Moving past traditional methods, the tourism industry sees great potential in the application of blockchain technology, argues Pablo Castillo, CTO of travel blockchain firm Chain4travel. He contends the aviation industry, notoriously cluttered with antiquated technology and standardization issues, could greatly benefit from this innovation.
A fresh exploration into Blockchain and the Travel Industry
Blockchain not only augments the travel sector by streamlining operations across the board, but it also counteracts the fragmentation inherent within the industry. However, Castillo claims that the effectiveness of this implementation is largely contingent on the unbiased nature of blockchain technology.
He also stresses the value of having a distinct layer 1 blockchain for the travel industry owing to its seasonal business cycles, which sees the cost of most layer 1 blockchains skyrocket when network usage is at its peak. This could adversely impact the financial feasibility during times of high booking.
Touching on the topic of safety, Castillo speaks to how blockchain can prevent potential data breaches like the one that occurred in 2018 at Marriott.
Delving into the travel industry’s key players, the challenges and the revolutionary impact of blockchain
Pablo Castillo (PC): The global tourism sector, encompassing different verticals including airlines, hotels, car rentals, cruises and more is vastly complex. In this labyrinth, the neutral quality of blockchain technology serves as a solid foundation. The aviation industry seems particularly ripe for this transformation due to its outdated technological structures and dire need for novel solutions. Despite its complexity, blockchain can alleviate several long-standing hurdles like payments that take up to a year to settle, consistency issues with data and the complications involved with ticket ownership and resale.
Moving forward, establishing a more streamlined loyalty program could be a key area for the application of blockchain. Unwieldy and often confusing, current loyalty programs struggle to deliver rewards in a straightforward manner.
Why a unique layer-1 chain for the industry: The pros
PC: The Camino Network or the Layer 1 blockchain tailored for the travel industry has its roots in overcoming industry-specific challenges. Seasonal fluctuations in the travel industry give rise to varied amounts of traffic which is directly correlated to the gas fees of most blockchains. However, on the Camino Network, gas fees are fixed and can only be changed through voting—enabling better stability and predictability. This network also emphasizes on ‘Know Your Business (KYB)’, eliminating the need for laborious paper contracting formats.
The role of blockchain in reducing fragmentation in the travel industry
PC: The travel industry backend displays an operational jumble due to the many service providers, customer interfaces and partners that coexist and work through a plethora of API’s. The answer to this chaos lies in the impartial nature of blockchain technology. Blockchain can introduce global data standards and connectivity, deliver a seamless customer experience and integrate miscellaneous areas like ticket booking, payments and customer interactions.
The mitigation of privacy issues and the safeguarding of customer data
PC: Ensuring the safety of customer data is an industry priority. To mitigate privacy issues, the construction of a decentralized, encrypted travel messenger is underway. This will provide a new level of connectivity and enhance data security, even for sensitive information exchanges.
We welcome your thoughts on this enriching conversation in the comments section below.
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Frequently asked Questions
Q1: What is the agnostic nature of blockchain technology?
A1: The agnostic nature of blockchain technology refers to its ability to be used in various industries without being limited to a specific field or application. It can be adapted to suit the needs of different sectors, including the global travel industry.
Q2: How can blockchain technology benefit the global travel industry?
A2: Blockchain technology offers several benefits to the global travel industry. It enables secure and transparent transactions, eliminates the need for intermediaries, reduces fraud, enhances data privacy, and improves the efficiency of processes such as booking, ticketing, and loyalty programs.
Q3: What are the challenges of implementing blockchain technology in the global travel industry?
A3: Implementing blockchain technology in the global travel industry comes with challenges such as regulatory compliance, scalability, interoperability with existing systems, and the need for industry-wide collaboration. Overcoming these challenges requires careful planning and coordination among stakeholders.
Q4: How does blockchain technology ensure data privacy and security in the travel industry?
A4: Blockchain technology ensures data privacy and security in the travel industry by using cryptography to encrypt and protect sensitive information. It provides a decentralized and immutable ledger, making it extremely difficult for hackers to tamper with data or gain unauthorized access.
Q5: Can blockchain technology help reduce travel-related fraud?
A5: Yes, blockchain technology has the potential to significantly reduce travel-related fraud. By creating a transparent and trustless system, it becomes easier to verify the authenticity of bookings, tickets, and identities, thus minimizing the occurrence of fraudulent activities within the global travel industry.
Q6: What role does industry-wide collaboration play in harnessing the potential of blockchain technology in travel?
A6: Industry-wide collaboration is crucial in harnessing the potential of blockchain technology in the travel industry. It helps establish standards, facilitate interoperability between different platforms, and enable the seamless integration of blockchain solutions across the entire travel ecosystem.
Q7: How can blockchain technology enhance loyalty programs within the global travel industry?
A7: Blockchain technology can enhance loyalty programs within the global travel industry by providing a secure and transparent platform for tracking and redeeming rewards. It enables travelers to easily earn and spend loyalty points across various travel providers, creating a seamless and rewarding experience for customers.