Maybe it's not that obvious
right now as it will seem that you are "just using the internet" -
but let us tell you: the internet has come a long way since its inception, and
so has its implications on the travel industry.
We want to bring light into the
darkness: What exactly does the term "Web3" mean? What impact has the
developments of the internet had on the travel industry? And finally, how can
companies operating in the travel sector benefit from future innovations?
If we think back to the turn of
the millennium, the travel industry was in a very different place. When it came
to booking a holiday, travelers either went to their local travel agency for
more information and made a booking, or the braver ones purchased a guidebook,
spent several hours researching, and then planned their own holiday by
themselves. Fast forward to the way consumers book their travel today - as we
all know - could not be more different.
We can see these multitudes of
differences when looking at the possibilities offered to customers online by
industry players such as Booking.com, Airbnb, Skyscanner, and many other travel
providers. They simply seem endless. Also, the developments we have seen inside
businesses within the travel industry so far are immense.
But how did we get here, and
what's next?
Web1: Early beginnings of a revolution
In the beginning, the World Wide
Web offered unlimited access to information for users. Web1 refers to the absolute beginnings of the internet - text and data collections from the 1990s, built on
HTML with seemingly no formatting whatsoever, published to the internet and
making it accessible to anyone who might be interested.
Comment functions, online
purchases, personalization, and the like were just dreams of the future. This
is why Web1 is known as the "read-only" web. Users could read
information but nothing more.
For travel, this first version
of the internet offered people easy, and rapid access to information regarding
their destinations - country characteristics, traditions, accommodation, and
flight details; everything could suddenly be found online. However, because of
the nature of Web1, users were not yet able to interact with the data or make
good use of it for themselves.
Want to travel back in time?
Check out this rebuild of the
early beginnings of the internet.
Web2: Welcome to today
While in Web1, users could only
access information. In the early 2000s, Web2 has become more of a “participatory
web.”
Social networks such as
Facebook, Instagram, and Twitter emerged, and users have become accustomed to
personalized content and being able to actively engage with the internet to
create their own content.
The combination of Web2 and the
travel industry is known as Travel 2.0. And it
has completely reshaped the sector - online bookings, review platforms such as
Tripadvisor, and numerous other new business models have emerged.
While a lot of good has come
from Web2, Travel 2.0 has also introduced significant disruption to those
travel companies and sub-sectors that failed to integrate these new web-based
business models.
The bankruptcy of local travel
agents and the emergence of services such as Airbnb are just two widely
recognized examples. Back in 2018, 82% of trips were
booked online via a mobile app or website – with no human interaction. In 2019,
the online travel booking market share represented 63% of the $1.2 trillion
generated by the travel industry. This is huge, and the impact of Web2 on the
travel industry is simply undeniable.
And companies that thought they
didn't have to embrace these web trends have suffered greatly.
The same is happening right
now.
Web3: Rethinking travel
Web1 was all about reading
information, Web2 was about co-creation (especially user-generated content), so
what is Web3 going to be about?
To understand Web3, we need to
detach ourselves from the image we currently associate with the internet we
know today. The transition to Web3 offers even greater possibilities, even more
innovation, and even further change than the leap from Web1 to Web2.
This is because Web3 is based on
the core concepts of decentralization, openness, and data security, which
presents many more benefits for users - all facilitated through blockchain
technology. Another feature on which Web3 builds is that of ownership. Through
Non-Fungible Tokens (NFTs) and smart contracts, digital assets are truly and
legally attributed to users of the internet and made tradable through proof of
ownership and transferability. As such, Web3 could potentially be more
disruptive and an even bigger paradigm shift than Web2.
To be more specific, using
artificial intelligence, machine learning, and blockchain technology, Web3 aims
to create open, more connected, intelligent decentralized applications where
users can manage their own data.
Web3 will bring a completely new
structure and technology to the travel industry and, consequently, infinite
opportunities for new products and business offerings.
Why your business should care
Although the possibilities that
Web3 will offer are yet to explore, companies in the travel industry need to be
aware that we are in the midst of an immense transformation. To stay relevant
in the market, it is critical to actively shape this new way of thinking in the
industry. In this, Chain4Travel, with the Camino consortium blockchain, serves
as a facilitator for travel companies of all sizes and sub-sectors. In addition
to the already mentioned point of remaining competitive in the market, there
are numerous other reasons why travel companies should (sooner rather than
later) concern themselves with Web3.
According to the latest data from the
TravelTech Show, 74% of business professionals in the travel sector plan to use
Web3 as a marketing tool. So, the ball is already rolling. Furthermore, it
offers various new ways to make business models more efficient, more attractive
and to save costs.
Here are a few ways Web3 can
impact the travel industry:
- Improved reconciliation processes involving blockchain, smart contracts, and decentralized applications (known as dApps). This will help reduce costs and increase competitive advantage.
- Personalized loyalty programs: Using Non-Fungible Tokens (NFTs) for better traveler rewards and loyalty programs could be among the lowest-hanging fruit for travel brands considering Web3 innovations. Consider automated bonuses for travelers who book sustainable travel and accommodation or small gifts for delayed flights or difficulties for reasonable rates. The possibilities for more personalized loyalty programs and closer ties between providers and customers are endless.
- Reduced costs with payment and settlement solutions for B2B-business in the travel sector as they can be facilitated by blockchain technology.
- The offering and exchange of information can be simplified when information is available on a blockchain. This is particularly relevant for those travel companies using API integrations with multiple partner companies.
- Improved trackability due to its inherent immutability and transparency characteristics offers possibilities way beyond just baggage tracking. Blockchain helps with the monitoring and reporting of emission reduction trading. For example, the effective tracking of carbon credit's complete journey and its connected offset projects are possible with Web3, giving both businesses and consumers a detailed audit record.
This list is by no means
exhaustive and is only the tip of the iceberg, but it illustrates the countless
opportunities that Web3 offers the travel industry - and the opportunities that
companies who do not want to follow the trend will miss out on. Think back to
the travel agencies at the time of the Web2 disruption...
It's vital to understand that it
is not solely about rebuilding existing business solutions on new technology.
It's about rethinking business processes and breaking new ground.
Right now, there is a new
generation of travelers asking for - or even expecting - more personalization,
sustainability, and decentralization - along with managing pandemics and rising
interest rates. The travel industry definitely has a lot to think about, and
there is a lot of potential to be exploited in the coming years.
Even though we have just arrived
at the intersection of travel and Web3, all companies must think about how they
can leverage these developments for themselves. Now.
Chain4Travel is building the new
ecosystem for the travel industry that enables your travel organization to be
part of the change and benefit from these new technologies.
These are exciting times for the
travel industry. Do not get left behind.