Will blockchain render powerful travel industry intermediaries extinct? That’s the prediction of Maksim Izmaylov, CEO of Winding Tree, a Swiss nonprofit building a blockchain-based travel distribution network.
“Right now … there are only a handful of companies that people use to book hotels or flights - those intermediaries. For us, mere mortals, hopefully in five or 10 years, those intermediaries won’t be there anymore,” he says. “There will be a thousand companies competing, not just on price but on quality and features.”
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The prediction comes ahead of Winding Tree’s token generation event, scheduled for February 1 to 14. The tokens, called Lif, are the cryptocurrency of the Winding Tree network, which is built on the Ethereum platform.
Driving innovation
Those who buy Lif will own a piece of the network and help to govern it, and the money generated by the sale will be used to fund projects that fulfill Winding Tree’s goal to drive innovation in the travel industry.
“How do we [drive innovation]? Our assumption is that without open data, we cannot have permissionless innovation,” Izmaylov says.
“What we want to do as the first step is create solutions to open up the data… where anyone can very easily access data about availability of hotel rooms, airlines seats and many other things.”
Izmaylov compares the potential impact of blockchain on the travel industry to what the internet did for international calling - eliminating the monopoly of phone companies on pricing and services and spurring innovation so now consumers can make calls for free using dozens of different applications.
“The travel industry is full of unnecessary intermediation. There’s no competition, there’s no nothing. Why is the combined market share of Priceline and Expedia 93 percent? That’s ridiculous,” he says.
“Hotels and airlines - those are the companies we want to help. They want to share their data with the rest of the world and there are many companies that want to access that data and they can’t. We want to help them get connected to each other.”
Next steps
Winding Tree did a presale of Lif tokens in September that raised about $3 million, and it has already lined up several partners including Nordic Choice Hotels, Lufthansa Group, Air New Zealand and RoomRanger.
Nordic Choice is currently testing Winding Tree’s smart contracts system, and talks are in process with the airline partners to develop solutions to help them share data regarding seat pricing and availability.
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Izmaylov says that some of the companies that benefit from the current concentrated structure of travel distribution are intentionally trying to create confusion about how blockchain functions.
He claims they and other companies in the wider tech world are promoting their own private blockchain.
“That’s a nonsensical term. The value of blockchain … lies in the fact that there’s no one company or individual that controls that piece of the infrastructure,” Izmaylov says. What opponents are touting as a “private blockchain” is the equivalent of a cloud database on servers they control, he says.