The popularity of cryptocurrencies has skyrocketed in recent years, as has consumer demand for new cryptocurrency use cases in travel. There is still a long way to go, but the progress has been encouraging: According to a recent survey, tourism is the most crypto-friendly industry.
Blockchain-based solutions have been flooding the space, whether launched by an innovative crypto company or a multinational giant, with many aimed to address the most common traveller pain points. Accenture, for example, has collaborated with the World Economic Forum (WEF) to establish the Known Traveler Digital Identity System. This blockchain collects and stores information from regular foreign travellers in order to improve their next customs declaration and clearing experience.
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It is clearly obvious that cryptocurrencies – and their underlying ideas – will have a seismic impact on the tourism sector. This is how.
Payments are simple and transparent all around.
In January, Airbnb CEO Brian Chesky took to Twitter to poll the firm’s fans on what the company should introduce this year. The end result? Unsurprisingly, the ability to pay for bookings in cryptocurrency ranked first on the list.
These findings are consistent with the findings of another poll, which indicated that 22% of American tourists now prefer to pay with cryptocurrency. Fortunately, the industry has reacted quickly to this rising demand, with sites such as Expedia already allowing clients to pay for hotel reservations using Bitcoin. Airlines are starting to follow suit, with AirBaltic, Norwegian Air, and LOT Polish Airlines among those that accept cryptocurrency payments.
Crypto is simply ideal for travel because it has the potential to unite a sector that has historically been divided and restrictive, with numerous manual and even paper-based procedures. After all, a traveler’s experience includes a variety of touchpoints, such as vehicle rentals and flights, as well as restaurants, hotels, and activity reservations. Travelers may pay for their experience in a direct, quicker, and safer manner by using a single, transparent system that skips gatekeepers and costly third parties.
Enabling crypto payments is also critical to attracting a rising generation. The number of worldwide crypto billionaires is expected to exceed 100,000 by 2021, and they are eager to spend their crypto earnings on travel experiences, particularly those focused on luxury and personalized services.
Redefining Loyalty Programs
Loyalty programs have never been more popular, according to MasterCard research, with 90 percent of US people participating in at least one. Loyalty and reward programmes are critical in the travel industry, allowing firms to compete with aggregator platforms, bring back returning clients, and motivate them to travel more frequently.
However, despite the fact that traditional loyalty programmes have been operating for decades, they have faded in comparison to thrilling crypto benefits.
The major issue with most loyalty programmes is that they do not provide enough value. Today, the most prevalent type of incentive programme is reward points, which are completely controlled by the firm – if it decides to terminate them or provide less in exchange, the client has no recourse. However, because bitcoin is decentralised, its value fluctuates with market demand. Furthermore, it allows tourists to trade or exchange their loyalty points for fiat currency, creating a fresh motivation for them to engage – and get value in novel ways.
Northern Pacific Airways, for example, a new carrier set to begin later this year, intends to reward regular fliers with flyCoin. Customers may use the token to get free flights and premium airline status, among other things.
The usage of payback in the travel sector has also been beset by issues. It is particularly region-specific and does not account for inflation, thus the incentive value declines with time. Customers may realise the value of their rewards and cash out or spend them anywhere in the globe, regardless of currency. With cryptocurrency, cashback becomes a type of investment: a traveller invests every time they book a trip and accumulates coins to spend for future trips.
Printed Tickets and Written Confirmations are being phased out.
Non-fungible tokens (NFTs) will also be a significant blockchain-powered innovation that will shake up the tourism industry. NFTs might operate as a sort of passport or ticket to give verifiable and transparent access to products and services in the travel sector, representing true proof of digital ownership (that can manifest in the actual world).
Lost or incorrect bookings, as well as the need for a traveller to use several platforms, would be a thing of the past. With NFTs, passengers may simply keep all of their information in their wallets, reducing the risk of fraud while improving customer experience.
While the industry is still in its infancy, there is enormous promise. And pioneers are already acting: LynKey, a worldwide platform that uses blockchain and artificial intelligence (AI) to power luxury resort and vacation properties, recently announced a marketplace initiative for tokenizing and selling NFT solutions for travel and tourism.
Finally, such initiatives will assist tourists in avoiding a variety of pain points, such as dealing with local currencies, a lack of transparency, and losing money to exchanges and third parties. They will be able to customise, change, cancel, or even sell their vacations without losing money or going through time-consuming bureaucratic processes thanks to cryptocurrency solutions.
Travelers and travel firms that have not yet dabbled in cryptocurrency may find it daunting. While there are certain obstacles, such as changing legislation and value volatility, these will be addressed as the industry grows. When it happens, the early adopters will be the ones who know how to traverse the environment – and flourish.
Crypto Travel 