‘Blockchain’ for travel and tourism industry in India

The need of the hour is to promote start-ups on blockchain based travel portals, customer reviews, business model disintermediation, supply chain management etc

The key feature of travel and tourism sector, which differentiates it from other sectors, is its growth and employment potential, with lower capital investment. As India is a tourist destination, if blockchain technology is adopted, it could do wonders in this sector, as it is fast, efficient, and verifiable, cannot be erased over time and is secure. It relies on a peer-to-peer network to validate new blocks and this requires a network majority.

Key development in the blockchain technology is the smart contract which are written as codes containing trigger points, enabling the contract to self-execute once the coded conditions are met, such as expiry dates or meeting of target price. It also allows the regulator to monitor the activity in this contract.

In the midst of the political and fiscal crisis in 2015, and massive defiance towards the traditional banking sector, Agistri, a Greek island, tested blockchain-based Nautiluscoin/Drachmae money solution, in order to kick-start the local tourism industry.

Smart contracts

Blockchain based travel portals is another example on smart contracts. A blockchain smart contract could send an acknowledgment or token access mechanism to the physical asset or user e-wallet, such as a one-use QR code to open a rental car or hotel room. UK-based TamTam Travels proposed a business model based on a membership portal, which offers discounts on benefits and services. This applies to international and domestic travels with potential savings reaching several thousand dollars.

Blockchain travel portals could be used for improving customer loyalty and reward programs. ‘Chain of Points’, a blockchain based token, provides a simple and flexible solution to merchants and customers in the loyalty rewards space. It incorporates cryptocurrency functions programmed to act as a technical backbone for the loyalty and gift card industries. Liquidity and ability to trade ‘points’ provides an unprecedented solution to merchants and customers implementing loyalty rewards programs.

Customer reviews is another area of application of blockchain which include inter-alia notorious travel sites aggregate reviews, ratings, photos, contact information, and opinions about tourism service providers. In a world wherein information circulates instantaneously, these online user-generated reviews are dramatically reshaping the tourism industry by making some businesses and breaking others.

‘Buuyers’, a Paris-based start-up that sets out to offer a customer review management tool based on blockchain technology, increased both transparency and credibility in the opaque world of tourism customer reviews.

Blockchain-based donation for heritage conservation is another good example, explored in Japan. Coincheck, a company has launched a Bitcoin donation platform from which heritage conservation projects in Japan greatly benefited. Donors could send funds to their preferred organisations simply by using a QR code. It avoided the transactions fees associated with international bank transfers as every donation becomes traceable and transparent, thereby acting as an incentive for donors who are usually reluctant to donate to opaque projects. Another benefit is that donors do not need to provide a name or an email address when they make a donation.

Business disintermediation

Business model disintermediation, peer-to-peer economy is another major application. The introduction of blockchain technology paves the way for new disintermediated business models.

Many industry sectors become freed from skewed regulatory and licensing schemes subject to the hierarchical power structures and influence of vested interest on the government. Blockchain technology, thus, allows the disintermediation and decentralisation of all transactions of any type between all parties on a global basis.

It is worthwhile stressing that Blockchain-based crowdfunding platforms make it possible for start-ups to raise funds by creating their own digital currencies. Investors in a crowdfunding campaign receive tokens that represent shares of the start-up they support.

Another major area is the processing of online payments for hotel bookings. Microsoft and Webjet have designed a blockchain proof-of-concept travel booking solution, which greatly facilitates booking data processing: The latter blockchain solution also rests on a smart contract platform that mitigates the consequences of data mismatch, and minimizes reconciliation costs. It also help remove the risk of data inaccuracies, streamline payment processes, boost data security, and resolve pain points in the payment process, thanks to their innovative blockchain travel solution.

Supply chain management is another area of application. Blockchain enables the tracking of items through complex supply chains. Companies have developed new platforms, to track consumer goods in the global supply chain, their origin and flows, so as to detect counterfeiting or mishandling.

Likewise, the tourist searching for authenticity, in order to improve her experience, is vigilant as regards the food she eats, and therefore the food supply chain. There are companies who have consortium-based project concerned with regional food safety that is of interest for tourism service providers. Swiss start-up “Food Blockchain” sets out to “manage commercial relationships among different actors in the supply chain through the introduction of its own token, “Foodcoin”.

Another adjacent field where the supply chain is paramount is medical tourism to create a safer and better care environment for patients. In India, there have been Yoga and Ayurveda healing techniques for 5,000 years, attracting thousands of people looking for health improvement and this is of much relevance.

When a person is travelling outside their home country, and treated for an emergency, access to a blockchain ledger could help detect a competent expert, who would have access to the healthcare data remotely in case of a very rare condition. Patients could store encrypted vital information on a blockchain ledger (IoT medical devices should be considered here), and instruct who has access to the private key, and ultimately to the patient’s medical information. It could store medical procedures, and more advanced directives, such as not-to-resuscitate orders.

This would amount to the self-management of healthcare conditions by patients themselves, who would nonetheless continue to receive the guidance of healthcare clinicians.

Thus, the need of the hour is to promote start-ups based on these technologies.

The writer is Deputy Secretary, Government of India. Views expressed are personal

Published on


March 23, 2022

https://www.thehindubusinessline.com/opinion/blockchain-for-travel-and-tourism-industry-in-india/article65252080.ece

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