Although a hot topic for several years now, blockchain is no longer viewed in the industry as that “Bitcoin thing,” but rather as a technology with practical use cases in travel.
According to Johnny Thorsen, vice president of travel strategy and partnerships at Mezi, blockchain is now a widely recognized technology platform, whether referred to as blockchain proper, distributed ledger, Internet 3.0 or a host of other names.
“There are many terms [for blockchain],” Thorsen says, “but we’re only scratching the surface of what it will become.”
Speaking at The Beat Live in New York last week, Thorsen outlines five reasons blockchain technology is needed in travel: unreliable data; highly inefficient integration; conflict of interest; lack of transparency; and cost.
For example, he notes that between five to 10 systems are needed to process and deliver a booking, and these systems aren’t designed for integration. “Not because people are stupid,” Thorsen says, “but it wasn’t easy back then and technology tools didn’t allow for open APIs.”
There is also a conflict of interest in travel over who wants to control and manage data. “That should only be one: the customer. But in travel, for sure we have a lot of people saying, ‘This is my data.’ … In the end, it’s the traveler’s, nobody else’s, and they’re the only ones who should control it.”
Technology companies, from startups with hardly any funding to the likes of IBM, are exploring how blockchain can be used in travel, including in the corporate space. One such company is Blockskye, which is using the technology to solve issues around distribution.
Founded in 2016, Blockskye is “applying business logic to blockchain,” says the company’s CEO, Brook Armstrong.
In January of this year, Blockskye and Airlines Reporting Company (ARC, which invested in Blockskye in April) completed a successful proof of concept regarding the viability of using blockchain technology with the ARC system to facilitate the reporting and settlement of United Airlines tickets for a corporate client.
In that test, ARC’s system tracked ticket lifecycles from issuance through settlement and identified all transaction modifications through smart contracts.
When asked if Blockskye is “the long-awaited GDS killer,” Armstrong says GDSs will “be a big part of the system for many years,” but Blockskye is built around a single-record-of-truth architecture that has GDS-like functions in the stack.
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Armstrong says one of Blockskye’s main value propositions for corporates is to help address leakage, and its product with ARC, for example, eliminates the need for expense reports.
“The way we see expense reports … they’re a means without an end,” Armstrong says. “We eliminate the expense report. It’s a proxy for that. As the traveler goes through [the booking process], they’re not presented with a method of payment.”
Changes made to a traveler’s reservations are dynamically reported back to the stack, he continues. “There’s a customer service benefit there. Think of, just economically, what I outlined there: There’s no credit card.”
Armstrong notes the Blockskye model will not spell the end for travel management companies, either. “We think [TMCs] will be here forever. They provide a real, legitimate, genuine service,” he says.
“There’s a very strong point in the flow for TMCs to play a role, as well as leveraging supplier relationships and everything on the back end.”