Travelport, IBM Collaborate on Blockchain for Hotel Commissions

Travelport, a business and consumer travel services provider, announced it is using IBM’s Hyperledger Fabric to guarantee commissions paid to travel agencies.

According to a statement released on August 20, the blockchain was designed with input from IBM, travel management company BCD Travel, and three unnamed hotel chains. The system aims to “put the lifecycle of a booking on the blockchain,” to reduce the amount of payment disputes.

In 2018, Travelport processed over $83 billion of travel spend over $2.4 billion in net revenue.

“Traveler modifications at property, no shows, and complimentary room nights are just a few examples that drive commission discrepancies which in turn generate escalations, cost, and revenue loss,” said Ross Vinograd, Travelport’s Senior Product Director.

“The traveler can modify their booking multiple times, leaving room for information to go missing. For example, if a traveler arrives and then extends a hotel stay, that information might not make its way back to us as booking data,” said Marwan Batrouni, Vice President of Global Hotel Strategy, BCD Travel. Additionally, blockchain will help close the “gaps” made by different payments systems.

The blockchain will track, manage, and account for commissions owed to booking agents on behalf of hotel chains. Blockchain tech will ensure that payments are more accurate and quicker than the current, manual method.

If successful, this may improve business for travel agents, who currently wait 60 days after their clients check out to earn their commission. Thirty-four percent of travel agents find commission reconciliation and collection difficult, according to Travelport industry surveys, as reported by Ledger Insights.

Still in the proof-of-concept phase, during the coming pilot testing IBM will host the nodes. If the project gets off the ground, hotels will be able to host their own nodes.

In a separate statement anticipating the official announcement, Vinograd said:

“With travelers having endless options for accommodations, a booking alone is not enough to provide a commission to an agency… With blockchain, we’re able to reduce costs and ease burdens for all parties involved by improving transparency, accuracy and efficiencies to enhance the process.”

IBM image via CoinDesk archives