Blockchains for hotel distribution
Webjet last month announced details of a major project it has been undertaking in partnership with Microsoft, aimed at using so-called blockchain technology to solve what it called the hotel distribution industry’s “dirty little secret”. Webjet ceo John Guscic revealed that the sector is rampant with inefficiencies. According to a presentation he gave at an investor conference, about one in three bookings are amended in some way, 10% require some sort of manual intervention, while one in 25 experience “breakage” – where a service is provided but never invoiced. That amounts to millions in lost revenue. The complexity comes because in many instances there are up to five participants in the sale, with a series of wholesalers contracting DMCS who in turn book the actual hotel. Each participant stores their bookings in their own technology platform, and there is no ‘single source of truth’ as to the status of a booking or its details. This results in high costs of reconciliation – hordes of accounts receivable staff - and financial losses due to disputes. The Webjet solution aims to use blockchains – internet-based technology which records transactions in multiple locations automatically updated to provide this single reference point – to store hotel bookings. A ‘Smart Contract’ matches up bookings and stores them on the blockchain, instantly notifying any discrepancies so data mismatches can be resolved straight away, rather than months later when unpaid invoices are being chased. It’s a novel solution, with Webjet currently rolling it out internally between its Lots of Hotels and Sunhotels operations, and planning to “invite selected external parties to use the platform to demonstrate the benefits it delivers to the industry”.