Travel Technology has its ups and down’s that creates disruptions and innovations that don’t always help to create harmony until recently.
The main purpose of hotels is to provide travelers food, accommodation, and commercial things for the people who are away from home, nowadays hotels are also serving many functions like centers of sociability, business, political headquarters and permanent residences, the hotel industry transformed travel throughout the world.
A quick history of the Hotel Booking process before the arrival of the internet, hotels relied on Travel Agents who relied on Tour Operators who relied on Wholesale Tour Operators and possibly even Destination Management Companies to get bums in beds. Which meant that every link in the chain charges about 10% commission thus costing hotels upto 40% commission. On top of that, they had other high costs such as marketing and media, travel shows, brochures, reservations staff etc.
The arrival of the internet in the 1990’s allowed suppliers to reach out directly to a much wider audience. However, as this was pre-google days it meant there was an overload of data which customers battled to sift through and choose the right hotel. For Airlines, however, this was the holy grail as there were few airlines back then compared with the millions of hotels around the world. Travel Agents by the mass suffered as consumers went online and booked air tickets directly which no doubt was the birth of cheap airlines such as Ryanair & Easyjet to name a few.
For hotels it was different they did not have the budget or technological know-how and so the online travel agent (OTA) was born such as lastminute.com, booking.com, Expedia etc which aggregated and filtered hotels by country, area, date of availability, age, urban, city etc making the booking experience much easier for the consumer. For hotels too, it was a great way of getting noticed and getting business as they could list their inventory, brand, pictures and availability in one central place.
The OTA’s charged commissions ranging between 15-30% so as to use a portion of this for advertising and solidifying their status amongst the various search engines of this time. Enter Google the creation of CPC advertising which meant the OTA’s who already tech-savvy understood how to leverage these commissions to ensure market and brand presence and eventually become oligopoly’s which leads to:
- High commissions
- Brand Hijacking
- Indirect Relationships
- Rate Parity Agreements
The worldwide hotel industry is as of now esteemed at $500 billion every year. A rough estimate demonstrates that up to $125 billion in pointless expenses (commissions) are yearly shared by hoteliers and visitors.
Why are OTA’s so Popular?
The major reason is, there is an absence of trust in the hotel business (particularly individual hotels). Travellers pick OTAs as they are more trusted. “Trust” is worked by various subtle elements. Easy to understand interface, an assortment of the decision, advantageous pursuit with important outcomes, different booking choices, various surveys, photographs, and reviews. This influences the customers to feel completely secure. Large hotel chains can bear the cost of significant marketing plans while small organizations don’t have adequate assets to cover this base. Not at all like OTAs, which spend vast aggregates of cash on publicizing in Google, Yahoo, Yandex, and Baidu.
The aggregators were becoming increasingly centralised and dominated by a small number of OTAs and whilst on the surface they provided convenient aggregation portals, in truth they distort the free market in travel accommodation. This results in a problematic commercial centre with low edges, high commissions, low client maintenance and trouble in achieving new clients.
Hotels want to have a direct relationship with their customers. That’s how they can offer their guests the best service and the best deals. Reward frameworks offer an answer, yet hotels are battling with how to actualize a reward arrangement that truly works, something that makes genuine esteem and at last forms reliability with their visitors.
Current reward frameworks are costly to run, have a low use, are exclusive and don’t embody esteem and are not transferable.
How can Blockchain solve this?
Blockchain innovation has a few focal points to offer the Hotel industry business, with a standout amongst the most evident being the security and strength benefits. For example, all information is decentralized and traceable, and the database can never go offline, or be tampered with, which can be imperative when managing money related exchanges & customer private information.
Also, the travel industry depends upon data and even personal information along with payments being passed between numerous diverse organizations. The blockchain can make both getting to and putting away data substantially simpler, taking into consideration upgraded cooperation and eventually enhancing the safety & security of the consumer.
