The Industry is sick and Tratok is the cure
Original insight by Nicholas Paillart, Chief Marketing Officer, Tratok
China alone, with 79,251 confirmed cases could see 25 million fewer Chinese travelers this year which could cost the industry a loss of $ 73 billion in Chinese spending alone.The global reduction in seat capacity, measured in how many planes remain grounded, is greater than during SARS and 9/11. A narrow-bodied aircraft costs in the order of $10,000 a day, this goes up to $ 50,000 for wide-bodied aircraft, not counting the cost of immobilized flight, cabin crew or ongoing aircraft maintenance. International Hotel chains such as Hilton, Intercontinental and Marriott are facing losses in the 10's of millions of dollars, while global carriers could lose $ 29.5 billion in for 2020.
Venice Carnival or Paris Fashion Week have been cut short. The July Tokyo Olympic Games have been delayed by a year.
This unprecedented collapse is forcing the industry to re-think the way it approaches business, rationalize its costs & streamline its operations. No longer will the industry be able to absorb the losses linked to the inefficiencies which have been plaguing it for the past decades. Now that the 100's of millions of dollars that have been carelessly lost due to ongoing lack of transparency, fraud, delays in payments and refunds, and outrageous commission schemes to Online Travel Agencies (OTA's) are added to the billions in losses resulting from this crisis, travel and tourism companies are faced with the very real prospect of fighting for their very survival. Marriott and IHG had already, last year, indicated a necessity to reduce their dependencies on OTA's, which, although guaranteeing occupancy, were damaging RevPar, making, in some cases, full properties, unprofitable.
The answers to streamlining, and in this tragic state of affairs, effectively saving, the travel and tourism industry exist in the form of modern technology, and more specifically, the blockchain. Relying on a series of self-certifying "smart contracts" which automate and, more importantly authenticate, transactions in a matter of seconds, and at a fraction of the cost, blockchain technology eliminates all need for the inefficient middle man, offering the service provider and the end user, the possibility to transact directly and transparently.
The nature of the blockchain is that each smart contract is publicly available and certified by the smart contract that precedes it directly. Contrary to the original and unfounded public fears on cryptocurrency and blockchain, this forced transparency eliminates the possibility of undetected or unattributed fraud. According to Finextra's research on Fraud in Travel Payments, the three most common types of fraud in the travel industry are stolen payment details, cyber breaches of online booking platforms and stolen security credentials. These attacks are costing travel intermediaries a whopping $21 billion each year. And that figure is predicted to increase 20% by 2020, exceeding $25 billion. All this can easily be eliminated by using the blockchain.
This is the original motivation behind United Arab Emirates based Tratok, the world's travel token, a blockchain powered travel portal that restores legitimate ownership of the travel and tourism industry to its rightful owners and offers them fees comparable to those of credit cards, rather than the outrageous 30% taken from hotel properties by the presently operating OTA's. In an age, where technology is able to guarantee the integrity of transactions, in terms of security, speed of transaction and reduced costs, it is criminal to continue operating on an outdated financial model which was built around manual operation or intervention.
Using blockchain and tokenization as the engine behind their revolutionary new travel portal, Tratok takes the model one step further, by creating an authentic community of travelers who are able to recommend and review properties and travel companies. To guarantee the authenticity of the experience, the blockchain ensures that these travelers have actually been guests or passengers of the experience they are reviewing and not paid agents or bots.
It is always in a period of crisis, when survival becomes the key focus and not merely the impact on the bottom line, that Industries start taking the need to revolutionize their ways of working. We have seen this with the 2008 financial crisis, when institutions such a Lehman Brothers closed their doors after more than 160 years of operation. There is no doubt that the magnitude of the financial impact of the corona epidemic on the travel and tourism industry will push service providers to have to re-invent the way they work – eliminate fraud, increase transparency and lower costs. Welcome to the 21st century, welcome to the blockchain, welcome to Tratok.