Travel is something we all do. But is the travel industry as efficient as it could be?
We discuss the current system for booking travel and what blockchain led projects – such as TravelBlock – could do to make things better.
Current travel system
A large proportion of travel is currently booked through the Global Distribution System GDS which is a computerised network allowing information and transactions to be processed between travel service providers and travel agents; think Expedia, Kayak and Booking.com.
GDS predominantly caters for:
- Airplane seats
- Hotel rooms
- Car rentals
- Cruise lines and ferries
The GDS pulls information from multiple third party sources via API and consolidates this into one master source. This means that someone like Expedia doesn’t need to directly communicate with a service provider – like an airline – and they can present information to the end consumer instantaneously.
This includes information about price, available dates, pictures, deals, amenities, descriptions and so on.
One important facet of the GDS is fees . These are charged for the use of the GDS, but can also be imposed by travel providers on GDS sales. For example, British Airways recently announced an £8 booking fee on GDS sales which is ultimately passed onto the end customer; me and you.
It’s also not always clear if you’re getting the best price or your booking is confirmed.
Travel has evolved significantly over the past 20 years; from phone calls to brick and mortar travel agents to websites like Expedia. But is there another step to take?
What is TravelBlock
TravelBlock hopes to introduce an improved system of booking travel which removes reliance on the Global Distribution System (GDS) by taking advantage of blockchain technology. The goal is that travel will be lower cost, secure and more transparent than current sources available to us.
They estimate that by using the TravelBlock platform, you will save an average of 30% to 60% on vacation costs. I don’t know about you, but this sounds appealing. This is largely expected as a result of decreased fees and price mark-ups, which are not always transparent.
TravelBlock tokens TRVL will be used to purchase travel services on the platform and will connect consumers directly with service providers, effectively cutting out the middleman.
Users will be able to search for and purchase travel services in real time, with no credit card or conversion fees. Personal information is also more secure being on the blockchain, lowering the risk of your data being stolen and harvested by malicious individuals.
The TravelBlock platform will be launched on 28th July 2018 and only those with TRVL will be able to book the services on offer.
The business model for TravelBlock works as follows:
- With their experience and connections in the travel industry, the TravelBlock team have been networking with providers and the top brands.
- Using these relationships they will bulk buy inventory – like flights and hotels – from providers.
- These will be made available on the platform and TravelBlock tokens TRVL will be used to purchase inventory.
- The funds will then then be re-invested into purchasing more inventory at bulk, and the cycle repeats itself.
The priority is building relationships with travel providers to get the best deals and travel options for platform users. This will be vital so that they can deliver on promised savings (30-60%) but also their ability to offer a range of popular destinations and services.
Can TravelBlock succeed?
They’re coming up against a multi-billion pound industry. However if they can offer better rates and greater transparency versus current alternatives (like Expedia) it will certainly attract a user base for the cryptocurrency.
But how will travel providers view the platform?
It does appear that the GDS is costly for travel providers to administer, so if TravelBlock can offer a more cost effective solution whilst also generating significant sales then they could grab the attention of big industry players, enhance relationships and build momentum.
Relationships are key, but they don’t view this as a stumbling block:
Another consideration is whether they can raise enough funds.
If funds are lower than expected, bulk buying will be less effective and supply will be lower. If the supply isn’t there the obvious answer is that demand for using TravelBlock will be lower! For example if certain destinations or providers can’t be booked via TravelBlock.
For me personally, it’s not always clear how travel providers price hotels and other services, so if TravelBlock can provide a greater degree of transparency along with great customer service I’d certainly welcome it.
Ultimately having this service on the blockchain could be a welcome development due to its low cost of usage and ability to eliminate transaction fees.
TravelBlock (TRVL) is an ERC20 token on the Ethereum Blockchain.
The minimum purchase is 0.1 ETH, with a Hard Cap of $37.4m and Market Cap of $84m.
From the TravelBlock Whitepaper:
Investing in an ICO requires your own research, but here are some things to consider when it comes to TravelBlock.
- Funds raised: It’s clear from their business model that a significant portion of funds raised will be put into bulk-buying inventory for travel providers. The greater the funds, the faster they will be able to scale and offer more hotels, destinations, flight routes and so on. As a benchmark; at 23rd March 2018, 23% of TRVL tokens have been sold with the pre-ICO sale still ongoing.
- Team: The team looks very experienced in the travel industry which is a plus, especially with their focus being on building relationships with suppliers. But it does appear they are light on the technology side. The platform needs to be rock solid to offer transparency and real-time booking.
- Community: Just less than 2,000 people in the Telegram group (as of March 2018) but still plenty of time until the ICO kicks off. Expect this to grow considerably.
- Free Vacation – One week for every 5 ETH purchase of TRVL. Quite a nice incentive!
- Competitors – One potential competitor is Concierge.io (CGE) however they don’t have a working platform yet. Regardless the travel industry is huge and there will be great demand for new technology.
- Partnerships: In the world of crypto it’s easy to shout about the number of partnerships you have with well known brands, but whether “partnerships” actually leads to tangible action is another question altogether. Until TravelBlock is live and it’s clear that they have access to a range of destinations and services, we won’t know for sure. They do however show an impressive list of platform affiliates on their website including hotel chains such as Hilton, Marriott and Sheraton.
I doubt Expedia are worried – but TravelBlock can certainly benefit travellers all around the world to get better deals and rest easy in the knowledge that their data is secure.
The platform is expected to launch on 28th July 2018 and I’m certain plenty of people in the cryptocurrency community will be curious to see if they can deliver their vision. Particularly the 30-60% saving.
If you’re a frequent traveller and you’re less than impressed with the mainstream industry, TRVL tokens could be a great alternative to explore.
TravelBlock Whitepaper – See here.