Everything is tailored for the customer in this new age of personalization, from social media ads to entertainment in streaming services. It is time for the travel industry to revolutionize the travel experience for its customers - from personalized offers and attractive prices to a seamless service experience.
Distribution Ledger Technology could provide the foundation on which the travel industry can scale personalization.
But What is Personalization, and What Does it Entail?
Today, with a customer exposed to a sea of alternatives, companies in every industry are competing to be a differentiator.
They’re constantly formulating strategies to attract new customers while simultaneously retaining the existing ones. Personalization has proved to be one such successful marketing strategy, and we break it down into two steps:
Make a promise: First, a travel retailer understands a customer’s need, works with many suppliers to curate a personalized product. The retailer may have to constantly re-negotiate partnership agreements based on changing market conditions.
The more flexibility the retailer has in defining the product, the more personalized the experience can be. Once purchased, a Personalized Offer becomes a Personalized Order. The retailer and its suppliers, in unison, have made a promise to the customer.
Keep the promise: Next, the suppliers need to work together and hold each other accountable to keep their promises. We see a tremendous opportunity in how Personalized Orders are created, tracked, modified, and settled.
What makes travel experiences harder to deliver (compared to a traditional Amazon Order) is that many parties are involved in fulfilling the order over a long period. Moreover, this order could change while still being delivered due to a disruption or a customer-initiated change.
Personalized Order as a Multilateral Contract
When the customer clicks on the “buy” button, an Offer becomes an Order. An Order is a multilateral contract between the buyer, travelers, retailer, and suppliers that must be tracked and enforced.
An Order has commercial terms and conditions like final price, payable taxes, revenue sharing agreement among suppliers, commissions owed to the retailer, etc. It also has service level agreements to handle missed connections, cancellations, disruptions, etc.
"Making a faster, affordable, and scalable model for personalization warrants the participants to function independently without intermediaries."
Today, these terms and conditions are outside the order in various places like code-share agreements, interline agreements, distribution agreements, and ATPCo fare rules. Travel companies then rely on middlemen like IATA or GDSs to enforce these terms and conditions.
This centralized contract enforcement and settlement model is slow, expensive, and not scalable to support a personalized order. Personalized order requires terms and conditions specific to a given customer and the context of their trip.
Making a faster, affordable, and scalable model for personalization warrants the participants to function independently without intermediaries. Suppose the participants can exchange value, trust each other and hold each other accountable without the need of a central authority.
In that case, this will allow everyone to make and keep promises contextual to the customer and profitable to the suppliers. We call this Decentralized Order Management.
Decentralized Order Management using DLT
An environment without a central authority could result in a lack of trust among participants.
The Distributed Ledger Technology (DLT) is a tamper-proof and transparent technology that has successfully solved decentralized trust problems in other industries. In the context of personalized travel experiences, DLT offers:
- Decentralization - Personalization of travel can begin with drafting individual contracts based on a customer’s need. Each supplier (or group of suppliers) has the flexibility to draw custom agreements without having to rely on a central authority to enforce them.
- Immutable & Transparent - The technology ensures that the contract and the transactions that enforce the contract are tamper-proof, creating trust among the suppliers.
- Cost-effective - Since no intermediaries are required to establish trust among the parties, DLT reduces the overall cost of distribution. Additionally, it increases the business model & product innovation speed, which further reduces the opportunity cost faced by suppliers.
- Data sharing at scale - In the quest to attain personalization, the retailers connect with a host of suppliers to increase the product line and services. Every supplier equipped with a copy of the personalized order can now manage transactions and track the order.
- Settlement - DLT has an inbuilt ledger and IOU functionality that allows the exchange of value that can be controlled programmatically and linked to changes in the state of a given order.
Deepair’s Travelgrid® platform
Deepair is one of the few companies innovating solutions to bring personalization at scale to the travel industry. Travelgrid®, a soon-to-be open-source platform by deepair, has been designed to curate, create, track, enforce, and settle personalized travel experiences.
- Travel services like flights, hotel rooms, ancillaries, revenue sharing agreements, fare rules are all unbundled and tokenized as “Travel Tokens” on the platform.
- These unbundled atomic travel services are then re-bundled at the time of sale by the supplier and the retailer to create Personalized Offers & Orders in Travelgrid®.
- A collection of smart contracts, oracle services, validators, and legacy connectors work together to track, enforce and settle these Personalized Orders.
- Travelgrid® connects suppliers, retailers, oracle services, validators, and customers as participants in a decentralized network as nodes.
- The underlying DLT protocol that connects these “nodes” allows the participants to collaborate, hold each other accountable and deliver the order.
- This novel decentralized architecture removes expensive intermediaries, increases the clock-speed of innovation, and allows travel companies to deploy new business models that can deliver Personalized Travel.
- Adoption: Deepair is working towards a plan to open source Travelgrid® to accelerate the adoption of this new architecture. It is also building a reference implementation of key travel systems like Offer Management, Order Management, and Customer Management systems on this platform.
- Change Management: Instead of overhauling the current tech stack, deepair recommends a use-case-based approach to test and roll out this technology. For example, deepair has deployed this technology for interline and intermodal journeys where the airline industry lacks standards and loses money. Legacy connectors that rely on NDC and One-Order standards bridge the new and the old world.
- Evolving Technology: Travelgrid® is architected to be agnostic to the underlying DLT so that it can quickly adapt to future generations of DLT.
- Privacy: By nature, all ledgers are publicly accessible, so it is important to keep certain aspects of the order private to the involved parties. Travelgrid® accomplishes this by storing as much data off-chain as possible and using privacy mechanisms like zksnarks for on-chain data.
In summary, Distributed Ledger Technology is an evolving technology with an investment of $6.6 billion in 2021, expected to grow to $20 billion by 2024.
It is challenging for a disruptive technology to break into an established market. Despite initial reservations, DLT has made a breakthrough in the financial services, banking, and supply chain industries.
"DLT is proving to be the go-to technology in any sector where intermediaries stifle innovation and add friction to value exchange."
It is currently making significant strides in these industries and steadily garnering acceptance from critical players, replacing speculations with substantial results. DLT is proving to be the go-to technology in any sector where intermediaries stifle innovation and add friction to value exchange.
Similarly, support from the travel industry and deepair as the front runner of the technology can eliminate the labyrinth of intermediaries. This technology can be used in numerous use-cases within travel, like payments, loyalty, operations, disruption management, etc. Personalized Order management through decentralization is one of them. To learn more about the DLT and Travelgrid®, reach out to deepair at email@example.com.