‘Don’t mention the B-word’ is rapidly becoming a recurring theme at travel industry conferences. That B of course is for Blockchain. The very mention of which strikes fear, or delivers a weary sigh, depending on which side of the tech fence you’re sitting on.
As everyone in business these days recognises, technology which can accelerate the process of “getting humans out of the way” to replace them with trustless, digital processes can rapidly reduce costs and open new profit pools. It’s also true however that digital success relies on identifying the problem first, followed by the balance of technology – and human – interaction that might solve it.
On the face of it, the “me too” blockchain bandwagon is in danger of becoming one of the many technologies looking for a problem to solve. Don’t call time on it yet though. In closed loop networks, such as the travel market and corporate treasury in particular, where payments between multiple parties or suppliers often constrict the supply chain – slowing transactions, absorbing cashflow and therefore pushing up costs to end-users – the need for more automation between the different members of an industry value chain is glaringly obvious.
Blockchain may, or may not, be the solution. And it’s certainly too early to tell when, or if, it will be. What is clear though is that high volume, low margin businesses, with complex supply chains, like the travel industry burn up to 20% of their profits through supplier payments – and that’s before any potential incremental gains from better data and greater visibility created by centralising payments, processing documentation, and purchasing power.
As with any innovation though, success depends on sufficient adoption among a relevant community, and blockchain adoption in particular requires a rising tide that incentivises, suppliers and providers simultaneously in order for those much-needed gains to be made.
There’s a long road ahead. Whatever the outcome however, the B word is driving the discussion about how existing 20th century processes need to be re-configured for the 21st century in a way that benefits providers, suppliers and customers? Shouldn’t that deserve a round of applause instead of a weary sigh?