Blockchain Technology in the Hospitality Industry

Blockchain technology in hospitality enhances secure data sharing and improves guest experiences. It’s crucial for its ability to streamline operations, ensure transactional transparency, and foster trust between service providers and customers, thereby revolutionizing industry standards.

Key Takeaways

  • Secure Payments: Blockchain enables secure, transparent payments in the hospitality industry, allowing for the acceptance of cryptocurrencies and streamlined bank transactions.
  • ID and Security Services: Blockchain can create a shared digital ID database, reducing wait times and enhancing security for travelers at various journey stages.
  • Enhanced Loyalty Programs: Blockchain improves loyalty reward schemes, simplifying point access and redemption. Rewards can be distributed as digital tokens, usable anytime, anywhere, reducing fraud risks.
  • TUI Bed-Swap: TUI utilizes blockchain for ‘Bed-Swap’, an in-house project for real-time inventory management and dynamic pricing based on demand.
  • LockChain: A blockchain-powered direct marketplace allowing hotels to rent property with zero-percent commission, integrating property management and payment.

Table of Contents:

Introduction

Blockchain technology is one of the most exciting digital technology innovations of recent times. Despite its relative youth, it has the potential to alter the way transactions are made fundamentally, and information is both stored and accessed. In this article, we take a closer look at the blockchain, explain it, and explore its current and potential future uses within the hospitality industry.

What is Blockchain?

Blockchain is a public ledger, or list of digital records, where transactions are recorded anonymously and permanently. The records, or ‘blocks’, in the database are secured using cryptography. Once information has been recorded in the blockchain, it resists modification, meaning the data cannot be altered.

Blockchain technology is decentralized, meaning information is not stored anywhere. This prevents manipulation and makes all data transparent. Many people share the record of events across a network, which provides additional security benefits, as there is no central point of failure or vulnerability.

Moreover, all information added to the blockchain is time-stamped. This ensures that all data entries are traceable, further enhancing the transparency of the database itself.

The following video will explain more:

 

What Are the Advantages Of the Hospitality Industry?

Blockchain technology has several advantages for those operating in hospitality management, one of the most obvious being the security and stability benefits. For instance, all data is decentralized and traceable. The database can never go offline or be removed through a cyber-attack, which can be important when dealing with financial transactions.

In addition, technology could have a vital role to play in simplifying actual payments. This can be somewhat complicated, especially when dealing with overseas settlements. With blockchain technology, the entire process can be streamlined and made more transparent, increasing trust.

Furthermore, the travel industry relies upon information and personal possessions being passed between multiple companies. The blockchain can make accessing and storing information much easier, allowing for enhanced collaboration and ultimately improving the overall travel experience for customers.

More information about the advantages for the hospitality industry can be found by watching the following video:

 

4 Ways the Blockchain Can Be Used Within the Travel Industry

Although the potential uses for the blockchain within the travel industry are almost limitless, some applications have emerged and have a transformative effect, while others are just around the corner. Three of the most important ways the blockchain can be used are explained in more depth below:

1. Secure Payments

The most obvious practical application of blockchain in the hotel industry will be secure payments. Whether it is the acceptance of cryptocurrency like Bitcoin or Ethereum, or simply providing a transparent, safe, global ledger, bank payments can be streamlined, and associated hotel costs can be reduced.

2. ID and Security

One of the most exciting potential uses for the blockchain within the hospitality industry is related to identification and security services. Passengers must provide ID at various stages of their journey, but industry-wide adoption of the blockchain could potentially allow for a shared digital database, with passengers providing, for example, a fingerprint to quickly and seamlessly verify who they are, reducing waiting times.

3. Loyalty Programs

Loyalty reward schemes are an important part of generating return customs. Blockchain technology can enhance the quality of loyalty programs by simplifying the process, making it easier for customers to access and redeem their points. With the blockchain, rewards can be distributed through digital tokens that could, potentially be used anywhere, at any time, while the inherent security benefits could reduce loyalty scheme fraud.

4. Baggage Tracking

Finally, the uses of the blockchain within the travel industry extend to things like luggage tracking. Typically, a traveler’s luggage changes hands many times throughout a journey, which can result in logistical issues. The centralized nature of the blockchain can allow different companies to share easily and access related data.

