Before setting off on a trip, many eager travelers click through travel sites looking for the best hotel offers from across the world. You know the ones — these online travel agencies or OTAs now dominate the tourism industry connecting travelers with empty rooms.
The concept is simple enough, but some critics argue that OTAs funnel profits away from small independent hoteliers. Some may even collude to inflate prices. Hospitality is an industry primed for innovative blockchain solutions. Nearly endless solutions exist for blockchain Airbnb or new startups could use to their advantage. Blockchain hotels may bring hospitality into the 21st century.
Nowadays OTAs are all about size. Initially, there were several competing sites. However, the space has evolved. Currently, when you see two different web pages, it doesn’t necessarily mean they’re different companies. There are capital groups which own as many as four online OTAs! It’s obvious that such a situation must have had an influence on the competitiveness of this market.
Of course, nature hates a vacuum and people, after seeing rising prices look for alternatives. We live in the time of startups rising to the size of corporations in years, if not months. Thus, the idea of a short-term rental portal was born. The name of the company behind it – Airbnb – is one of the hottest names in the business right now. The platform has turned the hospitality industry on its head.
However, blockchain innovation could continue to improve the service. Currently, the service is struggling with several problems, such as subletting or other scams, as the system behind it doesn’t verify the title to a property, or whether the listing exists at all. A similar blockchain Airbnb short-term rental platform would address these issues.
Gatekeeper’s markup & blockchain Airbnb
Partial monopolization didn’t do as much harm as we all did. Perhaps I should say our habits did. The sheer fact that few consumers today look for direct offers from hoteliers. This gives OTAs a chance to dictate the price. I’ve found an article claiming that an OTA’s markup can be as high as 25% of what the end customers pay. I didn’t verify the data myself, but no matter how low those sites would go with their markups, there could always be a cheaper solution, if only we work around the middleman.
I’m also not the only one noticing the problem. Recently, as the so-called Blockchain revolution sprung up, both hoteliers and their guests have spotted the opportunity. There have been several projects including Beenest, a blockchain Airbnb rival, a decentralized rental platform, and even a fully ICO-financed blockchain hotel network. One would say there really must be something to it. What might blockchain hotels facilitate?
Blockchain immutability can help in many ways. The first thing that springs to mind is the pricing. An individual hotelier posting an offer on a blockchain-based system can be sure that the price won’t change, as the system’s logic and cryptology included prevent it. Period. Hoteliers can avoid paying high commission fees, passing savings onto guests.
Customer loyalty programs could also reward frequent travelers.
Decentralized applications or dapps could also help hoteliers manage guest reviews. Dapps are a special fragment of code injected into the blockchain. As transactions are processed, these pieces of code can be invoked in order to facilitate an action. Such a code is called a smart contract, as it enhances traditional contracts handled by blockchain, with new possibilities. As blockchain platforms, such as Ethereum, offer complete languages for writing smart contracts, the possibilities are endless.
With a dapp, a chain of blockchain hotels could eliminate fake reviews and make it impossible to change the content of a review. Imagine that only a specific customer can post a permanent room-specific review.
Dapp’s application doesn’t end here, however. As blockchain is rather easy to integrate with practically any other piece of technology. It could even allow guests to access their rooms. Let’s assume that we have a traditional hotel but without a classic reception desk. Instead of a receptionist checking guests in, a dapp could autonomously confirm payment and issue a room access code. This would be especially useful in the case of a similar blockchain Airbnb service. Owners and guests would not have to bother with the hassle of handing over keys, especially early in the morning, or late at night. That way, hoteliers could cut the number of staff, allowing guests to seamlessly come and go as they please.
Now let’s take a different approach. If a guest damages a room, a hotel manager could run another seamlessly integrated dapp and the guest could be charged. It wouldn’t be anything extraordinary to include such a possibility in the terms of service. Small businesses or independent hoteliers could ensure guests are responsible for any damage they cause.
Lastly, to give you the full impression of what’s about to come, imagine a full network of blockchain hotels or a seamless blockchain Airbnb. Not only do they provide their services in exchange for cryptocurrencies, but also allow easy and trustworthy service. Rooms rented via a blockchain hotel network are guaranteed to have an honest price, which doesn’t empty your wallet, but also fills them for those who put their work to it. Tempting, isn’t it?
Increased trust that blockchain can facilitate could really revolutionize the way we travel. Not only would it make it possible for independent hoteliers to step up and cut out OTAs, but it could also launch the industry into the 21st century. This blockchain application could eliminate gatekeepers, invigorate independent hoteliers, put travelers back in control of their trips.