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How is Blockchain Technology Transforming the Hospitality Space?

Blockchain technology is existing for ages, and up until a few years ago, it was known as the “technology that created bitcoins”. However, over the years, experts have recognized the technology and its potential to revolutionize the way our World works. Today, blockchain is adopted by several global businesses every day, with the technology making headlines. Although the technology is in its nascent stage, it has the potential to transform the way transactions take place, and data or information is accessed and stored. In this article, we will know about blockchain technology, and how it is utilized in the hospitality industry.

What is Blockchain Technology?

Businesses and their stakeholders must have a trust level among them to conduct their projects, generate revenue, and create value for their consumers. Therefore, blockchain technology addresses a special requirement of all businesses, that is “Trust”. 

Blockchain is a shared ledger technology with a list of virtual records where transactions are recorded permanently. The data is stored in the form of “blocks”, and are secured using cryptography. Once data is stored in blockchain technology, it is not possible to change it or delete it in any way. This immutable nature of blockchain technology makes it wanted in every industry. 

Blockchain is a decentralized ledger technology, which means the information is not stored in one place, and there is no centralized authority to control it. This help to prevent manipulation or data tampering. Moreover, the network is shared among various people in the network, which provides no vulnerability, and additional data security advantages. Any transaction or data stored in the technology is saved in a “date and time” format, making it transparent and traceable.  

Also Read: Blockchain Application in Enterprises: Public Vs Private, Which is Better?

Major Blockchain Use Cases in Hospitality Industry

Blockchain is the incorruptible, and immutable ledger that facilitates a transparent record of documents, and transactions to secure the value of virtual assets. From a direct perspective, it can also indisputably secure the ownership of the asset, and its value using an unchangeable cryptographic audit chain. 

With the potential of the technology, here are the major use cases of blockchain technology in the hospitality industry. The use cases may not be direct to the hospitality industry, but it helps to form the base of the industry, making the procedure traceable, and transparent.  

Also Read: The Truth Behind the 5 Most Popular Crypto Misconceptions

Supply Chain Management

The supply chain is a series of complicated activities conducted by different parties across the network and is natively divided. To conduct an efficient supply chain, all parties must practice “trust” in one another. There are three different sectors where supply chain management is relatable. These are:

  • Vendor Management

Organizations usually conduct a centralized function that aims to manage a series of records and aim to identify the reputed suppliers and vendors. The onboarding data, background data, and quality control data of the supplier about their early orders are sensitive information that is a part of supplier segmentation.

Moreover, some subsystems depend on the supplier data, deciding on the purchase. Therefore, it is crucial to make the data available but secured throughout the network. In such situations, blockchain technology can provide coherent data endurance across the distributed supply chain where the data will be secured cryptographically using safe identities. The solution will help to build trust without any interference from a middleman. Moreover, since the data stored is immutable, any updates in the network are genuine and not breached. This creates a consensus between the data creator and the data with undeniable origin source proofs. 

  • Inventory Management

Blockchain technology helps to organize a uniform system of data for inventory that is transparent and traceable across the subsystems. Blockchain seamlessly manages the complexities of managing important data across several nodes to be used by downstream businesses in real-time.

  • Smart Contracts

To ensure that viable business rules are maintained between order and purchase cycles, on every order. In the order cycle, hospitality sectors can integrate smart contracts to ensure the pricing of the same items among other competitors. 

Loyalty Rewards Management 

Finding a new customer is time-consuming and way more economical than getting a new one. Customer retention and loyalty have been important factors in conducting business today, in every industry. 

Every hospitality enterprise will require an info system to manage reward points awarded to the guests for being loyal to the brand and track their earned loyalty points. It is a complex process to build such a procedure that provides an instant and real-time view of the entire ecosystem of rewards. Such an ecosystem must provide a transparent audit trail on how the customer can redeem these rewards. 

With the help of a blockchain-based platform, customers can acquire loyalty rewards as a part of their transactions with hospitality providers. Once the reward value is in the form of a digital asset, the provider can add the value or currency to the asset. This helps the guest redeem their loyalty rewards with any other merchants using the platform. 

Using Blockchain for Customer Identity Management 

Almost every business needs customers to survive in the market. Personalizing interactions will help enterprises to improve their experience. With the help of IoT and blockchain, any guest can now enter the hotel room with the help of a smartphone. 

On a blockchain network, the IP address of every individual is used as an identification. Every member is provided with a private key that is not shared with others. Every time the guest wants to make a payment, the transaction is visible to every member of the network, notifying them about the origin of the transaction. 

Suppose a guest enters a hotel for check-in and enters the reservation number in the kiosk form. An OTP is generated and sent via SMS or email to the customer’s registered mobile number. Once the guest is identified and verified, the blockchain technology will then assign a room to the guest. A time-sensitive token will be generated by the technology. 

If every room in the hotel has an NFC (Near field communication) integrated smart lock connected to the underpinned blockchain architecture. As soon as the customer taps on the smart lock, the token in the smartphone is shared with the lock. The guest’s public key is thereby used to verify, and allow access to the hotel room. 

Wrapping Up

Blockchain technology has evolved over the years and has a huge possibility in the hospitality industry. The above use cases are only a few examples of what the future holds for the industry in the generation of web3.

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