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Shake up the tourism industry and cut costs

The word “blockchain” is no longer perceived as exotic and super innovative, also because large companies have found various uses for this technology and customers have started to understand how it works. In addition, the increasing acceptance and popularity of blockchain technology has led to many projects using the technology exclusively for marketing purposes since 2017. The tourism industry is no exception.

Some of the initiatives related to the use of the blockchain for travel have not been implemented, and in some cases it has been shown that most decentralized travel projects have nothing to do with the actual use of the blockchain in tourism. For example, Startup Beenest promised to set up a decentralized, mediating network of hosts and guests during an ICO. The project appears to have been canceled based on user comments on the project’s official subreddit.

Meanwhile, the experience of other companies has shown that blockchain remains an immature technology and is inferior to the more traditional ones. For example, the decentralized FlightChain platform, which recorded more than 2 million flight changes between British Airways, Geneva Airport, Heathrow Airport and Miami International Airport. It turned out to be more difficult to use than cloud-based data services.

Shake up the tourism industry and cut costs
Shake up the tourism industry and cut costs

The good news is that there are solutions that major travel companies recognize as promising are passed at the state level, mainly in relation to air travel and the hotel industry.

Elimination of intermediaries and brokerage commissions

According to a report from SITA, an aviation communications and information technology provider, 59% of airlines are conducting pilot or research projects to integrate blockchain into their internal processes by 2021. The airports are continuing their experiments with the airlines: 34% of them plan to complete research and development in this area by 2021. A survey conducted by the consulting firm Accenture in 2018 showed this 86% of the defense and aviation companies planned to introduce this technology in the next three years.

And here, the blockchain can be used for a variety of purposes – from passenger identification to ticket sales, baggage tracking and administration of loyalty programs. Each of these use cases improves collaboration between industry stakeholders.

Today, Airlines and airports are increasingly fed up with data silos and cross-departmental infrastructure. The biggest obstacle to comfortable and efficiently organized passenger traffic is the isolation of the work processes of airlines, airports, ground handling specialists and regulators. Flight delays or overbooking, the consequences of this management model, can cost companies tens of thousands or even hundreds of thousands of dollars. So, How can blockchain try to solve this problem?

The way out is to eliminate intermediaries by providing a peer-to-peer network. For exampleS7 Airlines, one of the largest Russian airlines, issues and sells tickets using blockchain technology. In particular, it uses a private blockchain based on the Ethereum protocol and uses intelligent contracts for data exchange between the parties, reducing the processing time between the airline and the agent from 14 days to just 23 seconds. The platform is currently being actively used and is based on data that S7 published in 2019. The monthly transaction volume processed via the blockchain exceeds $ 1 million.

S7 Airlines was the first airline to use blockchain infrastructure for payments from start to finish – from the ticket reservation system to the bank’s payment system. In a press release S7 found that the introduction of the platform made it possible to increase the speed of transactions and reduce the paper workflow, while at the same time ensuring the security of operations. Jennifer Willy, editor of Etia.com – a platform that provides the travel community with the latest travel-related information and information – told Cointelegraph:

“Blockchain technology has reduced transaction costs by up to 20% when booking consumer tickets. Several airlines, including Air New Zealand, have used this technology to help them avoid over-shipping, simplifying the process and performing fast and secure payments. “

Last year, Hahn Air, another airline, also partnered with Winding Tree, a blockchain-based travel sales platform, to issue airline tickets.and you have already made your first flight with these tickets. Hahn Air will use the Winding Tree platform to create inventory, manage reservation requests and accept payments. Winding Tree has also entered into agreements with numerous well-known airlines, including Air Canada, Air France-KLM and Lufthansa and their subsidiaries Eurowings, Swiss Air Lines, Swissport, Brussels Airlines, Austrian Airlines and Air New Zealand.

Winding Tree has also found a way to avoid hotel service fees. The team says that has created a special blockchain platform that allows people to make transactions without incurring third-party commissions. Although some transaction costs remain, they are not comparable to current services such as Expedia, Booking.com and Airbnb, where agency fees can range from 10% to 30%.

Last year, Hotel Hobo in Stockholm, a member of the Nordic Choice Hotels group, made a reservation for a public blockchain and made the first transaction through Winding Tree. In addition, the tourism giant TUI has earlier moved all contracts to a blockchain. His BedSwap project, created in 2017, supports hotels with additional inventory and enables all authorized parties to track prices in real time and work directly with the hotelier. This system makes intermediaries like Expedia redundant and therefore cheaper for both sides.

Delayed flight or overflight? Blockchain compensated

French insurance company AXA has been using blockchain since 2017 to automate the process of paying compensation to passengers on delayed flights. When a customer signs up for flight delay insurance with the insurance company, their “bubbly” platform creates an intelligent contract and connects to global air traffic databases. S.In the event of a delay of more than two hours, compensation is automatically granted, so that no more claims have to be made and the processing time for applications is reduced.

