Blockchain will be one of the most exciting and impactful technological innovations of the next decade, and its utility has the potential to revolutionize hospitality as we know it.
Although the emergence of blockchain is closely tied to the cryptocurrency landscape, its applications can extend far beyond digital currencies, with the ability to form a platform that provides greater efficiency and security for hospitality businesses.
The global blockchain market is expected to grow from $20.1 billion in 2024 to $248.9 billion in 2029, recording a compound annual growth rate (CAGR) of 65.5% over the next five years.
In the travel and hospitality sector, blockchain can be utilized for a variety of purposes to transform customer loyalty, customer verification, fraud prevention, payment efficiency, and extensive security measures. With this in mind, let’s take a closer look at how technology is transforming an industry ripe for innovation.
Provide transparency
Hospitality businesses can rely on the greater transparency and trust that blockchain systems provide due to their status as immutable distributed ledgers.
For customers, this means their data can be stored securely without the threat of intermediaries or unauthorized third parties accessing their personal information.
For hotels, restaurants, gyms, cafes and other hospitality businesses, visitors can feel confident that their information is safe when they share it with the accommodation provider.
Level Up Loyalty
Churn is a serious challenge for many hospitality businesses, and developing a truly innovative loyalty scheme can be key to retaining customers. Blockchain technology has the potential to improve the quality offered by loyalty schemes through the issuance of digital tokens that can entitle them to a variety of benefits.
From accessing special offers, unlocking exclusive services, redeeming items, claiming freebies, and sampling new services, blockchain can help lodging businesses personalize rewards, become more creative, and more. Loyalty schemes can help limit instances of fraud.
One example of this can be found in Trippki’s use of blockchain for its loyalty rewards system. The hotel company utilizes its own digital ‘TRIP’ token recorded on the blockchain, which can be used for future visitors or exchanged for cash. Tokens have no expiration date and can be earned through lodging or using amenities.
Smooth Payment
Blockchain also has the ability to simplify the payment process for lodging businesses. This allows for faster and safer transactions.
Especially in the hotel industry and businesses that frequently welcome international visitors, blockchain offers greater payment flexibility to customers who can include cryptocurrencies as part of their functionality.
Expanding into the cryptocurrency payment space through an integrated point-of-sale (POS) system means customers can pay for services without having to go through fiat conversion, which can make up for inefficiencies such as currency exchange fees.
Instead, the flexibility of blockchain means that any party can leverage transactions to third parties on their own terms, quickly and at relatively low cost.
Enhanced Personalization
This technology can also work with artificial intelligence to help transform customer data into hyper-personalized experiences.
Integration with blockchain, which can securely store customer preferences and purchase history, allows hospitality companies to offer customized services across a variety of touchpoints.
In the hotel industry, this means personalized room settings, personalized dining recommendations, and more focused digital local guides. This integration of AI and blockchain helps deliver a level of customization that resonates with customers like never before.
supply chain efficiency
Another transformative impact of blockchain technology is the visibility it can provide to all stages of a hospitality company’s supply chain.
Focused on restaurants and hotels, digital ledgers can provide greater visibility into the supply chain of food, beverage, bedding and utility products, ensuring quality across inventory and ensuring business standards are maintained.
If poor quality or defective food or ingredients arrive, blockchain records can clearly show where that batch came from and when it was delivered for easy reference. This allows businesses to better track their suppliers.
Ultimately, increased blockchain visibility into the supply chain can provide stronger accountability and transparency throughout the procurement process.
Enhanced Security
Blockchain can provide a higher level of security for hotel guests because it can store encrypted identity information on a ledger.
When reserving a room, guests may verify their identity to the hotel and then provide identification information to help verify their identity during the check-in process to ensure that only valid guests have access to the site.
Taking hospitality to a new level
Blockchain will have a transformative impact on the hotel industry by providing new levels of efficiency and security.
As technology continues to advance, the ability to personalize customer experiences can enhance the ability of businesses to be innovative, helping them stand out from industry competitors.
Forward-thinking hospitality companies can gain more momentum than their competitors by looking at how to embrace blockchain today for a more sustainable tomorrow.