How Blockchain Technology can Eliminate Hotel Booking Problems?

Blockchain development has disrupted many sectors in the world’s economy bringing solutions which weren’t achievable until today. Few of these sectors are IT, financial securities, supply chain, and pharma. One of the sector which is likely to affect the most is web application based service industries or companies where the exchange of information needs features offered by blockchain technology. Those features are immutable data, transparent, decentralized and real-time tracking of information. One of the industry which heavily depend on the web and mobile application is the hotel industry. A hotel, be it a small or large scale chain faces issues about hotel chain distribution channels. Typically, a hotel hires a travel agent, has its own reservation or call center or own website and register on an Online Travel Agent (OTA) website known as hotel booking websites. The following issues have been found between hotel distribution channels which have affected the hotel industry slowly yet heavily:

  • Hotel Booking Payment Issues

Hotel booking payment issues raise while OTA pays the original amount of hotel room booked to the owner of the hotel or hotelier. This payment is known as accounts payables in OTAs book of accounts and account receivables in Hotelier’s books of accounts. Typically this transaction takes place after deducting fees by OTA in 3-4 days of room booked. In some cases, it takes longer and some OTA policies pay the hotel after the customer has availed the room booking services. This delays results in accounts payable and accounts receivables mismatch at the end of a quarterly or yearly closing of accounts. And the real profit margin is hard to determine for both in this low margin industry.

The room booking and payment made can be tracked on real-time bases through various blocks created while booking a room.

An OTA web application and mobile application or hotel booking websites built on the bases of blockchain technology can eliminate this payment issue. When a customer books a room from his/her device, that device can act as a node. The other nodes of blockchain such as hotelier, OTA, offline travel agents hired by hotelier and payment facilitator will accept the hotel booking through consensus. This way, the room booking and payment made can be tracked on real-time bases through various blocks created while booking a room.

  • Distribution Channels’ Disputes

Internal disputes between channel partners of a hotelier affect the customer service the most. Being the hospitality industry, customer satisfaction and trust building is the goal every industry player strive for. The disputes which arise here are in two categories. First, between OTA and travel agents hired by Hotelier knew as a horizontal dispute and second, between hotel reservation or call center and between either OTA or travel agent hired and this one is known as a vertical dispute. The reason behind the dispute is conflicting booking by the customer. Typically, customer inquiries from two or more distribution channels to book a room, so deciding who brought the customer first for a particular hotel room booking creates this type of disputes. The relationship between channels affected due to competition in the pricing of a room. Now solving both types of disputes with the help of blockchain based OTA’s web application.

Duplication of transactions or room bookings can be avoided.

Let us assume all the distribution channels are part of the blockchain based web application, acting as a node. When a customer books a room through the device or from hotel reservation, that device or hotel reservation will be a node too and a block of room booked will be created including customer information. This block will be transparent and immutable. Other nodes will either accept or through 51% consensus room booking will be confirmed. Here you can notice, duplication of transactions or room booking can be avoided, a fixed pricing structure can be implemented and customer satisfaction can be achieved.  

Adopting a new technology or a web application based on new technology can be hard at first for the hotel industry. But implementing this blockchain based model to eradicate such disputes can be a revolutionary to achieve customer satisfaction and trust. Hence, one can start this project by collaborating with selected hotel chains to increase the use of blockchain based web application.