How blockchain is revolutionizing the travel industry
Though often associated with the bitcoin and other cryptocurrencies, blockchain – the technology behind the digital currency – is promising to disrupt many other industries.
One industry that the technology is looking to revolutionize is the travel space. Anyone who travels is known to the myriad of inconveniences that can often arise. From excruciatingly long security lines, scrambling for your identify documents, to being asked to give up your seat because the airline has overbooked.
On top of this, there is the problem of fraud within the travel industry, costing around US$4.8 billion per year.
But blockchain can resolve many of these issues for both consumers, travel merchants, and for security-concerned governments. Let’s take a deeper look:
Identification services are immensely important to the travel industry. It has been estimated that up to 40 million travel documents are reported even lost or stolen in recent years. Can blockchain solve this problem?
Through the technology, the identities and travel documents of individuals can be recorded safely and permanently stored. With a simple click, these details can be accessed, totally eliminating the need for travelers to carry around and produce these documents several times during their journey.
A common use of blockchain technology is the development of solid, immutable contracts between businesses. And for the travel industry, this represents a huge advantage.
For instance, a variety of data can be stored on the blockchain including transactions between travelers and travel merchants, loyalty programs where travels can earn points, commission agreements between airlines, hotels and booking agents.
When everything is permanently recorded on the blockchain, this eliminates the probability of hidden fees or unexpected changes to their booking.
This is one of a traveler’s worst nightmares- being the last person at a conveyor belt and coming to the slow realization that no matter how many times that belt goes around, your bag isn’t coming.
Considering the amount of money some airlines are making from additional baggage fees, the ability to keep passengers luggage safe is a common problem. Research from SITA on the state of baggage handling around the world found that 21.6 million bags were mishandled in 2016.
Blockchain technology can be very useful in tracking the movements of luggage by using a decentralized database where tracking data can be shared between companies.
Travel is one of the most favorite industries of fraudsters. Last year alone, 55 million consumers made hotel bookings through websites operated by fraudsters. Such misleading bookings cost a whopping US$6 billion.
Fortunately, blockchain can be utilized to fight against the fraudsters, enabling the verification of properties. With all transactions on the blockchain being final and immutable, this significantly reduced the risk of fraudulent activity when making transactions.
The problem of overbooking
This can be a serious problem within the travel industry- remember the guy who was dragged off a United Airline’s flight last year?
Every day, many travelers face having to give up their seats due to an airline making an error of selling too many plane tickets.
Blockchain will give passengers a greater sense of security, with their reservations being securely stored in a block, and airlines will be pressured to hone in on the practice of double-booking.