Could blockchain technology change the world travel landscape?
Blockchain has the potential to revolutionize the tech sector – and it is likely to have the same impact on the world travel industry.
Blockchain are publicly accessible, generative data networks that can record transactions in an efficient, verifiable and immutable way. Industry leaders are conducting blockchain research that has the capacity to cause significant disruption. For instance, Amadeus is developing a blockchain research program focusing on traveler verification, loyalty interoperability, payments and baggage tracking. Here, we discuss the uses of blockchain and how it could change the way we travel.
Is blockchain the key to seamless world travel?
The transparency blockchain technology provides means that it has the potential to make world travel a more frictionless process. As research by Amadeus suggests, there are numerous fields across which blockchain could be deployed.
The trustworthy and unalterable nature of blockchain makes it an ideal tool for travel identification. Furthermore, the its sequential structure means that information can be tracked at every touchpoint – from booking, to security, in airport lounges, to boarding and at the hotel. Blockchain technology has the potential to supercede the paper passport, creating a frictionless world travel market and experience for customer, corporations and states.
Most frequent travelers are members of loyalty programs. These schemes accrue disperate points, scattered across company databases and systems. Blockchain has the potential to unify complimentary loyal program schemes into a single digital wallet. As a result, customers will be able to easily redeem or share points via a user-friendly app. Not only would this improve customer experience, it would also promote brand awareness and reputability. By exploiting the inherent interoperability of loyalty points in real-time, blockchain can transform loyalty points into a more universal currency.
The entire world travel market essentially relies on a chain of transactions between companies, intermediaries and customers. For example, when a hotel room is booked via an online aggregator, the transaction is not merely between the hotelier and the customer; the OTA and the supplier need to settle commission based on their agreement. Currently, this chain is very complex. Blockchain could have the capability to automate transactions across the industry in a verifiable, legible format.
Baggage tracking is another challenge for the world travel industry. The involvement of multiple actors – including airlines, ground staff and airports – can cause friction through the service chain. Blockchain could facilitate the seamless transmission of information amongst these actors, improving transparency across communications. This technology has the potential to reassure customers and reduce instances of mishandled luggage.
Limitations of blockchain
Despite the potential of blockchain, there are limitations that need to be addressed before it can become a fully operable platform. An important concern in world travel industry is scalability. Current blockchains – such as those that support cryptocurrency like Bitcoin, Ethereum, etc. – experience capacity challenges. To illustrate, Bitcoin’s network can only process about 7% per second – at its peak, Amadeus processes 100,00 transactions per second.
Transaction costs also need to be taken into consideration. Typically, blockchain needs significant IT resources considering the complexity of the cryptography. For instance, Bitcoin and Ethereum transactions often come with prohibitivly expensive fees. Consequently, this can make cryptocurrency unsuitable in numerous cases.
Finally, integrating with existing technology present another significant challenge. Currently, it takes special expertise to assimilate blockchain with older IT frameworks. As such, companies would need to make significant investments in consultancy and computing to create a workable blockchain solution.
Blockchain: An intriguing possibility
Blockchain technologies are still in development, but the opportunities they present are significant. Certainly, blockchain could make world travel market frictionless, transparent and decentralized. If companies can overcome the limitations presented by cost, blockchain could be an invaluable tool. Amadeus’ blockchain project proves the industry sees potential – and hopefully, there will be more successful case studies soon.