May 14, 2018,  by Allianz Partners Business Insights

Travel: The blockchain revolution has started

Currently making its debut in several sectors, the blockchain could revolutionise the travel industry when applied to passenger safety, luggage traceability, automatic payments or even personalised travel offers.

 

The blockchain – a decentralised computer technology that allows transactions to be approved almost in real time, in a secure way and without requiring a trusted third-party authority – has a bright future ahead.

After bancassurance, which quickly recognised the usefulness of this unforgeable register, many other sectors are set to benefit from the blockchain, such as logistics, data protection or food traceability. The travel industry could also use it to its advantage, says a study by Amadeus, a global supplier of technological solutions, as quoted on the website Voyages d’affaires.

 

Simplifying the traveller experience

 

Thanks to the blockchain, there would be no need to verify the passengers’ identity at every stage of their journey, from checking in at the airport to checking into their hotel. This would save them at least 10 minutes per journey, says Alexandre Jorre, Director of Marketing and Communications at Amadeus: “Simplifying the passenger experience would give airports a competitive advantage.” 

Luggage traceability would also become more accurate using this technology, which would better coordinate the airport operators, airlines, handlers, etc. and therefore reduce the number of lost bags. 

 

More secure, quicker and cheaper payments 

 

Cross-border and multi-currency payments between travel agencies, aggregators, transporters and hotels would become faster, more secure and cheaper thanks to the blockchain. This would relieve companies from paying costs linked to the Billing and Settlement Plan or the Airlines Reporting Corporation.

The conversion of “air miles” into transactions should become simpler and change how loyalty schemes work: in addition to free tickets, travellers would be able to use their points to pay for their hotel transfer, for example. 

 

Aiming to cut out unnecessary middle-men 

 

Industry stakeholders are already approaching start-ups specialising in blockchain technology with the aim of cutting out unnecessary middle-men: “Potentially, the blockchain will put all intermediaries at risk. Businesses will be able to create tailor-made offers by dealing with service-providers directly, without going through TMC (Travel management Companies), such as Carlson Wagonlit,” explains Thierry Gaillard, a tourism professional and manager of the online guide ‘La France à ma mesure’.

Service-providers, meanwhile, will be able to deal directly with their end clients: hoteliers, for example, will no longer need to use agencies like Booking or Expedia, and airlines will be able to cut out GDS (Global Distribution Systems). The recent adoption of the NDC standard (New Distribution Capability) by Air France, and Lufthansa teaming up with Winding Tree, all tie in with this idea of cutting out the middle-man.  

In addition to its applications to authenticate and secure assets and people, the blockchain provides a potential solution to a number of problems that affect customer confidence and transparency, such as false client feedback left by the competition. The public blockchain Ethereum is currently being tested by Axa in view of setting up a type of parametric insurance, Fizzy, which will automatically refund its subscribers as soon as their flight is more than two hours late.

 

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