EyeforTravel North America 2018

October 2018, Las Vegas

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Blockchain innovation: serendipitous, random, crazy

Are blockchain innovators like Winding Tree on the right track or barking up the wrong tree? Pamela Whitby investigates

Blockchain technology holds promise for the travel industry, but does it have the power to disrupt how travel today is distributed and where exactly is it likely to deliver the most benefit? Views on this are divided.

Broadly speaking, the Winding Tree “experiment”, as CEO Maksim Izmaylov refers to it, is to create a decentralised platform for travel in a world where there is no room for rent-seeking intermediaries. To date its partners include Lufthansa, Air New Zealand, Nordic Choice Hotels, CitizenM and Swissport. 

The Brillembourg Group, on the other hand, is developing STEP, a simple travel ecosystem protocol. “Ultimately we believe hotel owners can solve three fundamental challenges using blockchain: distribution cost, loyalty and alternative financing. We are focused on the alternative financing aspect by creating a market for room night tokenisation,” says CEO David Brillembourg.

Other startups, to name a few, like Voy, Keyocoin and Trippki, are focused on what Max Starkov, the founder and director of HEBS Digital, sees as one of the real opportunities for blockchain – loyalty.

“Blockchain has been all the rage these past 18 months. Unfortunately, similar to many other technology innovations in the past, some people are trying to use blockchain for the wrong industry applications. Winding Tree is focusing on the wrong application of the technology. If they really want to pioneer blockchain technology in hospitality, they should focus on loyalty programmes, contracting, procurement and payment systems but not on distribution!” he says.

Innovation doesn't follow one person's vision

Loyalty is certainly an opportunity if you consider the scale of the reward programmes of firms like Marriott and Hilton and the hundreds of thousands of vendors that they deal with across the globe.

However, in response to Starkov’s critique, Ismaylov says: “It seems rather silly to just dismiss a technology or its particular applications. That person has to possess either an insight into the future or a gigantic ego because innovation doesn't follow one person's vision. Innovation is serendipitous, random, crazy.”

Also, for the record, Winding Tree will be providing smart contracts for loyalty.

While Brillembourg agrees that there should be players using blockchain technology to solve issues around loyalty and procurement, he believes in proving one competency to its full extent, one at a time. “We see our company expanding its areas of focus in the future. For now, we’re going to be the leaders in room night tokenisation using STEP as the engine to power the ecosystem,” he says.

Getting the fundamentals right

Clearly, there are a growing number of applications for blockchain technology in travel. But for many, including Winding Tree, it is still early days. Izmaylov is quite open about the fact that what Winding Tree has embarked on is “is an experiment and we have never claimed that it will solve all industry problems”.

And problems there are. According to Starkov, there is no doubt that hoteliers need to embrace, learn about and invest in next generation technologies like artificial intelligence (AI), Internet of Things (IoT), voice assistants, chatbots, robotics and blockchain but he has this warning. “Hospitality - and both hotels and vendors are equally to blame here - has become an industry of buzzwords. Many people forget that before we all jump on the AI, blockchain or robotics wagon, we need to deal with hotel tech fundamentals first,” he says. 

Hospitality - and both hotels and vendors are equally to blame here - has become an industry of buzzwords

In his view this includes to name a few:

  • Optimising the hotel direct channel
  •  Fixing the six-year old hotel website
  • Getting a better central reservation system
  •  Improving hotel SEO
  • Creating the property’s Google accelerated mobile page presence
  • Launching multichannel marketing for the property
  • Optimising social media profiles
  • Investing in better business intelligence and analytics tools.

It is clear that the industry has work to do on several fronts, and who will emerge as blockchain winners is anyone’s guess, but everybody seems to agree that it can’t just be about the technology.

Ilya Khanykov, an advisor to Blockchain.aero, a consortium of firms operating in the mass urban aviation market, says: “The promise of blockchain is this singular database. It’s just another protocol layer like HTTP. But we don’t discuss the impact of the HTTP on the banking industry; that would be a silly thing to talk about. In a similar way, we will not be discussing the role of blockchain on this and other industries. Instead, it will be about the role of application layers built on top of the blockchain protocol layer.”

Winding Tree’s Izmaylov puts it like this: “Actually, blockchain is only one aspect of what we're creating. In fact, a very important part of what we're working on is a platform for people to collaborate on common rules in the travel industry, common infrastructure, in an open and friendly environment. Our mission is to enable more experiments in the travel industry, more innovation, more start-ups. People like Max either don't see it or are against it. They are the force that holds the whole industry back.”

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