The travel sector exists to get people from A to B and provides
everything they need in between. But there’s one very popular journey
many around the world are taking right now that the travel industry
doesn’t seem to be paying attention to: crypto.
In fairness there’s a lot more crypto-related activity in travel than
most might initially believe. Expedia has over 700,000 hotels available
for booking via Bitcoin (and 30 other cryptocurrencies) and Pavilion
Hotels and Resorts – an APAC‐headquartered chain with hotels around the
world – started accepting payments in 40 different cryptocurrencies in
July this year.
Meanwhile, in the aviation space, Air Baltic started accepting
payments way back in 2014 and Spanish airline Vueling most recently
announced plans to start accepting crypto from 2023 too. Even Bitcoin
cash machines are proving popular too – having initially appeared in
petrol stations and malls in the US, they are now coming to major
airports in Spain too.
Clearly these are outliers though. So is the travel industry really
on the edge of a crypto revolution? Should travel business be exploring
this? And what do industry members need to consider when it comes to the
technology and risks?
Belvera Partners rounds up views from technology experts in the travel industry:
James Montague, senior director security & integrations, Shiji Group, a hospitality technology provider
“We’ve had one or two hotel groups ask about this for sure. But once
we explained the complications of actually allowing guests to pay with
crypto there was no further interest, particularly as a payment method
for in-present payments. That’s because most hotels are still struggling
even to take a credit card payment over the internet – instead
capturing your details but then charging you with the physical card on
arrival. Even PayPal, AmazonPay or other alternative payment methods is a
stretch for most. The whole deposit process too, when you check-in to
hold your card for say the mini-bar or damages, would also be quite
difficult as there’s no way to do that currently with crypto – you’d pay
a deposit, but then by the time the refund comes the value of that
crypto could be different. For all these reasons, and many more believe
me, in the coming years we don’t see this as being a big thing with the
exception of perhaps a very small number of hotels.”
Matthew Chapman, co-founder and CTO, Vibe, a travel booking technology provider
“There are some travel companies – and many consumer businesses in
general – that are now starting to accept crypto. But you need to
understand that in almost all cases they are using some kind of
intermediary platform to handle the payment such as Coinbase or BitPay.
In other words, they’re adding crypto as they might add any other
non‐major currency they don’t currently accept or operate in, just like
they might add South Korean won or Singapore dollars – and almost
certainly they’re immediately converting that cryptocurrency into 'fiat
currency' (the normal, real world, non‐digital money we all know and
love, in order to avoid any exchange rate volatility risks). If you’re
thinking about this consider that all these payment platforms charge
suppliers a small fee and of course there are the implementation
resources required to do this. There are also tax implications in some
jurisdictions, making extra‐accounting record necessary. Basically
you’ve got to ask yourself, does accepting crypto leave better off net?
Right now it probably doesn’t, but that might change in time.”
Alex Barros, chief marketing and innovation officer, Beonprice, a revenue management & total profitability platform for the hospitality sector
“There’s a lot of questions that hoteliers might be worried about
here. For a start, with thousands of cryptocurrencies out there,
hoteliers would have to continually review which ones they want to
accept and which not. Also, they might be worried that they would need
to have their prices continually fluctuating to keep up with the latest
exchange rate valuation. In both cases the answer is that there are
companies with tools out there that can handle this and most other
technical or risk related questions a hotelier might understandably
have. The question is at what cost? And what about the technology and
internal resources you need to throw at the problem? Ultimately though
it comes down to demand, if your customers all suddenly wanted to start
paying in Mexican pesos or New Zealand dollars you’d find a way to make
that work. Looking to the future though it would appear that the
metaverse is going to be an ecosystem where crypto is the standard
payment format, so hoteliers should keep that in mind too.”
Fabian Gonzalez, founder of Forward_MAD, a luxury tourism event in Madrid
“The luxury tourism sector is consistently first in providing guests
with what they want. Firstly because they have a service mentality, of
course, but secondly because money is less of an issue for their
audience so they don’t have to get the economics right: there will
always be guests willing to pay. So when it comes to crypto if there’s
even the smallest of demand then luxury hotels will be quick to find a
way to accept payment – not least as there are many services out there
now that turn crypto in fiat (or real world money!) instantly and with
no risk. Right now it would seem that any demand is really miniscule,
but there’s indications that this is growing amongst affluent
travellers. Having said that, to date, I have not seen any
blockchain-based project that solves a real problem for travel industry
providers more efficiently than other existing technologies. My take is
that the hotels that are currently accepting crypto are doing this more
as a marketing & PR exercise than anything else – and quite a
successful one given that some achieve much free publicity by doing so.
This is a topic that we´ll be exploring during our conference as we know
that many attendees have questions and doubts about this.”
Alice Ferrari, founder and CEO, Kyte, an airline API technology provider
“There’s over a trillion dollars invested right now in crypto. That’s
an economy the size of a well-developed small nation and many of those
investors are regular people. As crypto is a very easy asset to
liquidate many of those investors are tempted to use their crypto funds
to pay for big ticket, one-off items like a holiday. So why not make
that purchasing decision easier for them by allowing them to pay
directly in crypto? Nonetheless right now this isn’t a hugely demanded
payment method clearly. But that is potentially going to change as
stable coins – crypto coins whose value is pegged to real-world
currencies like the dollar or euro – become ever more popular. Perhaps
now could be the moment to get ahead of the trend? Regardless of your
views on this there is one other important point to be considered about
crypto and travel: the blockchain technology behind it is soon going to
be used to power all kinds of travel experiences, in particular loyalty
and points programs as they become – perhaps totally unbeknownst to the
user – NFTs based on blockchain. We’re just at the beginning of things
really, so many massive opportunities we can’t even imagine for travel
are likely to come about indirectly as a result of crypto.”