How Will Blockchain Help Regulate OTA Commissions And Who Are Some Of Its Early Adopters

October 23rd, 2017 by Trefis Team
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Downside
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Market
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EXPE: Expedia logo
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Expedia

Under Blockchain, OTAs Will Continue Doing Business But In A Fairer Playing Field

OTAs might still thrive through their services of aiding travelers in finding the exact property they are looking for from a curated list. However, they might start to face greater competition in the travel industry, as anyone can source rooms from blockchain. Hence, the bigger OTAs will not have an exclusive control over the inventory, a welcome change from the hotel and airlines’ point of view, as not having this kind of control will also deter them from charging exorbitant commissions to the hotel and airline suppliers.

On the other hand, metasearch engines like TripAdvisor and Trivago, might have a tough time dealing with the blockchain platform. These search engines capitalize on the flaws in the distribution system to generate their revenues. The flaws might be minimized with the wider presence of blockchain.

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Some Of The Early Adopters Of The Blockchain Technology

Swiss startup Winding Tree is a decentralized open source platform for travel distribution that aims to make travel booking more affordable for the travelers while at the same time making it more profitable for the suppliers. Winding Tree is currently in the process of building a public blockchain for the travel market. The company, in turn, will not make any profit by the distribution or by transactions on the platform as it is decentralized. Hence, it is currently raising money for the project through Initial Coin Offering (ICO), a fund raising technique used by decentralized companies to raise capital.

TUI Group, one of the largest leisure, travel, and tourism companies in the world,  has shifted all its contracts to its private blockchain. As the next step, the company will move all its inventories to blockchain in the future with a large database that will be updated live with the availability statuses. TUI has also been in discussion with Winding Tree to build a decentralized distribution platform for travel products.

Also, recently, German airline Lufthansa announced that it will be working with Swiss startup Winding Tree to build travel applications based on blockchain. Lufthansa is currently Europe’s largest airline, and if this partnership becomes a success then we can expect more airlines to join and adapt the blockchain technology in the future.

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Notes:

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