is nearing a minimum viable product using blockchain to manage hotel commission
settlement, in a partnership with BCD Travel, Hyatt and IBM.
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.
senior product director Ross Vinograd says more than a third of its travel
agents say commission settlement is a major pain point.
we can solve for that friction ... then we effectively unlock new volume,” Vinograd
“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.”
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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
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
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,”
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
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.”