Travel segment's inefficiencies attract interest of blockchain developers

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The mix of airlines, hotels and other companies that make up the travel industry have lost an innovative edge, in part because a once-cutting edge system of combined booking and payments has not aged well.

It's one of the many legacy industries that have come to be seen as disruption targets for blockchain technology.

Today, travel brands still mostly interact with consumers by treating "miles" as an inflexible form of currency, said Kristian Gjerding, CEO of CellPoint Mobile. "The ability to make a single purchase that allowed anyone to make an entire round trip which came about in the '60s and '70s was very innovative back them, but it's a legacy lag now."

Blockchain distributed ledger technology was originally created for handling bitcoin payments, but it is increasingly being applied to other categories as a way to streamline processes and remove costs.

CellPoint Mobile, a Miami-based company that sells mobile payment technology to the travel industry, plans to release a new mobile booking engine in the next few weeks that will combine more mobile information on a consumer's travel activities, such as flight booking, check in, in-app payments for tickets, rental cars and hotels to create a more detailed picture of a traveler's "revenue potential" as part of a portfolio.

This will inform loyalty marketing programs, coupons or deals that are more personalized and quickly actionable as part of booking, according to Gjerding. He likens it to the general retail mobile commerce experience, in which shopping and payment on a mobile device is quickly accompanied by a special offer based on an individual shopper's past purchase or shopping patterns.

The blockchain will also provide a broader view of a customer's travel, since the traveler's use of varied travel companies and accrued travel miles will be decentralized rather than siloed by brand.

"A consumer may have participated in one loyalty program, but not another," Gjerding said. "Does that make the person less valuable overall as a source of travel revenue?"

CellPoint Mobile's challenge will be to lure travel companies and airlines to a model that recognizes people use other brands. The overall migration toward mobile commerce and use of blockchains to streamline and decentralize transactions works in its favor.

There's also a general migration toward mobile shopping and the "Uberization" of transactions that has created an expectation for booking, payments and rewards as part of the same mobile experience, according to Gjerding.

"Using a blockchain system can save a tremendous amount of money for governments that have huge expenses in travel security. The same thing would go for payments," Gjerding said. "And airlines should be working hard to win business. If they can recognize the traveler from the get-go, that will spark a massive change in the travel sector over the next 10 to 15 years."

Since people have rewards cards for travel, gas, groceries and other purposes, there's a potential benefit in consolidation, said Kevin Morrison, a senior analyst at Aite. "The move is to get away from these multiple cards," he said.

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