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How Blockchain Technology Can Transform Travel and Tourism Industry ?
Explore the ways how blockchain is transforming travel and tourism industry.
Blockchain Technology, a sublime in this digital economy has the tendency to resound every industry and enterprise. Even in its dawning stage Blockchain proves to be the most promising technology that has the potential to transform industries such as Healthcare, Banking, Supply chain and lot more.
We are here to discuss this optimistic technology application in one of the lucrative industry " Travel and Tourism".
Without a breach, let us jump into deep discussion. Come on, folks !!
Before looking into blockchain in the tourism and travel industry, let us have a short introduction about Travel Industry.
Travel and Tourism
“To Travel is to Live” – Hans Christian Andersen
Travel and Tourism is the largest service industry in the world that serves the number of people and also accounts for the high global revenue. Travel and Tourism is not just a pocket-sized industry as you think. Let us have a brief overview of Travel and Tourism for better understanding.
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The process of travel refers to the act of moving from one location to the other. Travel may involve short-distance travel, long-distance travel, a one-way trip or domestic travel or anything. Services all of these travels are overlooked by Travel Industry.
The term tourism refers to the act of traveling to various locations for at least 24 hours and not more than 1 year for the purpose of business or leisure. The services related needed for these kinds of travelers are served by Tourism Industry.
The main difference between the travel and tourism industry is that the tourism industry is concerned about short term traveling and the travel industry has a wider scope for traveling purposes
The travel and tourism industry involves the following sectors and companies to complete their whole purposes.
1. Transportation: This involves Airlines, Railways, Water transports, spacecraft and lot more.
2. Accommodation: Involving Hotels, Cruises, Hostels, Bed and Breakfast and so on.
3. Food & Beverage: Which involves Restaurants, Nightclubs, Catering, Bars, etc.,
4. Entertainment: Tourist Guides, Shopping, Casino and so on.
5. Other Connected Industries: Online Travel Agencies, Financial Services, Educational sector and more.
Challenges in Travel and Tourism
Listed here are some of the challenges faced by the travel and tourism industries over time.
1. Lack of Transferability
Some airlines encourage their users by a loyalty program called Frequent flyer points (FFP) that allows users to accumulate their points by taking their flights. Users can save these points for their air travel or any other rewards.
This FFP is one of the most popular things with long-distance flyers and airlines as it pays a way for repeating the business. The main issues are that many airlines are not willing to accept the FFPs of other airlines.
2. Improper Baggage Tracking
The Baggage management system in airlines is similar to the supply chain process where the products/goods that are transported are nothing but luggage of travelers.
This seems to be a complex process in every international flight in which a piece of luggage processing is carried out by several different organizations. This may surely constitute a point of failure or misplacement.
3. Difficulty in Identification Process
On these days too, there occur flight delays due to the long processing of travel documents during many air or sea travel. Even though there are many technologies to reduce the manual checking of documents the length of the queues in airports is not yet shorted.
4. Lack of Payment Security
As there are uncountable flights taking off from various airports and uncountable people makes their travel every day, there are huge payments carried over the travel industry. Hence there is a chance of untraceable payments and which makes it worse to secure back the money.
Overbooking is processing through which some airlines sell more tickets than the number of seats available on the flight. This involves a middle man who helps the travelers to book a seat and it requires at least 15% commission fees.
There are also many other challenges in this travel industry such as settlements between operators, lack of reputations, policies and lot more.
Blockchain in Travel and Tourism
There should be collaborations between airlines and hotel management for maintaining their whole process involving reservation systems. Many global experts also suggest that there is an essential to collaborate travel industry with both Global Distribution Systems (GDSs) and Online Travel Agencies (OTAs).
These collaborations can make the process of travel and tourism industry more tedious. Thus Blockchain Technology, a decentralized distributed ledger technology can make the whole travel and tourism industry more securable and transparent.
As implementation of blockchain has made the process so simple in many industries such as Healthcare, Education, Banking, Insurance and lot more. Applying Blockchain Technology in the travel and tourism industry will also be the best choice to eliminate the risks faced and help in making a digitally smart globe.
