How blockchain technology can improve the travel industry
Blockchain technology, the distributed ledger solution behind Bitcoin and other digital currencies, is making its way into the enterprise at a rapid pace. The system is good at not only tracking financial transactions but also providing a reliable record for all manner of digital exchanges.
This is proving to be particularly useful in the travel industry, which is chock-full of data interactions that span from initial booking over a web portal to scheduling airline seats, rental cars and room assignments. With blockchain, the travel sector can gain a high degree of confidence that the data coming from another source — whether a consumer, a business partner or even an internal system — is accurate and verifiable. While no system is threat-proof, blockchain’s distributed architecture sets the bar high, even for the most sophisticated wrongdoer.
Fixing the data chain
To get an idea of how blockchain can improve the travel experience, just take a look at all the ways data is exchanged for a typical air, car and hotel booking, writes CellPoint Mobile CEO Kristian Gjerding in Forbes. In addition to payments processing, there are also check-in and security clearances, inter- or intra-airline schedule coordination, hotel reservations and even multiple ancillary functions such as updates to customer loyalty and rewards programs. Blockchain can smooth over many of these pain points, turning what would otherwise be a lengthy series of data checks and rechecks into a straightforward process built around a single, shared data set.
Travel is also one of the most highly regulated industries in the world, particularly when international borders are crossed — and blockchain can iron out many of the wrinkles here, as well. To be sure, overcoming the compliance issues that travel-related businesses currently face will require more than a digital ledger. But as blockchain opens the door to digital passports and other forms of ID and enables trusted data exchange between travelers, providers and regulatory agencies, much of the regulatory burdens of today could soon be masked behind layers of automated abstraction.
Blockchain can also improve customer satisfaction, which has taken a beating of late, notes Trond Vidar Bjoroy, head of new product development and implementation at travel management firm ATPI, in CoinDesk. The common practice of overbooking probably won’t be eliminated due to airlines’ need to optimize resources, but blockchain can reduce it to a minimum through a more trusted ticketing and reservation system. It can also help maintain traveler profiles to ensure proper seating and dietary requirements are followed. The technology could even reduce waste and fraud by spotting passengers who engage in frequent charge-backs and cancellations.
Breaking silos with blockchain technology
Blockchain also offers cost benefits that extend far beyond mere payment processing. According to Cryptocoins News’ Lester Coleman, blockchain’s shared, distributed ledger system effectively breaks down the data silos that currently inhibit data exchange worldwide. Data systems navigate through a plethora of protocols, formats, platforms and infrastructure to find the information they require, and this data is often housed on proprietary, privately owned archives that charge a fee for access. Nobody owns blockchain, however, so its records are available to all and don’t require a complex reconciliation processes.
Perhaps even more intriguing is the integration of blockchain technology with other tools like personal digital assistants and automated purchasing and communications technologies. Gjerding says this trend could usher in an entirely new era in travel in which the long lines of check-in, security and other services will be gone. This would not only be more convenient but would reduce the number of times a traveler exposes their personal information throughout the travel process.
Clearly, there is quite a bit of work ahead of the travel industry to make this vision a reality, but with a trusted, verifiable and open digital ledger at the ready, the ability to move from place to place is becoming easier on businesses, regulators and, most of all, the traveling public.