Blockchain 101
How the technology underlying Bitcoin will impact the travel sector.
There’s been a lot of chatter about blockchain upending the tourism industry. We break down what resorts really need to know and what action—if any—they should take.
What is blockchain?
Blockchain technology was created to secure Bitcoin transactions but is now being applied to other areas. It tracks and encrypts information in a blockchain database, distributing full or partial copies among multiple computers. There are private blockchains, in which all the computers in a network are controlled by one organization, and public blockchains, in which users can store their own information and make transactions. Information can only be added, not changed or subtracted, and because information is distributed across multiple computers, blockchains are exceptionally difficult to hack, making them well suited to direct peer-to-peer transactions.
How relevant is blockchain to travel?
“Blockchain’s ability to create a consolidated travel ID for a person will enable travel operators to have a more holistic view of each customer,” says Noel Connolly, SVP global head of sales for airlines and hospitality at CellPoint Mobile. A single travel ID can store everything from loyalty points to passport details, allowing brands to personalize promotions. Blockchain could also be used to improve operations. For example, blockchain can track luggage at resorts and airports, integrating that information with changing travel itineraries. And as blockchain makes supplier inventory more available to potential customers, blockchain may decrease their reliance on online travel agencies and third-party distributors.
What action should resorts take?
For now, pay attention to the big picture. Connolly estimates it will take another three to five years before blockchain matures to the point of ubiquity and even longer before travel brands could monetize it. “While resorts may be hesitant to invest in blockchain technology right now, expect travel brands to focus blockchain on high-spend customers who want the best in user and customer experience,” Connolly says. This specific demographic can help brands test, measure and adjust methods for generating revenue with blockchain.
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