Tourism has become increasingly interactive with the advent of the Internet, allowing travelers to easily search for and create their own trips without the need for a traditional travel agency. This has greatly improved the overall tourism experience. But now, blockchain technology is poised to revolutionize the travel industry, fundamentally altering the travel customer journey.
Over the past decade, several tech powerhouses have radically reshaped how we experience accommodation, transportation and tourism experiences. Those have sparked a revolution by prioritizing cutting-edge app development and assembling top-tier tech talent. These companies have proven that technology isn’t just a tool but a crucial cornerstone for thriving in the travel sector.
While many of these travel tech companies are called platforms for the “sharing economy,” this label is somewhat misleading. While the concept of peers sharing value is appealing, these businesses thrive by aggregating resources and services, rather than truly sharing them. They are successful because they do not share, but instead concentrate and centralize control. In the process, they also collect data for commercial exploitation. They were the big disruptors, but now with blockchain technology the big disruptors are about to get disrupted.
The Next Generation of Travel and Tourism?
At its core, blockchain is an open-source code that can be freely accessed, executed and used to build new tools for online transactions. This versatility makes it a catalyst for the development of numerous innovative applications and untapped potential, with the capacity to revolutionize many aspects of society. Envision a decentralized alternative to centralized travel aggregators. In this scenario, the platform would operate as a cooperative, owned and governed by its members. An example, an accommodation aggregator; when a renter is searching for a listing, the new blockchain software would use the blockchain to scan for all available options and display only those that match the desired criteria. Transactions made on the network would be recorded on the blockchain, providing a permanent and transparent record of each interaction. This would enhance the reputation and establish the identity of users through positive reviews and eliminate the need for intermediaries to verify trustworthiness.
Given the unique attributes of blockchain; transparent, decentralized and immutable, it can create a more secure, customer centric and open marketplace for consumers and businesses.
However, the introduction of blockchain into tourism raises several questions and problems concerning, for example, disruption of established business models like companies operating as intermediaries (e.g., OTAs), changing demand patterns, data management or the adoption of technology in small and medium enterprises (SMEs). The rise of blockchains could generate decentralization of services and result in a decline in the power of current intermediaries.
The emergence of blockchain technology has garnered significant media attention and sparked immense interest across a multitude of industries, tourism is no exception. TUI, one of the world’s leading tourism businesses, accepts blockchain for its booking, reservation and payment system and has significant investments in start‐up ventures in this field. Travel Chain is a decentralized data exchange platform in the travel market where users enter their personal information and receive benefits for it. Flight Delay uses smart contracts for full automation of the signing and paying process for flight insurance policies. These companies are improving key aspects of the travel ecosystem and establishing blockchain’s place in the industry.
The use of blockchain technologies in tourism can potentially bring down the overall cost structure and benefit tourists and various service providers in the sector.
Blockchain Technology Investments on the Rise
According to the report by Price water house Coopers (PwC), the tourism industry, especially leisure and hospitality, are expected to receive the highest share of blockchain investments. Since the investments in blockchain solutions to the tourism industry are on the rise, these improvements are expected to have a considerable impact on the future of travel and tourism and the way the processes are to be handled.
World Travel & Tourism Council projections point to a strong decade of growth. Travel and tourism GDP is set to grow on average by 5.8% annually between 2022 and 2032, outpacing the growth of the overall economy (2.7% per year). Investment in the sector is important for improving the prospects for future growth. Blockchain solutions can effectively foster digitalization, automation, disintermediation and intelligent environments, resulting in a more efficient and seamless experience for travelers.
The creation of a comprehensive and impartial global database containing information on travel market suppliers, users and tourism experiences would bring a whole change in this industry, as blockchain-based databases would be accessible not only to large corporations but also to small and medium-sized enterprises aiming to further democratize what the Internet started decades ago. The blockchain technology’s impact is more than hypothetical, though, with several businesses disrupting nodes within the industry’s supply chain. But for now, companies are faced with understanding and implementing new technologies at a greater pace than ever before.
