New kids on the block
Over the past twenty years, the internet has transformed the travel industry, disintermediating here, reintermediating there whilst all the time granting travellers greater control and choice.
Blockchain’s ability to decentralise services, remove middlemen to lower costs, speed up transactions and improve transparency herald the next wave of transformation in the sector?
Winding Tree uses blockchain technology to connect travellers directly with airlines, hotels and other service providers – minimising associated fees. It effectively wants to create an open source blockchain with its own token that supports a decentralised travel industry - taking the likes of Experian, Airbnb and Skyscanner out of the picture altogether in their current forms.
The noise around the growth of blockchain technology has already had an impact on key strategic decisions for the larger players in this space. For example, the Winding Tree vision of the future was an important driver of TUI's sale of Hotelbeds for €1.2 billion, moving TUI out of its role as a business-to-business intermediary, which CEO, Friedrich Joussen believes blockchain can easily replace.
The different business model opportunities that this technology unlocks have also got investors circling. One business making a noise in this area is Cool Cousin. In a market where many question the authenticity of recommendations on larger sites (TripAdvisor’s algorithms, for example, have been gamed in the past), Cool Cousin brings together users to help each other with travel recommendations in specific destinations and earn rewards (utilising blockchain through ‘Cuz’ tokens). Thus, "travellers get on-demand city guidance that matches their style and needs, directly from like-minded locals" who are incentivised transparently for their authentic advice. Cool Cousin raised $2m in a seed funding round in 2017 led by Elevator Fund.
Travel and tourism has arguably been the consumer sector most affected by technology changes. This looks set to continue as emergent technologies such as blockchain are to be appropriated by businesses in this space, to cutting out the middle men and offering greater value and customisation.