Why Travel Needs Blockchain

in #blockchain4 years ago

A couple of years back I met up for coffee with my longtime friend Maksim Izmaylov. He raved about a problem he’d run into with his startup. After 8 years in travel technology, he had a brilliant idea of how to solve a problem around delayed flights and bookings. His idea was so good in fact, that he got accepted into Ycombinator. He also had a broad network of travel companies to work with. He developed the software solution and was going strong, that is until he stumbled upon the dark little secret of travel.

The secret? A handful of intermediaries owned and controlled everything in the travel distribution space. These intermediaries had no incentive to innovate or allow startups to do so from the outside. Mainframe computers were still in use and what should have been a simple integration taking minutes, took months of negotiations instead. To top it all off, these intermediaries were extracting extortionate commission fees to the tune of 25% and intentionally holding data back from the travel companies and ultimately travelers.

The level of inefficiency was shocking. He was furious at the power these middlemen had to bottleneck the entire space and he wasn’t alone either. Travel companies realized their predicament and were fighting to find a way out. He shared documented examples of the invisible battle between travel providers and distributors. He introduced me to travel startups and providers, the victims of these challenges. I got involved and started delving into the space. I was starting to see that this was the most important technological challenge to travel today.

We started working on a solution along with other developers and settled on blockchain, specifically a public blockchain as the solution to the problem. Now most people associate Blockchain with speculation, payments, fintech and whatnot. But that was only the first application of it. I get that, I personally invested in the stuff and have had a positive experience myself. But that’s not what it’s about. The more you delve into blockchain you learn that blockchain gives you the tools to cut off middlemen in any industry, not just banking.

The solution to this travel problem had to prevent anyone from ever having the level of control over the industry that these middlemen currently had. We found that Blockchain provided these very qualities and had other benefits as well, such as improved security, lower costs and 100% uptime. Which were a plus but the fundamental motivation for leveraging blockchain to solve this problem was that it puts the power to control the future of travel back into the hands of travel companies and travelers.

Winding Tree is essentially a set of smart contracts connecting travel providers and sellers of travel in a single marketplace. The catch is that there isn’t any human intervention, instead the smart contracts act as virtual middlemen with no alternative motives at a fraction of the cost. If a change needs to be made to a smart contract, anyone from the travel community can propose and vote on changes. The Winding Tree team has no more advantage than the next token holder on the platform to decide how things work.

This is all b2b, Winding Tree does not compete with frontend solutions and travel websites. Though the end traveller never sees Winding Tree, they will pay less for their travel. With the absence of the current predatory commission fees, the travel company can charge the end customer less. The travel experience overall will be enhanced as the travel companies will have higher profits despite offering lower prices to the traveller. You can expect a lot more technological enhancements as well as the barrier to entry for innovation is lowered and the competitive playing field leveled.

The solution is straightforward and clear. What was necessary is for the team behind this to have the right motives, to have credibility in the travel technology space and to come from heavy development backgrounds.

The team behind Winding Tree has years of experience in Travel Tech, are known and trusted in the travel community and is comprised almost entirely of developers. Backers of the project include a supervisory board of travel influencers, blockchain experts, one of the founders of the original lean startup and a number of leading global travel brands. It’s hard to imagine a team more qualified for working with travel companies to decentralize this 7 trillion dollar industry.

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@pedr0 good analysis, I agree, thanks for sharing

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