Studies on the world economy have established that the travel industry is the second-fastest-growing sector globally. Moreover, the travel industry has the right resources that allow it to incorporate new solutions and technologies that can keep track of the growth process.
Blockchain technology and cryptocurrency are able to advance and make the experience of the traveler more comfortable. Additionally, it makes employees more effective in their mandate as well as reduces high costs. How has your travel experience been? What activities do you engage in? There are sites like Guidesify, which share many excellent tips and if you visit the website to find out how to spend your time when you are traveling. In this guide, you will discover how blockchain and cryptocurrency can improve the travel industry.
What Is The Current Situation?
Several third parties populate the tourism industry. As a result, the tourists, who are the end-users, end up paying massive commissions. Moreover, this long chain of intermediaries normally leads to delays, mistakes, overbooking, among other serious challenges.
Fortunately, travel companies started to incorporate blockchain and cryptocurrency projects to address these issues. Below are some notable areas where blockchain can be integrated into the travel industry to make it better.
Payment Methods
Cryptocurrency has not been accepted globally yet. Nevertheless, more companies are accepting Bitcoin and other Cryptocurrencies for payment of goods and services. This is excellent news for travelers as they no longer have to worry about currency conversion costs, ATM withdrawal fees, transaction charges, and fraud risks.
At the moment, there are still various hurdles to overcome before travelers can comfortably use Cryptocurrencies all over the world. But, the initial results show that it can be a success.
Blockchain Technology for Travel Agencies
The travel industry usually has a long chain of intermediaries. Unfortunately, as mentioned earlier, these third parties usually cause delays that can lead to financial losses.
Blockchain technology can help address this challenge by closing the gaps created by different payment methods. For example, one business and consumer travel services provider revealed that it had incorporated Hyperledger Fabric so as to assure travel agencies of their commissions.
The travel service provider designed the blockchain in association with IBM, a travel management company, and three hotel chains. The system seeks to reduce the number of payment disputes by placing the lifecycle of a booking on the blockchain.
At the moment, the challenge is in managing hotel data. For instance, the traveler can adjust their booking severally, giving room for information to go missing. Supposing a traveler arrives and extends their hotel stay, that information might not make it back to the booking agency.
However, thanks to Blockchain technology, that data can be captured from other sources, leaving no gaps. As a result, it improves the reconciliation of hotel commissions, ensuring clients are getting the correct bills.
Various Services Make the Traveler’s Life Easier
In some instances, tourists don’t have to shop with cryptocurrency. However, there are times when they need to exchange fiat money into digital currency. Therefore, some companies offer solutions for such situations.
For instance, the international airport serving the Netherlands’ capital city, Amsterdam, unveiled a trial project. They unveiled an ATM that enables travelers to exchange their Euros for Bitcoin or Ethereum. In addition, the ATM gave travelers an option to convert their Euros to cryptocurrency as they leave the country.
What Are The Perspectives?
Travel industry experts argue that blockchain technology has a lot of potential for improving business processes. For example, it can help to develop loyalty programs and reduce transaction costs. Moreover, it can also help airlines to track bags and keep track of their supply chains.
Since the travel industry has many middlemen, blockchain technology will likely cause a major disruptive effect on the entire business chain. Some industry players claim that as cryptocurrency stabilizes, it would be wise for travel companies to consider using them. Luckily, even experts and industry authorities who were initially skeptical about cryptocurrency usage have changed their minds.
Based on comments by several industry experts, here are the issues that blockchain and cryptocurrency could help address:
- Overbooking – in theory, blockchain can help eradicate the issue of double bookings in the industry hence getting rid of double-spending.
- Fraud – the travel industry has numerous refunds and chargebacks. Therefore, the operation of merchants faces a high degree of risk of financial losses. With blockchain, once you make a payment, you cannot reverse it, reducing fraudulent cases.
- Identity and reputation – decentralization synonymous with crypto-economics enables billions of people who were previously disconnected from the global economy. This development will give more people the opportunity to travel since reputation-based identity systems can prove their identity.
- Settlement – Blockchain enables the industry players to move money faster. Moreover, it removes intermediaries and their fees, which greatly benefit the industry.
- Loyalty – loyalty programs are valid in travel companies. But, can you buy a ticket with points you earned from using the services of a competing company? Blockchain technology has the potential to make such mechanics a reality.
