From a prototypical concept to a mainstream global dialogue, the success of blockchain’s application is reaching the frontiers of technology, transgressing multiple industries across borders. With the wide range of benefits that it carries, blockchain can add value to services provided and is likely to reshape the hospitality industry if radically implemented.
The main features that make blockchain so alluring is that it induces traceability, immutability, interoperability and decentralization, which could exponentially benefit the hospitality industry. As far as industries are concerned, the hospitality industry itself is rather convoluted in terms of people, procedures and processes, not to mention the vast array of protocols that are to be followed. Keeping all these factors in mind the hospitality sector faces several roadblocks and bottlenecks. Several use cases can substantiate how blockchain is reforming the Supply Chain sector, Travel & Tourism Sector and other services that fall under the umbrella of hospitality
Blockchain Industry Use – Case and Applications
Blockchain for Supply Chain Management:
From order management, inventory management, transportation, warehousing, payment processing to the point of consumption, supply chain is a system that is inherently complex, entirely relying on the flow of data. This means that the flow of data should be fluid and accurate at all points. In all probabilities it is likely that this data flow can be interrupted, causing a cascading effect, consequently distorting the entire supply chain process.
Blockchain helps resolve this constraint by on-boarding accurate data from multiple parties involved in the transaction on an open distributed network. Information pertinent to any consignment can be traced and audited at any given point leaving no space for impeachment. Moreover, in conjunction with other integrated technologies like RFID and real-time GPS tracking, it’s safe to say that blockchain will be the backbone for any supply chain system to flourish.
Smart Contracts are powerful tools to enforce business agreements and policies. Through smart contracts stakeholders can track each and every component of the product on the supply chain to its original manufacturer from a single source of information on the distributed ledger, facilitating a greater degree of trust and transparency.
Blockchain for Travel and Tourism:
According to Statista, the total revenue of the e-travel industry worldwide is US$750.7 billion and is constantly growing. Our society is built upon billions of digital transactions being processed every day, therefore an infrastructure to monitor and control these transactions become essential. Luckily blockchain offers the means to streamline these processes.
As per a report by Medium, the rates charged by OTA’s make up as much as 25% of the booking revenue per customer. There is a notorious divide of trust between hoteliers and customers caused by middlemen such as OTAs that charge clients unfairly high commissions. Intermediaries can hold back customer’s information about available accommodation, cancellations, offers and deals.
Blockchain facilitates direct interaction between travel suppliers and customers to ensure complete disclosure of information. Additionally, with blockchain, cross-border settlements and payments that tend to get complicated can be simplified when transacted on a decentralized network, eliminating the risk of fraud by intermediaries, as there is complete visibility and clarity of information being exchanged.
As per a recent article by Coindesk, Singapore Airlines has officially launched its own blockchain-based Loyalty program called KrisFlyer, which is a digital wallet that enables customers to convert their recorded travel miles into units of payments via a mobile application, Krispay. These units of payments can be used by customers to make purchases with partner merchants in Singapore.
The hospitality industry is a goldmine for blockchain solution providers, investors and other technology providers. There is a myriad of opportunities that blockchain technology can offer to this sector that can bridge the gap between service providers and customers, solidifying the distribution process.
Blockchain is a leading edge technology that can streamline business processes, improve business relations and enhance the hospitality industry on a whole. The above use cases are only a few examples that this technology can achieve. Blockchain is evolving and is already being integrated into various industry domains. However, there is still a great amount of awareness that has to be raised so that people can start seeing the significance of this revolutionary technology.