How can Blockchain help hotels?

. 3 min read

In the constant hotel struggle to lower booking distribution costs charged by OTAs, we find a small light at the end of the tunnel that leads us to believe that the future brings an alternative. This light comes with a name - Blockchain. With the next few lines we hope to elucidate a little on this topic and how this new type of distribution can put the hotel on sale without being charged a commission by a third party.

Needless to say how much we are pushed on a daily basis to higher and higher commissions, since much of our production comes via OTAs, and as all of them tend to pull in the same direction, we hoteliers, are forced to accept those conditions, in order to not compromise the hotel's revenue. If we are an independent hotel, little or none will be our ability to negotiate with these giants, so it is assumed that these same hotels will be the pioneers to sell within the blockchain system. So, what is the blockchain? Let's dismantle the topic and see how this can be the solution to the end of the intermediation and its huge costs, supported by customers and suppliers.

It is not just about understanding and installing. This new system requires investment in technology and know-how to completely replace the current distribution scene, and this is where many will be left behind. Without the right tools and the right human resources to match the new challenge, exchange is not possible.

Blockchain, a chain of blocks

Nothing more than a chain of blocks, linked all together. Everything is based on a network, like a web, that joins several blocks. Blocks with information - records, constantly updated and capable of being copied and keeping these same updates, with the added value that cannot be erased or altered. These records maintain the confidentiality of those who register, and any element of the blockchain has access to it and its veracity and security is unquestionable since they are encrypted. There is at no time, a central or intermediate element, allowing transactions from A to B without any third party regulating or requiring commission. This is the base system of virtual currencies, without banks that centralize, intervene and charge for their presence.

For this to be possible, all the blockchain technology is decentralized, all the information is not stored in one place. In this way, it is possible to prevent the manipulation and makes all the information transparent to all the actors of the network. Any new information added, is accompanied with a time stamp and this allows any information to be tracked, promoting the database transparency.

Where to apply Blockchain in hotel and tourism industry?

The advantages are undeniable. Without third parties, distribution costs are drastically reduced. Transactions are secure and carried out to the second, and as there is no third parties, there are no bank fees. For this practiced, proprieties will have to accept virtual currencies as a means of payment. This database never goes offline and is immune to any computer attack. This stability brings security to all financial transactions.
This methodology can allow efficiency throughout the travel process, not only in the hotel purchase, but also in expediting identification while travelling, baggage tracking, access to loyalty programs, etc. It is a whole new logic based on a network with inviolable data, encrypted, with total security and confidentiality of who enters the data.

The following video demonstrates all this dynamics in a very practical way:

Everything seems impossible until it is done. [^1]

Final considerations

Everything is new and what is new frightens in the beginning. Internet was like this in the last decade of the last century, although this seems like it was a long time ago, it was just over 20 years ago, and today, there is nothing and nobody who lives and grows offline. Based on this evidence, we want to lift the veil and bring the opportunity that comes to our attention. At first it seems complicated. Accessible only to IT crowd and away from the hotel reality. It is a new scenario, completely disruptive of the current one. But the advantages are so many and so great that it cannot be ignored. It is important to know how it works, how it is established in the economic environment and mainly how it behaves. But as with any strategic step, we will have to know where we are and know well where we want to go and how. It is in this "how" that we put emphasis and add the "if". If this is really a way to go, for our company, our business.

With this article we want to present a system that in all its theory is genius. We must separate it from the case of Bitcoin and its bubble effect. We also do not want to pass on the idea that everything that is new and technological is the way to go. We suggest information, analysis and above all, a strategic thinking. In the future we will deepen the subject and clarify questions that you may arise.

There are already several companies in the industry that are already in this adventure, from airlines to operators. Explore the topic, see what is written, become familiar with it. Very soon the time will come for the first step.

[^ 1]: Nelson Mandela



Susana Castro

With a degree in Tourism Business Management she has held operational roles in such areas as Front Office, Housekeeping, e-Commerce and Sales. She has specific training in Revenue.

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