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Exclusive: Blockchain making itself at home in hospitality

Hotels are offering a less costly alternative to book rooms and become a loyal and repeat customer. Here's the catch.

Millennial travel is valued at more $200 billion annually, and the answer to cracking this market rests in blockchain technology Blockchain is perfectly positioned to increase Peer-to-Peer (P2P) communication and better customer incentivizing methods via tokenization Loyalty reward programs using blockchain technology simplify the process, making it easier for customers to access their points, and redeem them using digital tokens

A major pain point among hoteliers is data held by global distribution systems (GDSs) that can be expensive and inaccessible. Amadeus, Sabre and Travelport have an essential monopoly over GDS which in 1980 brought about a revolution in the tourism sector.

Now blockchain technology is the new revolution in that it inherently provides easy to access data at a low-cost, making it the unquestionable and most attractive option for the industry. 

According to Forbes, the current market for Millennial travel is valued at more $200 billion annually, and for many entrepreneurs and potential disruptors in this space, the answer to cracking the Millennial travel market rests in blockchain technology. 

"Blockchain technology start-ups that utilise distributed ledger solutions have not yet been disrupting the global tourism and travel industry to a large extent. In future, companies will successfully leverage Machine Learning Algorithms to efficiently create high end/bespoke/one of a kind travel itineraries that are tailored to each one of their prospective customers. Startups such as Stitch Fix, HelloFresh and others who have used technology to change how clothes and meals are purchased are clearly showing how they have been successful," Benjamin Boesch, Head – Digital and eCommerce, VFS Global, told AMeinfo.

How does Blockchain impact hospitality? 

The goals of blockchain technology in the hospitality/hotel industry are to eliminate third-party costs and interact directly with consumers. 

Blockchain is perfectly positioned to increase Peer-to-Peer (P2P) communication and better customer incentivizing methods via tokenization.

$2.1 billion has been spent globally on blockchain solutions in 2018 in all sectors, according to Pebble Design, creator of hotel and tourism websites. 

Just like any blockchain solution, secure payments is one of the first application of blockchain in the hotel industry offering transparent, safe, and a global ledger where payments can be streamlined and associated costs for hotels reduced, according to Revfine, a prominent Blog for Hotel, Hospitality and Travel Industry.



Graph Courtesy of MindTree

Revine also identifies loyalty reward programs using blockchain technology, simplifying the process, making it easier for customers to access their points, and redeem them using digital tokens that act as cryptos to make encrypted purchases anywhere, any time.

What value proposition does blockchain bring to travel and tourism?

“If you have the possibility to lower the cost for each and every reservation, that is a good thing. (Blockchain ) is also a way to gather all the competitors and airlines into one chain, and then you have a totally new distribution channel that doesn't cost what it costs for bookings and and those kinds of things,” Christian Lunden, Director of Future Business at Nordic Choice Hotels, told AMeinfo.

Examples of Blockchain usage in hospitality

TUI, the largest tourism company in the world, launched ‘Bed-Swap’ which uses blockchain to assess demand data and move inventories between different points of sale, in real-time.  

Trippki, meanwhile has launched a blockchain-based loyalty system, cutting out third-party involvement and directly linking hotels and customers, earning users TRIP tokens for staying at a hotel, consuming hotel amenities or leaving good reviews.

Webjet is piloting hotel room inventory on the blockchain, to collect exponentially more data with each booking and ensure prompt and complete payment to all parties.

Blockchain's potential for the hotel industry

Mindtree deliverers of digital transformation and technology services, say Blockchain in Hospitality can streamline Supply Chain Management. 

Mindtree said ‘Vendor Management’ within organizations is usually a centralized function aiming to manage a consistent system of records pertaining to the identity and reputation of vendors/suppliers. 

“A Blockchain based solution could provide coherent data persistence across a distributed system where records can be secured cryptographically using secure identities,” reported Mindtree. 

“Additionally, smart contracts can be used in conjunction with Blockchain to ensure relevant business rules are enforced both during the order and payment cycles for each purchase order.” 

When it comes to ‘Customer Identity Management’ using Blockchain in Hospitality, leveraging the identity of customers to personalize interactions with them can significantly elevate their experience, according to Mindtree. 

Guest check-in into the hotel with only his/her smartphone is now possible with the advent of Blockchain technology where each client is assigned a private key to transact with and provided a dynamic time-sensitive token pushed to the mobile app on the guest’s smartphone, concluding the check-in process. Using smart contracts and rooms equipped with Near Field Communication (NFC)-enabled smart lock connected to the underlying Blockchain platform, information is shared allowing guests to interact with various assets.

Challenges faced

“What we're seeing is that once several network members come together to use the blockchain, we are seeing the challenge around governance models. Questions are rising around ownership, particularly in relation to data – intellectual property, dispute resolution, the application of smart contracts and the agreement on the specifications of their contracts between the network members," Zeina El Kaissi, Head of Emerging Technologies and Global Partnerships at Smart Dubaitold AMEinfo.

"Also, funding becomes important. Who is going to be funding any infrastructure-related funds or shared services that you need as part of the blockchain application?” she asks.


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UAE hotels on the blockchain

Dubai's Atlantis rolled out a blockchain system that gives guests either a wristband or a digital wallet to charge all their services during their stay. It deployed the Lucid Pay smart settlement, which will enable guests to pay for services, activities and amenities at the hotel in a secure and easy fashion, reported

The solution will also be able to support loyalty applications, ITP said.

Guests will be able to recharge the wristbands through the wallet application, available for iOS and Android, or through charging stations at the resort.

In the future, it is planned to extend the payment system to third-parties, so that guests can pay for events and services at other venues and charge them to their hotel bill, according to ITP.

Meanwhile, Hotel Caesars Bluewaters Dubai rolled out a blockchain-based payment solution which will allow its staff to pay for their allowances using a digital wallet.

Lucid Pay solutions equips staff with a digital payment solution that allows them to use their allowances at the hotel's F&B and entertainment outlets, according to ITP. 

The smart platform is integrated to streamline the staff allowances and discounts within the resort in an efficient, secure and effortless manner.