Is Blockchain the Key to Transforming the Global Tourism Industry?
Blockchain

Is Blockchain the Key to Transforming the Global Tourism Industry?

IndustryTrends

Challenges faced by the global tourism industry are legion, and though some require governmental intervention – extreme weather, geopolitical instability – others can be readily solved through the implementation of cutting-edge technology.

From double bookings and identity verification issues to prohibitive payment processing costs and inefficient loyalty programs, long-standing problems continue to be a buzzkill for excited travelers. Thankfully, a solution presents itself in the form of blockchain, which just might hold the key to transforming tourism for the better.

Travel, Simplified

One of the most notable benefits of incorporating blockchain into the tourism industry is the ability to create transparent and tamper-proof booking records. This is one of the reasons bitcoin is so valuable: the public ledger is immutable, it is impossible to ‘double-spend’ a bitcoin, and users can verify the authenticity of the currency in their wallet by checking a block explorer.

The Bitcoin blockchain, of course, records financial data – but blockchain itself can record all kinds of information. By leveraging it for travel bookings, double and fraudulent bookings can be prevented, ensuring a seamless experience for tourists and reducing operational overheads for service providers.

Self-sovereign identities, which store public identifiers of an identity on-chain, are another gift to tourism. SSIs give individuals control over the information they use to prove their identities across various websites, services, and applications, and in the context of tourism could streamline hotel and airport check-ins, making the process less susceptible to identity fraud.

Moreover, by decentralizing personal data and eliminating the need for centralized databases – which are vulnerable to cyber-attacks – travelers can enjoy greater peace of mind and enhanced privacy. Earlier this year, an Australian travel agency unwittingly exposed customer data after leaving a database publicly accessible. This sort of thing simply would not – indeed, could not – happen if SSIs were used.

Another key benefit concerns the transactions that occur at every stage of the tourist experience, from booking hotels and flights to paying for attractions and dining out. With blockchain-based smart contracts enabling trustless transactions, payment processes are simplified and booking fees reduced compared to using credit cards.

By leveraging blockchain, service providers get to lower costs while consumers benefit from more accessible and affordable travel. Of course, not all vendors accept crypto. At present, around 15,000 businesses worldwide accept bitcoin, including 2,300 companies in the United States. Expect this figure to rise following the legitimacy conferred by the SEC’s spot bitcoin ETF approvals earlier this year.

Rewarding Loyalty 

Loyalty programs have become a pillar of the modern tourism industry, as airlines, hotels, and travel companies have recognized the value of a returning customer. And yet loyalty programs are riddled with inefficiencies, like rigid reward structures and a lack of reward relevance.

Blockchain-based loyalty programs are a different story. By leveraging digital tokens securely recorded on-chain, these transparent programs benefit from fewer intermediaries, superior flexibility, and reduced transaction costs. Payments can be automated and funds available almost immediately.

Additionally, the decentralized nature of blockchain eliminates the risk of data manipulation, fostering trust between travelers and vendors.

Travala: A Pioneering Example of Blockchain in Tourism 

The idea of bringing blockchain to tourism is not an abstract one: crypto-native travel booking platform Travala has been in operation since 2017 and exemplifies the technology’s transformative power.

With a vast network of over 2.2 million properties in 230 countries, more than 400,000 activities, and over 600 airlines, Travala has global reach. It also supports 125 payment options, including traditional methods like credit cards and over 100 digital assets and stablecoins.

Aside from supporting cryptocurrency at the payment stage, how does Travala use blockchain? Well, a core offering is its blockchain-based rewards system (the AVA Smart Program) which uses a native token, AVA, to unlock multiple benefits for users.

The token is central to the loyalty program, whose members can receive up to 10% back in AVA (for Smart-tier members) or bitcoin (Smart Diamond and Platinum members) for every completed trip. Even the Basic free membership grants users up to 2% back in AVA on bookings after a trip’s completion, paid directly to their wallet within 24 hours. Users are also entitled to up to an additional 3% discount on the booking price when paying entirely in AVA.

Beyond discounts, the top Diamond tier members can receive random travel experience rewards, claim travel credits by completing “contributor tasks”, and access other exclusive perks. AVA rewards can be put towards future bookings, traded for other digital currencies, or spent on platforms where AVA is accepted. Tokens even give users a say on the future of Travala.com, entitling them to vote on key platform proposals.

According to its most recent monthly report, over 20,000 Smart members currently take advantage of the perks offered through the unique blockchain-based loyalty program, while over $4.5 million has been distributed in AVA as ‘giveback’ rewards. The number of monthly active users (MAU), meanwhile, exceeds a quarter of a million and 78% of all bookings are paid using cryptocurrency.

As projects like Travala continue to pioneer the adoption of blockchain in tourism, it is clear that this transformative tech could play a pivotal role in shaping the industry’s future. Traditional travel companies would do well to note the prevailing headwinds.

Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.

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