Travelport and IBM try blockchain to improve the distribution of tours and destination services

After successfully trying a new concept in collaboration with IBM, Travelport is developing a private blockchain to streamline, speed up and validate the distribution of tours and services. This will result in increased transparency and automation to meet the needs of operators, intermediaries and consumers.

Mike Croucher, Travelport’s chief architect, states that, at the beginning of next year, a first useful version will be launched, possibly geared to tours and services offered in cruise ports or at large hotels in travel destinations.

This specialist highlights that, “unique destination-experiences, largely provided by small, independent suppliers, are increasingly catching the interest of travelers. This is a sign that ordinary distribution channels are not capable of meeting this type of demand.”

The idea of profiting from blockchain, as an alternative for loading content, came up in view of the high costs with which great platforms are faced when performing tasks such as loading content into their systems, making it operational, and managing its contracts.

On the other side of the equation, says he, there is the need to help travelers to discover and rely on the experiences provided by these small, local suppliers.

 

The concept

It is a way of “outsourcing” sales teams, whose volume would be unmanageable by Travelport’s staff, given the vast number of target destinations.

Blockchain content is expected to ensure quality and count with the backing of local players. How can this be attained? To ensure the reliability of the experiences available through this blockchain, Travelport will require that each activity offered at the target destination have the explicit backing of a local entity or person. After loading their content in the blockchain, suppliers must present a guarantor, selected from a list facilitated by Travelport (a local travel agent, a tourist consortium or association…), who will sponsor their work. This guarantor will receive a commission each time one of the products it has sponsored has been sold.

Another characteristic of blockchain is that commissions are easily settled through smart contracts, which allow instantaneous payment. These contracts are agreements of automatic execution that sustain the transaction rules in a blockchain, allowing immediate commission payment instead of waiting for several months.

Croucher summarizes the smart-contract process by saying: “When a sale is made, the retailer will get a 5% commission, the content sponsor will receive a single payment worth $ 100 and Travelport may receive 5% on each transaction. All these amounts will be automatically and instantaneously settled, through a fully transparent process.”

 

The potential

Initial tests show that this tool will probably develop greater potential when applied to large hotels in tourist destinations or cruise lines.

For hotels, it will mean alleviating their reception desks from the traditional task of providing information and selling bookings for destination services. It will imply automating a manual and time-consuming process.

For cruises, this platform will establish a connection with a wider and more original array of activities available for travelers.

“It is very difficult to coordinate this type of unique experience in each port of call. Making advanced bookings for experiences such as a cooking class, a Segway tour or something like that is complicated,” concludes Croucher.

The reference information is in Phocuswire

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