or Potential Uses of Blockchain in the Travel Industry
We have touched on a few areas where blockchain can change the game for travel. Let’s go a bit deeper into some further possibilities:
- Supply Chain Transparency: Blockchain can ensure end-to-end transparency in the travel supply chain. From tracking the origin of the food served in hotels to ensuring ethical sourcing, thus improving consumer trust and sustainability.
- Decentralized Accommodation Platforms: Blockchain can empower people to list highly unique accommodations, anything from a spare room to whole homes, without dependence on intermediaries. Smart contracts will automate rental agreements, payment processing, and dispute resolution.
- Travel Insurance Claims Automation: Building further on the previous point of smart contracts, blockchain can automate a lot that goes into travel insurance claims, such as loss assessment, detection of fraud, and payout distribution.
- Dynamic Pricing and Revenue Management: Blockchain can facilitate real-time pricing adjustments based on demand, competition, and exogenous events. This would optimize revenue for airlines, hotels, and other providers connected with travel.
- Fraud Prevention: Because of the decentralized nature of the blockchain, fraudulent manipulation of data is quite a challenge. This can be extended to the protection of travelers against booking scams, counterfeit tickets, and identity theft.
- Carbon Footprint: Blockchain can track and update the carbon footprint of flights, accommodations, and other activities that occur throughout your travels. The data can be made available to travelers to make better choices in supporting green options.
- Data Privacy and Security: Blockchain can provide a transparent, secure model for processing sensitive traveler data, like passport information or even payment details. It can minimize the risk of data breach by storing the data in a decentralized way.
- Secure and Traceable Payments: Travel can use blockchain as a secure and, in most cases, cheaper alternative to traditional modes of payments. It facilitates seamless transactions through cryptocurrencies and other digital assets. In addition, blockchain is transparent; therefore, every payment made is recorded to reduce fraud cases and disputes. The enhanced security and efficiency are not only limited to traditional travel payments. For example, top crypto casinos use the blockchain to provide secure and transparent gaming experiences.
By exploring these applications, the tourism sector will be better placed to finally unlock the full potential of blockchain in making this industry more efficient, more transparent, and customer-centric.
Blockchain Startups: Leading the Way
Several companies are already using the power of blockchain to disrupt the travel industry.
LockTrip: A Blockchain-Based Travel Marketplace
LockTrip’s centralized vision cuts out intermediaries, offering travelers up to 60% savings on bookings. It also gives users flexibility in terms of choosing between various payment options, be it by credit card, popular cryptocurrencies, or the native LOC token of the platform itself to avoid transaction fees.
LockTrip seeks to enable easier access to travel for the majority by reducing associated costs. It’s a unique business model where the economy of the platform is funneled into the LOC token. With every booking, 3% of the booking value is used to buy LOC tokens from the exchange and burn them. This process, visible on the blockchain, creates a deflationary effect on the supply of the token and might boost its value over time. The LOC token is built on the Hydra chain, which is a platform that puts together the best features of Bitcoin, Ethereum, and Qtum while introducing additional economic functionalities.
Beenest: A Decentralized Short-Term Rental Platform
Beenest is the world’s very first blockchain-powered marketplace that’s shifting the paradigm of the short-term rental industry. It empowers hosts to list their properties, and guests to book accommodation directly with hosts and bask in zero commission fees due to removing intermediaries. Blockchain technology, through smart contracts, gives this decentralized approach transparency and trust between hosts and guests.
The Bee Token is the native cryptocurrency of the platform. Bee Token holders will benefit through price discounts, potential access to exclusive properties, and the growth of the platform itself. This token-based economy incentivizes participation and fosters a living community within the Beenest ecosystem.
The Challenges and Future of Blockchain in Travel
Though the potential for blockchain in the tourism sector cannot be negated, there is also cause to be pragmatic about the challenges. Winding Tree, an organization that pioneered blockchain-based travel booking, shut down after seven years of operation. It attributed its closure to the industry being unprepared for blockchain technology and building more trust and understanding.
If blockchain is to finally make its mark in the travel sector, efforts have to be made for a concerted move in terms of investment in research, development, and education.
Yet, against such odds, the prospects for blockchain in travel do look optimistic. Soon we can expect that as technology advances and the industry gains more acceptance, innovative solutions will start to take over and define a new travel experience.
Blockchain can achieve what has always been wanted in this disjointed ecosystem: an efficient, transparent, and customer-centric scheme. Everything from decentralized accommodation platforms to secure systems of payment and individually tailored travel itineraries.
