9 Ways Blockchain Technology Is Emerging As A Game-Changer In The Hotel Industry
By Ava Lee, Business Analyst and Writer at MyAssignmenthelp
The blockchain technology is slowly and steadily carving out a prominent space for itself across different industries. Ideally, blockchain can be recognized as a decentralized, invulnerable ledger system that keeps track of economic transactions that can be implemented to record anything that holds value, other than just financial transactions. What was initiated as the foundation of the cryptocurrencies like Ethereum and Bitcoin, the advantages that blockchain brings to the table has been successfully integrated with the hotel and hospitality industry.
While a blockchain may not provide the solution for every challenge that is encountered by the hotel industry, but blockchain-based systems do present efficient solutions for several aspects of the industry. So let's throw light on how the blockchain technology benefits the hotel and hospitality industry, and its application.
The advantages of blockchain technology
Using blockchain technology in the hospitality industry presents several advantages, with the most evident one being the aspect of security and stability. For example, all the information becomes decentralised and easily regulated, and the database would be online at all times and reduces the risks in case of cyber threats, all of which are significant when it comes to maintaining financial transactions through digital platforms.
Additionally, the blockchain can be beneficial for accessing and storing information, and prompting better collaboration within the operations and ultimately enhancing the overall travel experience for tourists and consumers. Presented below are some of the ways blockchain proves advantageous for the hotel industry.
1. Helps in garnering better revenues
By adopting the blockchain technology, the hotels can share their catalog or inventory and other properties online with all the potential consumers. This enables the businesses to be more visible to the people. This, in turn, results in more exposure to the hotels and subsequently helps them to accumulate more revenues.
2. Safe transaction facility
One of the most prominent perks of blockchain technology is the seamlessness of transactions. Since all the global currency system or bank accounts are precisely integrated, it makes carrying out the transactions a lot convenient. In fact, this comes as a blessing in case of settling the payments of overseas transactions.
3. The convenience of booking a hotel
The system of decentralization of the database in blockchain simplifies the travel and hotel booking processes. With the help of the technology, people can automatically check the availability of accommodation or transportation and pay for the services directly. This would reduce the dependence on travel agents.
4. Establishing real-time collaboration
All details relevant to the hotel and hospitality industry can be managed efficiently by the blockchain technology. The details can be passed on to many organizations, and they can work together to provide a greater customer experience.
5. Helps in maintaining transparency in supply chain
Large organizations within the hospitality industry generally follow the franchise model where the quality of different supplies is immensely crucial to maintain the reputation of the brand. The blockchain technology opens up the opportunity to maintain absolute transparency in case of supply chain and make the whole process simple.
6. Assists in enhancing the user experience through loyalty programs
Loyalty programs enables the consumers to access all their points quickly. Such policies of loyalty benefits don't involve any gimmicky promotion strategy, and the tokens are offered to the tourists in a digitalized manner. In this case, the hotels, airlines, car rentals, and tour guides can form the blockchain network for their consumers to redeem their loyalty points from the partner organizations.
This hospitality industry has often been considered a sensitive business in terms of satisfying the consumers. The integration of blockchain technology will definitely allow the hospitality industry to provide an unmatched customer experience, and also make the backend processes more seamless, and establish the brand value.
7. Creating smarter contracts between hotels and travel agencies
The implementation of blockchain technology in the hotel industry also allows the formation of smarter contracts for both minor and major transactions. Hotels and travel agencies, for example, could strengthen their business relationships with smart contracts on blockchain systems.
Like the legal contract, a smart contract between hotels and travel agencies would incorporate the contractual provisions that are predetermined by both the parties.
Anytime a transaction is underway; it is saved and shared on the blockchain. When the transactions are recorded, the payments can be settled immediately. Not only would it simplify the transactions, but would also further boost the sales of a room through better liaisons between travel agencies and hotels.
8. Establishing digital identification
Blockchain technology can resolve the issue of identity theft. In hotels, restaurants, airports, tourists are generally required to present their ID as proof in order to get through the security checks while boarding flights, booking hotel rooms, or while consuming alcoholic beverages. Such processes often give rise to identity theft of the consumers.
As a credible solution to this issue specific digital IDs can be provided, or alternatively, driver's licenses, birth certificates, passports, social security numbers, and evidence of identification can be saved in the blockchain system, and people can be given permissions to check and verify the personal details.
Much like the QR codes, the digital IDs can come with cryptographically-secured codes that provide the validation of one's identity without actually looking into the personal details of a consumer. Other than warding off the likelihood of physical IDs or personal details, digital IDs that are saved on a blockchain could also reduce the risk of forgery.
9. Keeping track of the guests
The implementation of blockchain technology in hotels is bringing a colossal transformation in terms of keeping track of the guests. With the blockchain platforms, hotels can stay updated right from the time guests set out from home for the airport to when they check in to board the flight and even upon arrival at the hotel.
This procedure of tracking helps in increasing the efficiency, and decreases wait time while the check-in process is underway and hence make it convenient for the guests to travel in a hassle-free manner.
Now many may argue that tracking the guests' movements would mean meddling with their privacy, but the process of tracking will only be initiated after the guest's authorization, and ultimately the consumers will be able to regulate the degree of information that they wish to share with hotels or other members in the network. Hence, the blockchain technology has the potential to offer seamlessly integrated services without intruding into their personal space.
Even though these processes have only been underway and hasn't been fully implemented yet, but that day isn't too far away when the technology will completely take over the mainstream operations in the hotel industry.