How to Change Tourism Industry with Blockchain potential?

Before we start explaining blockchain’s role in the tourism sector, let us briefly discuss what blockchain is?

Well, if you note, blockchain is primarily a distributed ledger network that brings coherent

integration between different blocks. Point to be noted that these blocks are load with data relating to the system. 

 Bringing blockchain technology into any industry will help to maximize stakeholder buy-in,

more security awareness, most case of prioritization, and most importantly, regulatory buy-in. 

More than that, depending on the industry, adopting blockchain can help to open new

possibilities for the business. 


Over the past few years, blockchain has grasped noticeable engagement within various

industries and sectors. The reason is blockchain technology has transformed the old way of

storing data or information. 


On a report dedicated to the digital transformation of aviation, travel and tourism stated that

“there is widespread recognition among industry leaders that the role of digital technology is

rapidly shifting, from being a driver of marginal efficiency to an enabler of fundamental

innovation and disruption." The report was conducted by the World Economic Forum (WEF) in

2017. Since then the blockchain technology is proved to amplify transparency and security in the

system while also perk up transactions. Once you’ve understood the basic introduction of

blockchain, let’s explore the doors of opportunities blockchain has into the tourism industry. 


What is precisely, blockchain? 

For those who are not familiar with blockchain, it can be pretty confusing at first, but once you

get it, blockchain is very simple and quite easy to understand. In simple terms and also

according to public records, blockchain is a public ledger that allows users to store data of

transaction between two or more peers. Each of these data record is called blocks and hence

creates a chain joining these cryptographic blocks. To be noted, blockchain is decentralized, and no central authority can control blockchain. Not

only that, the stored data is permanent, every information stored in blockchain has a

timestamp and cannot be altered by any means.  


The features, as mentioned above, make blockchain the most secure, traceable, and

transparent network of all time. After all, blockchain is not bound to any central authority, so it

doesn’t seek any vulnerability or failure. So that the data is entirely resistant, there is no way it

can get tampered. 

Global spending on blockchain technological solutions is $2.7 billion as of August 2019, and is

expected to increase to about $11.7 billion by 2022. In almost every industry, like the financial

sector, agriculture, and healthcare, there’s a rush among companies to use blockchain solutions

to their advantage.

More than 70% of business decision-makers from the Life Sciences and the Automotive

industries expect blockchain technology to disrupt their respective industries. But how is

blockchain affecting the Tourism industry?


How Blockchain is impacting Tourism Industry


In a recent study about different aspects of digitalization in the travel industry by Geller (2017),

we found a comprehensive and relevant overview of current directions of the tourism research

community. He gathered various recent trends like e-tourism, internet, smart computing, big

data, gamifications, social media platforms and new digital travelers. He named the pack

“digital tourism.” In that report, he described blockchain as “a revolutionary technology that in

the future, will transform financial transactions, and strongly influence the tourism industry.”


Therefore, observing the trend of previous and ongoing studies, we can conclude that the

technological transformation in the travel business is still in transition mode. The technology

seems potential to reshape the travel industry significantly. Since the academic research

providing us a better understanding of blockchain use cases in the travel and tourism sector, we


strive to know how to exploit its potential fully. Therefore explicitly demand to answer these

two questions…

Q.1. how will blockchain transform the existing networks in the Industry? 

If we follow fundamental agency theories by various experts, we can assume that blockchain

can impact on the relationship flow and communication between a traveler and an agent. If we

go deeper, we summarize that these are the things that are going to change in travel relations. 


1. Roles: When it comes to defining the functions of each player in the travel industry, it is

complicated. As it is very unclear which team member participated in what. With blockchain, it

can be different, as blockchain will help to differentiate every role and also may change roles

and activities around the area. 


2. Relationships: It is evident that when a system will change the coherent links might change

along with it. With blockchain adaption, there are possibilities of increasing direct connections,

excluding intermediates. Hence will improve trust and efficiency. 


