If you haven’t heard the word block chain technology yet, you have missed out on the hottest topic in recent times. Blockchain technology is one of the most exciting digital technology innovations of the modern era, and despite of the fact that is still a young phenomenon, it has the potential to alter the way transactions are made, information is stored, and the way information is accessed.
Organizations across the world are trying to explore new ways to use block-chain technologies for business benefits. According to the International Data Corporation (IDC) more than $2.1 billion has already been spent globally on blockchain solutions in 2018. This is a clear indication that this new, emerging technology brings increased opportunities and is here to stay.
Just like the other industries, the hospitality sector can benefit greatly from blockchain technology as this technology has a lot of applications in business scenarios that involves the participation of multiple parties in a transaction. The distributed-ledger technology which is a concept within the umbrella of the blockchain technology, removes the middleman in transactions, such as hotel bookings or gaining loyalty program points. Here are a few things blockchain technology can contribute to the hotels, resorts, and the hospitality industry as a whole:
The records of transactions or ownership status of assets are concurrently available to all the members in a blockchain platform, providing a single source of truth in a blockchain platform. This makes all transactions transparent, easy to process and record, and saves a lot of time as well.
The transactions in a blockchain platform are verified and authenticated through a consensus that are predetermined by the participating members of the blockchain. Internally, the records of transactions cannot be changed or manipulated by any of the members in a blockchain. Externally, a blockchain platform is extremely difficult if not impossible to hack because blockchains are stored in multiple computers at multiple locations.
In a blockchain platform, individuals are not required to serve as intermediaries in order to establish trust as the transactions are processed and verified within the blockchain network itself. Furthermore, the Economist defines blockchain as the “trust machine” suggesting that it eliminates the need for trust between people. In other words, the involvement of third-party mediators, such as banks, financial institutions, and governments, to verify or authorize transactions is not required in a blockchain platform. The elimination of these intermediaries from the process restructures the procedure and significantly reduces transaction times as well as transaction costs.
Improving End-to-End User Experiences
Another potentially promising use of blockchain technology in the hospitality industry is that of putting reward and loyalty programs on the blockchain. Reward and loyalty programs are widely used, produce high costs, have low redemption rates and pose considerable risks to the balance sheet. Hundreds of thousands of dollars in value are issued annually for these programs. Another major problem in these programs are the technical issues associated with the transferability – these issues are of a prohibitive nature for most of the issuers of reward points. This is where blockchain technology can be used in order to provide solutions for these problems.
As you might know by now, there are several uses for blockchain technology in the hospitality industry. The hospitality sector is quite sensitive to customer sentiments as it has a direct effect on the brand value. The innovations brought forward by the hospitality will help hotels and related businesses to improve customer experiences, make internal processes more efficient and smooth, and improve the overall brand value.