How Blockchain and Smart Contracts Will Power the Next Generation of Travel

Ambitious new startups are using blockchain and smart contracts to revolutionize the travel industry

Maybe you remember the days of going to a brick and mortar travel agent’s office, having them tell you about available flights, and looking through catalogues to choose a hotel. If you remember this you know how radically the travel industry has changed in recent years. The internet changed the playing field with the emergence of aggregator websites that allow travellers to book flights and hotels themselves with just a few clicks, eliminating almost all physical travel agencies around the world in the process.

Now, however, the travel industry is set to be disrupted again by new technologies.

Supplier-centric refers to how Online Travel Agencies (OTA) dominate the industry and add to the cost for travellers. OTAs such as Travelocity, Priceline, Booking.com, and Expedia demand high fees from providers to list their services. Because OTAs bring so much traffic, service providers have no choice but to comply with their demands. These high fees are passed onto the consumers. Other unnecessary costs are also passed onto travellers by way of bloated profit margins and various hidden fees.

Over the years, large OTAs have managed to build monopolies over online travel booking. The result is small hotels and airline companies tend to lose out over larger companies and the end customer has less choice. Another way of describing these monopolies is that say that the online travel industry is centralized.

Blockchain and smart contract technology have the potential to effectively cut out OTAs and disrupt corporate profit margins. A blockchain-based system using smart contracts can perform all of the functions companies like Expedia currently do. It can link airlines and hotels directly to potential customers, without the need for separate websites. Since blockchain technology is capable of verifying customer identity, smart contracts can ensure all parties uphold agreements and the full value of a transaction is transferred. No chain of intermediaries is needed for this process, just a simple, secure transfer of funds between a buyer and seller with no additional costs.

Once a traveller chooses a trip, the Please system uses oracles to access external data on the blockchain to finalize the bookings. The traveller can then access and manage all aspects of his/her trip through the Please platform. Smart contracts let service providers post their services with no booking fee, which means lower costs for consumers.

Additional features of the platform include the option to earn digital tokens. After a trip is completed, the traveller, the trip creator and the service provider are incentivized to leave reviews for each other through token rewards. For example, users can receive PLS after a trip is completed or after completing specific tasks. PLS can also be used to vote on decisions affecting the platform and to pay for trips or advertising. Users can even stake PLS to reduce fees, receive special offers, or increase voting power.

Please’s technical solution is based on a xApp approach, which promotes an API-first architecture that is more agile and easily develops multi-channel apps for niche markets.

There is little doubt blockchain and smart contract technology could revolutionize the travel industry. The key to the success of Please.com will be if it can deliver on a platform that takes full advantage of the potential of these technologies. It also needs to be appealing and easy to use for consumers. Much will also depend on how readily services providers adopt the platform and if they find it profitable when they do.

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