The decentralized computing future of travel
- November 2021
- Phocuswright Research
The idea of centralized computing has long been familiar. Simply put, centralized computing refers to all functions of an application being stored in one location according to Phocuswright’s latest travel research on the topic The Decentralized Computing Future. The second step in IT evolution, distributed computing - also called cloud computing - is well underway throughout most industries including travel, while the emergence of decentralized computing is just beginning to have an impact.
From a broad perspective, decentralized computing - and especially the implementation of smart contracts - brings a new level of transparency to the travel industry. Everyone shares a single source of "truth," automating agreed-upon terms and eliminating disputes based on different sources of data.
- Airlines: In a peer-to-peer environment, greater customer intimacy is possible as barriers created by intermediaries are removed, delivering on the promise of NDC.
- Hotels: Decentralization will bring faster settlement and commission tracking for hotels, especially for boutique properties, lessening the power of the OTAs.
- Corporate travel: Greater transparency, accurate rate usage and simpler, faster settlement.
- Ground transportation: Uber and Lyft do not own fleets. They are tech providers that connect large fleets with customers. What if these fleets could directly connect with customers?
- Tours & activities: Market access of the entire long tail of activities is possible with decentralization facilitated through the blockchain. This can reduce the control of large tour and activity aggregators and empower smaller providers.
By its very nature, decentralized computing reduces the role of intermediaries as barriers to commerce. To be clear, this is not to suggest that blockchain will eliminate companies that act as intermediaries. Rather, it will help ensure that intermediaries do not act as gatekeepers of information and add costs without adding perceived value. As long as these costs (e.g., travel support services) add value, intermediaries will maintain their relevance in the new decentralized distribution world.
For more on how decentralized computing creates an evolving role for intermediaries, insights into a new peer-to-peer computing world and how travel companies can prepare for change, subscribe to Phocuswright Open Access. This article also shows how decentralized computing has already impacted consumers in other industries and how it translates to travel.
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