Business

Erik Gibbs

IBM, Travelport want to put hotel commissions on a blockchain

In yet another example of the diversity and flexibility that that are inherent characteristics of the blockchain, IBM and Travelport are developing a solution for hotel commissions that is based on the technology. The platform will allow hotel operators to streamline their commission payments, ensuring that the proper amounts are paid and providing a more transparent record of performance.

Travelport and IBM are teaming up with BCD Travel, a travel management company, to work on the new solution, according to a Travelport press release. The goal is to “optimize hotel commission processing on a distributed ledger by managing reconciliation, tracking and accounting for commission payments owed from hotel chains for services purchased by travelers via booking agencies.”

Because of blockchain’s vast capabilities, commissions can be better audited – including in real-time and reconciled more quickly. The secure nature of the technology means that the data is protected at all times and greatly reduces the amount of human interaction needed to cover the commissions.

Ross Vinograd, the senior product director for Travelport, asserts, “Blockchain technology applied to commission reconciliation has the potential to deliver real ROI to both a travel agency and the hotel. 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. Our aim is to put the lifecycle of a booking on the blockchain and we believe doing so will drive transparency, trust, and ultimately booking volume.”

The project was first introduced on August 6 during the Global Business Travel Association (GBTA) Conference in Chicago, Illinois. It has already recruited several high-profile hotel chains to help in its development and will almost certainly become the norm in the hotel industry within the next five years.

IBM Blockchain’s lead Kurt Wedgwood, who participated in the GBTA presentation with Vinograd, explains, “Global distribution companies and providers would benefit from this use of blockchain technology to remove their never-ending work of reconciliation to spend that time adding new experiences and insights for the traveler. Eliminating the hours spent addressing dollars in dispute or the timeliness and accuracy of information allows all participants to focus on what matters most: the traveler.”

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