In order to optimize the overbooking compensation experience, software developer Volantio started its “Flex-Schedule” program. The solution is now used by United Airlines and helps solve cases where a passenger is removed from a flight because the number of passengers exceeds the number of seats.

In case of overbooking, The system automatically selects flexible customers for whom a flight change is less critical, sends them compensation and assigns them a new flight. This in turn maximizes the profit for the airlines and enables them to sell highly profitable seats to last minute passengers.

Digital identity of the well-known traveler

Waiting at the airport and customs clearance can overshadow any trip, but Accenture has developed a digital passport for travelers. Canada and the Netherlands were the first countries to approve the use of this system at their airports, including Air France-KLM and Air Canada. It has been reported that the blockchain identification system developed by Accenture will allow travelers to pre-inform customs and border controls about their route and biometric characteristics.

In the blockchain, the personal and biometric data of the traveler are stored and the status of the “known traveler” is obtained through the collection of reports or requests that have been confirmed by trustworthy partners such as border authorities and airlines. It is expected that The new data identification system will significantly reduce the time spent at the airport. Norbert Goffa, CEO of ILCoin – a startup blockchain focused on scalability – told Cointelegraph that these solutions could be important given the rapidly growing volume of air travelers:

“Global airlines carry more than 3 billion passengers a year and the industry’s annual profit exceeds $ 600 billion. Analysts are predicting a 50% increase in passenger traffic over the next 10 years, meaning companies will need to automate their business processes The experience of global companies using blockchain has shown that this technology has great potential to simplify data exchange between participants. “

Dubai International Airport uses blockchain, but in a slightly different format, as the Directorate General of Residence and Foreign Affairs of Dubai (DDRFA) has signed a contract with the British company ObjectTech for the installation of biometric tunnels for the English acronym.

This technology is designed to reduce long queues at the airport upon arrival in the UAE. Registration in the country is possible using a pre-approved and fully digitized passport that includes an electronic chip, fingerprints, a scanned opening and scan data for the face. The face scan is carried out using LIDAR technology, which is already used in autonomous vehicles in Dubai. The DDRFA has already launched the “Emirates Smart Wallet” program, which allows passengers to go through border control using smartphones instead of conventional passports.

Another blockchain initiative is “Smart Path”, which has been used at Orlando International Airport since 2018 to improve the flight experience. The solution combines blockchain technology and biometrics to reduce the number of documents required for passenger identification.

Get a reward

Almost all travelers have several customer cards for airlines or hotels at the same time. According to a poll by Colloquy 28% of travelers leave these programs without using their loyalty points. T.Having a large number of cards can become an annoying process that requires constant monitoring of promotions, use of hard-to-remember codes, etc.

Companies can move their loyalty programs to the blockchain to cut costs. Some US companies can spend up to $ 35 billion a year on these programs, and the introduction of crypto-based bonds that are automatically distributed can bring significant savings.

A real example of this program is a blockchain-based loyalty program from Singapore Airlines that customers can use to redeem their airline miles in stores. The company was the first airline in the world to launch a digital loyalty wallet called “KrisPay” based on blockchain technology. By downloading the KrisPay app, users can convert their KrisFlyer miles into KrisPay miles, shop with the KrisPay QR code, and select the number of miles to use. Currently, 18 providers from various industries are working with the platform.

Related: It’s not just a pretty name: blockchain technology creates real value in traditional industries

Likewise in 2016 Loyyal used blockchain technology in a universal loyalty system that enabled hotels and airlines to offer their customers cheaper reward programs and reduce the costs associated with account reconciliation and payment management. In February, the company signed a three-year manufacturing contract with The Emirates Group. In an interview with Cointelegraph, Evan Luthra, an influential “Top 30 Under 30” technology entrepreneur and blockchain expert, noted the seamless experience that blockchain-based loyalty systems offer:

“As someone who spends hundreds of nights on hotels and flights each year, I see tremendous opportunities for payment systems when several different companies come together to work with blockchain. Travel is already heavily impacted by blockchain technology and we are becoming a lot see a smoother, faster and generally better customer experience. “

So does the blockchain scratch the surface of tourism?

Blockchain has great potential in tourism and is already used to improve the travel experience. Inexpensive, easily accessible decentralized business models can make it an attractive alternative to traditional systems, with the elimination of intermediaries being one of the main advantages.

In addition, the blockchain still has to solve some serious problems before widespread acceptance, such as B. the storage of personal data and identification, which can become an obstacle, since improper management can access the information third parties. Ian Khan, the director of the blockchain City documentary, told Cointelegraph that the use of blockchain in tourism didn’t even scratch the surface:

“The global tourism industry is a billion-dollar industry with multi-billion dollar inefficiencies and the ability for technology companies to increase efficiency and enable seamless financial transactions. Transparency is in the billions. Startups and technology companies with A good value proposition should investigate how complex the different segments within travel work and how it can be helped. “

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