It’s a technology that boasts a quarter-trillion-dollar industry gradually growing in importance, but why should the travel sector join the blockchain craze?
Put simply, travel needs new technology to update old ones and to fix inefficiencies, according to Troovo CEO Kurt Knackstedt. And blockchain could be the answer.
At its most basic level, blockchain is a chain of digital blocks of information stored in a public database. These blocks store information about transactions like date, time and payment amounts.
The key difference between blockchain and regular payment models is that it is decentralised and nearly impossible to crack.
“There are a huge number of applications, practical and strategic, with respect to blockchain from a travel perspective,” Knackstedt said during his presentation at the Travel Tech. Summit 2019 in Sydney last week.
While the improvements a decentralised business model can offer are abundant, the main benefits in travel include improving trust with consumers, reducing intermediaries, increasing fraud resistance, transparency and robustness, and reducing friction.
Blockchain could also enable travel companies to return to customer focus by shifting the emphasis away from “grunt work” and cost-inflating models, Knackstedt explained.
“That middle-man model needs to evolve. Middle services are in industries because of inefficiencies … and we think there is a lot of application for blockchain to help make some of those inefficiencies less of an issue for the industry,” he said.
“Ultimately, if we can find ways to remove inefficiencies, then we can redeploy that capacity in other areas, which is more beneficial to our end customers.
“When people in the industry are afraid of technology because they’re worried it’s going to replace their role, the challenge is whether their role was relevant still in the first place.
“Because if there is a way that technology can make that role not all about churning out grunt work, and rather servicing the customer, which is the ultimate responsibility of the travel industry, isn’t that a better thing?”
A range of existing efforts to incorporate blockchain are ongoing in the travel industry.
Webjet is currently working alongside Microsoft to incorporate it. TUI Group and Blockskye are working with ATPCO, and Smart Hotel Rate with Troovo and Consensys. While major German airline Lufthansa and French national carrier Air France are working with open-source travel distribution platform Winding Tree.
In November, minor German carrier Hahn Air became the first airline in the world to issue a real-world ticket enabled by blockchain technology, utilising open-source travel distribution platform Winding Tree.
Hahn Air is also the first airline to fly passengers holding blockchain-powered tickets.