Blockchain is the buzz word which we’ve all been hearing about. But what is blockchain and how is it going to affect the hotel industry?
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed
to record not just financial transactions but virtually everything of value.”
Don & Alex Tapscott, authors Blockchain Revolution (2016)
In short, Blockchain is the disruptive technology behind Bitcoin. The core essence of blockchain is that it’s decentralized and the transaction information is encrypted and by storing data across its network, the blockchain eliminates the risks that come with data being held centrally.
The technology, however, has applications that go far beyond finance and have the potential to disrupt other industries including travel and hospitality.
Blockchain is in fact already finding its way into the travel industry. Because the distributed-ledger technology removes the middlemen in transactions, such as hotel bookings, it could be the answer to reducing the total cost of doing business. This will open a whole new set of opportunities especially to the independent properties which tend to suffer the most from the distribution costs due to their lack of bargaining power.
Some hotel chains and travel agency are already coming up with ideas on how to implement this technology into their work processes. Among the chains utilizing this technology is the Nordic Choice hotels who are aiming at raising their revenue by lowering the distribution costs.
We are yet to see how the new age technology will affect the hotel industry and it will surely take time to see its full potential. But the most obvious benefits of implementing blockchain technology are already clear -lower costs of acquisition and greater control over the distribution process.