Avoiding the hype to see the value of blockchain for travel

Andy Bell, enterprise business architect at Travelport, discusses applications of blockchain

The 2017 Gartner Hype Cycle for Emerging Technologies categorised blockchain as being in the ‘Peak of Inflated Expectations’. But is this true for the travel industry? At Travelport, our architects have been investigating the implications of blockchain, both for our business and for the wider travel sector. 

In an industry which is already built on trust, where strong relationships exist and which is working well to manage complexities, we started with an important question: Is there a role for blockchain? To get to the bottom of this, as a start, we’ve been analysing the suitability of blockchain to manage on-boarding and management of travel content for secure distribution and selling. We have also been considering other potential use cases for the technology in our sector.

The Travelport assessment

Use case Suitability for blockchain or distributed ledger and limitations
Whole trip, travel reservations Currently not suitable for public blockchains, scalability and speed of transaction verification are limiting factors.
Traveller identity Suitable for blockchain or distributed ledger, needs robust access control mechanism and security model.
Payments for travel transactions Suitable for blockchain, requires financial partners and requires currency stability.
Loyalty federation Possibly suitable for blockchain, requires collaboration of travel suppliers and agreement on exchange mechanism.
Guarantee of bookings and payment Validating a booking on distributed ledger, suitable for blockchain as it does not involve keeping the whole reservation on the ledger.
Ticketing Similar to the above but risks transposing legacy process to distributed ledger technology.
B2B Settlement Suitable for distributed ledger in a closed business network.
Shopping and inventory Inventory control possible with distributed ledger but probably only within a limited access group or closed network due to performance and scalability.
Travel exchange Travel token or currency exchange capability, working across supplier’s ledgers. Will probably be a necessity to support some of the other models.

Travelport predicts that in the short term most blockchain developments will happen in closed supplier groups on private and permissioned chains within the travel industry. In the mid-to-long term we may see payments, inventory and order management disrupted by blockchain or distributed ledger technologies.

Whole trip management on blockchain, air settlement and combining of air supplier journeys we see as a longer-term opportunity, anticipating further evolution within blockchain technology. The evolution of open standards around travel blockchains and the willingness of travel suppliers to offer or sell content on a distributed ledger will drive advancements in these areas.

The main impact of blockchain and distributed ledger technologies, however, will be a reduction in processing times and efficiency improvements for any process where multiple parties must share and agree the same information. Examples include invoicing, settlement, moving of payments, contract negotiation and identity verification.

Travelport customers currently undertake many of these activities using manual processes with multiple checks and verification steps. A distributed ledger secured by blockchain would ensure that all parties agree on a single version of the truth in real time cutting out many of the existing processes.

In summary

Short Term (1-2 years) Mid-term (2-5 years) Long term (5 years +)
Limited B2B payments Travel cryptocurrency exchanges IATA coin for air settlement
Travel cryptocurrency/token offerings Reservations on distributed private ledger Whole trip on blockchain
Basic traveler identity Cryptocurrency payments for travel Interlining across blockchains
Private permissioned distributed ledger for supplier inventory Early IATA Coin adoption for air payments and settlement Global traveler identity
  Traveler identity shared across suppliers

For more information, follow this link to read Travelport’s technical report on blockchain in the travel industry.

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