Australian travel company Webjet has teamed up with Microsoft to create a new payment and billing solution which it claims could save the industry billions of dollars.
The new blockchain solution is essentially a digital transaction ledger that can be shared between a network of computers, showing all historical updates in the transaction chain. This clarity of data will help businesses remove any discrepancies, and will “fundamentally change the way businesses exchange value and assets, enforce contracts and share data”, according to Webjet.
“Globally, hotel room wholesaling is a hundred-billion-dollar marketplace. Every day there are millions of transactions taking place and a single hotel stay could involve five or more transactions in the distribution chain. This marketplace can be prone to data discrepancies due to the volume of bookings passing through multiple systems. Between five and 10% of bookings can be impacted or, in other words, up to 10 billion dollars’ worth of transactions,” said John Guscic, managing director, Webjet.
He added that the decision to work with Microsoft on the new blockchain solution was a “no-brainer”.
The Webjet-Microsoft solution is a first for the travel industry, but the blockchain concept is growing in popularity across multiple sectors, and blockchain-based businesses are forecast to be worth US$10 billion by 2022. Webjet said that the idea was born out of a project to improve the efficiency of its own supply chain. But during the development phase it realised that it had the potential to “transform transactions across the entire travel industry”.
“Blockchain eliminates transaction errors by having an indisputable record of truth,” Guscic commented. “As we’ve tested the technology, we quickly realised it had the potential to improve processes with the rest of our travel partners who face similar complexities.
“We realised facilitating bookings in the travel industry through blockchain could become an additional business we could enter in the future, and the same technology could also help solve problems outside the travel industry. Undoubtedly, the blockchain technology built with Microsoft is an exciting opportunity for us over the next few years,” he added.
Webjet is rolling out the blockchain platform in three phases, the first of which is now being trialled by the Lots of Hotels and Sunhotels brands. Other companies will be invited to trial the platform in future.