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24 Nov 2017

BY Matthew Parsons


How loyalty programmes can be benefit from blockchain

Many frequent travellers have become dependent on hotel rewards for staying an extra night when work requires or when they just need to get away.


Guest comment: Trippki's Edward Cunningham on how blockchain can improve hotel reward experiences

However, many hotel rewards systems are convoluted and lacking in transparency. Meanwhile, the accumulation of rewards through the bigger online travel agents takes a long time to accrue and then expires too early. Rewards are often restricted to specific hotels, locations, and trips and cannot be used freely.


Off the starting blocks

Blockchain technology can provide the solution to the broken hotel rewards structure. But what is blockchain exactly? A blockchain protocol is a decentralised, international database that securely and publically logs transactions. No person or company has the ability to alter this digital ledger.


Many companies are turning to the Ethereum blockchain protocol (including Air New Zealand) because of the smart contract applications it enables. A smart contract is a code-based logic for determining the action required for specific data input.


For example, a smart contract could be written to determine the release of rewards points according to the following logic: if a consumer stays X number of nights, then they receive Y reward.


Another capacity enabled by blockchain technology is tokenisation, which refers to the creation of digital tokens, or coins, that can be used to pay for services within the ecosystem. In the case of Trippki, travellers can use tokens to book hotels and hotels can reward travellers, thereby incentivising more stays. Trippki is also an asset and can be spent or traded at the owner’s discretion.


Additionally, the identity of users is protected by cryptographic, pseudonymic identities so that users’ real names are not associated with their accounts. Using a peer-to-peer hotel booking economy benefits travellers and hotels by eliminating costly intermediaries for online transactions and by incentivising the growth of the hotel economy – but there are more ways the travel industry could be optimised with blockchain technology. For example, it can can cut fraud in travel bookings by creating a distributed record of transactions.


Many blockchain applications, Trippki included, seek to empower the individual against the current industry Goliaths – the OTAs that take a hefty cut and store personal data on individuals for future advert targeting. By decentralising hotel rewards and booking, individuals can save on vacations and travel more, and hotels can get more exposure and save millions of dollars a year.


Edward Cunningham is chief executive of Trippki

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