Blockchain in travel: A game-changer for efficiency and trust

The decentralized, transparent, and secure nature of blockchain is revolutionizing the travel industry, which is poised to reach $10 billion by 2030. There’s a pressing need for efficiency and trust, which can be achieved through streamlined operations, personalized customer experiences, and mindful resource optimizations.

Blockchain technology features such as secure record-keeping, transparency, and disintermediation are critical to building a more efficient and trustworthy system for the travel industry. Coupled with artificial intelligence (AI), it becomes a key digital transformation enabler by building more resilient booking systems, loyalty programs, and more.

Blockchain can potentially address several long-standing issues in the travel industry, including inefficiencies in the business model, costly intermediaries, and concerns. Decreasing dependencies on intermediaries such as travel agents and brokers can enforce disintermediation, allowing service providers and consumers to interact via reliable sites and platforms. This can revolutionize areas like ticket booking, baggage tracking, and loyalty programs while offering more secure and streamlined processes.

Let’s explore the technology’s far-reaching impact on the industry:

Disintermediation and efficiency

At present, many travel transactions, from hotel bookings to airline tickets, go through third parties, wherein the experiences are controlled. They are often negative because of slow processes, unplanned user journeys, and the inability to resolve customer queries immediately. Through blockchain, companies can forge a direct relationship or line of communication with consumers, reducing costs for themselves and their partners. An example of a decentralized travel solution includes a booking platform that can connect travelers directly to airline or hotel customer experts, reducing the complexity of cross-border payments.

Improved security and trust

Travel transactions leverage personal information for financial transactions, and blockchain’s inherent security features, such as cryptographic encryption and immutable records, help safeguard sensitive customer data, reducing the risk of hacks or fraud. It also enables transparency, allowing all participants to view and verify information, furthering the trust between consumers and service providers. For instance, blockchain can improve trust in the sharing economy by creating a decentralized verification system for services like home rentals or ridesharing.

Faster and cost-effective money transfers

Currently, international payments can be slow and expensive due to intermediaries like banks or payment processors. With blockchain in travel, it’s possible to streamline financial transactions, such as making cross-border payments instant and low-cost by slashing transaction fees and waiting times. This is particularly advantageous for multi-currency transactions, such as booking hotels or paying for tours across different countries.

Applications of blockchain technology in travel present a golden opportunity for businesses to enhance operations and personalize travel experiences in the AI era.

Blockchain technology offers several innovative yet practical use cases for the travel industry, providing innovative solutions to long-standing operational challenges:

Airplane maintenance transparency

Airplane maintenance is crucial to passenger safety, but travelers often have no visibility into when or how an aircraft is serviced. Blockchain can enable airlines to create a transparent record of maintenance checks made available to all stakeholders (regulators, airlines, and passengers) in real time. This would boost trust in airline safety and ensure optimal aircraft usage. Additionally, airlines can streamline meeting regulations and provide safety information in a tamper-proof and secure way.

Passenger revenue accounting

Blockchain in travel can simplify airlines’ lengthy processes when accounting for passenger revenue, especially with the complexity of direct and agency ticket sales. Utilizing smart contracts on a blockchain can automate revenue recognition and reduce the time to rectify mistakes, which can often take up to 90 days — payments and reconciliations to happen in near real-time, drastically reducing administrative costs. This would enable airlines to operate more efficiently, with better cash flow and fewer accounting errors.

Tradability of frequent flyer points

Blockchain can also revolutionize airline loyalty programs by making frequent flyer points tradable assets. Instead of being locked into a single airline or its partners, travelers can buy, sell, or trade points through a blockchain-based platform, increasing the value of points and providing flexibility to redeem them. Furthermore, blockchain can enhance interoperability between different loyalty programs, enabling travelers to use their points across various airlines, hotels, and even retail partners, creating a seamless and more rewarding experience.

Blockchain’s potential to transform the travel industry can invite new levels of efficiency, transparency, and trust. At TP, we leverage the power of blockchain to build innovative, customer-centric travel solutions that streamline operations, reduce costs, and enhance user experiences — all while maintaining the highest levels of security.

Our goal is to help travel companies unlock new business opportunities. We also believe that blockchain, along with AI, is a strategic enabler for reshaping the future of travel.