When travelers book a trip, they probably imagine their information and funds transferring to a single vendor. The reality is typically much more complex.
Data about the traveler, luggage, and trip might be passed between dozens of vendors who support the transaction. When a traveler’s flight gets rerouted, for instance, every relevant vendor needs access to that information fast enough to take corresponding actions.
Today, we pass an immense volume of data from one vendor to the next. We build complex integrations, automation workflows, and data checks. And we go to great lengths to optimize the speed of data transfer.
Blockchain presents a more efficient and secure option. Rather than transferring data between vendors, blockchain connects approved vendors to a shared set of data—a single source of truth. Every approved vendor has immediate access to that update when a transaction or change occurs. They can all access the same information at the same time.
By eliminating the transfer of data from one party to the next, Blockchain connects buyers and vendors more directly in a peer-to-peer environment.
This article will explain what blockchain is and provide examples of how it can benefit the travel industry.
What Is Blockchain?
Blockchain is a list of public records, known as a public ledger, in which the transactions between parties are listed and stored. Each form, known as a block, is secured using cryptography.
According to Investopedia, “one key difference between a typical database and a blockchain is how the data is structured. A blockchain collects information together in groups, known as blocks, that hold sets of information. Blocks have certain storage capacities and, when filled, are closed and linked to the previously filled block, forming a chain of data known as the blockchain. All new information that follows that freshly added block is compiled into a newly formed block that will be added to the chain once filled.”
One of the most critical aspects of blockchain technology is that the data is decentralized. This makes it very difficult for malicious actors to modify or remove previously sealed blocks of data. Blocks are permanent and can’t be altered without consensus for the entire network and without altering all subsequent blocks. So, the information on the blockchain remains secure and traceable.
How Can Blockchain Help The Travel Industry?
A Few Examples:
- Traveler Security – Even within a single travel facility, a traveler may interact with several vendors, each of whom currently needs to verify that traveler’s identity securely. With blockchain, a single identity token could be shared across vendors and validated throughout the trip, making for a better traveler experience and fewer resource hours.
- Luggage Tracking – With baggage location and changes to the itinerary and timing centralized to a single data set, “where’s my bag” should rarely be uttered again.
- Connections – Imagine a travel scenario where connecting flights, shuttles, cabs, and hotels always have the data to make a traveler’s connections as smooth as possible. This could improve the traveler’s experience and potentially reduce wasted downtime for drivers and vehicles.
- Customer Loyalty Programs – Vendors could leverage blockchain to collaborate on customer loyalty programs, providing travelers with cross-promotional opportunities and more compelling rewards. Southwest, Avis, and Holiday Inn could partner to allow travelers to use their airline miles rewards toward car rental and hotel (and vice versa).
- Transferring Funds – In addition to the traveler’s data, their funds (the cost of travel) also get distributed between booking agents, air carriers, and airports. 16% of travel costs go-to credit cards, bank transfers, and exchange rate fees with so many touchpoints. That’s a 16% opportunity for the industry to reduce costs. Since travel is regularly changed, rescheduled, or canceled, it’s easy to see how vendors could end up with differing data about the transaction, leading to disputes and disruptions for travelers. Blockchain’s single source of truth for all vendors creates joint trust and visibility, reducing wasted time comparing mismatched data from disparate systems. And cryptocurrency, built on the blockchain, could significantly reduce those fund transfer costs.
Since its inception, the current process of tracking and paying intermediaries for travel services has been complex and painful. Each travel agency must go through a complicated and time-consuming settlement process with every supplier. This involves receiving email confirmations for each booking and then end-of-period statements that they must reconcile individually and often manually. This situation lends itself perfectly to the use of blockchain since there are multiple data writers, and there is a need for a distributed and trusted data set accessible by all. Blockchain technology will improve the reconciliation process.
At Cornerstone Information Systems, we think blockchain has an exciting future. We are the technology partner behind the scenes of tens of millions of automated bookings. Our technology helps you configure workflow and services that deliver measurable savings and insights to manage your travel program and operations.
Travel operations that fail to automate will not be able to compete on customer satisfaction or pricing. The right technology partner will enhance your program and set your business up for ongoing success. Ready to learn how you leverage our solutions for your success? Join the more than 600 companies with more than $2 billion in travel spending that depends on us to succeed in their travel program. Contact Cornerstone today to learn more.