The travel industry is no stranger to market headwinds. Closely interconnected with the aviation and hospitality industries, the travel sector is tested by global geopolitical events, new technologies and changing trends every few years.
A couple of decades ago, OTAs (online travel agents) like MakeMyTrip and Expedia made the traditional travel agency redundant. In the late 2000s, Airbnb’s business model disrupted the short-term rental market and it took the hospitality sector years to adjust.
The after-effects of the Covid-19 pandemic notwithstanding, the industry is now poised for rapid growth. As per FICCI, the Indian travel market alone is projected to reach US $125 billion by FY 2027.
As most countries have finally reopened their borders, a number of travel tech startups are now augmenting existing business models with Web 3.0 and blockchain tools, to transform our travel experiences in the decade ahead.
Pay Via Cryptocurrency
Perhaps the most obvious use case for blockchain technology in travel is the use of cryptocurrency as a payment option for travel bookings.
Travala.com is one such blockchain-based travel booking platforms that also offers a wide selection of hotels, apartments, villas, hostels and 5-star luxury resorts from around the world. Their native token, AVA, can be used for payments, and redeeming loyalty rewards. Their Travel Tiger Utility NFTs (non-fungible tokens) unlock value for users in the form of access to airport lounges, and travel experiences.
Sam Woolard, Chief Marketing Officer at Travala.com, says, “Around 80 percent of our bookings are paid with cryptocurrencies. Blockchain technology is also enabling us to create more engaging loyalty programs, tokenizing trips with NFTs, and developing interactive metaverse travel experiences."
Tokenized Flights & Hotels
Most frequent travellers have had to bear the inconvenience of cancelling or altering their travel plans at some point. No doubt, a non-refundable ticket not utilized is a loss for the passenger, but the airline is at a disadvantage too, as it could have sold the ticket at a higher price to another customer.
TravelX, a South America-based startup is leveraging blockchain technology to reduce these market inefficiencies and create a frictionless distribution model with NFTickets.
By tokenizing airline tickets, travellers can sell these NFTickets on a secondary marketplace, and recover their initial cost, or at times even earn a profit in case travel plans are altered. Meanwhile, the airline can earn a smart contract-enabled royalty each time a ticket is sold on the secondary marketplace.
India-based Buk is experimenting with a similar business model for the hospitality industry. Recently seed-funded by Polygon Studios, Buk promises a tokenization platform that enables open trading and resale of hotel room reservations in the form of NFTs.
Says Arul Prakash, Founder & CEO, Buk Technology, “Hospitality as an industry is well primed for tech innovation. Our model ensures a better user experience for customers and simultaneously solves hotel distribution as well as price parity inefficiencies that we see in the market today. Our MVP (minimum viable product) should be ready by March 2023.”
Community-owned Travel
Short-term vacation rentals have taken off over the past few years, but these centralized entities are plagued by high fees, thus disincentivizing hosts from listing their properties on these platforms. Additionally, property managers are unable to exert significant influence regarding numerous policies enforced by these companies.
Dtravel, a community-owned and operated travel ecosystem, empowers short-term rental hosts and property managers to create their own direct booking website and enhance discoverability in the Web 3.0 ecosystem. Hosts set their own booking terms, determine the content they display on their site, and earn rewards with each booking while drastically reducing the fees charged by centralized entities.
Bookings are governed by smart contracts and conducted on-chain in a peer-to-peer manner. Using a DAO (decentralized autonomous organization) structure, hosts can also vote on proposals for product improvements, and determine the future direction of Dtravel, which acts solely as a technology and infrastructure provider.
Says James Soulodre, Head of Marketing at Dtravel, “Web 3.0 infrastructure reduces overhead and costly data maintenance fees, while opening the door to new payment methods, governance models and demand drivers for hosts.”
Luca De Giglio, Founder of Trips Community, a DAO for the travel fraternity, is, however, cautiously optimistic. “Tokenized travel and NFT use cases in the industry is an encouraging sign and there will be more innovation in this space in the years ahead. Nevertheless, until custodial and semi-custodial wallet penetration does not reach critical mass, the adoption of these Web 3.0 business models is likely to remain a bit slow” he signs off.
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