Blockchain Technology Is About to Disrupt Travel, But Wall Street Is Oblivious
The travel and tourism industry is a global economic driver that promotes trade, interconnectedness, a deeper understanding of our differences, and the flow of ideas for a better world. In 2016, the travel industry contributed about $7.6 trillion to the global GDP. The World Travel & Tourism Council (WTTC) submits that the travel industry employs about 292 million people.
More interesting is that the travel industry is still growing exponentially. In 1995, the number of people that travelled internationally was placed at 520 million. By 2015, the number of people that traveled internationally jumped to 1.06 billion. Economists predict that by 2030, the number of people traveling internationally will surge to 1.8 billion.
The advent of the Internet has also helped to boost the rapid growth of the travel industry. Now, travelers can take virtual tours of their intended destinations, book flights and hotels online, create a complex itinerary through multiple countries and continents.
Despite its meteoric growth in the last couple of decades, the travel industry is far from perfect. Travelers still have to grapple with an overload of information with varrying degrees of reliability on the way to and from their destinations. Then there are financial headaches in terms of currency conversions, transaction fees, and fraudulent charges. Thankfully, some blockchain based solutions are trying to revolutionize the travel industry and the idea of travel itself.
Get To Know Your Cousins
Cool Cousin, a VC-backed blockchain startup launched in 2016, is trying to bridge the information gap for travelers desperate for authoritative information about their trip and travel itinerary. Working under the premise that having a trusted friend or family member living in your destination city improves the odds that you’ll have a pleasant traveling, Cool Cousin provides travelers with a network of local guides (Cousins) who have similar interests and who can help you get the best out of your travel experience.
In the last six months, Cool Cousin has been gaining popularity among travelers. It has recorded a 220 percent user growth up to 550K users in the last six months. In the same period, the startup has increased its community network organically to 3 million. Because of the blockchain-based nature of Cool Cousin, interactions, payments, in-platform services will be powered by the crypto token CUZ.
Canada partners with Accenture on blockchain-based ID system
Another company offering solutions to a seemingly congenital problem of travel is SecureKey, an identity solution being developed to simplify the ID process for accessing online services and applications. The thesis of SecureKey Concierge is that you don’t have to go through a fresh process of biometric registration and KYC when accessing government services if you have a online banking credentials. Your bank has already done a good job of verifying your identity and another ID verification process to access government services is simply redundant.
In partnership with IBM (NYSE: IBM) blockchain, SecureKey has already built Canada’s first ID network that allows users to access more than 80 Canadian government services online using their online banking credentials. this manner of verification has the potential to simplify airline verification and screening process to just a few button presses.
This initiative mirrors another decision from Canada to build a blockchain-based travel ID system. Marc Garneau, Canada’s Minister of Transport revealed that the Canadian government was working with Accenture PLC (NYSE: ACN) to create a ‘Known Traveler Digital Identity’ system to make travelers move through custom more efficiently using biometrics, cryptography and Blockchain technology.
Canada’s decision to adopt blockchain technology is a precursor to upcoming changes in the travel industry as more countries come to the realization of the huge potential of blockchain technology is solving ID problems.
In the words of Mr. Garneau “Innovation is key to enhancing global competitiveness, mobility and productivity. Leveraging new technological advancements can support risk-based approaches to public safety and security, making air travel more efficient while improving the travel experience.” Navdeep Bains, Canada’s Minister of Innovation, Science, and Economic development also notes that “Emerging technologies have astounding potential to transform and enhance the global travel security system.”
The disruption is already underway
The chart below shows how the shares of major travel companies on Wall Street have fared in the last six months. You can see that the share price of Expedia Inc (NASDAQ: EXPE) has declined more than 31 percent, Priceline Group Inc (NASDAQ: PCLN) has lost more than 15 percent in its trading price, TripAdvisor Inc (NASDAQ: TRIP) is up a negligible 0.46 percent, and the Dow Jones Travel and Leisure Titans index is up a measly 2.43 percent.
Of course, it would be illogical to conclude that the weakness in the bullish prospects of the traditional travel industry is a function of the activities blockchain startups. Blockchain startups are still operating in a niche segment of the travel industry and it is still somewhat too early to conclude that blockchain will succeed in upending the industry. Nonetheless, blockchain technology is here to stay and it would be folly to underestimate its disruptive power as a catalyst for change.
Will traditional travel players try to fight back?
Interestingly, traditional travel companies don’t seem to be particularly smitten about leveraging blockchain technology to improve the efficiency of their processes and systems. For instance, Priceline CEO Glenn Fogel was reported saying about Blockchain “We’re not going to be worrying about it tomorrow or pouring a lot of investment into it. Of course our engineers are curious. But from my understanding, they’re saying ‘there are other things you can panic about.”
Expedia Inc’s new CEO Mark Okerstrom, also holds the same sentiments. In an interview session with Skift’s Andrew Sheivachman he noted that he “doesn’t see blockchain as a competitive threat at the moment” even though he admits that he tends to “paranoid over everything”. However, the traditional players in the travel industry need to sit up and pay attention to the massive disruption that blockchain technology is bringing to the industry.
The indifference of the two high-profile CEOs in the travel industry is not particularly surprising. For one, the travel industry is averse to change and the fact that the two biggest players are skeptical about blockchain speaks volume about the industry.
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