Over the past few years, bitcoin and blockchain are two words that nearly all of us have had to add to our vocabulary.
Today, blockchain technology is already in use across several sectors, but is it also going to disrupt the travel industry? While Bitcoin is expected to reach new heights in the future and blockchain technology starts changing certain aspects of the economy, the travel industry is undergoing one of its biggest-ever transformations.
In oder to get some insights, we set-up a joint interview with investor Jan-Frederik Valentin and founder Florian Montag, taking a look at how blockchain can impact the travel and hospitality industry over the next year. Jan Valentin is already involved in tourism and blockchain scale-ups (Solana, HomeToGo) and is General Partner of ennea capital partners, an early-stage VC firm focusing on travel and mobility. Florian Montag, as the Co-founder of Hotelhero and Apaleo, is familiar with the latest technical developments in travel tech.
Jan, what are the key challenges that you’ve seen in the travel industry over the past couple of years?
Well, obviously the pandemic slowed down startup growth and at the same time has kept old companies alive through state subsidies. A few of them might not exist anymore if not for the subsidies. Secondly, GAFA and the extraction of profits from the ecosystem, notably by Google and Facebook have been a challenge for travel companies. Furthermore, the slow adaptation of the public sector to badly needed technological advancements, which, in turn, slow down the success of startups, especially of mobility B2B companies.
Jan, you are also involved with the traveltech scale-up HomeToGo. Can you tell us a bit more about this company?
HomeToGo built an incredibly strong team with a vision to tackle a hugely complex whilst underrated challenge, solving the fragmented alternative accommodation industry. They’ve managed to bring together a very diverse supply across thousands of points of sale and providers, empowering the industry with technology solutions to fuel growth. To see how far they have come since their founding in 2014 is impressive. They drastically accelerated throughout the pandemic and saw record growth last year, especially with their onsite business – where the complete transaction from discovery to booking to payment happens on their domains. In my opinion, they have effectively evolved to be an Airbnb competitor in Europe. Being the first European tech SPAC IPO is a huge achievement, possibly bigger than in flights (KAYAK) or hotels (Trivago). If HomeToGo can evolve from a full-stack holiday homes aggregator to the world’s largest marketplace for alternative accommodation, and on its way to becoming a SaaS-enabled operating system, decacorn status is possible in my opinion. A true tech champion for Europe.
How is HomeToGo using blockchain to disrupt the industry?
Technology is always at the core of its business, so the team at HomeToGo is constantly looking at new use cases and how to effectively evolve its product. While I’m sure they have considered the potential of blockchain, I don’t have knowledge of their future plans in this regard.
Florian, your company Apaleo, founded in 2017, is a cloud platform for agile accommodation. Can you first tell us a bit about the company?
We are a rapidly growing hospitality tech startup from Munich. The hospitality industry is notoriously lagging in the digital transformation process, this is mainly due to all-in-one legacy technology and the bottleneck of lacking connectivity. Our open hospitality platform aims to turn this around, having connectivity at the heart of the value proposition. Apaleo allows hotels and accommodation providers to build a custom tech stack by simply connecting the right apps from our app store, or developing custom solutions on top of our API’s. Digitization and automation can thus be precisely tailored to the planned concept – from full service to a pure automated hotel. We have over 500 properties live in 12 countries and our customers range from rapidly scaling concepts like Numa and Limehome, to innovative hotel groups like Novum Hospitality or HR Group.
Digitization is undoubtedly the future across industries. Do you think that the hospitality and travel industries are now playing catch up?
I would argue this portrays things the wrong way: Flight bookings were one of the first products that were digitized back in the mid-1900s. As for the software required, booking travel products are way more complex than for example buying books or buying food online. Hence, development let alone making quantum leaps changing the entire industry is more difficult. Moreover, a lot of travel and hospitality is very local in nature, much more local than let’s say the music industry, which was one of the first to become completely digital. On top, travelling itself is – and hopefully remains – a largely non-digital experience. As a traveller, you want to feel with all senses – nothing a digital experience can fulfil.
