Blockchain Technology in the Travel Industry

Prepared by: Mechille E. Lugo

Blockchain technology in the travel industry is transforming secure data sharing
and transactions. By enabling decentralized control, it enhances trust, reduces fraud,
and streamlines operations. Its application ranges from secure payments to managing
customer identities and loyalty programs, making it a pivotal tool for advancing
transparency and operational efficiency in the travel sector.

Key Takeaways
● Luggage Tracking: Blockchain enhances tracking accuracy, especially in
international travel, by sharing data across companies.
● Identification Services: Blockchain technology can reduce check-in times with
biometric-based identification methods.
● Secure Payments: Improves the security and traceability of payments, including
those in cryptocurrencies, in the travel sector.
● Managing Overbooking: Blockchain assists in efficiently handling overbookings,
reducing errors and improving customer satisfaction.
● Personalized Travel: Facilitates tailored travel experiences based on securely
shared customer preferences.

Introduction
Over recent years, blockchain technology has generated significant excitement within
many industries and fields. This is largely because it has the potential to dramatically
change how information or data is stored and used, enhancing transparency and
security, while also improving transactions. Here, we take a more detailed look at the
various ways blockchain is used or is likely to be used, within the travel industry.

Understanding Blockchain Technology: What Is It?

Although blockchain technology can initially sound confusing, it is pretty simple to get
to grips with. Ultimately, it is a list of public records, also known as a public ledger,
where transactions between parties are listed or stored. Each record, known as a ‘block’
within blockchain terminology, is secured using cryptography.

One of the most crucial aspects of blockchain technology is that data is decentralized,
with information shared across a peer-to-peer network. Each block contains transaction
information and a time stamp. Blocks are also permanent and cannot be altered without
consensus from the entire network and without altering all subsequent blocks.

The decentralized, permanent, time-stamped, and unalterable nature of the data

recorded in the blockchain means that data is more secure, traceable, and transparent.
After all, there is no central point of vulnerability or failure, and the data is resistant to
modification and unwanted tampering.
How Can Blockchain Benefit the Travel Industry?
Regarding the advantages, blockchain technology can offer within the travel industry,
stability and security rank very highly. The decentralized nature of the blockchain means
that information can never go ‘offline’ or be lost through accidental deletion or a
malicious cyber-attack, ensuring transactions are always traceable.

The travel industry relies upon different companies passing information between one
another. For example, travel agents need to pass customer details on to flight
companies and hotels, while the personal belongings of travelers are often passed
between companies and tracked too. Blockchain can make accessing and storing
important information easier and more reliable, because responsibility for storing it is
shared across the whole network.

Of course, financial transactions are a vital part of the travel industry too, and
blockchain technology has the capacity not only to simplify, but also secure payments.
This is especially true when dealing with overseas payments. As a consequence,
blockchain can potentially improve the level of trust among all parties.

Uses or Potential Uses of Blockchain In the Travel Industry

Below are four of the most exciting uses for blockchain technology within the hospitality
and travel industry.

1. Tracking Luggage
Blockchain technology can be extremely valuable for tracking luggage movements,
especially with international travel. In many cases, a customer’s luggage changes hands
multiple times throughout their journey. Using a decentralized database makes sharing
tracking data between companies a lot easier.

2. Identification Services
Identification services are enormously important for the travel industry, and blockchain
could become the industry standard for storing this information. Used in this way, the
technology can drastically reduce check-in times, or queues in airports, as a simple
fingerprint or retina scan can replace showing documents.

3. Secure, Traceable Payments

Perhaps the most important use of blockchain technology within the hotel and tourism,
and travel industry is related to payments. Here, its applications can range from serving
as a global ledger, making bank payments more simple and secure, to allowing travel
companies to accept payments using Bitcoin and other cryptocurrencies.

4. Customer Loyalty Schemes

Finally, many travel companies run customer loyalty schemes to encourage return
customs. Blockchain can also assist with these programs, simplifying the process,
allowing customers to access information about their loyalty points more easily, and
allowing tokens to be distributed. It can also help to combat fraud in this area.

Examples of Blockchain Technology In Action

In addition to these more general examples of the way blockchain can help to transform
the travel industry, there are also some more specific examples of the technology being
put to good use already, such as:

1. LockChain
In simple terms, LockChain is a direct marketplace for hotels and hospitality companies
looking to rent a property. The platform covers payment, property management, and
other aspects of the booking process. Best of all, there are no middlemen or
commission fees because it uses a decentralized system.

