How to Prepare for Deployment of Blockchain in the Hospitality Industry

By Josias Dewey Partner, Holland & Knight LLP | December 24, 2017

The blockchain-based application, by Webjet, will be able to provide accurate information about hotel inventory, on a real-time basis, for hotels around the world.  Yet, this application of the technology may not have the biggest impact on the industry.  Hailed as the best use case for blockchain by the Harvard Business Review, loyalty reward systems are the target of significant investment by blockchain companies looking to add functionality to a system of critical importance to the industry. 

Overview of Technology

Perhaps the least understood technology in recent years, blockchain, or as it is sometimes referred to, "distributed ledger technology" ("DLT"), is particularly difficult for many to conceptualize.  Even the terms "blockchain" and "DLT" technically refer to slightly different concepts, where the term blockchain is a subset of DLT.  More specifically, DLT is generally understood to describe a collection of techniques or methods that result in a distributed, peer-to-peer network of computers that, through the operation of a common software protocol, can achieve "consensus" on a single version of truth about some facts or "states," each of which is recorded on a ledger (think database or spreadsheet).  That ledger, in turn, is identically replicated on each computer (or for some data, two or more computers to the exclusion of others) connected to a network.  The result is a network of computers where each user can trust that the records on his or her copy of the ledger are identical to every other copy maintained by the network and that any change to one copy will be made to every other copy-or more simply, a golden source of truth.  

The term "blockchain" refers to a system that implements the above characteristics, and in addition, processes groups of data entries or "transactions," known as "blocks," where each block includes a unique cryptographic marker of the prior block.  This pattern of chaining blocks so that each block is inextricably linked to the prior block gives rise to the term "blockchain".  For certain applications, most of the benefits achieved by blockchain can be realized from DLT without the need for this pattern of storing data in blocks.  As we will see below, this is especially true for ledgers not designed to be accessible by the public, but rather are private or otherwise require permission in the form of credentials to gain access.  This nuance is one of several that can alter the characteristics of a form or type of DLT or blockchain.  An entire book can be written about DLT and blockchain, which requires us to overlook many of these nuances, and instead, focus more on the capabilities of DLT and blockchain in the context of hospitality and less on how it achieves them.  From this point on, we will use the terms blockchain and DLT interchangeably, and treat most technical matters as a "black box".  Just as you don't need to understand TCP/IP protocol to understand the value of the internet, you don't need to know how blockchain protocols achieve "consensus" about their data to understand the value of DLT.

Application to Hospitality

Choose a Social Network!

The social network you are looking for is not available.

Close

Hotel Newswire Headlines Feed  

Richard D. Hanks
Larry Mogelonsky
Jason Ferrara
Peggy Borgman
Douglas Aurand
Julie Lepp
Peter Anderson
Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.