3. Transparency: With blockchain, it is possible to bring clarity in certain areas. Thus will create

a more lucid and compelling system to work on. Transparency in the system can also help to

work faster and produce better financial relationships with peers. In 2017, 4% of airline

bookings were rejected due to suspected credit card frauds, and fraudulent hotel bookings cost

$4 billion. Using blockchain technology eliminates the possibility of fraudulent transactions.

Financial transactions carried out on the blockchain can’t be modified as they remain registered

in the chain. This allows for more transparent, easier, and safer payment systems. For example,

Japan Content Token (JCT), a platform based on blockchain, has a ticket distribution platform

named JaCKET, where a JCT coin is used for payment. JCT coin being valued at $0.139010 now,

the blockchain technology on the JaCKET platform ensures a high level of security based on

smart contracts.


4. Disintermediation: Most importantly, because of all the traits as mentioned above,

blockchain can help to build in-force tourism system that eliminates intermediates. Which

means booking process can get more easy and transparent; stakeholders don’t need to rely on

third-party providers hence save a lot of time. For example, Travel Coin, a blockchain that

focuses on travel ticketing, charges only 1% fees, whereas the fees and charges by third-party

travel agencies in the market range from 20% to 30%.

Another example is Winding Tree, a start-up that lets companies build their own OTA on a

public blockchain that it provides. It allows sellers access supplier inventory at cheap rates. By

using blockchain technology, it aims to eliminate the middlemen in trip reservations, thereby

reducing the price up to 20%.

Q.2. What capabilities or resources are required to adopt blockchain in existing


To answer the second question, we followed resourced and capability-based views theory; we

mainly centralized the idea of required resource to enable maximum potential. Blockchain itself

of course serves as an ingredient, but there is several more responsive resource or capabilities

that can ensure better utilization of blockchain in the travel business. 


1. Market structure: First and foremost, to imply blockchain, it is mandatory to change the old

market infrastructure. Changing the market structure will make the adopting structure more

efficient and maximize the benefits. 


2. Process and management: if all the processes in the system can be changed into intelligent

technology, the systems can become potentially personalized. This will help to manage supply

chains better. Thus will increase more demand for data analysis, and customers can use these

data stored in the blockchain. For example, Anglo-German travel giant TUI Group that serves

around 20 million customers with its 6 airlines and 1,600 travel agencies, is adopting a private

blockchain by using BedSwap. BedSwap maintains real-time records of hotel bed inventories via

a blockchain-enabled system. This would lead to a one-to-one marketing relationship of TUI

Group with guests, and so more personalization.


3. Competitive advantage: When a tourism company is operating a global online system, it will

develop opportunities for extra money for the organizations. Also, help to widen the gap

between those organizations that do not have the capabilities to earn that extra money. 

4. Network infrastructure: If you take care of travellers point of view, while buying a tour

package there's so many middlemen in between. But if bookings can be done with

transparency, it can bring trust.

5. If you take care of travellers point of view, while buying a tour package there's so many

middlemen in between. But if bookings can be done with transparency, it can bring trust. For

example take companies like Xceltrip who are able to utilize the revolutionize technology to

build their network infrastructure in tourism business. Hob Khadka, CEO of Xceltrip created a

in-force example of usecase, according to the sources "They have created a network with more

than 800000 hotels & 150+ flights using cryptocurrencies. The system is completely

decentralized and processed by secured Blockchain" They are one extraordinary example of

decentralized travel ecosystem.


In the end


In this blog, we tried to propose a theoretical approach to the better implications of blockchain

in the tourism sector. We came into the conclusion that the whole process is still in the transition period, and it may take five or six years to change the game plan. It is essential to

consider blockchain is not a disruptive technology rather a foundational technology. 


While, in truth, blockchain technology is little less overwhelming, specially to the people who

acquire less knowledge about digital technology, encryption, cryptocurrencies, and peer to peer

network it is a quite tough process but not impossible to get acquainted with. However,

through the studies we seem blockchain can be proved as a potential choice to improve the

tourism industry.

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Nissan D.
Nissan D.

Writing is my passion and I create informative, interesting, and high-value web content for companies large and small. With a focus on marketing, I walk companies through the branding process and write content that will help them achieve their goals

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