Blockchain in Hospitality – Applications
With over 1.7 billion dollars invested in blockchain, it is evident that the technology will prevail over the next few years. Blockchain technology has several applications, and enterprises across industries are trying to leverage it for business benefits. But what are the applications of blockchain in hospitality?
Blockchain is one of those technologies that is expected to benefit the hospitality industry greatly. Many business areas and existing systems can be augmented using blockchain.
The ideal setting of the blockchain technology is where multiple parties form a network with an intention to participate in a financial transaction. Blockchain is secure, rigid, and transparent, making it perfect for certain businesses. Hotels, inns, and resorts are businesses that have many business areas and stakeholders. Such businesses need a payment system that is robust.
What Are the Benefits of Blockchain In Hospitality?
- Efficiency in business processes, particularly reconciliation of transactions.
- All transactions will be auditable as blockchain maintains data provenance.
- Eliminates the need of third party arbitrators – resulting in time & cost saving.
Blockchain proves that it is the perfect solution for the entire hospitality industry. Here are a few features of blockchain:
Blockchain is Rigid: A transaction that is registered on blockchain cannot be changed. Transactions need to be agreed upon by all involved parties. This minimizes the need for an external or third-party arbitrator.
Blockchain is Secure: All transactions that are done on blockchain are cryptographically encrypted. This makes it difficult to alter – meaning the transaction data cannot be altered or tampered with, which makes the system fail-safe.
Blockchain is Transparent: Usually in a business transaction, multiple parties are involved, Blockchain guarantees that all parties have visibility to all transactions. If the involved parties do not agree to any of the terms and conditions, blockchain ensures that the transactions fail.
Based on the features and benefits, here are a few application use cases of blockchain in hospitality:
Supply chain management in hospitality using blockchain: Supply Chain is an amalgamation of complex events that involve multiple parties and extend across multiple geographies. Supply chain in itself fundamentally fragmented. One of the key aspects of supply chain is trust between parties. Blockchain helps address this key element of supply chain. Aspects such as payment management, inventory management, and vendor management are simplified in the hospitality industry using blockchain technology.
Blockchain technology helps the hospitality industry by providing a lucid data management solution across distributed systems. Using this technology, records can be cryptographically secured – making it possible to store data without the need of an intermediary auditing solution.
Similar logic and concept can be used to solve inventory management challenges. Blockchain effortlessly addresses and manages the challenges involved in replication of data across multiple silos.
Rewards and loyalty points management in hospitality using blockchain: For any hotel, retaining existing customers/guests is crucial. Customer loyalty has become a fundamental facet of running a hotel. Therefore, it is imperative for hotels to effectively manage customer/guest data and the reward and/or loyalty points associated with their accounts. Not just managing loyalty points, hotels need to ease the process point redemption for customers/guests.
Logically, loyalty points are digital assets provided by key stakeholders and accumulated by guests. When there is a value associated with these points, it becomes easier for guests to redeem them and simple for hotels to manage these points. Through this technique, each stakeholder in the loyalty points process can define their own value. This simplifies the delivery and redemption of reward and loyalty points for both the hotel and customer/guest. All this data management needs a robust and secure technology which is possible only through blockchain.
Guest identity management and improving guest experience: Guests and travelers are at the heart of any hospitality organization. With millennials making up for over 50% of the entire cluster of guests, personalization is an essential element for the hospitality industry. Something as simple as opening a hotel room using a smartphone can improve guest experience. IoT coupled with blockchain makes this possible.
The possibilities of blockchain technology in the hospitality industry are immense. The use cases mention above are just to elaborate how hotels can use the technology. Having a secure Wi-Fi network that runs on blockchain technology improves guest experience and simplifies the mundane of day-to-day tasks.
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