The Applicability Of Blockchain In The Hospitality Sector
Blockchain is one of the most ingenious technologies of recent times, and despite being relatively new, it has a huge potential to change the way transactions happen these days. According to international reports, the total worth of the currency present in blockchains is close to US $9 billion, and is expected to be over $3 trillion by 2024. The stats itself show that the technology has what it takes to improve the foundation of our economic and social systems.
While the technology might seem complicated, the concept is simple. Blockchains allow us to transfer money from anywhere, to anyone in the globe, without using any third-party transfer service such as PayPal, a credit card company or even a bank. Blockchain also works as a digital ledger where economic transactions are recorded that are anonymous and incorruptible.
Will Blockchain Become The New Era Of Internet?
Blockchain was formerly invented for a digital currency named Bitcoin. But following its colossal success, the tech community went ahead to find another potential uses of this ingenious technology. There are tons of organizations around the world that are already investing in this technology such as Citi group, Goldman Sachs and SBI holdings. In fact, the State Bank of India has shown great interest in using Blockchain for a myriad of processes, including the KYC system. Kotak Mahindra, Axis Bank, Bank of Baroda, YES bank and ICICI are some of the few banks that are trying their hand at integrating this new technology into their processes.
Believe it or not, it is an innovative technology that can be incorporated to “you-name-it” domain. From aviation industry to finance, supply chain to agriculture, Blockchain is almost everywhere. And hospitality industry is no exception.
How Blockchain Can Be Utilized In Hospitality Sector?
According to Tarik Dogru, “A world with little or no intermediaries where there is no need to build trust between people and transactions are completed in seconds. This is the promise of the Blockchain Technology.”
This profound statement proves the capability of this technology and also it shows how it can transform the way transactions are carried out inside or outside the hospitality sector. While the technology is still new, hospitality industry could enhance their overall value by incorporating it into their business.
Let’s discuss how it can be utilized in the hospitality sector.
Loyalty programs are limited to the businesses that provide loyalty offers to their customers. But this not only makes it rigid for the businesses to attract more customers but also restricts the customers in various ways. With the integration of blockchain, businesses can have an open system where they can enable their customers to exchange their loyalty programs across different sectors. This way, customers can use their points as digital tokens anywhere, at anytime. Thus, the points earned from airlines can be easily used for staying in a hotel. Blockchains allow users to conveniently buy, sell or exchange their earned point with others. This increases the competitiveness of loyalty programs among businesses as well as improve the overall service quality for customers.
A great example would be a startup company called Loyyal that has developed a blockchain platform in collaboration with IBM where customers buy, redeem, sell or exchange their loyalty tokens.
Identification And Security
One of the most interesting potential uses of Blockchain technology is related to security and identification services. Customers are required to present their ID proofs to check in to their hotel rooms, flights and even while booking a table at the restaurant for security purposes. This often gives an open invitation to identity theft; not only by the person who is responsible for checking the ID proofs but also other people who are always on the lookout for such sensitive data to be leaked for their own advantage. Thus, sensitive data and/or IDs such as passports, social security numbers, driver’s licenses, and birth certificates can be freely stored in the blockchain and can be accessed from anywhere without physically presenting your ID proofs. The data is stored in a form of cryptographically-secured codes, and thus ensures complete security.
By far, this is the most practical and obvious utilization of blockchain technology within the hospitality sector. Whether the transactions are made in cryptocurrencies like Ethereum, Ripple or Bitcoinor or in the form of global ledger, safe, transparent bank payments, the transactions can be streamlined and the cost associated with transferring payments can be reduced drastically.
Blockchain technology can be implemented to improve the transparency in the supply chain. Hotels, airlines and even restaurants can communicate through a blockchain platform where they can easily track and monitor all the supplies without fail. It can be a game changer for supply chain management transparency. Think about it, every time a product reaches a new phase, an entry can be recorded on the blockchain platform, which stays there forever. This can significantly reduce added costs, time delays as well as human errors that disrupt transactions.
The hospitality sector is highly sensitive when it comes to customer reactions as it directly affects the image of the brand. Considering the benefits Blockchain has to offer, we believe it can help businesses improve their brand value, customer experience, and make other processes efficient.