Look at the video below to get an idea about blockchain can make the travel industry a better one.
Source : Amadeus IT Group
Benefits of Using Blockchain In Travel and Tourism
1. Decentralized Booking
By using Blockchain Technology in Travel and Tourism, we can make a decentralized booking system through which travelers can book flights directly with airline service providers. This reduces the problem of Overbooking and this decentralized booking method can offer a better experience for the customers.
2. Eliminations of Flight Delays
When blockchain is implemented in the travel industry, the complete details of travelers are stored in the public ledger and the airlines can access all the documents of the travelers when they enter the airport. This eliminates the long queues for the authentication process, in turn, reducing the flight delays.
3. Secured Payments
As blockchain is a decentralized ledger technology, the payments through this network can be more transparent and secure. The travel industry can also make use of this technology and also can accept payments using Bitcoin and other cryptocurrencies for customer engagements.
4. Trouble-free Baggage Tracking
The biggest issue faced by the travel industry is missing baggage. This loss of baggage is due to handling the baggage by various parties. This issue can vanish the whole reputation of the travel company.
Thus the use of blockchain technology can enable a decentralized and transparent system for Baggage Tracking which relays on smart contracts and it is automated.
5. Loyalty Schemes
Many airlines involve customer loyalty schemes for encouraging the return customers. Thus the use of blockchain technology can also simplify this process, which allows customers to easily access information about tokens and loyalty points. This also helps in reducing the fraudulence activities.
There are a lot more benefits when blockchain technology takes over the complete processing of the travel industry. Thus, this distributed ledger technology can make travel and tourism more simple and safer.
Well-known Travel companies utilizing Blockchain Technology
Let us here look at the topmost travel companies that started implementing blockchain technology in their processing.
1. Winding Tree
Winding Tree with the help of its LÍF token connects travelers directly with service providers which minimize the cost of associated fees. The use of smart contracts and ERC827 protocols deliver the best savings for the travel industry and reduces the unnecessary fees to the booking process.
Source : Winding Tree
Winding Tree platform is being the foremost example of baggage tracking via blockchain. Thus Winding tree provides easy, safe, secure and transparent travel services for their customers.
One of the key factors that travel industry uses for retaining their customers is loyalty program. Sandblock is aiming to improve the customer loyalty programs by using blockchain technology. Sandblock is creating a much more customizable token for all travel companies to make their loyalty scheme more effective.
Accenture in collaboration with the World Economic Forum has introduced the Traveler Digital Identity System. This is a blockchain-based identification system, in which the traveler's informations are stored on the distributed ledger. This helps airports in accelerating the process of document verifications more faster, thus reducing the lines in the airports.
Travelchain is looking forward to set a pattern with this blockchain technology to make an open-source system to manage the data of the travel industry. The data of the travel industry in turn implies the data of the travelers. Thus this system will track and keep safe of all the travel data and users will receive tokens as compensation for sharing data.
Top Blockchain Projects on Travel and Tourism Industry
Here are some other blockchain projects that are working for the betterment of the travel and tourism industry.
1. Trippki, a blockchain-based project that aims to create better customer loyalty schemes in the travel and tourism industry.
2. ShoCard and SITA is a project which is in its early stage that proposed to improve Identity management in the travel industry through blockchain.
3. Krispay, a digital wallet allowing Singapore Airlines customers to turn their FFPs into payments which are developed by KPMG and Microsoft.
4. Lockchain, being a direct market place for many hotels, airlines and more. It uses the decentralized system for payment, property management, booking process and lot more.
5. Bed-Swap, launched by TUI is able to move inventories between various points of sale and selling margins.
Future of Blockchain in Travel and Tourism
Traveling should be comfortable, enjoyable and also cost-effective. The issues like fees, bad reviews, booking irregularities and lot more makes travel worse and also a bad user impression over the complete travel industry.
The use of blockchain technology is the first step that the travel industry has taken to improve its processes. The utilization of this technology for the betterment of the travel industry is only in the infant stage. There takes much time to identify the changes in these applications, but the first mover to implement this technology will experience the changes and benefits sooner than others.
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