Yet another buzzword that we heard a lot in the past year or two is Blockchain. However, Blockchain is not just a buzzword. It’s a brand new technology that has spread around the world and found its way into many industries. One of the sectors that might have many benefits from implementing Blockchain is the travel industry, more specifically – hotels.
Even though Blockchain has many uses, the potentials for the hotel industry are still being discovered and there is an increasing amount of hype around this technology. However, since the start of 2018 we’ve been seeing a number of success stories about Blockchain for hotels and its benefits.
The main reasons why everyone in the industry has their eyes on Blockchain is because it might fix the problems with rogue rates for hotels, help hotels implement technology more easily and with less money, and minimize the market share of intermediaries.
Blockchain Explained
At its core, Blockchain is a large digital database of records in which organizations and individuals can permanently record their transactions in an anonymous way. All of the transactions are encrypted, meaning that they cannot be changed or manipulated. This data is traceable and decentralized and it can allow transparency when it comes to online payments. This is where its potential lies for the hospitality industry.
One of the largest benefits of using this kind of framework is that it can be deployed quickly while saving money. The way hotels can benefit from it is that they wouldn’t have to use any online travel agencies for their transactions with customers. They will no longer depend on agencies for bookings or reservations, and there are already decentralized booking platforms that do this.
This also means that the fees for transactions will be reduced and the speed of bookings increased, as hotel chains usually have to send customer information multiple times.The Potential of Blockchain For Hotels
Having inaccessible and centralized inventory was always a big issue for the hotel industry. Most of the important data has been “taken hostage” by a few big companies, and this has created barriers for other companies that want to enter the market. The theory is that Blockchain can make all the data accessible to everyone and increase hotel distribution options.
Some big hotel chains are already using Blockchain internally to manage their assets and inventory. At the same time, a Blockchain system can provide a data sharing network where hotels can create and store better guest profiles. When customers make transactions through a cloud-based hotel management service with Blockchain it might help hotels create better loyalty programs. It will also be easier for hotels to track customer behaviors and give better personal experience to each customer, target them with one-on-one marketing, and create customized rates based on previous transactions. Financial transactions can also potentially improve through Blockchain. It’s a secure way of transferring funds and paying for services around the world while having direct communication.
How The Hotel Industry Looks on Blockchain
Those that are closely watching the development of Blockchain have two different views on this new technology. The first thing that is sure is that Blockchain is a potentially revolutionary technology that can completely transform the way hotels do their business and help them become more efficient.
At the same time, many feel that there is no big rush for making huge investments in this technology. Some people simply feel that there is too much hype around Blockchain at the moment and that there are still no proper business practices that can help make the most out of this technology. This camp is concerned that there is a growing bubble around Blockchain.
Still, there are already plenty of examples of how hotels have used Blockchain platforms properly and chances are that we are going to see more examples in the future. There is undoubtedly a lot of potential and we have to see what kind of solutions will be used in the future.
If you ask us, we firmly believe in Blockchain and its success in the hotel industry. Those that get on board with this technology will be able to gain a significant competitive advantage in the industry.
