How DID and SSI will transform the travel experience market

The evolution of decentralized identifiers (DID) and self-sovereign identity (SSI) will transform a fragmented travel experiences market during the next decade. 

It will allow individuals and groups to connect on a near peer-to-peer basis to plan, shop for, execute and savor integrated seamless travel experiences. 

How that evolution will occur is uncertain; that it will occur is not.

The reason: There is economic value created by DID/SSI for consumers, suppliers, intermediaries and service providers individually and collectively. By whom and how that value will be captured and/or shared is uncertain. The incentive to capture it is real and certain.

Strategic significance of DID/SSI

Over time the evolution of DID/SSI is likely to be a travel industry game-changer, enabling travelers to manage their own personal information to maximize personal economic effect and protect personal privacy.

The DID/SSI effort is already gaining a foothold in the banking and medical industries. Like travel, these are sectors that need to engage with consumers of all types en masse while requiring proof of identity prior to the certified exchange of digital documents.

The awareness and adoption of SSI was further accelerated by two newsworthy events:

• The COVID epidemic created the urgent need to digitally communicate health status for travel and for entry to restaurants, bars and shops.
• The increasing awareness and use of cryptocurrencies, which introduced the technologies of blockchain and digital wallets to many people for the first time.

Consumer benefits for travel 

Expansive versions of DID/SSI could lead to more personalized, seamless and contactless travel experiences for travelers. This would produce numerous personalized, facilitated and optimized consumer benefits including:

• Easier shopping for rates and travel services (e.g., via loyalty, associations and corporate memberships)
• Traveler ownership and control over verified, real-time, personal information
• Discounts and value-adds from suppliers and intermediaries
• Sharing of benefits across industry verticals (e.g., bank cards, shopping sites)
• Opportunities for NFT (non-fungible tokens) for travel-related use
• Efficient international travel with verified identification, passport, security and medical information
• Contactless check-in and boarding (airlines), room access (lodging) and car rental pick-up and return
• Sharable information among travelers for business and leisure group and event travel

Travel industry advantages 

• There are significant advantages for travel suppliers and intermediaries, including: cost savings; the ability to provide more personalized and value-add services for customers; reduced dependence on intermediaries; and improved capacity to work with industry partners to provide seamless travel experiences. 
  
  Potential additional benefits for suppliers and intermediaries include:
• Rich, real-time, verifiable consumer information for improved customer relationship management
• Supplier-inclusive, verified credentialed shopping to better serve loyalty program members and to attract new, loyal consumers
• Integrated seamless/contactless travel experiences without intermediaries that improve service, reduces labor costs and produces operational efficiencies
• New cooperative service / product partnerships among travel and retail suppliers to facilitate seamless, differentiated travel experiences for travelers
• Reduced OTC/intermediary sales commissions and increased market share of direct sales

A major consideration is whether travelers will support and use DID/SSI applications for travel. The likelihood is they will. Less certain is how and how soon.

Major industry participants such as travel service providers, intermediaries and integrated destination service providers like tour operators and government-sponsored destination marketing organizations (e.g., DMOs) have a win-win incentive to encourage consumers to adopt and use them. This could incentivize willingness to legally cooperate among suppliers and competitors on issues such as technology standards and modernized business practices.

But in the near term, there are two major impediments to integrated DID/SSI developments via cooperation among suppliers and intermediaries: (1) existing individual activities to secure and retain consumer loyalty and (2) reliance on legacy technologies. These impede efforts to partner, cooperate, and integrate technologies that are needed to support DID/SSI developments.

Securing consumer loyalty

Hotel chains, airlines and car rental firms use their loyalty programs and credentialed access (e.g., corporate and association rate programs) to incentivize direct-to-supplier reservations and avoid intermediary fees. The major objectives have been to secure current and future business from consumers and to reduce the levels of margins and fees paid to intermediaries. The multi-year effort to “drive business direct” by major hotel chains is representative of this effort.

Offsetting this trend has been the need and value of intermediaries to support packaging and opaque discounting that protect individual supplier rate structure integrity. Intermediary packaging hides the price of individual supplier (air, hotel and car) prices with a comprehensive single package price quote. This reduces the ability of consumers to view discounted (package) prices that are lower than the potentially higher prices they could have paid or did pay.  

Intermediary discounted opaque pricing allows suppliers to provide lower rates to intermediaries, where the rates given to the intermediary are not revealed to the consumer. 

