In recent years, blockchain technology and its application are becoming a “hot” trend in Vietnam and the world. Blockchain applications can support many areas, such as financial services, manufacturing, education, energy, etc. Today, let’s learn the meaning of Web3 with Omatech Web3 for the industry. Let’s travel!
Web3 and its related technologies, like blockchain, can be disruptive for many reasons. However, one thing that has led to their widespread adoption is their ability to revolutionize various aspects of our daily lives, including how we travel.
While large business entities operating in a centralized manner dominated the travel industry, the travel experience can become much safer and tourist-friendly by integrating web3. Why? Because blockchain technology is at the heart of the web3 revolution. And since the blockchain is a shared, distributed, and encrypted digital ledger that serves as an irreversible and irreparable public database of stored information, it can bring transparency, safety, and accountability to several vital touchpoints.
As a result, web3 in travel holds promise for businesses, governments, and travelers alike. Still, consumers are likely to be the biggest beneficiaries as web3 in journey ensures a seamless travel experience and is reasonable with a higher autonomy for tourists. Before diving deeper into the discussion around web3 in travel, let’s get to the basics, starting with what web3 means.
What is Web3?
Web3 is the latest version of the world wide web, characterized by decentralization. As mentioned above, web3 achieves the quality of devolution based on blockchain technology. Web3 is still evolving; therefore, all the web3 definitions can be considered incomplete. However, one thing that needs no further clarification is that web3 lays the groundwork for a genuinely decentralized world where nothing is under the top-down supervision of centralized entities. Blockchain-based applications and services are slowly evolving, with a lot of money pumped into their development. Web3 in travel also uses machine learning, artificial intelligence, and other innovative technologies to create more adaptive and intelligent applications. It is no surprise that travel and tourism are among the industries that have benefited the most from the web3 movement.
Now that we understand the concept of web3 let’s see how it has helped the tourism industry grow.
Implications of web3 for the travel industry
Stability and security are two of the essential benefits of web3 for travel services. The decentralized nature of the blockchain implies that recorded transactions are always traceable; therefore, information cannot be accidentally lost or deleted.
The travel industry relies heavily on information exchange between companies. Travel agents must pass customer information to hotels and flight companies. Travelers’ belongings are also often shared between companies and tracked. Any impediment in the flow of such information could significantly impede the travel experience. Cases of data loss or incorrect information being transmitted can worsen the situation. Regarding web3 in travel, blockchain technology makes the flow of information seamless. Since the entire network of nodes responsible for running the blockchain shares the responsibility of storing data, accessing and storing passenger data becomes a hundred times easier when done in a decentralized manner.
Financial transactions are also an essential part of web3 in travel. Blockchain technology not only simplifies but also ensures secure payments. This is especially true for transactions abroad. Blockchain might increase trust between all stakeholders–from airline companies and travel agents to hotel businesses and tourists.
What aspects of travel have been most affected by the web3 movement?
With more people willing to splurge on travel, travel prices are rising. Prices are rising mainly because vacationers and tourists try to seize every opportunity available in the travel space. This has resulted in people paying more for their vacation than they would like and even missing out on the opportunity to travel because they need help to afford the trip.
This sudden price increase has become a topic of concern for visitors. Thankfully, blockchain technology can help here. Blockchain-based travel booking platforms are easy to use and bring greater transparency and security. BitBook is one of many booking platforms operating in the blockchain space. However, what sets it apart from its contemporaries is that it allows users to book travel and earn cryptocurrency.
Such blockchain-based travel booking platforms allow you to book hotels, vacation rentals, car rentals, airlines, and more. Web3 in the travel sector also offers startups and scalers an excellent opportunity to compete in a market dominated by central institutions. Unfortunately, hotels are forced to pay massive commissions for booking and processing payments under the current centralized system. This makes it seem impossible for startups to compete in the industry.
While the travel industry may have had little choice in the past, web3 in the travel sector can prove revolutionary in addressing this apparent gap. But how do decentralized applications operating in the web3 domain in travel differ from regular applications? While the user interface experience is familiar to both guests and hosts, the difference lies in the transparency and controllability on the back end enabled by smart contracts created on the web blockchain.
Identity verification and management
The most useful blockchain-based identity management and verification at airports. Passengers must use multiple centralized systems as they move through an airport.
A decentralized identity management solution could make it easier for passengers to move through airports by creating a “network of trust” using blockchain technology. These trusted networks share or use passenger identification information, but they also ensure the highest level of data privacy.
Passenger identification information flows through these networks using Decentralized Identifier (DID)-based proofs. A decentralized identifier (DID) is a unique identifier that enables a verifiable, decentralized digital identity. They allow the disclosure of only necessary information to specific systems and users.
What are the networks involved in such a DID-based solution?
- Airports Permitted Trusted Network- This network deals with known and trusted entities of an airport.
- The trusted network allowed for airport security services- It applies to all airports in a country.
- Authorized Trusted Network for Passengers and Government Agencies- This network is used for issuing passports, visas, and so forth
- A trusted network allowed ground handling services- Involving service providers in the airport.
- Allowed IoT Network- This network is for all devices in the airport.