What is the state of affairs in Europe’s traveltech space? Where do you see it going in the next 5 years?
I actually view Europe on par with the rest of the world, if not ahead in the game. If you look at the US, for example, the travel tech development has generally suffered from lesser competition and an initial lack of capability to encompass the needs of various markets. Consequently, market leaders in flights (Amadeus), Hotels (Booking), Experiences (GetYourGuide) and Packages (Booking, Expedia) have come from Europe. If the industry manages to build internationally scalable tech players, we can keep that edge in my opinion, also versus players from India or China. That said, there is a real danger that Google or Amazon will own the space alongside potentially Booking.com in 5 years’ time. But these players, too, have uphill battles to fight to get to a point, both technically, legally, and in terms of customer experience.
The travel industry has been massively disrupted over the past couple of years. Is blockchain the solution to reviving the industry?
No. Employing blockchain technology will be just one element of providing a better user experience and creating more value overall, next to improved machine-learning, mixed-reality experience, substantial improvements to payment processing (both blockchain-based and not), and many other tech advancements. Today, providing a better experience than an average travel agent is still what tech players struggle to compete with, this will not be solved through one technology.
Cryptocurrencies. Do they have a place in the travel and hospitality industry – or is it just hype?
Obviously, they do. Making payment seamless, instant and global will benefit the industry. Next to cryptocurrencies allowing to store value, e.g. for loyalty programmes. Travala, for example, works similarly to booking.com, but with the advantage that customers can pay with cryptocurrencies. In addition, the startup has developed its own Ethereum-based coin, which makes it possible to profit financially from its increase in value.
What are the different use cases of blockchain in the travel industry?
From its technical nature, there are benefits for the industry, especially when we think of money transactions, digital identification, loyalty programmes and business collaborations.
Startups like Winding Tree or Traffics, for example, are working on solutions that make booking a hotel room or a flight easier and more efficient. Via decentralized marketplaces, companies can sell their services directly to other companies as well as consumers. Such a concept will dispense with intermediaries such as Booking.com. For smaller transactions like trips or tickets, “smart contracting” technologies are also interesting, as they allow direct transactions without any time delay.
Another example in which travel can utilize blockchain is “digital identification”. In a joint project of various companies, technologies are currently being tested which allow people to check into hotels via smartphone by using an ID-wallet based on blockchain. There are also international collaborations like the Hospitality & Travel SIG which is working on the introduction of Self-Sovereign Identity (SSI) and Decentralised Digital Identity technologies in tourism. With both approaches, travellers will be able to manage their data independently and identify themselves in hotels or when boarding a plane. This is particularly exciting for tourism, as intermediaries such as Booking.com or HRS are now the ones who decide which data they share with hotels. With SSI, however, guests decide which data they share with whom. In addition, such technologies make a world possible in which waiting at the gate to board a plane becomes obsolete.
Which do you see as the most exciting for the next few years to come?
There are many, but to pick one: In an ideal scenario, I see blockchain solving 3 problems at once for hoteliers, who struggle to earn their fair share of the pie in the face of the Google-Booking-Expedia oligopoly. A strong blockchain network could allow hotels to provide more differentiated offerings on their own sales channels, including e.g. micro-transactions at affordable cost. Secondly, blockchain should reduce the costs of payments and thus reduce labour costs. Lastly, it should provide loyalty systems that create a long-term incentive for customers to book directly, through shared ownership of the system or token appreciation. Holistically, this could change the distribution landscape, at least for the savviest hoteliers.
What innovations are you most excited about within this sector?
Whilst it is a “buzzword”, I’m most excited about the “connected trip”, i.e. truly serving travellers with a seamless companion product that takes the friction out of travel planning and out of travelling itself. Whilst many companies are working on this from very different angles, no one has yet come up with a nearly perfect proposition – neither booking.com nor anyone of the hyped startups pledging to deliver on the promise.
via https://www.AiUpNow.com
March 2, 2022 at 08:03AM by contact@bcurdy.com, Khareem Sudlow
