Blockchain technology: the real solution to the OTA challenge OR a glimmer of hope

The chairman of the Swiss Hotel Association and the Swiss blockchain start-up ambassador DA pointed out that “there are paid search, SEO and other services that require payment of commissions, which is the current status of online travel. Therefore, you book a hotel and order a taste. Good Greek salad, but if you connect them together, it doesn’t look very constructive. There is no direct connection between the two businesses, only intermediaries.”

What is the relationship between blockchain technology and the hotel industry?

In the brand new global digital world brought about by the fourth industrial revolution, blockchain technology has completely changed many industries, whether it is banking, insurance, or the art industry. However, although the above-mentioned industries are actively carrying out projects based on blockchain technology to evaluate the opportunities provided by the technology, in general, the technology has not affected the hotel industry. Similar to the development stage of other technological infrastructures in the entire industry, the rapid development of this technological application has brought many problems and challenges to hoteliers. 

Although empirical research has gradually shown that the application of blockchain technology has positive significance for the hotel industry and the tourism sector. However, there are still not many papers and studies on the effectiveness and feasibility of blockchain technology in the hotel industry. Of course, some scholars have carried out related research. Dong et al. (in 2020) exemplified the capabilities of a decentralized reservation system, which uses blockchain technology to bring convenience to hoteliers and travelers.

Although there are various startups based on blockchain technology in booking sales, reputation management and procurement, the technology development stage and all stakeholders involved in the field still have little understanding of blockchain technology. Major companies in the travel industry, such as Cool Cousin, Winding Tree, Webjet, LockTrip, Hotel P2P, Sandblock, Travelchain, and TUI with the BedSwap project have applied blockchain technology in operating their systems and gain competitive advantage through its advantages .

Blockchain technology: the real solution to the OTA challenge OR a glimmer of hope

Global hotel technology industry leader DR pointed out, “We really want to talk about what blockchain technology can do for the hotel industry. This is a mainstream technology that has become an important part of companies such as IBM, Microsoft, and Amazon. ” 

Most empirical studies believe that blockchain technology is a new technology and introduces a new association model between system applications and consumers, removing the current intermediary between B2B, B2C, and C2C. Although some people think that blockchain technology is a potentially destructive application, it will forever change society’s dependence on intermediary institutions. Some people think that blockchain technology is an infrastructure technology, and it will take several years for it to develop to the level of socio-economic integration. In its development process, the most important thing is the end user’s understanding, compliance regulations, corporate organization and investment situation. 

In addition, the unpredictability of financial risks and investment returns makes it difficult for some independent hotels like homestays to apply blockchain technology, although they may be the individuals most likely to benefit from this technology.

“You may have the idea that blockchain technology is decentralized, and the current relationship is decentralized. This is the most important part. You can obtain P2P relationships without an intermediary. This Very important, this is the way hotels do business.” added DA, Chairman of the Swiss Hotel Association and Ambassador of Swiss Blockchain Startups.

The first author of this article conducted an empirical study that summarizes the views of blockchain technology suppliers, hotel industry participants and technical experts in the hotel industry to reveal the potential and limitations of blockchain technology, and answer the following Question: Does blockchain technology have the potential to become a panacea for OTA (system) to break through again 20 years after its launch?

Aspects to consider when considering blockchain technology

1. Combine market and technical knowledge

The hotel focuses its investment on blockchain products and services, which is very important in its mature development stage. From this perspective, hotel management must, accompanied by strategic technical consultants, conduct a comprehensive assessment of the use, needs and expectations of blockchain-based implementation. 

The use case is determined, and the rate of return on investment is the key to judging investment risks. In addition, active, frequent and transparent communication between experts and participants is essential to grasp the needs of all stakeholders and “bridging” the gap in complementary knowledge.

YRH, a senior strategic consultant and technical blogger of a blockchain company, pointed out, “Why use blockchain technology? If you want a decentralized host, you want to prove that your data has not been publicly changed, and you want to be transparent Ways to share specific nodes with many users. As long as there is a program that does not meet such standards, it is an unqualified application for me. Then blockchain technology is valuable.”

2. The copy and paste of the current OTA infrastructure will only leave the last call to the OTA

It must be pointed out that the current centralized system also uses blockchain technology as an adjustment to eliminate new competitive threats. The world’s four major centralized travel booking platforms have all the elements needed for instant profitable implementation: financial resources, complex IT structures, global business networks, and a huge international customer base. Their competitive advantage will surpass any institution new to this industry at all levels.

Blockchain technology: the real solution to the OTA challenge OR a glimmer of hope

Therefore, people think that online travel agencies may be faster than any aspiring independent startups in developing blockchain-based concepts, because online travel agencies have capital, a relatively reasonable investment portfolio, and mature infrastructure to transform technical concepts. At this point, since 2020, Expedia has partnered with travel booking platform Travala to provide more than 700,000 cryptocurrency-specific assets. On the other hand, independent luxury hotel is located in the Chedi Andermatt, Switzerland recently said it would use bitcoins and Ethernet Square as a new payment method.

Global hotel technology industry leader DR pointed out, “Will the hotel be the first to use blockchain? What are its advantages? Or is it the first to adopt it will be the intermediary? Because intermediaries can indeed do this.”

YRH, a senior strategy consultant at a blockchain company and a technology blogger, pointed out that “the intermediary wanted to do this because they felt threatened.”

3. The final portrait of the client

The general challenge of adopting a new technology is the need to “educate users.” Most end users learn about blockchain technology through crypto marketing related to media such as Bitcoin, email, and Ripple . For this reason, experts not only question whether end consumers are willing and accept new emerging technologies, but also worry about the immature stage of blockchain applications and the risk of rushed decentralization.

YRH, a senior strategy consultant and technical blogger at a blockchain company, pointed out that “Customers don’t care about the underlying technology. Customers want to download a practical application.”

Finally, the implementation process of applications based on blockchain technology in the hotel field returns to the original question: “Who owns customers?” Owning customers means owning sales channels, which means owning market share.

“After all, the biggest question is who owns the customers? Who owns the sales channels?” added DR, a leader in the global hotel technology industry.

In general, blockchain technology can be considered a natural continuation of the technological evolution that the hotel industry is still catching up with. Although it is widely regarded as a beneficial system application for multiple industries and government infrastructures, hasty and less strategic implementation may bring more challenges to hoteliers rather than benefits.

Summarize

Finally, all thorough system development takes time. Forecast models such as Gartner’s 2021 blockchain hype curve predict that the decentralized model will stabilize in 5-10 years. Therefore, on the one hand, it is too early to predict the potential of blockchain to provide a panacea for online travel agencies, and this is what the hotel industry has been waiting for. 

On the other hand, it can be completely attributed to the problem of laying eggs or laying eggs. First of all, it all depends on the idea. The right idea to meet the needs of all stakeholders at the right time will break the vicious circle of persistent obstacles. Only the right ideas will trigger the long-awaited paradigm shift, acknowledging that blockchain technology is beneficial and feasible for the hotel industry, and breaking the widely recognized hype cycle forecast. In summary, the question remains “What is the right idea?”

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/blockchain-technology-the-real-solution-to-the-ota-challenge-or-a-glimmer-of-hope/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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