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Keeping track of hotel commission payments has often proved a difficult task, especially as more travelers book online while much of the hotel commission process remains manual.
Now travel technology company Travelport has joined with IBM and travel management company BCD Travel in an effort to fix that. Together, Travelport and IBM developed a blockchain solution to streamline hotel commission payments between BCD Travel and three hotel chains, Travelport announced Tuesday.
The solution tracks and accounts for commission payments owed by hotels for services booked through online travel agencies and stores it on a shared ledger. The goal is to provide an accurate and shared view of the booking status for all parties involved. The joint venture designed the blockchain technology to combat some of the challenges in the hotel reconciliation process, including the lack of audit trails driving escalations and manual data mapping.
“Blockchain technology applied to commission reconciliation has the potential to deliver real [return on investment] to both a travel agency and the hotel,” said Ross Vinograd, Travelport’s senior product director. “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 life cycle of a booking on the blockchain, and we believe doing so will drive transparency, trust, and ultimately booking volume.”
Boosting Efficient Reconciliation
Travelport has been working to integrate blockchain solutions into its tech portfolio for a while now, seeing it as a way to solve some of the most difficult problems in travel and make distribution more affordable to fringe players. In an interview with Skift last year, Travelport Chief Architect Mike Croucher explained his vision of using blockchain to address hotel commission reconciliations.
Blockchain technology can be thought of as a secure online spreadsheet. It gives users the ability to collect data, build upon that data in real time, and then report information to others who have permission to view the spreadsheet.
This solution will help global distribution providers by freeing up time that would otherwise be spent tracking down and verifying commission payments, according to Kurt Wedgewood, blockchain leader for IBM.
“Global distribution companies 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,” he said. “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.”