OPPORTUNITIES

WHERE COULD BLOCKCHAIN BE USED IN BUSINESS TRAVEL?

From secure, safe and speedier payments to luggage management, loyalty programmes, trip insurance and ID management, blockchain could help unlock significant efficiency and innovation within the business travel industry and travel management space.

With poor visibility of travel data that can lead to disagreeable outcomes – such as cancellations, refunds or overbookings – blockchain can help. Visibility also matters when it comes to delivering on ESG outcomes. But it’s also about visibility on the right things. Blockchain secured by cryptography can only be accessed by those that have authority via the distributed ledger.

Sharing travel trip details with travel managers, suppliers and others is not secure enough. Blockchain gives that added layer of security, individuals can remain anonymous, or details encrypted securely. It is a big deal.

There is a huge opportunity around identification that is just begging for blockchain to come in. All checks can be done without reconciling a centralised database.

Videa Mike, blockchain specialists TemTum Group Chief Operating Officer

HOW COULD BLOCKCHAIN BE USED?

DIGITAL PAYMENTS – Could we see a revolution in the payment and settlement process, where instant transfers are made? Credit card fees, for example, represent significant expense on every airline ticket sold [18]. The processing fee could be driven down using blockchain [19]. Whether blockchain could eliminate the need for credit cards and become an alternative to the virtual card remains to be seen at this stage.

EXPENSE REPORTING – Blockchain could be used to account for the whole expensing process for any particular trip. Details of all expenses can be recorded on a distributed ledger that is then used as the single source of truth when the finance department is evaluating the value of a trip to the business. Expenses can be instantly recorded and reconciled.

BETTER SUPPLIER MANAGEMENT – Hotels, ground transportation and events are all fragmented. Distributed ledger technology, which consolidates data on chains of blocks, allows a consolidation of information and implementation of smart contracts [20]. For example, it can bring data together on insurance and travel trips, encoding data on these issues that is immutable.

IDENTIFICATION – Whether it’s missing luggage, tracking baggage, digital passports, visas, biometrics, vaccinations or access to events, blockchain can store ID data in an efficient, accurate and transparent manner, once security and privacy concerns are overcome [21]. COVID-19 has highlighted the need for such collated information when travelling. Data on a blockchain could be used to verify a business traveller at any point in their journey, without the need for a centralised database from governments, travel managers, GDS’ or airline booking systems.

TRAVEL POLICY – Compliance is a big issue. Many travel managers don’t get a full picture on whether an executive traveller is compliant on a trip or not. Self-reporting is rife. Blockchain is again immutable. It can provide a single source of the truth about a trip and whether it was compliant for managed travel, policies and insurance. Smart contracts can also set out rules so that compliance occurs.

LOYALTY PROGRAMME MANAGEMENT – Loyalty rewards could one day be managed across different sectors for airlines, hotels and rail on one blockchain, with all points tokenised. You could be credited with reward points instantly, redeem them easily and get refunds quickly [22].

CREATING NETWORKS AND THE KILLER APPS

The ultimate victor, when it comes to blockchain, will be the platform that attracts the most users. Any success will depend on widespread use of this blockchain globally or regionally. Critical mass and mainstream adoption are both vital for use. A possible ‘killer-app,’ involves realising the traveller benefits out there that are poorly managed.

If a traveller isn’t extremely digitally savvy and is happier picking up the phone to their TMC representative, then the delivery of blockchain must be either a killer application or useful at the back end.

With blockchain, if it offers real value to the marketplace - to airlines, hotels, vendors and customers that dominate the market and those who move money in corporate travel - then it could be adopted at scale.

Ilan Twig, TripActions Co-Founder and CTO

WHAT ARE THE POSSIBLE KILLER APPS FOR BLOCKCHAIN?

CLIMATE AND CARBON ACCOUNTING – ESG compliance is a massive issue for many corporates right now. Many businesses are looking to reduce their carbon footprint and business travel creates emissions. Blockchain could provide a clear, reliable, secure and transparent tracking of emissions related to corporate trips, giving businesses confidence in what they are claiming.

This could help businesses set targets, be transparent about climate goals, track trips and account for reductions in a verifiable way. This could help with the adoption of electrified travel, more sustainable aviation fuels [23], rail use and more. Blockchain could also be used effectively for ESG accounting in a cohesive network such as European rail.

