One of the most advanced (or at least one of the the louder) efforts to bring blockchain to travel booking has thrown in the towel. After seven years of trying to develop a crypto-based, independent distribution and booking marketplace for airlines and hotels Winding Tree closed its operations and released its code to the public.
In a long-winding open letter CEO Maksim Izmaylov shares a mix of frustrations and blames for the failure. Not surprisingly, most of those are projected on to others.
Winding Tree was supposed to deliver massive savings for the industry, as distribution and bookings would shift from a oligarchy of corporations to the decentralized blockchain. As an added bonus, the company would enable payments via cryptocurrencies, further removing overhead.
In reality, almost no one cared. Or they didn’t believe it was viable. The net result is the same.
The failures come from two sides. First, cryptocurrencies dominantly remain the realm of gambling and illicit activity. Even Izmaylov concedes, “I was dispirited to notice that there weren’t any projects that would offer a “normie” (a person not experienced in crypto) anything remotely resembling anything useful. Until now, crypto’s sole use case is gambling, which includes buying tokens in the hope that its price will increase.”
Second, the value of blockchain as a platform has not sufficiently evolved. It remains an overly complex and expensive environment to integrate with and operate in, despite a long-standing promise of expected improvements in implementation costs, transaction speeds, and servicing costs. Also, the repeated very public instances of fraud don’t make it any easier for a major company to commit to the concept.
Izmaylov alternately blames ignorance of industry executives (“Another challenge was the time it took to explain blockchain’s opportunities, sometimes weeks or months. Many gave up before recognizing its true value.”) and the industry’s legacy technical debt. He obliquely admits that the technology is simply not ready for enterprise-level operations (“We quickly discovered that the travel industry, technologically challenged as it were, was far from being ready for the challenges that crypto was riddled with and is still struggling to address.”), but presents that as a failing of the travel industry, not blockchain and cryptocurrencies.
Even when Winding Tree did manage to sign on airline partners, those deals rarely involved the supplier getting in to the crypto ecosystem. Air Canada’s distribution agreement with the company simply allowed access to the carrier’s Direct Connect API. So did American Airlines’ agreement with the company. Any sufficiently motivated and qualified distribution partner can secure that.
One specific anecdote shared in the letter is particularly telling. Izmaylov excoriates a Phocuswire reporter for reporting on the industry without actively using cryptocurrencies. Indeed, he suggests the reporting is dishonest for lack of specific personal experience, “One assumes journalists are honest people who try to get to the nitty-gritty of the subjects they write about…Of course, she never tried to do anything crypto-related. To this day, I am puzzled by this.”
Other blockchain travel plays
Winding Tree was not alone in trying to capture a chunk of the travel market, though its goal of delivering a distribution and payments platform was arguably the broadest. Still, others have shown more success with smaller efforts.
Most notable among the successes is likely airBaltic’s push into NFTs for its loyalty program. CEO Martin Gauss is an unabashed fan of NFTs and blockchain and the carrier has developed a (technically, if not financially) successful loyalty program play on chain. Similar efforts from Etihad (selling elite status via a nontransferable NFT) are far less mature.
IATA hopped on the bandwagon in 2018, pitching blockchain as a way for airlines to save money moving payments around the globe. It would skip intermediaries, saving everyone involved time and money. And it would be backed by an organization they all did business with anyways. Its current status as a program is unclear.
The 2018 play by Singapore Airlines to better integrate with partners was mostly buzzwords. Emirates did successfully integrate with a loyalty program partner via blockchain in 2019.
Air Europa managed to sell a seat on one flight as an NFT. The option no longer appears on its website based on several test searches. The carrier’s help site shows no references to NFTicket nor NFTs.
That so few efforts truly benefit from decentralization or developing “on chain” is telling. Even the IATA solution could be delivered via simple accounting between its members, rather than depending on a decentralized platform. Loyyal admitting it didn’t really need blockchain in its Emirates implementation was surprising, though arguably aligns with Izmaylov’s observation that no one really cares about decentralization:
Turns out it’s not a sought-after feature… An executive of another company admitted in a bout of honesty: “Max, we’re using words like ‘decentralized,’ just for the sake of marketing!’”
Is there a future for blockchain in travel?
Izmaylov concludes his note with a bit of hope, “What’s left now is to wait until a critical mass of crypto-savvy travel companies enters the market. I am talking about people genuinely interested in the benefits that decentralization enables.” Alas, even a decade into that conversation roughly no one has developed that broad, legitimate use case, and not for lack of investments in the space.
Maybe there’s still something on the horizon, but that seems incredibly unlikely.
More on blockchain in the travel world
A favor to ask while you’re here…
Did you enjoy the content? Or learn something useful? Or generally just think this is the type of story you’d like to see more of? Consider supporting the site through a donation (any amount helps). It helps keep me independent and avoiding the credit card schlock.
This news is republished from another source. You can check the original article here