- Trusted Networks Allowed for Retailers and Financial Services- Involving all vendors operating at the airport.
- The trusted network is allowed for the customs department- It applies to all airports present in a country.
All trust networks other than the authorized trust network for passengers and government agencies provide proof of a decentralized identifier for each stage of passenger movement within the airport. The information is written to the blockchain ledger using a DID document.
Passengers must provide their DID document to confirm their identity and be eligible to fly from the airport on a particular flight. Blockchain-powered decentralized identity management solution offers the following benefits- decentralization of interoperability.
Blockchain-based loyalty rewards programs are an excellent solution for both businesses and customers. With blockchain technology, it is possible to help customers realize the full potential of loyalty programs. Blockchain technology can improve efficiency, reduce costs and increase brand loyalty in any organization, from banks to airlines.
Here are some of the most important benefits of blockchain-powered loyalty rewards programs
1. Cost reduction
Although blockchain has an upfront cost, your savings from system management, transaction activity, and customer acquisition are substantial. With smart contracts that enable secure, traceable, and transparent transactions, a blockchain-based loyalty rewards program can significantly reduce system management costs for businesses in the region—the whole industry.
2. Create a system without friction
Accessing and managing rewards with a blockchain-based loyalty rewards program is easy. Customers can credit their tips to the same crypto wallet that they will use to redeem their hotel stay rewards. The decentralized and trusted technology of the blockchain makes loyalty rewards programs streamlined and highly efficient.
3. It involves a near real-time process
Blockchain allows transactions to be recorded and accessed in real time by multiple parties. This helps loyalty rewards program providers accumulate credit points quickly.
4. A safe environment
The blockchain is an immutable, distributed digital database that efficiently records transactions. It allows easy tracking of transactions and makes them irreversible. Therefore, double spending, fraud, or any other transaction manipulation is eliminated.
5. Digital Payments
Blockchain integration can improve travel in many ways but mainly facilitates secure and traceable payments. In today’s world, booking airline tickets is easy and fast. This process can be further simplified using blockchain technology. Winding Tree, a blockchain-based distribution platform for the travel industry, facilitates airline and hotel bookings with lower transaction costs. Airline companies like Air New Zealand have also used blockchain technology to simplify ticketing, resulting in fast and secure checkout, transactions, and payments.
Defi Payments eliminates the need to use a third-party payment application for digital payments, as payments can be made directly between the parties involved. Blockchain technology also has the potential to make payment gateway companies like Visa and MasterCard obsolete. This powerful technology allows you to go straight to the airport and board your flight without waiting in long lines for verification and other procedures. Blockchain-based payments reduce the time it takes to complete payments.
Governments can also use blockchain technology to provide public transport users with a faster and more secure payment experience. Blockchain, combined with artificial intelligence and other cutting-edge technologies, could eliminate the need for physical tickets for buses, railways, and other transportation services. A single database can be used to track user journeys across all modes of transport. Even for customers, a special payment and identification method will allow access to shipping services.
Blockchain also eliminates the need for physical documentation in travel-related processes. Blockchains replace physical documents with digital contracts, also known as smart contracts. Digital agreements are traceable, which means they prove helpful in a dispute. Consumers can view a digital copy of the agreement to understand its terms and conditions thoroughly.
6. No agency fees or involvement of third-party intermediaries
Since blockchain runs on a peer-to-peer network, blockchain-based travel solutions and services eliminate the need for intermediaries or mediators. As a result, many travel agencies use blockchain technology to take advantage of this unique attribute. For example, S7 Airlines, a Russian airline company, uses blockchain technology to issue and sell tickets. The private blockchain it uses runs on Ethereum and uses smart contracts to exchange information between parties. This has speeded the settlement process between agents, airlines, and passengers from 14 days to 23 seconds. The platform is in active use, and the value of monthly transactions through its server blockchain is in the millions. Since no third parties are involved, there are no agency fees and commissions to be paid.
7. Insurance against flight delays and overbooking
Many airlines are now using blockchain technology to automate the compensation payment process for passengers who have been denied seats due to overbooking or delayed flights. French insurer, AXA, uses blockchain technology to provide coverage for delayed flights. The compensation payment process involves intelligent contracts. Therefore, compensation is automatically paid when a customer’s flight is delayed for a certain period. Compensation for denied seats due to overbooking is also adopted by many well-known airlines, such as United Airlines.
Conclusion: Web3 is changing the travel industry
Blockchain technology has attracted a lot of attention from across industry verticals. For the travel industry, blockchain presents itself in incredible ways. A significant amount of money is also being pumped into new business projects serving the needs of users and businesses related to web3 in travel.
Administrative inefficiencies can add strain to everyone’s travel experience. Blockchain technology can significantly improve the customer experience by recording every transaction entry to enhance security, transparency, and information traceability. This dramatically reduces inefficiencies. Travel businesses, from airlines to hotels, use blockchain’s disruptive technology to improve their operations and services. And what does all of this mean? Improve business efficiency and a better travel experience for customers.
If you want to build a web3 product for your travel business, contact Omatech Web3
today. Our expert developers can make your dream project a reality.