Traveling is big business. It contributed nearly $6 trillion to global GDP in 2021. And while the Covid-19 pandemic caused an unprecedented impact, travel is now very much back, especially this December holiday season. The “travel recovery” is in full swing despite rising costs and logistical problems as demand outstrips supply. We humans just can’t get enough of moving.

Travel is also a very complex industry that relies on an intricate network of information exchange (eg customer data, inventory management, etc.) combined with the logistics of physical moving parts. A true fusion of bits and atoms.

From the early days of commercial aviation to the birth of online ticketing in the 1990s, the travel industry has flourished considerably over the past decade, with continuous technical progress and repeating cycles of innovation. again.

While much of this innovation was incremental, at times there were radical advances in our travel evolution. In 2014, Expedia momentarily accepted Bitcoin for hotel reservations, but soon dropped it, presumably due to a lack of commercial adoption and the extreme volatility of BTC prices at the time. Though at the time considered niche and marginal, this nevertheless signaled a desire and hunger for technological advancement.

Despite technological progress, a large number of problems still remain deeply embedded in the “travel stack”. Reliance on intermediaries, siled data, lack of transparency, and systemic inflexibility are issues that continue to resurface as pain points in the travel industry.

And while it’s an industry that’s interconnected and networked, it’s also highly centralized. Few entities control the majority of the category. Expedia Group, Booking Holdings and AirBnB dominate the online booking market which is projected to reach US$691 billion by 2026. Meanwhile, Amadeus, Saber and TravelPort control most of the inventory distribution. Ultimately, this means higher costs for both travelers and businesses, as these largely unchallenged gatekeepers enjoy significant fees and control of information.

Travel is an industry ripe for disruption, and one with many problems and attributes that Web3 could arguably solve.

As nature is particularly heavy on the ledger with different companies passing information to each other, there are immediate use cases for blockchain with clear potential. For example, since customer luggage changes hands multiple times over the course of each trip, a decentralized open source database could make tracking between companies and entities much easier. And consider identification services, an important part of the travel industry’s information flow. A global blockchain standard could be used to store this data to drastically improve problems like check-in times, airport queues, and even make us reevaluate the concept of physical passports.

In essence, the opportunity for an open-sourced, decentralized ledger could ultimately reduce reliance on existing travel-related intermediaries and incumbent bastions that store data in silos, thereby lowering costs that could eventually be passed on. to the traveler

But Web3 is also about much more than blockchains and ledgers. Things get really interesting when we think about the consumer-facing potential of Web3, particularly around the concept of decentralized ownership, identity, and governance.

Imagine for a moment that you are planning your next trip and looking for places to visit. This is a significant (and often stressful) aspect of the traveler experience. You are probably doing some googling and reading some reviews on TripAdvisor. How do you know those reviews weren’t fake? Have these people really been there? Why bother posting a review? The issue of authenticity prevails when we try to distinguish between the genuine and the inauthentic.

What if we could prove that every review or post was posted by someone who was undoubtedly there at the time they said they were? A “proof of travel” that is immutable and could be linked to a composable identity that transcends multiple platforms and services. An on-chain credentialed identity that can build a lasting reputation to become an asset in itself.

What if we could make sure all contributions were rewarded proportionally to the value they provide, instead of just getting a few likes and upvotes for your submitted review? On Web2, virtually all financial value accumulates on the platform. Meanwhile, the real value is created by network participants, such as submitted reviews and high-quality content. On Web3, contributors would be able to play the game and benefit from the overall success of the platform, which in turn would increase the likelihood of high-quality and authentic contributions. An autonomous ecosystem could be created that is partially owned and governed directly by members of the community, benefiting from the growth of the very network in which they participate.

To paraphrase Web3 investor Chris Dixon of a16z Crypto: Imagine if Uber offered tokens to its drivers and passengers from the ecosystem whereby the community is directly incentivized by the success of the network as a whole, rather than a select few (early investors). , shareholders), as we currently see with the Web2 model. You can probably already see how this thinking could be applied to the various elements of the trip.

Finally, now that you’ve booked your trip, what if you actually owned your airline tickets, which you could easily resell for added flexibility? You would have full control over the management and arrangement of your tickets and any other travel assets freely and without hassle. Travel is one of the largest industries without a secondary market, leading to a typically inflexible travel experience. Instead, NFT tickets could be programmed to not only give you the benefit of the resale, but also allow the airline in this case to collect some percentage of the advantage as defined in the smart contract. A win-win scenario.

There are countless problems that can be solved by the potential of Web3. Though keep in mind that the few incumbents that currently dominate the industry will likely feel little incentive to discontinue. A more plausible scenario might see smaller, more nimble start-ups, highly motivated to challenge the status quo, lead the charge in the classic innovator’s dilemma, before the headlines take notice.

We are potentially in the midst of a radical new phase of travel innovation. A new wave of opportunities to create a blockchain-based travel retail and distribution infrastructure. Our assumptions will be challenged and we will potentially be forced to rethink many areas of travel. The use cases may not seem obvious at first. In fact, the concept of the metaverse may seem profoundly antithetical to travel, as it challenges the value of the physical over the digital. We will likely see a lot of false starts and hear a lot of noise until the true value of Web3 in travel is realized and startlingly obvious in hindsight.