How to Decentralize Travel Monopolies, Explained
Who are the travel monopolies?
Travel monopolies include the likes of Airbnb.com, Expedia, and Booking.com.
These are platforms that may have been considered “decentralized” in the past, but a further look sees that they are far from it. Before online booking, brick and mortar travel agencies were the most popular way to book flights and accommodations. Big hotel companies had the advantage to plug complete monopolies over particular travel agencies, adding large percentages of commission for the middlemen who would book everything.
Online platforms like Expedia.com and Booking.com aren’t much different, but they offer a few more options and have tightened up the ship. Then came Airbnb.com, which made renting spaces easier and more affordable. It single-handedly disrupted the hotel industry giving people another, more p2p option.
How are these options not fully decentralized?
While Airbnb undercut the market by cutting out many middlemen, the operation itself is still centralized.
Airbnb is the middleman and charges vendors a high booking fee price. Booking.com, Expedia.com, and Airbnb take 15-45% booking fees from their vendors, causing vendors to up their prices to accommodate. The vendor and renter both share the weight of these fees in the price of the fees. Airbnb, for example, takes up to 12% in guest service fees and additional 3% service fee from the host.
These are all “middlemen fees:” fees to pay lots of people who run the database, as well as run the offices.
How can blockchain help decentralize the process?
Blockchain can cut out middlemen.
Blockchains are sleek, slim, and fast. They can perform many of the jobs that companies currently are paying people to do. Smart contracts help to create trustless systems that do not need intermediaries or escrows. Digital identities can track people via the blockchain to keep loyalty points in order from airlines. Global ledgers can settle payments with less bulk to make airlines cheaper.
They can cut out a lot of middleman fees, like at 15% from Airbnb.
How would that work?
The platform would directly connect the guest to the vendor.
There are projects like Concierge.io, for instance. It has created a platform that connects vendors and renters via p2p without commission for the supplier, which will be passed onto the customer with low prices. Vendors have different payment options to gain better exposure for their product -- they can pay with popular cryptocurrencies, the project’s token, CGE, and via standard payment ways.
How does p2p interaction work?
P2P stands for ‘peer-to-peer.’
This means that there is a way for guests to search for their optimum place and to talk straight to the owner of the listing. The project, for example, uses NEO platform to create NEOcontracts (smart contracts) that will ensure that the vendor and guest come out with the best deal. Smart contracts lock currency in the contract so that a middleman is not needed. Once all requirements are settled within the contract, the money is released.
So you’re saying there are other blockchains that can be built on?
There are other competitors that offer different things.
NEO is a Blockchain-as-a-Service (BaaS) token just like Ethereum. This means that platforms can build their product on the NEO blockchain, just like with Ethereum. NEO uses Delegated Byzantine Fault Tolerance (DBFT) for consensus, allowing 1000 transactions/sec. It also supports a number of programming languages, while Ethereum developers need to learn Solidity, a language built just for Ethereum. NEO is the most popular BaaS token competitor to Ethereum at the moment.