Examples of Blockchain Usage Within the Hospitality Industry

It is important to stress that, aside from the hypothetical future potential of the technology, the blockchain is already in use within the travel and hotel industry. Some of the most significant examples of this are described below, complete with details of how they are helping hotels, customers, and the industry as a whole.

1. TUI Bed-Swap – Inventory Within the Blockchain

TUI, the largest tourism company in the world, was among the first to truly commit to blockchain technology, through the launch of ‘Bed-Swap’; an in-house Blockchain project. The technology allows TUI to assess demand and move inventories between different points of sale, in real time. From there, it can flex selling margins based on demand.

More information is contained in the following video:

 

2. LockChain – Direct Marketplace With 0% Commission

LockChain is a direct marketplace powered by blockchain technology, allowing hotels and other hospitality companies to rent their property. It is an all-in-one platform, allowing property management and payment to occur in one place. The decentralized booking engine cuts out ‘middlemen.’ Another major advantage is that LockChain operates a subscription model with a zero-percent commission policy.

An introductory video about LockChain can be found here:

 

3. Trippki – Loyalty Reward System Via the Blockchain

Trippki has started to make use of the blockchain through the launch of its loyalty reward system. Again, the service benefits from cutting out third-party involvement and directly connects hotels and customers. Customers are rewarded with native ‘TRIP’ tokens for staying at a hotel, or using hotel amenities. The TRIP tokens are recorded in the ledger, do not expire, can be used to book future visits, or can be exchanged for cash.

The following video explains more about this system:

 

4. BeeToken – Home-Sharing Blockchain Platform

BeeToken, or Beenest is a blockchain home-sharing platform, which connects customers with hosts and allows customers to arrange and pay for stays. Its peer-to-peer transactions mean that no commission is charged, while the decentralized nature of the platform provides added security benefits. The BeeToken platform includes payment, reputation and arbitration protocols, helping to keep both customers and hosts safe.

More about BeeToken can be learned from this video:

 

5. Winding Tree – Booking and Baggage Tracking

Finally, Winding Tree is an existing open-source demand and supply-side marketplace for inventory tracking. Several airline companies, including Air New Zealand and Luftansa, have already entered into a partnership with the platform, with advantages including an example of a blockchain booking and baggage, a lack of third-party involvement with booking procedures, and greater transparency and traceability when it comes to baggage tracking services.

More about Winding Tree can be learned from this video:

 

More About Blockchain

Understanding blockchain technology can be a little daunting, but the technology is less complicated than it initially seems, and it’s potential to disrupt the entire hospitality sector is enormous, so it is worth learning more about. If you have some spare time and want to find out a little more, we recommend the following video:

The Potential of Blockchain To Disrupt The Hotel Industry by Ron Galloway:

 

Blockchain Technology Hospitality Opportunities and the Metaverse

In addition to the blockchain technology hospitality trends and uses outlined, blockchain is also a concept that is closely associated with the metaverse. This refers to a network of 3D metaverse virtual words, where users are able to interact socially, and a growing number of hospitality businesses are waking up to its full potential.

Read the “Metaverse Opportunities for the Hospitality Industry” article for a lot more information on the metaverse, how hospitality companies use metaverse technology, and future opportunities in this area.

Blockchain is a relatively new digital technology that serves as a decentralized database, allowing information to be entered and stored across an entire network. For the hospitality industry, this offers enormous potential in reducing third-party involvement, enhancing security, improving the speed and ease of transactions, and allowing important information to be accessed anywhere.

More Digital Trends

With digital technology continuously evolving, it should come as little surprise that its applications in the travel and hospitality industry also evolve. In the following articles, we piled up the most innovative digital trends in the hospitality industry.

More Tips to Grow Your Business

Revfine.com is a knowledge platform for the hospitality & travel industry. Professionals use our insights, strategies and actionable tips to get inspired, optimise revenue, innovate processes and improve customer experience. You can find all hotel & hospitality tips in the categories Revenue Management, Marketing & Distribution, Hotel Operations, Staffing & Career, Technology and Software.

This article is written by:

Hi, I am Martijn Barten, founder of Revfine.com. I am specialized in optimizing revenue by combining revenue management with marketing strategies. I have over 15 years of experience developing, implementing, and managing revenue management and marketing strategies and processes for individual properties and multi-properties.