Web3 in Travel
With 2022’s cryptocurrency markets in turmoil, it’s easy for skeptics to question the long-term value of many blockchain and Web3 projects. However, judging the category by the price of speculative tokens misses the point that many companies in this space have little to do with digital currency, but are instead using the underlying technology to deliver unique solutions.
Decentralization and tokenization in accommodations
The high fees imposed by popular home-sharing platforms like Airbnb or VRBO have been a hot topic amongst customers. A decentralized, smart-contract-based marketplace could be a solution that ensures higher earnings and more control for hosts. In this scenario, a decentralized, programmable marketplace removes the “middleman,” by allowing property owners to rent directly to guests. One company already doing this is Dtravel, a decentralized autonomous organization (DAO) owned and governed by its community of hosts, guests, and token holders. As with other concepts, management by DAO is intended to give the community the power to decide where resources and profits are directed: whether that be for enhancements, new features, or paid to the community as dividends.
So now that the high fees are solved for, what about the lack of flexibility in most reservations? Houston-based Pinktada aims to make reservations transferable, sellable, and swappable by tokenizing stays into what they call a “room-night token” (RNT). Put simply: Pinktada offers a secondary market for your hotel reservation. And if no one wants to buy your stay from you, Pinktada will also act as a market-maker, offering to buy back the reservation at an increasing discount the closer you get to the intended date of the stay.
Part of the benefit of this model is that the hotel’s revenue for the room is guaranteed, regardless of how many times the RNT for a particular room and night changes hands. Travelers also get significantly more flexibility and peace of mind and might even be able to make a profit if the price of hotel rooms rise above their purchase price. However, we can imagine both pros and cons for that scenario…
The rise of crypto for online travel agencies
Another intriguing area is the acceptance of cryptocurrency as a differentiating factor for online travel agencies (OTAs). Australia-based Travala has built a successful and growing OTA around the premise of accepting cryptocurrencies while also offering token-based rewards and incentives.
Tokenizing carbon offset credits for good
The voluntary carbon market — which is intended to allow carbon-intensive businesses to offset their emissions by purchasing carbon credits from projects that remove greenhouse gasses from the atmosphere — is another focal point for several blockchain-based companies. These companies argue that existing purchasing options are complex, opaque, and laden with middle men whose fees take away from project funding. The market is currently estimated at around $300M with McKinsey forecasting growth to $50B by 2030. Other estimates double and even triple that number.
Whatever the future market size, tokenizing credits might help bring more transparency, liquidity, efficient pricing, and hopefully funding for projects.
Mobility as a Service (MaaS) is a concept that allows travelers to choose from all available transportation modes on a single platform. Existing initiatives have been slow to catch on and generate revenue. Could a web3 community enable the goals of a MaaS platform in a peer-to-peer way? A growing focus on sustainability could drive the shift toward decentralized mobility markets and lead to environmental benefits through more efficient travel.
While there’s more of a smattering of web3 developments in travel and tourism mobility so far, we suspect the brands that will win the web3 future are the ones that start experimenting now to improve traveler mobility and lead the way in sustainable travel.