Web3 and the whole decentralization element that comes with it, is an exponential evolution in the way the internet operates. Nothing more, Nothing less. Its not a choice of transition, but thats how entire technology landscape is going to evolve.
Current focus areas
- User Interface & User Experience – Unlike web2 transition that happened in the past, the way we interact with web3 applications are currently different. It didnt take a learning curve to move from static pages of 1999 to the UGC of facebook era. But web3 is a bit different in the way the user interacts with these applications, with specific needs on understanding of wallets, private keys etc, to get the maximum benefit out of web3 dApps. there is a lot of work going on in this space and should shape up in the next 2-3 years.
- Dissociating Web3 / Blockchain / Cryptocurrencies – Just as the early internet era where internet got a bad rep due to dark markets and nefarious activities, web3 technology has got some bad rep for similar nefarious activities using cryptocurrencies. Blockchain here is the tool, how it gets used, doesnt devalue its importance and innovation.
- Enterprise adoption – The enterprise blockchain landscape is still evolving. A steady state is yet to be reached in terms of how the landscape will look. Considering enterprise spends on blockchain are long term decisions, it would be wise for travel companies to look at consumer facing applications with low capital cost before investing in full fledged enterprise blockchain solutions. Its still too nascent.
Opportunities
- Automated reconcilations – Financial reconcilliations have the potential of being skimmed down to matter of hours than days or weeks, with advent of smart contracts and blockchain based transactions. The advantage that digital systems brought to physical book based reconcilliations will be abysmal in comparison to savings that blockchain based systems can bring. It will be done in real time, removing the necessity to reconcile, if integrated right.
- Cross border payments – Travel is a trans-national business with different currencies, associated risks, conversion costs and transfer delays. NAtive blockchain based settlement mechanisms(cryptocurrencies or otherwise) can remove the 1.5 – 3% that CFO has to account for in the P&L against conversion charges. Easily.
- Better Distribution control – Hotels lack any distribution control of their own inventory today, beyond primary sale. This leads to poor brand control due to cheap prices or high customer dissatisfaction, in case of high priced purchase. With a blockchain based system need for price parity monitoring will go away, cos the hotels are now in CONTROL. they can literally control who can sell their inventory, where and what price, until it gets consumed. No other system has the ability to provide this beenfit.
- Tokenization of rooms – A trillion dollar market, with no secondary market is a joke. Hospitliaty is sitting at the cusp of this change. A transaparent secondary market, thats not just focused on resale of rooms, but on creating a new asset class for the industry. This will add liquidity to the market and create larger ecosystem around travel reservations, financialization and bookings. What Hopper has done till date will look like childs play, when hotel rooms are tokenized and financialized.
For hotels, best way forward would be to engage with smaller companies building bespoke consumer facing web3 applications. Start capturing the value on these peripheral usecases, before going deeper into enterprise use cases.
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