Key Takeaways
- Web3 can provide a variety of benefits to the travel industry, such as cost reductions, increased transparency, better data protection, and new experiences
- Web3 introduces the possibility of tokenising customer loyalty rewards, which facilitates portability and interoperability between travel service providers
- Web3 offers a secure data environment through decentralisation and the use of self-sovereign identity (SSI)
- Peers can share and trade tokenised travel experiences, which creates a brand new, richer, and more personalised travel experience
Introduction
Web3’s technological innovation promises to deliver a new way to experience the web. Web3 uses decentralisation, open source, and transparency to transform the web journey as we know it in entertainment, gaming, social platforms in the metaverse, marketing, and so much more.
And speaking of journeys, the travel industry may soon embrace all that web3 has to offer to create more efficient, diverse, and richer experiences. In this article, we explore the best ways to use web3 technologies in the travel industry, such as:
- Loyalty programs and tokenisation
- More secure and privacy-focused travel data
- Peer-to-peer travel marketplaces
Let’s start with using web3 to launch better loyalty programs!
Tokenised loyalty programs
Just a mere 40 years ago, the Holiday Inn chain introduced the very first customer loyalty program for the hospitality industry in 1983. Originally dubbed ‘Priority Club’, the idea was to keep customers coming back to Holiday Inn establishments by offering rewards and perks for returning customers. The idea took off, big time. Soon, all hotel chains introduced similar programs.
Since those pioneering days, customer loyalty programs haven’t changed much. People get air miles exchangeable for discounted flights or other perks in the case of airlines, and hotel users get upgraded rooms, vouchers, discounts, etc. The mechanics and rewards remain much the same, and therein lie missed opportunities. Society has changed and evolved quite dramatically since the early days of customer loyalty programs. Particularly following the advent of the modern internet. In the era of streaming services and social media, customers have come to expect more personalised, engaging, and rich experiences. This is exactly web3’s purview.
Web3 technologies, particularly tokenisation, can drive much-enhanced customer loyalty programs in multiple ways. For example, traditional programs yield rewards that can only be redeemed in the issuer’s framework, they cannot be ported over anywhere else. This has some drawbacks. Airline Customer A may have earned a certain reward, which may or may not be suitable for different reasons. If Customer A cannot (or doesn’t want to) redeem this reward, they may lose it, as it may be time-sensitive, like a special offer. But this particular reward might just be what Customer B wants at this point in time! In a web3-enabled customer loyalty program, that reward could be tokenised and traded between Customer A and Customer B. Such a system would facilitate customers to get the rewards that are better suited to them.
But reward tokenisation would go much further than that, of course. Imagine the possibility of redeeming tokenised rewards in a metaverse, for example. Not only would blockchain technology (one of the pillars of web3) allow redeeming rewards easily. It would enable their portability and interoperability between travel service providers operating in the metaverse.
All in all, the possibilities are endless with web3 enabling new ways of rewarding customers. As well as fostering collaboration between competitors, bringing benefits to the whole industry.
Secure and privacy-focused travel data
But what about all the personal data that gets thrown around during all stages of travelling? Travelling, especially across borders, requires the provision and handling of a lot of personal information. Passports contain extremely sensitive information. The same with ID cards. Credit card details when booking travel, accommodation, short trips, etc. People give airports, private companies, etc., a lot of data, which is often handled by third parties, as most companies, hotels, and tour operators in particular, wouldn’t have the expertise or capacity to handle cyber security.
The crux of the problem lies in the fact that most of these entities store vast amounts of data in centralised locations, often a database, which becomes a honeypot for adversaries to tap into. Airlines EasyJet and British Airways have been the target of hacking incidents in recent years, compromising the personal information of millions of customers. Prestigious hotel chain Marriott also suffered a high-profile cyberattack that, once again, exposed the personal information of millions of past guests. These incidents are unfortunately the result of doing business in the internet era, amplified by data centralisation.
Web3 offers a secure alternative through decentralisation and the use of self-sovereign identity (SSI). By decentralising data with blockchain, adversaries no longer have one singular target (that honeypot).
Self-sovereign identity (SSI) is a revolutionary concept that is gaining traction in the world of digital identity management. In simple terms, SSI is a way for individuals to control their digital identity and personal information. And use it to interact with the world around them. This benefits users by providing them with a safe way to manage and share their personal information. It also takes away the burden from companies to manage and store this sensitive data.
In addition to the aforementioned benefits, it can also streamline the overall information-sharing process. This is done by having more easily accessible and verifiable credentials. And lastly, this can of course lead to cost reductions as travel companies have to spend less money and time on cyber security. All in all, self-sovereign identity in the travel industry is a great match.
Peer-to-Peer marketplaces for accommodations and experiences
Peer-to-peer marketplaces for accommodations and experiences have gained significant popularity within the travel industry. While platforms like Airbnb, Vrbo, HomeExchange, and Tripobox are well-known examples, numerous others exist. The defining characteristic of these platforms is their peer-to-peer nature, enabling direct communication between individuals worldwide. However, establishing trust among peers can be challenging due to the anonymity provided by intermediary platforms and the internet itself. The lack of transparency often leaves individuals uncertain about the legitimacy and trustworthiness of the accommodation or experience providers.
This is where web3 technology brings unique advantages that go beyond what traditional centralised approaches can offer. Web3 is built upon principles of decentralisation and transparency, with its foundation in blockchain technology. Unlike centralised systems that rely on intermediaries to facilitate transactions, web3 reduces the need for middlemen, resulting in a more cost-effective ecosystem.
By removing intermediaries, web3-powered marketplaces reduce the financial burden for both providers and consumers. In traditional platforms, intermediaries often charge substantial commissions or fees for their services, driving up the overall cost of accommodations and experiences. In contrast, web3-powered marketplaces cut out these intermediaries, resulting in significantly reduced costs. Participants can directly engage with one another, transact peer-to-peer, and eliminate the need for excessive fees. This cost reduction is a direct result of the decentralised nature of web3, where transactions occur directly between peers without intermediaries taking a significant cut.
Furthermore, thanks to web3’s transparency and immutability, all transactions are recorded and transparently available for anyone to verify. This increased transparency reduces the need for extensive auditing processes and provides a higher level of trust among participants. Consequently, the costs associated with verifying and ensuring transaction integrity are significantly reduced.
In addition to cost benefits, web3 technology offers enhanced security and trust. Blockchain-based smart contracts, an integral part of web3, provide automated and secure execution of agreements. These self-executing contracts reduce the need for intermediaries to enforce terms and conditions. By leveraging the power of smart contracts, participants can have greater confidence in the integrity of their transactions knowing that the agreed-upon terms will be automatically enforced without the risk of manipulation or fraud.
Web3’s decentralised nature and transparent infrastructure offer a unique combination of cost reduction, increased security, and enhanced trust within peer-to-peer marketplaces. By leveraging blockchain technology and eliminating intermediaries, web3-powered marketplaces create a more efficient and cost-effective ecosystem for travel-related transactions. The inherent advantages of web3 make it an ideal solution for revolutionising how accommodations, experiences, and other travel-related services are exchanged, benefiting providers and consumers alike.
Conclusion
The possibilities of web3-powered travel ecosystems remain largely unexplored, but the possibilities are certainly tantalising. This is far from the only application of web3 to the travel industry, however, as this article explores. Cost reduction thanks to the reduction of middlemen, higher security through SSI and decentralisation, and a richer travel experience mean that web3 may be the greatest thing ever happening to this industry since commercial aviation went mainstream.
