Travel and tourism industry set for more digital disruption
Monday, March 13, 2017
A 2012 episode of the TV series "The Good Wife" named "Bitcoin for Dummies" told a story about the three possible and mysterious Bitcoin founders. It also predicted that crypto-currency would be the money of the future.
Not many took it seriously, yet today we are faced with the real possibility of using only digital currency. This is even more true for the travel and tourism segment, which has to deal with complex rules and regulations across regions and businesses.
Crypto-currencies have grown in their use and importance and have, in fact, rapidly become synonymous with secure and convenient payments without having to worry about intermediaries and currency exchanges. So much so that we even have hotels held ransom by hackers who ask to be paid off in crypto-currency only.
Now, we have businesses looking into this potential for legitimate transactions. In the last few weeks, Hawaii has made major ripples in the tourism industry — not with a new tourist attraction announcement but with its interest in crypto-currency. The state is looking at a bill that will study how to implement blockchain technology like Bitcoin into its tourism businesses.
Though still controversial, digital currencies like Bitcoin are slowly gaining momentum. In Asia, the use of virtual currencies is considered safe by many. Since a large portion of Hawaii's tourist footfalls hail from that continent, the authorities think it's high time to set up a dedicated group to learn more about digital currencies and apply them to business.
This should not come as a surprise. While governments and regulatory bodies are still opposed to digital currency usage, they are no longer rigid in their antipathy. As Maksim Izmaylov, founder, and CEO of Roomstorm, stated, the applications for Bitcoin are too numerous to ignore. This is especially true of travel and tourism.
In fact, Izmaylov stated that blockchain companies have the power to do away with the middleman. Companies like Airbnb and Uber would be replaced as intermediaries since blockchain operates under the unhackable direct transaction code between parties.
With personalization solutions and superior identification methods coming in, it has the potential to completely disrupt the way we travel and book hotels. One should note that Airbnb hired the startup ChangeCoin in 2016 to offer Bitcoin-based micropayments service called ChangeTip, showing quite a futuristic outlook.
In fact, as experts are pointing out, the travel industry is starving for innovation and disruption, and use of blockchain technology might just be the answer. Blockchain's potential goes beyond underpinning Bitcoin. It can enable peer-to-peer services to do away with intermediaries, and it can simplify schemes like loyalty points and insurance policies, which can then work automatically and autonomously.
Australian company WebJet recently announced the building of a hotel distribution solution on Microsoft's Azure Blockchain-as-a-Service platform. And startups like TamTam are looking to use this disruptive new technology to offer businesses newer ways to expand, market themselves and attract customers. It will accept a number of crypto-currencies like Bitcoin, Dogecoin, Ethereum, Litecoin and NXT amongst others.
This will enable all kinds of users to come to their platform and use their services. It is no longer a convergence of resources, but a single platform for all things travel. Though the impact is most felt in travel, companies like McDonald's, Samsung and Unilever are all leveraging the power of the blockchain technology as well.
As early as 2015, The Economist pointed out that blockchain will deeply affect the travel industry and reshape the future of finance. It can streamline payments and lower financial risks via "a single, secure, transparent global ledger."
What started out as a controversy now has leading institutions like Goldman Sachs and Credit Suisse exploring ways to adopt this disruptive technology. This transparency immediately validates a transaction, thereby enhancing accounting systems and negating the need for the complicated ledgers to track and payments in multiple countries and currencies.
Of course, there is a lot of fear and regulatory uncertainties surrounding the new technology. Change won't be fast and sudden, but there will be change. It makes sense for the tourism industry to be prepared.
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