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PRESS RELEASE
By 31 August 2018 | Categories: Press Release

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By Guido Verweij, Regional Managing Director, Africa – Travelport.

As Bitcoin becomes more popular, traveling while spending crypto is becoming easier than ever before thanks to blockchain technology.

Blockchain is a young technology, but it has the potential to disrupt the way business is traditionally done. In terms of the advantages it can offer the travel industry, stability and security rank very high. 

The 2017 Gartner Hype Cycle for Emerging Technologies categorised blockchain as being in the ‘Peak of Inflated Expectations’. But is this true for the travel industry? At Travelport, our architects have been investigating the implications of blockchain, both for our business and for the wider travel sector. 

In an industry which is already built on trust, where strong relationships exist and which is working well to manage complexities, we started with an important question: Is there a role for blockchain? To get to the bottom of this, we’ve been analysing the suitability of blockchain to manage on-boarding and management of travel content for secure distribution and selling. We have also been considering other potential use cases for the technology within our sector in Africa.

Mobile is a key differentiator for Africa – a global frontrunner in mobile technology usage. But apart from online booking for South Africa domestic travel, take-up of technology within travel programmes is poor. And although blockchain-based currencies like Bitcoin are disadvantaged when it comes to payment processing time, financial and technology companies like Mastercard are warming up to cryto-currency. The financial giant recently announced it will be opening up access to its blockchain technology via its API published on Mastercard Developers, and aims to make Bitcoin transactions possible on credit cards, providing flexibility for travellers and travel partners alike. 

Given the above considerations, here’s our assessment on how the technology could be used in the travel industry:

Use case

Suitability for blockchain or distributed ledger and limitations

Whole trip, travel reservations

Currently not suitable for public blockchains, scalability and speed of transaction verification are limiting factors.

Traveller identity

Suitable for blockchain or distributed ledger, needs robust access control mechanism and security model.

Payments for travel transactions

Suitable for blockchain, requires financial partners and requires currency stability.

Loyalty federation

Possibly suitable for blockchain, requires collaboration of travel suppliers and agreement on exchange mechanism.

Guarantee of bookings and payment

Validating a booking on distributed ledger, suitable for blockchain as it does not involve keeping the whole reservation on the ledger.

Ticketing

Similar to the above but risks transposing legacy process to distributed ledger technology.

B2B Settlement

Suitable for distributed ledger in a closed business network.

Shopping and inventory

Inventory control possible with distributed ledger but probably only within a limited access group or closed network due to performance and scalability.

Travel exchange

Travel token or currency exchange capability, working across supplier’s ledgers. Will probably be a necessity to support some of the other models.

Our architects predict that in the short term most blockchain developments will happen in closed supplier groups on private and permissioned chains within the travel industry. In the mid-to-long term we may see payments, inventory and order management disrupted by blockchain or distributed ledger technologies.

Whole trip management on blockchain, air settlement and combining of air supplier journeys we see as a longer-term opportunity, anticipating further evolution within blockchain technology. The evolution of open standards around travel blockchains and the willingness of travel suppliers to offer or sell content on a distributed ledger will drive advancements in these areas.

The main impact of blockchain and distributed ledger technologies, however, will be a reduction in processing times and efficiency improvements for any process where multiple parties must share and agree the same information. Examples include invoicing, settlement, moving of payments, contract negotiation and identity verification. Travelport customers currently undertake many of these activities using manual processes with multiple checks and verification steps. A distributed ledger secured by blockchain would ensure that all parties agree on a single version of the truth in real time cutting out many of the existing processes.

In summary

Short Term

          Mid-term

               Long term

1-2 years

          2-5 years

               5 years +

Limited B2B payments

Travel cryptocurrency exchanges

IATA coin for air settlement

Travel cryptocurrency/token offerings

Reservations on distributed private ledger

Whole trip on blockchain

Basic traveller identity

Cryptocurrency payments for travel

Interlining across blockchains

Private permissioned distributed ledger for supplier inventory

Early IATA Coin adoption for air payments and settlement

Global traveller identity

Traveller identity shared across suppliers

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