HEALTH AND WELLBEING – This is of significant concern to corporations. How many hours should an executive fly in a week, month or year? When is an upgrade to business class essential to make sure the health and wellbeing of an executive is preserved for a series of a trips? Blockchain could effectively be used to account for a person’s travelling experience. Analytics and algorithms could be applied to travel data in order to calculate when that person has travelled too much, when they should be given time off, or another trip disallowed. Smart contracts could then kick in to forbid new bookings or upgrades kick in accordingly. It could also account for blended business and leisure trips.

VALUE OF TRAVEL – In a post-COVID-19 age, when deals are done effectively online and concerns for the environment are on the rise, there is increasing scrutiny on travel trips and their business value. What value does a certain trip bring to the company? Is that trip and associated expenses really justified? Blockchain could be used to put a real value on travel more effectively by bringing together blocks of data on the complete price of a trip, with data on the value it generates to the bottom line.

There are a huge number of opportunities around the race to net zero emissions, many businesses want to be transparent, avoid greenwashing and do good. Blockchain can help.

Brendan Martin, Reed & Mackay Global Head of Data and Business Intelligence

MULTICHAIN BLOCKCHAINS AND DECENTRALISED AUTONOMOUS ORGANISATIONS

The travel industry is already developing many different blockchains. It’s likely the sector will need to bring them all together at some stage and make them inter-operable. In comes Polkadot and Cosmos – multi-chain blockchains. Cosmos is dubbed the ‘internet of blockchains.’ Inter-operability is one of the strong points of these technologies. Blockchains on these network can easily be used to exchange value. What may happen in the future is there is a dedicated ‘Internet of travel blockchains.’ This would make sense [24], since any business trip is made of multiple elements from flights to hotel room nights, ground transport and insurance. Utilising multiple blockchains within travel could happen in the future.

Then there are decentralised autonomous organisations [25] (DAO); this is a new way to govern business. A DAO doesn’t have a central authority or administrative body that makes a decision. Instead, a collective group of leaders and participants act as the governing body. DAOs are an organisational framework where decisions are made through a bottom-up management approach. They use smart contracts – rules encoded in blockchains – that execute themselves automatically under certain conditions, to carry out their business. Funds are only transferred if most leaders have digitally signed off on a transaction [26]. The main aim is peer-to-peer interactions in the travel space – a marketplace where suppliers and buyers transact freely without intermediaries [27] could then be possible.

LOOK TO NDC FOR INSPIRATION

Blockchain relies on the network affect. It needs travel players to agree on data standardisation and transaction protocols. If everyone signs up to a system, every player in travel will benefit. This is the idea behind IATA's New Distribution Capability (NDC). A new technology, promising better business opportunities and speedier service. This sounds familiar when it comes to blockchain.

NDC demonstrates a new standard that can’t be put in place in isolation. It requires the network affect and mass adoption to work. A move towards a consortium blockchain, rather than numerous private blockchains, therefore makes sense. Technology of this kind can’t be useful globally until it’s supported and put in place across the entire travel ecosystem. There’s a lot that can be learnt from IATA’s NDC [28].

FROM DE-FI TO DE-TRAV – DECENTRALISED TRAVEL

In order to become mainstream, applications will have to be as easy to use as a smartphone and cheaper than dealing with conventional intermediaries in travel. That’s the story surfacing in decentralised finance or De-Fi. The aim is to democratise finance. This is the same promise being offered by blockchain players in travel; we could potentially call it the era of decentralised travel or De-Trav. Fundamentally, De-Fi doesn’t rely on centralised financial intermediaries and operates as a form of blockchain finance. It has faced a lot of controversy and questions. Regulation of De-Fi remains patchy. The Financial Stability Board, a risk monitoring watchdog for the G20 economies, has said De-Fi could present risks to financial stability without regulation and oversight [29]. De-Trav could face the same issues.

The people who designed blockchain sage cases in the past have been techies, data people and developers. This is changing; people with business experience are now looking to leverage this technology. We need to look at the USPs of blockchain now and apply it to business travel.

Videa Mike, Temtum Group Chief Operating Officer