TravelKoin the new blockchain travel service: “In terms of innovation and disruption, this is huge”
The problems with business to business payments in the travel industry are numerous and abundant. A single booking from a travel agent, inclusive of flights and accommodations, can pass through a myriad of middlemen, accruing charges as it bounces from pillar to post – before eventually reaching the suppliers — with as much as 5 percent subtracted from the initial spend.
Despite this being a complicated and convoluted process, with a profound effect on a business’s bottom line, there is no urgency to change. Because, as awkward as it is, the system does work. And of course, it makes those middlemen a hell of a lot of money.
However, as technology makes more and more changes to our everyday lives, serving up slick solutions to perennial problems, a trio of forward thinking, yet practically minded entrepreneurs think they have found the solution.
Using blockchain technology, and a wealth of experience in hospitality, finance and tech, Yann Gouriou, Bjorn Harvold of Traveliko and ICS Travel Group Martin Struschka , have created Travelkoin – a new way of making payment transfers – all set to upset the zeitgeist and potentially kick-start a whole new way of doing things…
Check this video to bring you up to speed
Travel Daily sat down with Yann and Bjorn from Traveliko, to discover more about this potential game changer for the travel industry.
TD – How did Travelkoin develop?
Yann (below) – Myself, Bjorn and Martinmet while doing some charity work in Phuket. We got talking and I expressed my frustration to him about the relationship hotels have with the OTA’s. Bjorn, being a developer/architect for huge IT platforms said OK let’s build you one as a joke – expect it wasn’t a joke.
Bjorn suggested we start a token to facilitate payment in the travel industry, using blockchain. With blockchain technology we can do peer-to-peer transaction and create a smart-contract, which can be tracked, and reconcile the information automatically.
Currently a hotel chain, for example Anantara, will use a reservation system like SynXis, who take a percentage of each transaction, e.g. if I book a hotel for a thousand dollars, SynXis may take ten dollars.
This [traditional] invoice then goes from SynXis to Anantara accounts, saying ‘hey guys you owe us X amount of money’ – this is all done manually. Maybe the invoice is generated and maybe even sent automatically. But, someone still needs to receive, and check the booking, before finally making payment via bank transfer.
How does the smart contract differ from what happens now?
With a smart contract you avoid all this. The system will know automatically how many transactions have happened (including refunds and cancellations). At the end of the month the invoice is generated, sent to a wallet — which checks the smart contract, and payment is made. No human interaction, no bank, no fees and no error.
How much will it cost?
The service itself is almost free, but you need a coin to power the transaction. We have two products, first is the payment gateway and the next is Travelkoin (TK), which acts as fuel to the system and a loyalty program. If you book on Traveliko you get TK. If you are a TA and you want to pay the airline, you can use our software and be rewarded with TK.
Despite all the current craziness surrounding, cryptocurrencies are here to stay, but how do you give TK value?
Bjorn (below) – When Martin and I approached this we had to determine, as everyone who enters crypto-land does, how do we create value? Regular countries do this with oil reserves; gold etc. which goes supports the fiat currency. There are two ingredients to a successful Crypto-economy – one, build a killer app. and two, build a community of like minded people— which is why potcoin has been so successful.
For example, we have travellers who travel, usually they will earn loyalty from their booking agents or with air miles. Then you have the bookers, who dish out these loyalty points, but they have no real worth – unless you are a very valiant traveller and you stick to one hotel or airline – plus they often expire.
“It’s a real crypto-currency that can be converted to a real fiat currency i.e. something tangible, that will not expire. Hotels and airlines will lust for it.” – Bjorn Harvold
How do we fix a situation, where there are a lot of cross border transactions going on? Simple, build a platform and put a crypto on it.But, you can use Bitcoin for that. Our expertise is not in creating a new infrastructure in the crypto environment, our knowledge is travel. We take the platform, make it smart and then it to solve day to day problems in the travel industry. Such as smart contracts, which then go onto the blockchain.
We have built the killer platform and the B2B community, now we want to solve the second biggest problem – loyalty. We don’t want brand loyalty, we want platform loyalty.
There is up to 69 percent dissatisfaction with any loyalty reward program. What if we give you a Travelkoin as a reward, instead? It’s real crypto currency that can be converted to a real fiat currency i.e. something tangible that will not expire. Hotels and airlines will lust for it.
Why, what is the incentive?
If you make a booking [on Traveliko], you earn two TK. The next time around the airlines and hotels will say they are willing to give you a great deal, if you pay part or all your stay with TK.
Because those companies will need those Travelkoins later to make the payments, so they can use all the services on the platform for free. Lufthansa, Sheraton etc., they can all white label TK if they want — call it Sheraton points or Lufthansa miles — and if their marketing is not good enough, they won’t get the customers to come. Then they will run out of TK and will have come to us directly to buy a batch. Suddenly you have a community of B2B and B2C working together in an environment where everyone wants to partake.
“In terms of innovation and disruption, this is huge” – Yann Gouriou
We have two currencies. One is the Standard Travel Unit, which is basically like a dollar; a one-to-one exchange. Travelkoin however, which we’re going to put on the exchange and present to investors, has the volatile value – which we want, of course. If there is demand or scarcity of TK they have a chance to make their token more valuable by encouraging their customers travel.
As the interview comes to an end, Yann takes the opportunity to impress the scale of the project, “the amount of money being transferred within the B2B travel sector is worth 2.4 trillion. We are in that space, the software, the STU and TK can be part of those trillions. In terms of innovation and disruption, this is huge”.
Click here to learn more about TravelKoin and the team.