You’ve probably seen the word “Blockchain” dancing about the internet recently, usually followed by something to do with the regulation of bitcoin or cryptocurrency…. But what actually is it?
Katherine Grass, head of innovation and ventures at Amadeus (she knows all about it), explained it this way: “Blockchain is a technology of how to move information from A to Z in an efficient and encrypted way to help streamline and protect the process.” (Have a look at the diagram below for a bit more info)
So that’s what it’s for! Glad someone told us… But how does it affect the travel industry?
Well, this youthful technology has led industry leaders to believe that this does, in fact, have some potentially valuable application to the world of travel *gasp*.
Following a recent talk on the stage of the 2017 Phocuswright Conference this month made by Norm Rose, some interesting points were made about the future of this technology for the travel industry. Rose stated “Outside of payment settlement, blockchain will likely be able to help combat fraud in the travel industry”.
Blockchain won’t completely eliminate fraud, but it will help reduce it massively. This isn’t the only application this technology has….
We could see advancements in improved baggage tracking and identity management. It could also make loyalty and referral schemes more user-friendly by making it easier for suppliers to partner with each other and transfer loyalty points.
So, although Blockchain has effectively cut out the middleman with its application for bitcoin, it serves to hand new opportunities to the middlemen of the travel world, the OTA’s and GDS’s.
Excellent news, so when is the big switch? How come I haven’t had a thousand startups offering me a new secure blockchain integration, promising a secure-payment-utopia while protecting my company and customers from the invisible ever-apparent fraudsters?
Well, the tech is still very young and in this case slow. According to Rose “Three to four bitcoin transactions per second can take place on blockchain. On the other hand, it is possible to process 2,000 credit card transactions per second.” Ahh, some work still needs to be done.
Grass and Rose both predict that this technology will become important and have a major use for all sectors in about 4-5 years. The technical bods need time to grow. Fantastic news and further proof that technology (as we’ve spoken about here) is inciting huge change for travel, we just have to wait.
Another question that hasn’t been raised by the experts is the possible involvement of using bitcoin for travel. Now, they’ve probably been reluctant to do so because of all the negative stigma and media attention associated with the online currency.
Nonetheless, Bitcoin continues to combat its sceptics with insane growth (that showed them, ha.). Bitcoin has real potential to push travel organisations through international bookings. It avoids all the difficulties when it comes to exchange-rates and saves on cost by completely voiding the central bank (middleman) necessity, not to mention the marketing possibilities and the appeal to the currencies birth generation, millennials.
It’s something we are looking into at Gomingo and we’re sure others like us will be too. Looking to the future is becoming more and more important in the travel industry. Change is on its way!
What is your view on blockchain and bitcoin being incorporated into travel? A good idea in concept? Let us know in the comments.