Travelport, BCD, Hyatt test blockchain for hotel commission settlement

Travelport is nearing a minimum viable product using blockchain to manage hotel commission settlement, in a partnership with BCD Travel, Hyatt and IBM.

During a panel discussion August 6 at the Global Business Travel Association’s convention in Chicago moderated IBM blockchain lead Kurt Wedgwood, representatives from the three travel companies discussed how blockchain can eliminate leakage around settlement, expedite reconciliation and provide all parties an accurate view of data. 

Travelport senior product director Ross Vinograd says more than a third of its travel agents say commission settlement is a major pain point.

“If we can solve for that friction ... then we effectively unlock new volume,” Vinograd says.

“Our MVP is not to change the way things work; it’s to overlay symbiotically on top to make things more optimized and more efficient.”

BCD Travel's vice president of supplier relations for global hotel strategy, Marwan Batrouni, says complications are typically the result of travelers changing their arrival or departure dates or simply not showing up at the hotel.

That triggers what he calls “break points” in the data flow that cause commission amounts to be incorrect or payments to be delayed.

“We have no idea when we are getting paid. We have no way of knowing how accurate the data is,” he says.

“That prevents us from budgeting. ... It’s almost like shooting in the dark when it comes to being able to forecast out. This area is ripe to have something that will take all the complexities, all the noise that we see in terms of data and reporting and put it all together in a very, very clear way for everyone to see.”

Batrouni says he sees blockchain as a very practical solution that will streamline what has been an unnecessarily complicated process.

Hyatt’s global process owner/director, Dan Stephenson, says blockchain can solve data standardization issues and create a single source of truth that all parties can trust.

“I have two goals when it comes to our payment process: that we pay accurately and we pay as quickly as we can. The less time we’re all spending thinking about getting to the right answer, the better off we all are,” Stephenson says.

Vinograd says Travelport’s aim is to “solve the last mile to reduce the escalations for the hotel as well as to provide the revenue forecasting for the agency” and to create a platform that “begins to separate the payment from the booking, because there is no reason why those two get coupled together.”

Travelport began working on this project around the end of March and is preparing to move into phase two, “expanding in scale and sophistication.”

“Beyond MVP, we would expect that each hotel chain interested in participating would run their own node. They would effectively be pushing their own data to the distributed ledger,” Vinograd says.

When asked about the commercialization of a blockchain settlement system, Vinograd says that has not been determined yet, but, “I can guarantee that there is enough friction and pain points and millions of dollars being spent already that we believe there is an opportunity to carve a monetization model out of this that does suit all parties.”