Blockchain in Travel for Dummies

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by: Trond Vidar Bjorøy, Corporate Travel Tech Enthusiast / Head of Product Development & Implementation Nordics, ATPI.

While still in its infancy a lot has been written about blockchain, the technology believed to transform many of the business models that we know today. The buzz it’s been generating especially over the last year has been massive, comparable to that of the Internet in the early 90s. And the blockchain is often referred to as the next generation of the Internet – the Internet of Value.

Image source:

At this point, rather than the complex technology itself (which I am looking forward to fully understanding one day!) I want to know about the use cases of it (although most of them haven’t been conceived yet), especially within the travel industry.

So I won’t give a long introduction to Blockchain but instead refer you to a couple of sources which have already done that in an excellent way.

[Wikipedia] Blockchain

[Ted Talks] How the blockchain is changing money and business

[NRK, Norwegian] Teknologien som tar livet av avgiftene

Let’s focus on the potential impact that this technology could have on our industry just a few years from now. It truly is inspiring stuff!

Even though most of the blockchain work is happening in Fintech, there is a lot of potential for other industries as well, including our own. I’ve looked at some areas likely to go on the blockchain one day as well as some of the ongoing projects out there, beyond purely financial transactions. Some are just visions while others have come as far as to showcase actual solutions even though it’s mostly just proof of concept at this stage. Here’s my attempt at collating some of the most exciting initiatives out there, from both startups and well-established players.

Loyalty programs

Imagine if you could access all your loyalty rewards programs, across different companies and industries, in one digital wallet. Imagine being credited your reward points in near real time and being able to redeem them immediately, or transfer them to a friend. Imagine receiving only promotions personally relevant to you.

While the user experience of loyalty programs running on a blockchain will probably be like nothing we have seen before, interoperability between different loyalty programs isn’t new or a game changer in itself. However running a loyalty program is expensive today and the business value lies in the cost-efficient collaboration between programs that the blockchain enables. Making loyalty programs capable of interacting with each other will become easier, cheaper and more secure.

This is a great article on loyalty points on blockchains.

The below image shows what a typical customer journey could look like in a blockchain world:

Image source: Making blockchain real for customer loyalty rewards programs, a Deloitte report.

Some of the players in the loyalty area:

Identity Management

The blockchain could be used to store your passport, visas and other personal identification cards and records as part of your digital wallet. You could potentially use one single identification to get through different airlines and airports and even across borders.

  • SITA Lab and Shocard are researching how a Single Travel Token based on biometrics could be implemented and have demoed this in a mobile app. Here’s a white paper on the project (requires a free registration on their site).
  • Airbnb last year aquired a team of blockchain experts and are looking at using the technology to establish hosts and users’ identity and reputation. However, the disruptors in peer to peer companies like Airbnb and Uber run the risk of being disrupted themselves as smart contracts potentially can perform the same transactions that these companies coordinate today. La’Zooz is already here and through their app, volunteers give people lifts in exchange for tokens they can later trade for rides. One of the founders says he’s hoping to create the anti-Uber.
  • Estonia’s e-Residency program could be going on the blockchain
  • World citizenship projects proposed by Bitnation and Chris Ellis

Air Travel Insurance

German startup etherisc developed an app called Flight Delay, based on public blockchain Ethereum. Embedding smart contracts into the blockchain ensures automatic and instant payout to your account if your flight is delayed or cancelled.

I tested their proof of concept using the Ethereum Mist browser (you could also use the Metamask extension for Chrome). I added some Ether to my digital wallet, selected my flight, applied for an insurance policy and passed the amount of my premium in ETH. I received an error when clicking apply so I guess the project had ended, however, to quote Andrew Quentson in this article:

Through an entry form, what previously required, and still, currently, requires, whole insurance departments and even skyscrapers, is turned into just 1s and 0s.

etherisc’s Flight Delay app

Open Travel Marketplaces

Winding Tree, in the words of one of the founders, is a «decentralized autonomous marketplace for travel. It’s one single organisation, but no one can control it and raise transaction fees or cut someone off the network (…) Winding Tree wants to democratize access to travel data and prevent the existence of monopolies». Winding Tree will be based on Ethereum.

I didn’t quite catch exactly which parts or how much of the whole travel process they are looking to handle. If we look at flight bookings for example, how will they gain access to the inventory, fares and availability. Considering both the current distribution landscape and process with its intermediaries and third parties, as well as NDC (which they aren’t huge fans of), it seems a really ambitious project. I look forward to seeing how it will evolve.

Australia based OTA Webjet together with Microsoft have built a private blockchain solution for hotel bookings which they claim «could transform the travel industry and hotel booking process». Although, as this is built on a private blockchain it won’t be open per se…

Personally I’m interested in seeing how the technology is going to affect the TMCs. One of the areas where we could see a revolution is in today’s settlement process for TMCs and airlines. Blockchain could enable instant payment from agents to carriers, as opposed to now where using the two central settlement systems BSP and ARC brings a delay. While an advantage for the airlines this could on the other hand affect how TMCs today can offer buyers credit until they are required to settle.

No parts of travel are likely to remain unaffected by the blockchain. From booking, ticketing and payment, to the trip itself, all processes will see improvement.

Even though at the moment we can’t really do much with the technology besides accepting payments in cryptocurrencies like Bitcoin, it certainly holds great promise. Once these solutions start reaching critical mass and the technology becomes mainstream we’ll see new business types emerge and witness the blockchain revolution.

If I have missed any exciting projects, if you spot any mistakes or if you can clarify on some of my unanswered questions, please let me know in the comments.

Trond Vidar Bjorøy, Corporate Travel Tech Enthusiast / Head of Product Development & Implementation Nordics, ATPI


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