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Blockchain and tourism, buzz or reality?

#Business watch

Tourism is becoming more and more predictive, what about the role of the blockchain? 

Tourism is a profession that has all the criteria to make it viable for blockchain. There is great potential as the levers for adoption are as powerful as they could be. There are however temptations that lead to poor uses.

 

Tourism is a sector where there is an abundance of data, used by successive and different players, with the gathering of sensitive personal, financial or health data. These criteria are perfect for the use of blockchain and make it a solution for tourism professions to record and store a maximum quantity of secure and compliant data, to process them and use them for predictive marketing.

The main use of blockchain, which works perfectly, is to allow for digital transactions that are sufficiently secure that they do not require a third-party. Therefore, blockchain is a cause of concern for all intermediary businesses.

In the financial field, it is banks that are the first in the line of fire and must identify new roles to compensate for the loss of revenue due to the disappearance of the possibility of margins on transactions. In tourism, it is the Online Tourism Agencies. The pace of change depends on the strength of the main levers, which are reducing costs, saving time on transactions and the legality of bypassing a sworn and trusted intermediary. New services exist. OTAs can find new sources of revenue by using blockchain’s capacity to process data in a way that complies with the GDPR (General Data Protection Regulation): becoming specialists in predictive marketing in the value chain, making package offers for key accounts according to their customer profiles, etc.

This same property of blockchain to process “GDPR compliant” data allows for a significant enrichment of ‘know your customer’ data for big players in the hotel industry.

 

Anonymising data

Beyond secure storage and the traceability of their collection and use, the main interest of blockchain is that it makes data anonymous: a hotel group could therefore gather and use a maximum amount of data as clear access to the data would be subject to rights that are securely managed in compliance with regulations. The prior work consists of defining which data to chose before, during and after a stay, and sending them to a few authorised people. From there, the advantages, for the customer and the hotel group are practically endless:

  • Eradicating magnetic passes
  • Doing away with queues at reception on arrival and departure
  • Increased knowledge of customers’ wishes to customise the preparation of their room
  • Automated billing, including consummation from the mini-bar
  • Marketing that is perfectly tailored to each customer

Customers will give their data and their permission as they will be the first to benefit.

Let us now study an example of the adoption of blockchain for false good reasons: the loyalty tokens applied to “crypto air miles”. These “cryptomiles” are the fashionable version of the points accumulated in multi-brand loyalty programmes, be they air miles or from retail. These loyalty programmes have historically posed an initial problem: they create debt on the balance sheet. Imagining that, by using blockchain you could avoid adding debt to the balance sheet with these loyalty points issued as cryptomiles is an illusion. These loyalty programmes historically also have a second problem: how to give a different value to the miles from a company that gives them easily and a prestigious company that give them out in a far more restricted manner? Again, blockchain has no answer.

Finally, another use where blockchain fails is when it is used for fashion reasons on one part of a process, but without giving the same level of security to each stage. The encrypted, distributed and logged code is unbreeched to this day. But any element outside this code must be secured.

There is no sense in putting blockchain in a digital identity validation process based on a passport if the holder may not be the one presenting the document. However, the digital validation by blockchain of biometric finger print data is an excellent us of the technology as the physical fingerprint itself is undisputable biometric evidence.

 

A revolution in security

By opening new horizons to explore what may sometimes be a source of anxiety, blockchain has the potential to revolutionise the world of tourism.

Its only power however is to increase the security of a digital transaction. Between objects and human beings. To collect data, store data and for processes.

Blockchain does not secure the data that enters into the digital transaction or how the data is processed after the transaction. It is an over simplification, but one that is clear, to quote the case of reserving a guaranteed all inclusive journey, blockchain can only guarantee the transport segment.

Warning: it is better not to fall victim to a passing fad: the issues of certifying the inputs to the blockchain, cross validation, by sworn third parties guaranteeing access rights for decrypting, the legal framework, etc. make good uses for blockchain rare.

Do you think that the GDPR hampers European business? Now that you have had an overview of the potential of blockchain in this area maybe you can see the GDPR as an opportunity to benefit from the national expertise in blockchain and to get a head start on the giants from Asia and the USA?

 

Géraldine Mauduit, Open Tourisme Lab

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