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NEWSLETTER SIGNUP My account Log Out Jul 18, 4:59 AM EDT Business Technology World National Politics Media & Culture Opinion Sports Social Capital Crypto NEWSLETTER My account Log Out US Edition Business Technology World National Politics Media & Culture Opinion Sports Social Capital Crypto Listings & More Spotlight Glossary Editions Australia Edition India Edition International Edition Singapore Edition United Kingdom United States NEWSLETTER Follow Us Editions Australia Edition India Edition International Edition Singapore Edition United Kingdom United States Crypto Blockchain: The Silver Bullet Travel Industry Has Been Longing For By Ralf Usbeck 07/18/23 AT 4:59 AM EDT Share on Facebook Share on Twitter Share on LinkedIn Share on Reddit Share on Flipboard In the travel industry, where multiple parties collaborate and intersect--tour operators, airlines, car hire companies, travel agencies, destination management companies, and other service providers--smart contracts could effectively streamline the entire process. AFP In an era where technology constantly disrupts traditional industries, it's easy to overlook those sectors that already seem to operate like clockwork. The travel industry, with its wide assortment of convenient aggregation sites (Booking.com, Skyscanner), budget airlines, and competitive insurance providers, has undoubtedly made the process of booking flights, hotels, and tours a breeze for wayfarers worldwide. However, even this seemingly efficient industry stands to greatly benefit from disruptive technology--and the silver bullet it has been waiting for might just be blockchain. Smart contracts to make travel, tourism even smarter Blockchain, the underlying technology behind cryptocurrencies like Bitcoin and Ether, has made waves across various sectors for its potential to revolutionize data management, enhance security, strengthen privacy, and lots more besides. Major companies like Alphabet and BlackRock, as well as multiple national governments, have deployed blockchain to pursue digital transformation on a vast scale. By leveraging the power of distributed ledger technology (DLT), the travel industry could follow suit, overcome some of its longstanding challenges and enhance the experience for consumers, service providers, and partners in one fell swoop. The introduction of an immutable public or private ledger, as well as the deployment of smart contracts, could bring myriad benefits to travel. Smart contracts--self-executing contracts coded with predefined rules, conditions, and penalties--could produce many meaningful benefits, such as drastically reducing the time-consuming process of contract negotiations between providers. What's more, they offer the prospect of more efficiency, since payment and assets are in the same transaction. Smart contract technology is the bedrock of the multi-billion dollar decentralized finance (DeFi) sector, which seeks to replicate the financial system while eliminating intermediaries. While DeFi is not without its flaws, smart contracts have kept the industry ticking along for several years now. In the travel industry, where multiple parties (and their APIs) collaborate and intersect--tour operators, airlines, car hire companies, travel agencies, destination management companies, and other service providers--smart contracts could effectively streamline the entire process. After all, as things stand, when a customer books a travel-related product or service online, at least a dozen entities effectively take a share of that booking. And there are other pain points, too. Like the due diligence and onboarding times for clients and partners in the travel industry, which are notoriously slow. Indeed, onboarding new distribution channels or a technological service provider can, after a due diligence/contract set-up phase, take up to six months. The booking process might look efficient on the front-end but the back-end process is a complete mess. With blockchain-powered smart contracts, these processes can be significantly expedited, in many instances reducing onboarding periods to mere minutes. The immutability and transparency of blockchain, meanwhile, ensures all parties have access to verified data, lowering the need for repetitive checks and enabling faster, smoother onboarding. This, in turn, creates a more efficient ecosystem for all participants. Decentralization to tackle fraud Another major problem in the travel industry is credit card fraud--criminals purchasing flights and booking hotels with stolen card info, for example. The International Air Transport Association estimates that such card fraud costs $1 billion each year. Blockchain technology has the potential to address this issue head-on. By utilizing a decentralized, tamper-proof ledger, sensitive financial information can be securely stored, shared, and verified across the network. The risk of data breaches and fraudulent activities is therefore reduced, providing travelers with greater peace of mind when making online bookings. Enabling simplified access via a single identity Furthermore, blockchain has the potential to harmonize the process by which consumers access various travel services. Even with handy aggregation sites, today's travelers often have to navigate multiple platforms and websites, each with its own registration, payment, and verification processes. With a Self-Sovereign Identity, which depends on blockchain, decentralized identifiers, and Verifiable Credentials, a single digital ID could be created for each consumer, enabling seamless authentication across numerous platforms. This would not only simplify user experience but also enhance security and data privacy. While the travel industry has already embraced technology in many aspects, blockchain offers a new paradigm that can transform the industry even further. By deploying smart contracts, the sector can improve client/partner due diligence and onboarding times, enhancing efficiency and customer satisfaction. The tech's inherent security features can also mitigate the risk of credit card fraud, the elephant in the room that web2 technologies seem incapable of removing. Lastly, the harmonization of travel services via blockchain can simplify UX and create a more seamless journey for travelers. As the travel industry continues to evolve, its embrace of disruptive technologies seems somewhat inevitable. After all, this is not an industry that is stuck in its ways--one only needs to consider the dizzying array of travel-related mobile apps to know. With its ability to streamline processes, bolster security, and foster collaboration, blockchain is the secret weapon the travel industry has been crying out for. By harnessing the power of such tech, we can unlock new levels of efficiency and transparency, ultimately revolutionizing the way we explore the world. (Ralf Usbeck is the CEO and co-founder of Chain4Travel) REGISTER FOR FREE to continue reading ✔️ Unlock the full content of International Business Times UK for free offer available for a limited time only ✔️ Easily manage your Newsletters subscriptions and save your favourite articles ✔️ No payment method required Already have an account? Log in © Copyright IBTimes 2023. All rights reserved. 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