How blockchain can make your next trip Instagram-worthy
“New generations are no longer buying assets. They’re buying experiences.”
Photo by Roberto Nickson on Unsplash
For some, a vacation means a sun-filled week swigging margaritas at the beach. For others, vacation means paddling through dense Guyanese rainforests in an indigenous dugout canoe, or photographing spectacular horse races in Mongolia’s Golden Eagle Festival.
“New generations are no longer buying assets. They’re buying experiences,” said Mike Croucher, Chief Architect at travel commerce platform Travelport.
The demand for memorable moments over material goods has created what Jeff Frum of Millennial Marketing calls a form of “experiential currency.” In this digital age, Gen Zers and Millennials want fun experiences they can share on social media to earn likes and inspire their friends, family, and connections.
Millennials plan to spend 35 days each year traveling, and 40 percent prioritize “Instagramability” when choosing a destination, according to Skift. Gen Zers are more “bucket-list oriented and looking for off-the-beaten-path locations,” and 90 percent of their travel decisions are influenced by social media.
Travelers want unique experiences they can manage with ease and simplicity. But is the travel industry ready to accommodate them?
“The supply chain within travel is often fractured,” Croucher said. “It’s especially challenging when you look at in-trip tours and activities. Local cookery or language lessons, Segway tours, and gallery passes are often part of an Instagram-worthy trip, but they need to be procured from small, in-destination suppliers and paid for in local currency.”
Travel commerce platforms like Travelport could enable a single-transaction booking of in-destination experiences. Managing the complexity of large numbers of small-scale suppliers, according to Croucher, has historically been a barrier.
“The cost for us to put content from smaller, local travel providers onto our system takes quite a lot of work,” Croucher said. “There’s the expense of surfacing it and then the expense of settlement and managing contracts.”
The entire process to reach a completed transaction often takes time, he said, due to the diverse nature of travel services and products, and the limited technical capabilities of travel suppliers.
Today, travelers looking to discover small, local suppliers must sort through many untrustworthy and even false reviews. Booking flights, hotels, and other travel accommodations can be overwhelming.
That’s where blockchain can make a big difference, Croucher said. In 2018, Travelport began working with IBM to explore how the distributed ledger model of a private blockchain could solve the issues of content distribution and settlement.
Thanks to blockchain, travelers, experience providers, and hotels could benefit from the management and increased availability of so-called “long tail content.”
“We’re putting the ability into the hands of the operator to upload bookings and work through contracts and administrative tasks within the blockchain network rather than manually managing and owning these tasks, which is normally the expensive part of transactions,” Croucher said.
To ensure that the experiences available through this blockchain are trustworthy, meaning that they actually exist and are of suitable quality, Travelport will require every piece of content—every walking tour or fishing expedition—to be endorsed by a person or entity in the local market.
“A local travel agent or a tourist board would endorse the content, giving a seal of approval on the chain,” said Croucher.
Once the content is endorsed, it will become visible on the blockchain to resellers, such as a hotel or cruise line, and the endorser will receive a commission on the sale of their endorsed products. When a sale takes place, a smart contract will execute an automatic payment to each participating party.
“It’s an instant settlement of commission, whereas today the settlement of commission on any sale is a six to eight-week process,” said Croucher.
While the value of blockchain for travel may be compelling, companies may be unsure about where to start. Croucher has some advice for cutting through the hype of blockchain.
“It’s not about applying blockchain to existing processes,” he said. “It’s about identifying business problems that distributed ledger capabilities can solve and then applying blockchain.”
This thoughtful approach will lend itself, he said, to a successful digital transformation.
“Technologies like blockchain allow us to think differently about business and processes. No matter what industry you’re in, you must disrupt yourself,” he said.