2. BeeToken / Beenest
One of Blockchain’s most innovative current uses is the BeeToken or Beenest home-
sharing platform. Here, the technology is used to put customers in touch with hosts, so
that they can arrange and pay for stays. Again, there is no commission, while payment,
reputation, and arbitration protocols are all in place, keeping users safe.

3. Winding Tree
The Winding Tree platform is perhaps the foremost present-day example of baggage
tracking via blockchain and includes a booking element. The lack of third-party
involvement means that booking and tracking can be achieved easily, safely, and
securely, with all processes benefiting from greater transparency.

4. TUI Bed-Swap
Finally, TUI has launched its in-house blockchain project, called ‘Bed-Swap’. Using this
technology, the company can move inventories between different points of sale and flex
selling margins, in real-time, based on the level of demand that is present at that time

Further Learning
In truth, blockchain technology is less complicated to come to terms with than it may
initially seem. Nevertheless, learning about it can still seem daunting or overwhelming,
especially to people with limited knowledge of digital technology, encryption,
cryptocurrencies, and peer-to-peer networking.

However, its huge potential and capacity to transform the travel industry make learning
about it important. For those who do wish to find out more, we recommend the
following video from Ron Galloway:

More Innovating Technologies Within Travel

With technology continuously evolving, it should come as little surprise that its
applications within the travel industry evolve too. In the following articles, we piled up
more innovative technologies in today’s travel and tourism industry.

● How Augmented Reality is Revolutionising the Travel Industry

● How Artificial Intelligence is Changing the Travel Industry
● How Virtual Reality is Transforming the Travel Industry
● Robots in the Travel Industry: 8 Real-World Examples
● How the Internet of Things (IoT) can Benefit the Travel Industry
● How Can Voice Control Benefit the Travel Industry?
● 4 Ways Facial Recognition Can Be Used in the Travel Industry
Blockchain technology has the potential to revolutionize various industries, including tourism,
by providing transparency, security, and efficiency.
Here are some applications of blockchain technology in tourism marketing, loyalty programs,
and asset management:
1. Tourism Marketing:
a. Decentralized Travel Agencies:
Blockchain can enable the creation of decentralized travel agencies that connect
travelers directly with service providers, eliminating the need for intermediaries. This
can lead to lower costs for both tourists and service providers.
b. Smart Contracts for Bookings:
Smart contracts on a blockchain can automate and execute agreements between
travelers and service providers. This can streamline the booking process, reduce
fraud, and ensure that terms are met without the need for intermediaries.
c. Transparent Reviews and Ratings:
Reviews and ratings of hotels, restaurants, and attractions can be stored on a
blockchain, ensuring transparency and authenticity. Users can trust that the reviews
have not been tampered with, providing a more accurate representation of the quality
of services.
2. Loyalty Programs:
a. Tokenized Loyalty Points:
Loyalty programs often suffer from issues such as expiration of points and limited
redemption options. Blockchain can tokenize loyalty points, making them more
flexible and transferable between different programs and partners, ultimately
increasing their value.
b. Enhanced Security:
Blockchain's security features can help prevent fraud in loyalty programs. Fixed
records on the blockchain ensure that once points are earned or redeemed, they cannot
be altered, enhancing the integrity of the loyalty system.
c. Interoperability:
Blockchain facilitates interoperability between different loyalty programs. Users can
combine points from various programs, encouraging customer engagement and
loyalty across a broader range of services.
3. Asset Management:
a. Tokenization of Assets:
Real estate, hotels, and other tourism-related assets can be tokenized on a blockchain.
This allows for fractional ownership, making it easier for investors to participate in
the tourism industry and trade assets seamlessly.
b. Supply Chain Transparency:
In the tourism industry, blockchain can be used to create transparency in the supply
chain. For example, it can track the origin and authenticity of goods and services,
ensuring that travelers can access accurate information about the products they
consume.
c. Smart Contracts for Agreements: Smart contracts can automate and enforce
agreements related to asset management, such as revenue-sharing arrangements
between different stakeholders. This reduces the need for intermediaries and ensures
that contractual obligations are met automatically.

By implementing blockchain technology in these areas, the tourism industry can

benefit from increased efficiency, reduced costs, enhanced security, and improved
overall customer experience. However, it's important to note that widespread
adoption may take time, and regulatory considerations need to be addressed for these
applications to reach their full potential.

References:

Banerji, D., Rashideh, W., Arora, B., & Pratihari, A.R. (2021). Application Potential of
Blockchain Technologies in the Travel and Tourism Industry. Blockchain Applications in
IoT Ecosystem.

Barten, 2024. How Blockchain Technology is Transforming the Travel Industry.

Revfine Optimizing Revenue. https://www.revfine.com/blockchain-technology-
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6H8 last access 02/09/2024