Tourism is a highly profitable industry. According to data for 2020, its share of world GDP was about 5.5%, that is, every 20 cents per dollar is spent in the tourism sector. And it’s no surprise that this industry is of great interest for blockchain which is revolutionizing all traditional sectors.
The distribution of services designed to provide vacationers with everything they need is based on intermediaries’ involvement, whose role is played by travel agencies or aggregator companies. Their field of activity is transportation, accommodation of tourists, meals, sightseeing services, search, and provision of up-to-date information.
Intermediaries do not work for free, and their services increase the cost of rest. Traditional ways of reducing tourists’ spending, such as reducing the share of intermediaries in the final cost of a tourist service or product, or increasing the level of trust between counterparties – do not work too well today, having exhausted their capabilities.
But in recent years, there has been progress associated with the spread of decentralized network technology. Blockchain is already working in many sectors of the economy, and the prospects for using cryptocurrencies in the tourism sector are clearly underestimated. But the situation has already started to change. Startups appeared that turned out to be quite useful and interesting, and their number is steadily growing.
Most of those who have heard of this term know almost nothing about what it is. From a technical point of view, blockchain technology is a complex structure, but in general terms, it can be represented as a specialized relational database. Individual records are called transactions here, they are combined into blocks, and blocks form a chain in which each new block refers to the previous one. Blockchain Features:
- all records are securely encrypted using advanced cryptographic algorithms (especially if we speak about forward-looking blockchains like DecimalChain. Decimal has a range of blockchain developments including token Decimal that can be used in various spheres) ;
- the blockchain itself is stored simultaneously on many computers (they are called nodes), so deleting data on one or many nodes is not a critical event;
- data is entered into the blockchain after the transaction correctness is verified by miners who have been delegated this right. Anyone can become a miner if they have the appropriate equipment. The verification procedure itself consists in performing complex and energy-intensive mathematical calculations, for which miners receive a reward in the form of a commission in cryptocurrency for a confirmed transaction;
- data entered in the blockchain can no longer be changed.
These key properties of the blockchain make its application safe and transparent, requiring no intermediaries.
Three advantages of blockchain technology
The above-listed features of distributed registries determine the advantages of their use:
- data security. Reliable encryption, which makes it almost impossible to hack by brute force, combined with distributed storage of the blockchain on many nodes at the same time, provides a high level of record security;
- immutability. If someone wants to change a previously made record for selfish purposes, this number will not work for him, since such a transaction will not be confirmed by miners. And technically speaking, old records that have already been verified and entered into the registry cannot be changed.;
- decentralization. This is democracy in action. Even the owner/developer of the blockchain does not have full control over the network after its deployment. Especially – other subjects. Blockchain guarantees complete anonymity of counterparties, since their identifier is the number of the crypto wallet, and nothing more.
The basic characteristics of the blockchain promise many advantages of its use, but they are limited to simple transactions operating with cryptocurrency. The emergence of programmable smart contracts, which are recorded in the blockchain in the form of a dormant transaction activated by users, has led to a significant expansion of the scope of decentralized networks. Developed blockchain ecosystems often provide their users with several related services, like DecimalChain with its crypto decimal places and crypto decimal calculator.
Blockchain in the tourism industry
Security and transparency are the trump cards that can make tourism and blockchain technology inseparable. The simplest example is booking hotels and air tickets by a travel agency. The procedure is quite troublesome, since it is necessary to contact many firms, and the human factor here often leads to conflicts.
The use of blockchain technology is able to perform such operations more transparently and safely, partially automating the process in which responsibility will be distributed over the network. In the end, everyone will benefit the client, the travel agency, the final beneficiaries, the airlines, and hotel/hotel owners.
Promising directions of using blockchain in the field of tourism
We have given the simplest and most obvious example. In fact, the possibilities of decentralized networks with their smart contracts are much wider.
Secure payments
Cryptocurrency as a means of payment is used in many areas, providing complete security of transactions and the ability to track them. In addition, as a result of the exclusion of intermediaries, they cost the parties less and exclude the possibility of outside interference in order to delay the payment of tourist services.
Another positive point is that there is no need to buy the currency of the country where you are going to go on vacation. Often it is such currency transactions that are the riskiest and quite lengthy in time, especially if it is not the most common currency.
Management of transport or hotel logistics
Automation of tourism logistics is a rather promising direction that promises a noticeable reduction in costs for large travel companies. In particular, by refusing the services of intermediaries. It is also important that management with the help of blockchain reduces the number of errors and reduces the time spent on management.
Business ratings
Is there anyone who has never read comments on the vacation place before going there? It can be difficult for an ordinary user to understand how objective the information he consumes on thematic forums is. The use of blockchain for these purposes guarantees greater transparency, reliability, and security of such assessments.
Baggage management
A traveler usually has no control over the location of his luggage after he leaves the check-in desk. He repeatedly commits various perturbations that are almost impossible to track. The introduction of blockchain and cryptocurrency can simplify the interaction between carriers, which will allow you to know exactly where your luggage is at the moment.
Reward systems
Many travel agencies practice using customer loyalty programs, providing them with various preferences for repeated requests. But such information, as a rule, is opaque and subject to manipulation. Blockchain is able to solve the problem by giving customers the opportunity to independently check their points` balance and use it at their discretion.
Current examples of the use of blockchain in the tourism industry
Now, decentralized networks are actively used in the field of recreation. Here are some real examples:
- Winding Tree. The company has developed a smart contract for booking tourist trips, which allowed customers to reduce costs by an average of 20%, pre-evaluating them using a cryptocurrency calculator;
- ShoCard and SITA. The joint project aims to facilitate the management of tourist identification at airports, hotels, and checkpoints. At this stage, the platform is in beta testing;
- DecimalChain Uses smart contracts to distribute the club loyalty token, and cooperates with a pool of validators from Asia, offering cheaper holidays mainly in the Asian region (Thailand, Vietnam). It is based on the token Decimal. Exchanges where Decimal is traded: BitTeam, KickEX, Coinsbit, XT.com;
- Trippki. Another example of a project in the field of loyalty program support. Provides an opportunity for direct interaction between clients and companies in the tourism industry.
Summarizing
Since there is a great deal of money circulating in the tourism industry, and for some countries, this is the basis of the economy, increasing the attractiveness of travel agencies requires the use of innovative approaches, one of which is the active integration of blockchain technology into the industry. According to experts, in 5-7 years, the use of decentralized networks in the tourism sector.
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