With such pricing schemes, the consumer is shown a single bundled price that includes both the rate given to the intermediary and the fee charged by intermediary for the transaction. The supplier’s rate to the intermediary is never displayed. This too reduces the ability of consumers to view prices that might be lower than the prices they could have or did pay under other circumstances. Cooperation among suppliers and intermediaries with DID/SSI developments could still preserve this important OTC feature.

Reliance on legacy technologies

Major travel suppliers such as hotel chains, car rental firms and airlines have made significant investments over time in operating, reservations, information (e.g., customer relationship management databases), channel distribution and revenue management systems. 

In many cases, these systems have links with one another and with external systems such as global distribution (GDS) and intermediaries (e.g., OTC) systems. To modify or replace these systems and the links among them to “integrate with” and/or “make them open” to DID/SSI technologies could be costly and cumbersome in the near term. This is despite the potential future advantages and efficiencies.

Likely industry forces for change

There are several industry forces for change. These include:

• Technological epiphanies within individual travel supplier, intermediary and service supplier organizations
• Commitments to DID/SSI by major technology firms like Microsoft and IBM
• Partnerships among major travel industry organizations
• Appearance of new entrants or disruptors in the technology and service providers spheres

Technological epiphanies

It is highly likely that strategic thinking and planning is already underway related to DID/SSI within many travel industry organizations. Because there can be potential competitive advantages for individual firms associated with DID/SSI adoption, internal thinking and planning may remain confidential for now.

The essence of such strategic decision-making about the value of industry cooperation is the determination of financial, operational and temporal tradeoffs of insular DID/SSI developments versus cooperation and partnership with other suppliers and intermediaries to accommodate integrated applications.

Commitments by major tech players

Beginning in 2018 both Microsoft and IBM made public commitments to develop and participate in standards development for a set of decentralized identity management technologies across multiple industries.  

They continue to be active in moving forward developments and gaining industry participation. Specific to travel, in 2018 Northern Block began working with Canadian government to produce a suite of self-sovereign identity products that facilitate the adoption of digital trust ecosystems. All of these stakeholders envision the opportunity to gain financially by enabling developments within the travel industry.

Partnerships among major travel industry organizations

Partnerships are already forming among major players within the technology and travel industry related to DID/SSI. Some are vertical between suppliers and intermediaries. Some are horizontal across suppliers and competitors.  One recent (October 2021) example is collaboration between the World Economic Forum, Accenture and several industry players and governments to envision a future for cross-border travel and co-design a trusted, shared and mutually beneficial system. Another is IATA One ID, a project sponsored by IATA for airlines, airports and governments to improve staff productivity by reducing time spent on manual ID checks plus real-time visibility of where passengers are in the airport.  

New startups/innovators/disruptors

The evolution of DID/SSI applications and its potential benefits for consumers and suppliers is likely to spawn a set of new entrants and innovators in the technology space. We are already witnessing some of that activity. Examples include Affinidi, a firm providing applications enabling cross-border travel with verification of digital health credentials; Indicio, a start up with the objective to produce a comprehensive, trusted digital ecosystem equipped with pre-built components and interoperable systems. Similarly, Trinsic is a platform to implement decentralized identity in any industry using verifiable credentials and other interoperable protocols.

For the consumer, Danube Tech is a new entrant producing technology to place individuals in direct control of their online relationships and transactions. Liquid Avatar and Mattr provide SSI verified users with services to manage, control and benefit from their digital identity. Spherity is producing a cloud-based identity wallet designed for secure and tamper-proof business transactions. 

These are just a few of the many emerging firms and startups entering the SSI/DID space.

What are some steps forward for the industry? 

The evolution of SSI/DID is already underway and its impact on the travel experience market will be significant. The timing, structure and pace of the market transformation is less certain. Yet, there are some actions that current market players – firms and organizations – can do to protect their future financial and strategic interests and gain a share of the market value the evolution will create:

• Make the evolution of SSI/DID a part of internal strategic planning.
• Understand, support and fund activities that enable the SSI/DID evolution in the travel industry by attending conferences, reading blogs, reports, etc., and by joining DIF’s Hospitality & Travel Special Interest Group.
• Evaluate options for partnerships, acquisitions and arrangements with intermediaries and service providers to optimize future benefits, value creation and market share.

In summary, travel experience providers and their technology partners should get educated and get involved – now.