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Blockchain and The Hospitality Industry: The Latest Buzz

Never-before-seen levels of efficiency and opportunity are opening up within the hospitality industry through the advent of blockchain. This latest buzzword of the moment is living up to its hype thanks to the  tangible benefits it offers to guests and businesses, from both corporate groups to smaller independent hotels.

As Atlantis the Palm in Dubai becomes the first hotel in the world to offer a blockchain-based payment system onsite, the industry is coming to recognise the watertight security, not to mention productivity benefits of having guests charge all their transactions to a single incorruptible digital ‘wallet’ that is ‘always on’ and viewable by all parties. When this instant, cloud-based payment system is integrated with third party entities around the city and beyond, suddenly every transaction becomes an opportunity to understand more about our customers’ behavior and to work in partnership with other touchpoints in the value chain to deliver a seamless, integrated country and even worldwide guest experience. This is being described as next generation CRM at its best and now is only just the beginning.

In early March, His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the Crown Prince of Dubai announced the creation of a huge and fully blockchain-based marketplace for tourism and the hotel business. According to a government press release, the marketplace will become fully functional in only two years from now. A smaller-scale project is also being developed in Australia.




What is blockchain?

Blockchain is a ‘digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly’. Put simply, blockchain is Google Sheets compared to the old system of updating a word document and sending it to another party to be edited. Google Sheets updates the document for both parties in real time, with no locking out process. Using a blockchain based payment system, any transaction of value can be deducted from this cloud-based ‘coin purse’ as long as all terms are met and there is sufficient credit available.

*Blockchain via Google Docs analogy courtest of William Mougayar, Blockchain Specialist, Toronto.

What are the benefits of Blockchain to the hospitality industry?

> Guests pay for services effortlessly

> Even overseas settlements and transactions are frictionless

> Loyalty programmes can be automated and driven by behaviour

> With a trusted, direct billing and payment system in place, third-party involvement such as OTAs may soon be surplus to requirements, thereby reducing room costs for guests and commission paid by hotels to OTAs themselves.

> OTAs that continue to drive traffic and rankings for hotels can also integrate within the blockchain. This would involve scanning for available hotels based on customer preferences and deducting credit from the same digital wallet once booking terms are agreed.

> Personal information from traveller ID to baggage tracking to loyalty points can be accessed from within this single decentralized ecosystem.

> Conversely, any room damage or service payments that are unfulfilled on the part of the guest can be deducted automatically even after check-out.





What are the latest examples of blockchain in the hospitality industry?

TUI Bed-Swap: TUI, the largest tourism company in the world launched ‘Bed-Swap’; a blockchain system that prioritises hotel accommodation to online booking markets where demand and margins are highest.

LockChain, is a direct marketplace, powered by blockchain technology, which allows hotels and other hospitality companies to rent out their property. The decentralised booking engine cuts out ‘middlemen’ and operates with a zero percent commission policy.

Trippki: This loyalty reward system cuts out third-party involvement and provides a direct connection between hotels and customers. Customers are rewarded with native ‘TRIP’ tokens for staying at a hotel, or using hotel amenities. The TRIP tokens are recorded in the ledger, do not expire and can be used to book future visits, or can be exchanged for cash.

BeeToken, connects customers with hosts and allows customers to arrange and pay for stays. Its peer-to-peer transactions mean that no commission is charged.

Winding Tree: Airline companies, including Air New Zealand and Luftansa have already entered into a partnership with the platform, with advantages including blockchain booking and baggage, a lack of third-party involvement with booking procedures, and greater transparency and trace-ability when it comes to baggage tracking services.

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