How Travel and Transportation Industries are Using Blockchain to Drive Sales

Travel and Transportation Industries are Using Blockchain to Drive Sales

By Maksym Prykhodko

Ever since its first introduction in October 2008 as part of a proposal for the application of Bitcoin (Harvard Business Review, 2017), blockchain technology has been increasingly expanding its utility across various fields and industries. For the uninitiated, blockchain works by creating a localized network that enables peer-to-peer channels of transacting and communicating without the need for a centralized authority to govern the system (Forbes, 2018). Each individual piece of data transmitted on the blockchain includes a time stamp and unique details related to the transaction, rendering it irrevocable and unchangeable once it has been completed. 

Given that there is no way for this information to be falsified, all the data stored on the blockchain is highly verifiable (Geneva Business News, 2018), which is why the decentralized nature of blockchain technology can provide a number of ways for the streamlining and improvement of travel, transportation, and logistics-related processes, which could consequently lead to greater profitability in these industries. Indeed, as pointed out by Gelter (2017), “blockchain will create unique opportunities for travel companies to track their customer’s preferences, build more personalized and meaningful interactions, and extract more value from loyalty programs” (p. 75). Blockchain has been adopted in other industries, as well, including healthcare, real estate, and banking. Learning about how blockchain is implemented in decentralized finance through podcasts about DeFi or reliable articles can provide helpful insight when dealing with the financial side of the transportation business.

When it comes to profitability, a special kind of cryptocurrency, stablecoins, can be helpful due to its stability. Namely, the price of one stablecoin always matches the price of the fiat currency it’s pegged to. In the case of the most popular stablecoin, USDT, that’s the U.S. dollar. Those in the travel and transportation industries who know how to buy USDT and how to use it can bring additional value to their respective industries.

Greater stability and security are the other two prominent benefits that blockchain technology may provide to the travel and transportation sector. As previously noted, information stored on the blockchain can never be accidentally destroyed—for example, as a result of a malicious cyberattack—which effectively ensures that all transactions are able to be traced and verified at any given moment (Revfine, 2022). However, companies in the sector need to keep an eye out for relevant changes in the blockchain tech and industry through a number of specialized websites, such as tradecrypto.com. Still being a young industry, blockchain is likely to transform in the future. 

In addition, enhanced stability can be seen in areas such as luggage tracking. Given that a customer’s luggage is frequently handled by multiple airlines during a single long-distance trip, baggage tracking using a decentralized database across several companies can greatly reduce the risks of its misplacement. Rana, Adamashvili and Tricase (2022) have argued that “by using an integrated system between airplane companies and airports, [blockchain] can provide an innovative system to check the path of baggage and avoid it being stolen, loosened, or damaged” (p. 7) potentially saving the US airline industry hundreds of millions of dollars per year.

Blockchain can also significantly improve accountability and transparency in the travel and mobility industries. Since the technology can provide untamperable accuracy for digital transactions, it can be used by travel companies to safely and properly record purchases on the blockchain (IBM, 2018). Moreover, when tourists purchase their travel packages with companies who use a blockchain-based system, they would be able to book all of their tickets on a single website, eliminating the need to log into and buy tickets from numerous different sources. The blockchain ledger would appropriately distribute the payment among all the participating suppliers after recording the single client purchase. Hence, Valeri and Baggio (2021) argue that the adoption of blockchain technology does not only benefit customers by providing more simplified services that are well managed, but also businesses by automating their processes, reducing the workload of standard procedures, and increasing productivity levels of staff overall.

Furthermore, seeing as the travel sector relies heavily on personal identification services, there is a potential for blockchain to eventually replace other methods of storing sensitive data as the industry standard. As reported by Line et al. (2020), blockchain can be used to streamline authentication procedures by eliminating the requirement for physical copies of IDs required by most current systems. Furthermore, by identifying individuals that are traveling with fraudulent documents, the technology could vastly decrease the possibility of terrorism or criminal assaults. When used in this way, blockchain could also exceedingly shorten airport check-in lines and wait times since presenting identification documents can be replaced with a quick fingerprint or retina scan.

About the Author

Maksym Prykhodko has denied the existence of crypto as an asset for 3 years when he was working with standard financial instruments. Became Head of Treasury. Won the best bank employee award and left the bank for cryptocurrency exchange the next day. Got a second university degree, but that didn’t stop him from studying finance yet. Combines fiat and crypto experience to be as objective as possible in general matters. His dream is to be interviewed by Bloomberg.

References:

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.