Blockchain in Hospitality Industry

How can the hospitality industry benefit from blockchain?


Blockchain Experts


“Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.” – Vitalik Buterin

Whether a property in a quiet hill-station depending solely on online booking companies be able to compete and reach out to customers directly is still debatable, but theoretically it is possible using Blockchain.

So, are we predicting that Airbnb will be out of business soon? Not really, but there is a lot that can be achieved using this technology which will ultimately benefit the whole community and ecosystem.

Blockchain technology has already become a buzzword in the hospitality industry. This technology has gained momentum due to the value it brings to the hotel industry in terms of scalability, reliability, and decentralization. It is helping the hospitality industry in eliminating third-party costs and encouraging direct customer interaction with the service provider. The Blockchain companies are creating platforms which focus on connecting customers to the providers with transparency and at a low cost.

What is Blockchain?

For those who are still unfamiliar with this technology, blockchain is a decentralized digital ledger which records all transactions in a chronological order that are made in cryptocurrency such as bitcoin. The transactions recorded are incorruptible and transparent to all the parties involved.

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Present scenario in the hospitality industry

The competition is fierce in the hospitality industry with online travel agencies having a considerable control over the rooms and rates. With online hotel booking becoming a norm, there are many companies such as Airbnb, Expedia etc. who are offering a wide range of selection that was an unimaginable couple of years ago. However, the success of such companies shows how much money does the actual service provider pay as a commission to them.  For example- For booking a stay online in any hotel, you will see that around 25% of the transaction amount is spent on the online booking platform and the transaction fees. Apart from that, there is the additional tax levied on the transaction amount. So, the hotel owners end up paying a hefty percentage as a commission to the online company on each booking made.

How can the hospitality industry benefit from blockchain?

One of the most important and obvious advantages which blockchain offers to the hospitality industry is the stability and security. All data under blockchain technology is traceable and is decentralized hence the data can never go offline or neither it can be removed by a cyber-attack. This is beneficial when dealing with transactions.


This technology also plays an important role in simplifying the actual payments which at present gets a little complicated especially when there are overseas settlements. With blockchain both storing and accessing of information becomes much easier, hence allows enhanced collaboration and improves the overall customer experience.

With blockchain technology, the customers and the accommodation providers can be allowed to interact directly without the risk of spending more, miscommunications or over-booking. The hotel executives are realizing that knowing the customers at a personal level is one of the best ways to stand out in the competition and the blockchain technology is helping them to take one step further in that direction.

Another area where blockchain technology is helping the hospitality industry is in managing the loyalty point accrual and redemption. Since decentralized ledger of records is secured by encryption, it makes tracking of loyalty points more secure, instantaneous, less expensive and transparent to both the issuing company and the owner of the points. By analyzing the redemption patterns, it can give more opportunity for personalization.

The other major benefit is that with blockchain technology transparency can be maintained in the supply chain. Many big hospitality companies work on a franchise model in which the company does not own the physical property, but is only the owner of the brand. This puts the responsibility on the company to make sure that the supplies are on par with the image and reputation of the brand. The blockchain technology fits perfectly into this scenario.

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For instance, a hospitality chain franchise owner is typically required to buy coffee, tea, towels, toiletries, and other room service items. They usually procure these items from various suppliers from different locations. However, it is mandatory that these items meet the quality standards of the hotel chain and in such procurement, two parties are basically involved. So, if the franchise owner, hotel chain owner, packer, and supplier take part on a personal network based on the blockchain, it will ensure instant clarity on the availability of supplies from the source till it is received by the hotel. The information on the place where the product is made, when it is made, price, quantity and other relevant information that is required by the hotel chain can be stored at a transaction level detail at every supply chain stage on the blockchain.

It will bring transparency since the owner of the franchise and the hospitality chain owner will have instant visibility on the position of supplies. And with the help of this, the owner of that franchise can plan better for the procurement of supplies. At the same time, it establishes a source of supplies that can be used as a strategic advantage to increase the trust of the customer in the brand by securing supplies from reputed enterprises.

What to expect from blockchain?

The blockchain is, without doubt, a groundbreaking technology that is surely going to transform the way business transactions take place. However, the technology is still in a bubble with many projects lined up and over-hyped. But despite that, it has already found its way to the hospitality industry.

Since blockchain is a distributed-ledger technology it removes the middlemen from hotel booking transactions which helps in reducing the total cost involved in doing business. This remarkable feature of blockchain will open a whole new set of opportunities for the hospitality industry especially the independent properties as they tend to bear the brunt most from distribution cost as they lack bargaining power.

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Some hotel chains are already coming up with ideas on ways to implement blockchain into their systems. However, it may take some time for this technology to work to its full potential within the hospitality industry.


The hospitality industry knows that customer sentiments have a direct impact on their brand value and hence they are extremely sensitive about it. We believe that this technology will help in enhancing the customer experience, will make the backend processes more efficient and thus will improve the brand value. So, it is the time that the hospitality industry explores this highly advanced and upcoming technology and gears up to be future ready.


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