In this article on “How BlockChain Can Radically Change Travel” we look at two articles one by Skift that goes well below the surface of how to get more direct bookings. In-face we look at a chain of action and technologies that are soon going disrupt the entire travel bookings landscape. It will make it possible for hotel to completely bypass the OTAs and be readily available for travelers.

This can breed new life into direct bookings for hotel. It will help news startups like Travify and PersonaHolidays to establish new, easily accessible ways for travelers to search, find and book hotels directly by-passing entrenched distribution with innovative alternatives hooked into blockchain for distribution and payment.

Travel startups have a huge hurdle in competing with established distribution like the Online Travel Agents (Booking.com, Expedia etc). Blockchain and its application, including Bitcoin and Ethereum are seen as a massive disrupter of the status quo in travel distribution. This status quo is not innovating and growing out of touch with current travel needs for personal and authentic spot on recommendations that reflect their mood, style and personality. See travelers frustrated with traditional systems

Beyond Rate Parity

Blockchain is the core to Bitcoin and more to come. What that may mean is that hotels may in the future be able to throw out their Rate Parity and restrictive clauses that tie them up and inhibit direct sales. They may just compete as a supplier using the new system of connection, distribution and payment inherent in Blockchain.

Similarly Tnooz writes about the emperors new chains. A play on blockchains as the emperors new cloths. but actually he really had none. In some way BlockChain is stripping away the fabric of distribution.  The Tnooz article is liked here as it gives a foundation to understanding the concept of transaction and what might be the new fabric of distribution in the future.

But lets start by curating from Skiff what we think is the key idea that will disrupt tourism marketing and travel.

https://skift.com/2017/08/07/channel-shock-the-future-of-travel-distribution/

Consider the example of a fledgling travel booking startup trying to break into the industry which can’t because it needs to negotiate for access to a global distribution system to access content and pricing information.

Cost of Entry is a Killer

The cost of accessing the system can kill a startup that isn’t well-capitalized. There’s also the matter of industry politics,
important for getting access to global distribution system content; too disruptive a concept, and your company may be denied access.

How Blockchain Helps Hotels and Tourism Operators

A blockchain-based platform can eliminate this challenge, allowing travel companies to list their products and sell them on a platform offering a lower distribution cost than a traditional GDS, and anyone
can buy the tokens needed to participate in the marketplace.

Fritz Joussen, CEO of TUI, belives that Blockchain technology will dominate travel marketing and B2B within five to ten years. It could potentially “change the internet”.

His previous comments about Blockchain heralding the end of the road for Booking.com and Expedia grabbed the headlines early in 2017.  Blockchain, he says offers non-discriminatory access to everything”.

See more like this at https://www.tnooz.com/article/tuis-blockchain-initiative-blips-ibm-radar/

Its more that technology it’s a fundamental shift in the business model

“What we’re replacing here is not just the technology,” said Izmaylov. “It’s not just to decentralize the marketplace. What we’re proposing is a change in the governance model. Today, for example, we have a bunch of different players. We have IATA. We have, of course, Sabre and Amadeus, which were created by a group of airlines. The fundamental problem with
those organizations is they can innovate once a year or in the case of IATA, for example, once in five years. It just doesn’t make any sense. That’s why the industry is 10 years behind, and that’s why I’m saying that the whole system has grind to a halt.

Traditional Systems Lack Innovation

“We need to radically change and rethink how we innovate. We need to decrease the feedback time between what customers, travelers, or businesses around the world actually need, and what anyone who can
produce good software can deliver. That’s what we’re changing here, sowith Winding Tree the idea is that one part of that platform is the actual marketplace, where suppliers of travel can create their
inventory, can sell their inventory to travel agents, which could be a mom and pop shop, or a website, or an iPhone app. Doesn’t matter. It’s just a set of APIs.”

For more on the mechanics of bitcoin and blockchains see:

The emperor’s new chains- Tnooz

Now that is a heavy article that digs into the how and explain transactions in technical terms. The point I get from it is reposted here. Namely that its not trivial, it takes a lot of resources and its a hog on energy. All that must change for it to fly.

“The Bitcoin network currently has an annual power consumption comparable to that of Ireland, which is being paid for by ‘miners’ because it is backed by a cryptocurrency and it is currently profitable for them to do so.

All of this should give you pause for thought when weighing up proposals for distributed marketplaces or supply chains based on Blockchain that could operate at the scale and speed required in the travel industry.”

As two prominent Blockchain tech researchers, Michael Mainelli and Alistair Milne, state in a research paper “The impact and potential of blockchain on securities transaction lifecycle“:

“Current interest in mutual distributed ledgers has established significant momentum, but there is a danger of building unrealistic expectations….Understanding of the technology lags well behind the hype….Blockchain technology seems to promise major change for capital markets and other financial services, but few can say exactly how or why.”

So while we see the potential it is goo to keep an eye on the cons before we jump to con-clusions.

Here is a good description on what it is. By Bettina Warburg · Blockchain entrepreneur and researcher

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