Blockchain: The End of The Tour Operator?

I was talking to a friend of mine over a BBQ at Christmas (did I mention I spent Christmas on the beach in New Zealand?). The topic of BitCoin came up along with its base technology, BlockChain. We were talking about the potential of this emerging tech (some say a new Web 3.0) and about who, where and how it could be used. It occurred to me that I hadn’t seen anything in the UK travel media about Blockchain. It may be I hadn’t been looking, but I thought it worth a bit of digging to see how it might be leveraged.

 

For those who aren’t au-fait with Blockchain, it can be thought of as a decentralised way of allowing digital blocks of information to be shared, but not copied. It is a distributed database – almost like a spreadsheet duplicated many hundreds or thousands of times over a network of computers and continually reconciled (once every 10 minutes or so). This database isn’t stored in any one place, it exists on all computers, simultaneously – a bit like a Google Doc, but bigger, more robust, more agile…more everything really. The name comes from the fact that these ‘blocks’ of information are stored in a chain – one more block being added for each new piece of information or group of transactions.

 

BitCoin users can already transact directly with one another, safely and securely – hence the ‘perceived’ value of the currency. Imagine then, if this technology was implemented in the travel industry? There could be big negatives for established operators, who act as middlemen for many other services and essentially “centralise” information and transactions to create holidays for their customers.

 

With Blockchain, a single travel agent could securely create a new chain for each customer holiday, pulling in an airline, transfer company, hotel and ground operator. The chain would be set up so that each block represents a payment going one way with a corresponding commission going the other – to the agent. No need to wait for your commission – it would be instant. The customer would pay for her holiday up front – but onward payments would only be triggered once a certain condition was met – whether that be a timed condition (2 weeks before departure perhaps) or a financial one or even when the customer actually “checks in” at each or any stage of their journey – totally safe for all parties, and it would all be transparent. But it could be the ground operator running the chain, or the airline or the transfer company. Anyone could become a tour operator.

 

Consider that a hotel chain may decide to offer a number of ancillary services without taking a commission though – and without paying a commission to an operator, agent, OTA or other. It may be the automation of such a service using a blockchain will be so devoid of administration costs that they could increase room nights whilst offering a valuable service at little cost to themselves.

 

There is a company called Winding Tree, aiming to create a decentralised repository of travel services – rooms, flights, tours etc – accessible by any individual, anywhere. A global, commission-free GDS, available to the public. Think on that for a moment!

 

Other potential uses include financial services, legal, healthcare, and governmental services, and supply-chains of all sorts across the globe. Middlemen (as tour operators) of any type will have to radically rethink their roles – the bundling of services with centralised control will disappear.

 

Large operators are already using blockchain to manage hotel inventory, according to Skift’s Travel MegaTrends 2018 report. But they’re using a technology that could see their role in the travel industry radically change.

 

I don’t think it will be fast – but once it catches, it could go stratospheric. It would be well worth the while of any travel company, of whatever ilk, to start looking at this technology and considering strategies to deal with the change that is sure to come.

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