Utility Will Help Fully Integrate Cryptocurrency and the Travel Industry

Utility Will Help Fully Integrate Cryptocurrency and the Travel Industry

Cryptocurrency
April 11, 2022 by Editor's Desk
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The travel industry has been slow at adopting cryptocurrencies. However, with consumers noticing more and more use cases, it’s a matter of time before it becomes a mainstream form of payment. The integration of blockchain technology and cryptocurrencies with the travel industry’s various processes has been sluggish, despite the many benefits the technology poses for
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The travel industry has been slow at adopting cryptocurrencies. However, with consumers noticing more and more use cases, it’s a matter of time before it becomes a mainstream form of payment.

The integration of blockchain technology and cryptocurrencies with the travel industry’s various processes has been sluggish, despite the many benefits the technology poses for the sector. Most people still prefer to pay for their vacations with fiat money, even if that means incurring costly transactions in currency exchanges. According to Similarweb, using crypto for this purpose is still considered a “niche” interest.

As for the industry players, the current picture doesn’t look much better either. The only commercial regular airlines taking crypto are Latvia’s airBaltic, LOT Polish Airlines, and Japan’s Peach Aviation. And as far as hotels go, only this year, luxury brand Kessler Collection started accepting bitcoin and other coins as a payment method.

This slow but steady wave of adoption of cryptocurrencies in the travel industry is reminiscent of when bitcoin first started, circa 2009. Mining and investing began happening in a few places all over the world, and now it’s the most widely adopted coin. Similarly, the few tourism-related businesses accepting crypto are scattered worldwide. And the number grows each year as more travelers gain confidence in spending with crypto and not just investing in it.

What Holds the Industry Back

It is no secret that one of the biggest setbacks of the travel industry as a whole has been the Covid-19 pandemic. In the first ten months of 2020 alone, the health crisis cost the tourism industry $935 billion in revenue worldwide. And more than 100 million jobs were lost in the sector, particularly affecting the Asia-Pacific region.

Before this, crypto and blockchain were building great momentum across all industries, and they would have probably progressed much more in the travel sphere had it not been for the pandemic. For example, during the last couple of years, these technologies effectively took off other spaces in remarkable ways, like in the media industry.

The main difference between the two is that tourism deals with physical products and services, which were limited or banned for the better part of 2020 and well into 2021. Media, on the other hand, is mainly digital, so it benefited from lockdowns and stay-in-place orders. People had time on their hands and were more willing to experiment, which resulted in tremendous growth in the NFT market.

Another significant distinction is the regulation. Any person can sell their artwork or music on the internet, but not everyone can operate a hotel, an airline, or a travel agency. Companies in this sector are much more guarded, so changing any part of their business model takes time and requires consultancy and authorizations from the highest levels within the corporations.

Broadly speaking, regulations (or lack thereof) around crypto play a significant role in holding back adoption in the travel industry. Governments have started to take a stance on the matter, and while there are countries like El Salvador or Thailand that are embracing crypto, others have opted to ban it completely, which can affect business’ confidence in accepting it.

Moreover, concerns about regulations also affect customers’ trust and motivation. The lack of clarity around its legality and terms of use makes people doubtful about embracing it as currency. Also, the documentation and procedures currently in place to mine and invest in crypto set a high entry barrier, making it a hassle for most people to get involved.

Finally, crypto’s volatility makes it a hard sell for business owners who confide in financial planning for their company’s sustainability. This year alone, bitcoin went from under $30.000 in July to over $65.000 in November, and Expedia famously backed out of accepting it in 2018 due to its rapid price changes.

What Can Be Done to Increase Adoption

To make crypto highly valuable for customers and companies, it requires as much utility as possible. When a particular coin has a lot of use cases, people see value in it, and it draws investment. This cycle will eventually make the currencies more stable, which in turn will mitigate the risks associated with it.

Bitcoin is an excellent example of this. It has become the most accepted cryptocurrency globally, both in geographic locations and across industries. Thanks to this, people invest in it more confidently because the chances of its value reaching zero are very slim.

Marketing is also a great resource. Industry players can promote cryptocurrency adoption by making special promotions or deals for crypto users or promoting it on their accounts. Influencer marketing works very well with this type of industry as well, and it helps reach a younger audience. And rewards programs such as the one we implement at TripCandy draw in more users curious about crypto’s possibilities.

One by one —hotels, tourism operators, airlines, and travel agencies— are starting to see they need to adapt to crypto if they want to prepare themselves to avoid being left out in the future. And as customers notice this, they’ll feel motivated to use crypto as it presents great opportunities in terms of efficiency and savings. For instance, it spares tourists of the need for currency exchange in foreign countries, ranging between 1% and 3%.

In my experience as the founder and CEO of TripCandy, a company that operates in the crypto space of the travel industry, I believe that the sector will grow exponentially over the next few years. As we have witnessed over the past decades with other technologies, the gap between launch and massive adoption gets shorter and shorter with every development. This leads me to think that we’ll see an enormous number of utilities for blockchain and crypto in the travel industry in the next 3 to 5 years.

The adoption of crypto in the travel industry is still very early in the game, but I’m excited for what is to come, and I am happy to be part of this transformation. The one thing we’ll still have to deal with is learning to live with COVID as an endemic disease, but I’ll leave that to another expert.

The article has been contributed by Jeremy Foo, Founder and CEO of TripCandy.

About TripCandy

TripCandy, is a travel cashback rewards platform leveraging cryptocurrency tokens ($CANDY) that aim to establish the premium standard in travel accommodations and services through the innovative use of blockchain technology.