We have all felt the pain – making online reservations and filling in those fields with name, birthdate, credit card information, etc.; getting through airport security lines with our ID’s and shoes in a tray; finding that our flight has been overbooked and agents are asking for volunteers or, in some cases, kicking passengers off; ordering an Uber upon arrival and again punching in all of that information; arriving at our hotel and once again showing our ID’s and credit cards during the check-in process.
It’s a hassle, compounded by the pervasiveness of security, fraud, ID theft, and more. And travelers pay the price.
There is an easier way, and it is about to disrupt the travel industry. It’s called blockchain. And while it has already disrupted the financial and healthcare industries, it is only poised to hit the travel industry. But it will hit soon, because it solves so many consumer pain points, and customers will begin to demand it.
Why Blockchain?
Basically, blockchain records and stores transactions and data in a secure environment, through a type of ledger system. Every transaction, or every piece of information that is committed to a “block” is there permanently, attached to the block before it and the block that comes after. These cannot be altered because they are stored on a system of computers, not a single database. Any attempt to alter an item in a block will immediately be caught and curtailed. Access to blocks is granted by key codes, which the parties to a transaction or a piece of information have in their possession. They can access but they cannot alter. The benefits for financial transactions are clear and obvious; likewise, the ability for patient records and data to be stored and accessed in a secure environment is a monumental improvement.
How about the travel industry? Here are just a few ways in which blockchain will meet consumer and government demands for ease, for security, and for overall efficiency.
- Overbooking
This has been a standard practice in the airline industry for decades. The concept is that by overbooking, every plane will be full, because some travelers may not show up. In the U.S. at least, government agencies are considering regulations that will prevent airlines from doing this (Remember the United Airlines passenger who was dragged off the plane recently?).
Setting up a blockchain airline reservation system will prevent double-spending on available seats, ensuring passengers that they will not be asked to volunteer, or, worse, being kicked off a plane that has been overbooked.
- Identity
Travelers have to “prove” their identities at several points in their journeys. Further, they must pull out their credit cards to pay for many parts of those journeys. What if all of this were securely stored in a block and accessible with one click? Reputation-based identify systems and secure storage of credit card information can do just this. Through biometric technology, a traveler can establish his identity which will then be stored in a block. Ultimately, this can eliminate standing in security lines at airports or the process of hotel check-in. Add to that the use of blockchain to securely store card information, and that card will never have to come out of a wallet.
Foreign travel brings with it even more paper-based identity requirements – specifically, passports. These are routinely lost, stolen or counterfeited. Even ISIS has the ability to create fake passports. By 2013, in fact, Interpol had reported that over 40 million travel documents had been lost or stolen.
The answer can easily lie in digital passports that can be stored through blockchain technology, not just streamlining getting across borders and through customs, but also returning control of identities to the owners of those identities.
- Fraud Prevention
The travel industry is highly susceptible to fraud and chargebacks, and merchants lose money every year to these activities. While online travel merchants are under immense pressure to expand and compete, each add-on that a merchant embraces comes with new risk for fraud. At the same time, consumers of online travel arrangements are demanding a more streamlined process.
Add to this, the increase in mobile bookings, and the opportunities for fraud increase. According to recent statistics, 40% of travel bookings were completed via mobile devices in 2017; 72% of mobile hotel bookings were made within one day of the intended stay; and last minute changes put increased pressure on travel merchants who may not have time to check for potential fraud. Al of these activities are easy prey for fraudsters.
Here are some additional pretty shocking stats:
- Average fraud losses to travel merchants are 0.44% per year
- 4% of airline bookings are rejected because of suspected, not necessarily real, fraud
- Credit fraud in the airline industry alone represents up to a $4.8 billion problem every year
The problem lies in the fact that merchants must check for fraud manually or depend upon established risk factors to decline bookings. This is inefficient, can anger legitimate travelers, and still does not eliminate a lot of fraud.
Further, when travel merchant depends upon keeping travelers’ personal and financial information in their own databases, the risks for hacking and theft are always there.
Blockchain can eliminate most of these issues. When travelers can establish their identities and their credit card information through this technology, fraud can almost certainly be eliminated. The only potential is when a traveler does not maintain his keycode securely, and that key code is stolen. But the fault then lies with that individual, not with the merchant.
- Company Travel
This is a huge industry for travel merchants. Companies send their employees all over the place, and, traditionally, either the individual employee or a specific corporate department is responsible for booking all of the travel arrangements.
Many large enterprises enter into agreements with travel management companies and must provide employee travel information to that company, often each time an employee makes a trip. The effort to streamline this process is to create employee profiles which the travel company stores in its database. Again, the potential for hacking enters into this mix.
If employees had their profiles entered into a blockchain, they are there permanently and not hackable. Manual profiling becomes “history.” And if any information must be changed, it can be entered into a new block.
One unified profile, made available to whatever travel merchants necessary streamline and secures everything. And when managers need to check on an employees’ whereabouts, blockchain can provide that information in real time, through a connected IoT device.
Are You Ready?
These are only some of the potentials for the promise of blockchain in the travel industry. If you are in this industry in any capacity, you should be ready for this disruption. And you can be by setting up your own private blockchain technology within your own niche right now. You will then be poised to participate in the next disruption which many call the “internet of blockchains” – systems that will open up collaboration among travel merchants with specific niches. It’s all coming.
If you want to get a great competitive edge, Brainberry can develop a private blockchain for you right now. You can give your clients/customers more streamlined experiences, greater security, and position yourself to be far less susceptible to fraud. Let’s have a discussion about it.