Our sector exists to get people from A to B and provide everything they need in between. But there’s one very popular journey many around the world are taking right now that the travel industry doesn’t seem to be paying attention to: crypto.
In fairness there’s a lot more crypto related activity in travel than you might initially believe. Expedia has over 700,000 hotels available for booking via Bitcoin (and 30 other cryptocurrencies) and Pavilion Hotels and Resorts – an APAC‐headquartered chain with hotels around the world – started accepting payments in 40 different cryptocurrencies in July this year.
Meanwhile in the aviation space Air Baltic started accepting payments way back in 2014 and Spanish airline Vueling most recently announced plans to start accepting crypto from 2023 too. Even Bitcoin cash machines are proving popular too, having initially appeared in petrol stations and malls in the US they are now coming to major airports in Spain too.
Clearly these are outliers though. So is the travel industry really on the edge of a crypto revolution? Should you travel business be exploring this? And what do you need to consider when it comes to the technology and risks?
We interviewed several experts from leading travel technology companies to hear their views.
James Montague, Senior Director Security & Integrations from hospitality technology leader Shiji Group comments:
“We’ve had one or two hotel groups ask about this for sure. But once we explained the complications of actually allowing guests to pay with crypto there was no further interest, particularly as a payment method for in-present payments. That’s because most hotels are still struggling even to take a credit card payment over the internet – instead capturing your details but then charging you with the physical card on arrival. Even PayPal, AmazonPay or other alternative payment methods is a stretch for most. The whole deposit process too, when you check-in to hold your card for say the mini-bar or damages, would also be quite difficult as there’s no way to do that currently with crypto – you’d pay a deposit, but then by the time the refund comes the value of that crypto could be different. For all these reasons, and many more believe me, in the coming years we don’t see this as being a big thing with the exception of perhaps a very small number of hotels.”
Matthew Chapman, Co-Founder and CTO of travel booking technology provider Vibe comments:
“There are some travel companies – and many consumer businesses in general – that are now starting to accept crypto yes. But you need to understand that in almost all cases they are using some kind of intermediary platform to handle the payment such as Coinbase or BitPay. In other words, they’re adding crypto as they might add any other non‐major currency they don’t currently accept or operate in, just like they might add South Korean Won or Singapore Dollars – and almost certainly they’re immediately converting that cryptocurrency into ‘fiat currency’ (the normal, real world, non‐digital money we all know and love, in order to avoid any exchange rate volatility risks). If you’re thinking about this consider that all these payment platforms charge suppliers a small fee and of course there are the implementation resources required to do this. There are also tax implications in some jurisdictions, making extra‐accounting record necessary. Basically you’ve got to ask yourself, does accepting crypto leave better off net? Right now it probably doesn’t, but that might change in time.”
Alex Barros, Chief Marketing and Innovation Officer from Beonprice, the revenue management & total profitability platform for the hospitality sector, adds:
“There’s a lot of questions that hoteliers might be worried about here. For a start, with thousands of cryptocurrencies out there, hoteliers would have to continually review which ones they want to accept and which not. Also they might be worried that they would need to have their prices continually fluctuating to keep up with the latest exchange rate valuation. In both cases the answer is that there are companies with tools out there that can handle this and most other technical or risk related questions a hotelier might understandably have. The question is at what cost? And what about the technology and internal resources you need to throw at the problem? Ultimately though it comes down to demand, if your customers all suddenly wanted to start paying in Mexican Pesos or New Zealand Dollars you’d find a way to make that work. Looking to the future though it would appear that the metaverse is going to be an ecosystem where crypto is the standard payment format, so hoteliers should keep that in mind too.”
Fabian Gonzalez, Founder of Forward_MAD – a luxury tourism event happening in Madrid between 5-7 October – comments:
“The luxury tourism sector is consistently first in providing guests with what they want. Firstly because they have a service mentality, of course, but secondly because money is less of an issue for their audience so they don’t have to get the economics right: there will always be guests willing to pay. So when it comes to crypto if there’s even the smallest of demand then luxury hotels will be quick to find a way to accept payment – not least as there are many services out there now that turn crypto in fiat (or real world money!) instantly and with no risk. Right now it would seem that any demand is really miniscule, but there’s indications that this is growing amongst affluent travellers. Having said that, to date, I have not seen any blockchain-based project that solves a real problem for travel industry providers more efficiently than other existing technologies. My take is that the hotels that are currently accepting crypto are doing this more as a marketing & PR exercise than anything else – and quite a successful one given that some achieve much free publicity by doing so. This is a topic that we´ll be exploring during our conference as we know that many attendees have questions and doubts about this.”
Alice Ferrari, Founder and CEO of airline API technology provider Kyte adds:
“There’s over a trillion dollars invested right now in crypto. That’s an economy the size of a well-developed small nation and many of those investors are regular people. As crypto is a very easy asset to liquidate many of those investors are tempted to use their crypto funds to pay for big ticket, one-off items like a holiday. So why not make that purchasing decision easier for them by allowing them to pay directly in crypto? Nonetheless right now this isn’t a hugely demanded payment method clearly. But that is potentially going to change as stable coins – crypto coins whose value is pegged to real-world currencies like the dollar or euro – become ever more popular. Perhaps now could be the moment to get ahead of the trend? Regardless of your views on this there is one other important point to be considered about crypto and travel: the blockchain technology behind it is soon going to be used to power all kinds of travel experiences, in particular loyalty and points programs as they become – perhaps totally unbeknownst to the user – NFTs based on blockchain. We’re just at the beginning of things really, so many massive opportunities we can’t even imagine for travel are likely to come about indirectly as a result of crypto.”
