Blockchain, Bitcoin and the Tourism Industry: A New Travel Experience is Coming

With airlines and travel businesses facing billions of dollars in losses every year due to credit card fraud, CoinTelegraph spoke with blockchain game changers about its use in customer loyalty platforms.

The topic of payment fraud solutions will be discussed at the 10th Air Travel Payments Summit (ATPS), co-hosted with Global Air Travel Initiative. The conference will be held in Barcelona on April 26-27 and will explore three topics:

1. Payment Monitoring

2. Fraud Detection

3. Travel agency and online travel agency monitoring

Main areas of blockchain application in tourism

Gregory Simon, CEO and co-founder of ribbit.me, identifies four main areas where blockchain can be used: currency, licensing, booking and insurance.

Currency: Blockchain tourism applications are associated with currency. The Bitcoin payment process from the smartphone terminal to the foreign exchange is expensive. If Bitcoin is not possible to realize the payment function, then another cryptocurrency application that converts the legal currency from Bitcoin into local currency through Bitcoin ATMs or using crypto exchanges will be more advantageous. In addition, crypto technology is also used in Rabbit.me's customer loyalty platform.

Documents: In blockchain we can store important documents like passports, visas, permits, ID cards, driver’s licenses.

Booking: Travel DAC (Distributed Autonomous System) is one of the important concepts behind Ethereum-based blockchain. Through this system, travel companies can organize tourists more effectively.

Insurance: Travel insurance generated using decentralized peer-to-peer technology becomes an alternative because it is cheaper and more transparent.

Bitcoin is a borderless technology application

Christopher Franco, blockchain scientist at ribbit.me, points out that Bitcoin is a borderless technology. This is why Bitcoin is so powerful in the tourism industry.

Franko told coinTelegraph:

I can travel to any country in the world with a dollar or a million dollars in my pocket and face little risk of ransom. Imagine if you carry a suitcase with 100 dollars in it, your suitcase will be "empty" in no time. Whether Expedia needs it or not is irrelevant, what should be considered is whether the traveler can carry it and redeem it for goods or services.

Do we need special blockchains for new cryptocurrency applications as backup? Franko thinks not.

He told CoinTelegraph:

If they think they can do better than any existing blockchain then go for it! I think the essence of blockchain is a decentralized, fault-tolerant, incorruptible, transparent database, if all of these are what you need then by all means give it a try.

Online Travel Agencies

Kalpesh Patel, owner of Green River Inn and BookwithBit.com, said there is demand for bitcoin among online travel agencies. His site, bookwithbit.com, only accepts bitcoin, and Expedia Inc. has had some success using it as a payment method.

Patel told CoinTelegraph:

Travelers who have experience in traveling have learned that Expedia uses Bitcoin for bookings and that there are no promotional offers for booking with Bitcoin, so they are a little disappointed. Other websites offer special prices or discounts, but Expedia does not have any discounts. There is no rebate for hotels and consumers, so why should they use Bitcoin to book hotels? However, these people do not know that Bitcoin has an immeasurable future.

There are still many issues to be solved in the application of Bitcoin. Patel stressed that Bitcoin must create fast and efficient work efficiency. For example, if a hotel accepts Bitcoin, it should be possible to use Bitcoin to directly purchase some goods or pay bills.

Patel continued: “When someone pays with Bitcoin, the merchant converts the Bitcoin into dollars. As the value of Bitcoin rises and falls, it is necessary to create a unique economic model for it. Therefore, there will be a need for venture capital or support from the Bitcoin community.

Tourists cannot really benefit at present

Lee Gibson Grant, developer of the Spanish Tourism Club on the Bitcoin forum, said it is necessary to consider why Bitcoin or blockchain has not disrupted the travel sector. On the contrary, there is innovation in certain areas.

Grant believes that tourists and businesses are now only concerned about how to get more benefits, but not about information transparency and cheaper payment methods.

He told CoinTelegraph:

Currently, tourists will not benefit from buying Bitcoin. Many people in the crypto system also believe that Bitcoin is just a widely used virtual currency. If tourists sometimes cannot access the Internet, cannot log in to online banking, or there is no Bitcoin ATM nearby, the Bitcoin they hold will not realize its value, and they will not be able to exchange Bitcoin for local common currency.

According to Grant, Bitcoin currently does not provide the incentives to cater to the market, and therefore cannot serve the tourism sector and tourists.

He continued:

The tourism industry has already seen the emergence of digital currency in its customer loyalty system. We can see on the mileage cards of major airlines that tourists can earn flight mileage rewards when they spend money at terminal stores, gas stations, on flights, or by using credit cards.

Grant pointed out that it is also very important to look at consumer behavior. When consumers know that they can earn air miles and double rewards by using credit cards, going to gas stations, and buying fuel, they will deliberately perform these behaviors in order to get rewards. These behaviors are omnipresent in consumers' daily lives. In the Netherlands, there are 16 million people, and 3.8 million people collect air miles.

Airline Miles vs Bitcoin

Why do airline miles play such a big role in the travel industry that Bitcoin can’t compete with them? According to Grant, 140,000 miles (about 60% of all miles) are not redeemed. If tourists spend £0.031 ($0.045) to buy Avios points, it will create a market value of more than $600 billion. You can buy and sell airline miles, and even exchange them. What Bitcoin can do is facilitate the direct connection between airlines and end consumers.

Grant told CoinTelegraph:

Airlines that have air miles programs have harshly criticized more than 70% of frequent flyers because they want to use their air miles for other purposes rather than flying, and another 60% of these people do not redeem their air miles because they want to collect more points to get real benefits.

While Bitcoin and blockchain technology may have a big role to play in the industry, they have yet to find a niche and have been criticized by companies that have already adopted them.