Let’s face it, blockchain technology is growing by leaps and bounds, and there are no signs of it slowing down anytime soon. In past couple of years, it has significantly shaken up virtually every industry, and hospitality is no exception. Although the tech is still in its early stages, it has opened new doors of opportunity for hotels, restaurants, travel agencies, and other hospitability businesses to improve service quality, maximize earnings, skyrocket operational efficiency, and reduce management costs.
The technology offers gazillions other benefits, including more efficient payment processing, real-time collaboration, secure transactions, transparent supply chain, greater potential of loyalty programs, and much more. Taking all that into account, major industry players like Lufthansa, CitizenM Hotels, Singapore Airlines, TUI Group, and JetBlue are investing heavily in this technology and hiring proficient blockchain developers for building blockchain-based platforms.
So, if you’re into hospitality and want to know what blockchain has in store for you, then keep reading — you’ll definitely come away with some useful insights.
Keeping everything aside, my personal advice for you would be to buckle up and sit tight as it’s gonna be quite a ride!
A Quick Rundown: Why Hoteliers Ought to Have Blockchain on their Radar
A blockchain-integrated system has the following advantages over traditional GDS (Global Distributed System) and OTAs (Online Travel Agencies):
Thanks to its decentralized and transparent nature, blockchain eliminates OTAs, the third party sites that charge up to 25 percent of the booking revenue per guest.
You no longer need to rely on intermediaries such as Travelocity, Expedia, Trivago, etc. to bring in new guests and generate bookings.
With blockchain comes an array of new business opportunities in the form of baggage tracking, loyalty schemes, secure payments, traveler ID, and more.
You can reach out and connect with your customers directly and effectively, thus cutting the middlemen’s profits.
It allows you to present and promote your available inventory to your prospects without requiring systems that aggregate data on flights and rooms, thereby saving you some valuable dollars in the long run.
There’s no room for misinformation or trickery, as once an entry is made on a public blockchain, it cannot be altered or removed.
Is Blockchain Really worth the Hype or is it Just an OTA Killer?
With Online Travel Agents (OTAs) taking the lion’s share of the market, hoteliers have a good reason to adopt a new technology like blockchain for their business operations, which could serve as an ideal replacement for their traditional business model.
It’s already proven how blockchain rolls out trusted intermediaries from the picture, but the question is, does it do any more good than just being an OTA killer? Well, my friend, you’ve no idea what blockchain is capable of. Let me brief you a bit about this evolving tech. Besides helping you eradicate third-party costs, there are countless other ways in which blockchain can be used in the hospitality industry.
Tracking Guests & Food
Using Blockchain, hoteliers can instantly update their rooms from the time a guest makes a booking, leaves his dwelling for the airport, boards the flight, till the time he arrives at the hotel. This tracking facility can significantly increase efficiency by reducing wait-time during check-ins and check-outs, thus increasing client satisfaction and enhancing the hotel reputation in the marketplace.
Also, it is possible to track guests’ movements; however, that might be considered as an invasion of their privacy; accessing such information will require the guest’s consent. Furthermore, with blockchain-based supply chain management systems, restaurateurs can easily track and monitor food, thereby maintaining transparency and authenticity.
Smart Contracts
Businesses involved in hospitality can implement smart contracts to facilitate transactions (both major and minor). It could help them streamline their business operations and relationships. Just like a legal contract, a smart contract between the two parties, for example, a hotel and travel agency, contains the contractual provisions that both the associates have agreed upon.
Each transaction is recorded and shared on the blockchain. The payments, based on contractual terms, are processed once the transactions are recorded on the network. Likewise, franchise agreements and management contracts can be carried out using smart contracts, based on the predetermined governance guidelines, which could possibly eliminate avertable conflicts and increase efficiency.
Moreover, with blockchain comes the concept of digital IDs, which are assigned to guests along with a digital key that can be recorded in the blockchain database once the payment is received. The best part is that both digital IDs and payment information are encrypted via secure codes, which plummets the chances of theft or embezzlement.
The applications of smart contracts are not just limited to hospitality, they can be extended to other industries as well, including car rentals, healthcare, real estate, and so on. If you’re planning to hire skilled blockchain developers in India to incorporate smart contracts into your business model, then you don’t need to look any further. Visit the company website for more information.
Better Loyalty Schemes
It’s no secret that customers adore loyalty programs that offer rewards and points. Whether it’s a hotel, restaurant, airline, or travel agency, all have different schemes that play a crucial part when it comes to driving return business and keeping patrons happy & engaged. These businesses rely on outdated systems and ideologies, with the majority simply offering points in return for purchases.
Without a doubt, some schemes are better than others, but the biggest downside of this approach is that plenty of points are often left unspent, possibly because customers are exasperated by the lack of leeway and the restrictions applied on spending these points. Blockchain technology can be used to enhance the quality of loyalty programs. It simplifies the process and makes it easier for your clientele to access their points and redeem them.
Using this tech, you can distribute rewards through digital tokens, which could potentially be redeemed or used anywhere, and at any time. Unlike loyalty points, digital tokens, also referred to as loyalty tokens, are free and are offered without any financial compensation from whoever acquires them. To put it another way, customers can freely buy, sell, or exchange their digital tokens with anyone they want.
Blockchain in Action: 5 Real Life Examples in the Hospitality Industry
The California startup Loyyal is a perfect example of how blockchain can be used to improve the quality of loyalty programs. They’ve built their loyalty and rewards platform using blockchain and smart contract technology, which helps them reduce fragmentation in the loyalty business and makes it easy for businesses to partner.
Another good example of a blockchain-integrated loyalty reward system is Trippki, which is powered by a crypto-token called TRIP that provides a whole new level of customer experience and doesn’t require maintenance on behalf of the hotelier.
ShoCard & SITA is a great example of how customers’ ID details can be stored on the blockchain, allowing hospitality businesses to retrieve and verify a guest’s ID any time they want.
Winding Tree, an open source, decentralized booking and inventory (plus baggage) tracking system that works flawlessly without any third party involvement. Different airline companies like Air New Zealand and Lufthansa have already formed an alliance with the platform.
Last but not the least, blockChain, the first blockchain-based marketplace that can be used for booking hotels and private accommodations. Here’s the best part: it involves no fees and commissions, which means hosts and travelers can transact directly without having to involve any third party or middleman.
Isn’t that awesome? Imagine… Direct dealings between parties without any human intervention. No more annoying invoices. No more delayed payments. No more concerns related to cash flow.
What else do you need as a hotelier?
Unlock the Untapped Potential of Blockchain Technology
With each passing day, more and more hotels, restaurants, and travel agencies continue to bet big on blockchain’s bandwagon. Long story short, the tech has a lot to offer as far as the hospitality industry is concerned. But does it have the same potential applications for other industries as well? Well, we’ll cover that in our next blog post, so stay tuned for that.
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