Segments where Blockchain can be used in the Hotel Industry
- Payment – As you must have guessed Secure payments is one of the first thought that comes to mind. With Blockchain, payment can be made securely while having a very low transaction cost.
- Identity & Security – A standout amongst the most energizing potential uses for the blockchain inside the hotel industry is Identity & Security. Travellers are required to give ID at different phases of their booking process, while industry-wide adoption of the blockchain could conceivably take into consideration a common advanced database, with travellers giving, for instance, a fingerprint to rapidly and consistently check their identity, diminishing holding up times.
- Loyalty Programs – They are a critical piece of creating return customers and blockchain innovation can improve the nature of such programs by simplifying the procedure, making it easier for customers to get to their points and recover them. With the blockchain, prizes can be disseminated through computerized tokens that could, possibly, be utilized anyplace, whenever, while the inborn security advantages could diminish the chances of fraud.
Some Projects in the Hotel Industry Sector –
Having spent 20+ years in the travel industry both as a Wholesale Tour Operator & Boutique Hotel owner Edward Cunningham saw a great opportunity when he discovered Bitcoin and the Blockchain on an adventure trip to Uruguay in 2014. Having discovered the vast opportunities that blockchain could bring by reducing friction and middlemen, Edward moved back to the UK in order to put together a team of industry related specialists to develop and launch Trippki.
Trippki replaces the traditional closed silo model with an open protocol powered by an Ethereum based token system. In the Trippki model, part of each booking payment is converted into TRIP tokens which are given to the customer as a loyalty reward, upon Proof-of-Stay. TRIP token’s data persistence and immutability is provided by the Ethereum network, granting a built-in system of reputation that allows hotels to tailor-make, reputation-based, offers to their guests every time they make a booking be it through Trippki or directly with the hotel.
TRIP is cryptographically secure and a decentralised token. TRIP is a crypto-asset that is robust and redeemable at the holder’s discretion, unlike any other reward point. For customers, TRIP has immediate utility as it can be used to pay for hotel bookings, room upgrades and/or services on the Trippki platform. Trippki utilises crypto-economic alignment for the different players within the travel economy. Your Trip Tokens can be traded through secondary exchanges into Bitcoin or Ethereum or just cashed out to purchase anything you desire.
Their goal is to build and maintain a network effect that can dramatically reduce channel costs (commissions) from up to 30% within the existing OTA model down to 2.5%.
Customers are able to be rewarded through a variety of tasks such as sharing pictures and experiences on social media or writing reviews, which is captured through their unique identity held on the blockchain through Proof-of-Stay. Imagine writing a review be it positive or negative and getting rewarded and what’s more exciting imagine if some random person agreed with your review, that would mean that both you and them would share in the more rewards.
Not only is Trippki evolving the OTA’s its evolving how reviews are perceived through their Proof-of-Stay Model.
Trippki is a true sharing platform.
You can Connect with Trippki on :
The LockChain is a marketplace, controlled by blockchain innovation, which permits hotels and other organizations to lease their property. It is an across the board stage, permitting both property administration and installment to happen in one place. The decentralized booking mechanism removes ‘brokers’ and another real preferred standpoint is that LockChain works a subscription model, with a zero percent commission approach.
BeeToken or Beenest is a blockchain home-sharing platform, which connects customers with people who want to rent their property. Its shared exchanges imply that no commission is charged, while the decentralized idea of the stage gives included security benefits. The BeeToken platform includes payment, reputation and arbitration protocols, helping to keep both customers and hosts safe.
To sum it all up, a lot of projects are coming up in the Hotel industry which needed innovation for a long time. With Blockchain we hope new ways of doing business comes up and gets mainstream adoption, although the ever debatable issue of blockchain scalability & integration into existing systems will be there but for the future that blockchain and cryptocurrency promises we need to start somewhere & slowly we will see implementation as the technology moves ahead on the Adoption Curve.