Service Innovation Through Blockchain Technology in the Tourism and Hospitality Industry: Applications, Trends, and Benefits

Introduction

Application of IT is now an essential requirement of new forms of tourism emerging across the globe (Caddes and Pinna (2021). Blockchain, therefore, is an emerging technology disrupting innovations (Barkel,Kurgun and Groen, 2021), including in the hospitality and tourism industry. The technology is expected to occupy 10% of the global GDP by the year 2025, with 2016 being the age of its prototypes, with 2017 witnessing a mass scale of implementation of the technology in all government and industrial sectors across the developed economies like the banks (India Blockchain Alliance, nd). Charted Accountants Australia and New Zealand (2017), highlight that the total capital investments in the Bitcon and the Blockchain start-ups had exceeded $1.1 billion U.S. dollar globally. It possess the potentials of revolutionising many aspects of businesses, technology, governance, etc (Dogru and Leonardi, 2018). One of the key differentiator of the Blockchain is its dis-intermediation of the ledger – i.e., its ability to transact without any need of third or trusted party (Charted Accountants Australia and New Zealand, 2017). In addition, its tamper-evident, trust-free, as well as its cryptographic security structure enables itsfiatcurrencies, and the development of centralized autonomous organisations, creating smart contracts, etc, (Dogru and Leonardi, 2018).Similarly, it eliminates the cost of the third party and other frictions in the processes (Charted Accountants Australia and New Zealand, 2017). These are among the justifications for adopting the technology into hospitality and tourism industry.

Though the technology is in its infancy stage, hospitality (hotel and restaurants), and tourism (transport and travel agents, Airlines, DMOs) can apply it for their guests’ experience (satisfactions), service quality, as well as profitability by integrating the technology into the business. As a result, all the stakeholders in the hospitality and tourism businesses will benefit from its application (Dogru and Mody, 2018). As a result, it will enhance the competitiveness of the firms, attract more customers, and make the business operations cost-effective.

The Purpose of the Study: The purpose of this research is two-fold; to explore and identify the benefits of Blockchain technology; and to identify the areas the Technology could be applied to in the tourism and hospitality industry to reap the benefits associated with it. To enhance trust between business parties and stakeholders, to avoid some costs, by providing transparency in the business.

Academic and Industrial Justification of the Study: Hospitality and Tourism industry is a customer-oriented, with volumes of customer-industry interactions. The organisations need reliable trusts between clients and the industry as well as need for cost-cutting strategies to reduce overheads. Blockchain, as a technology, has huge potentials to achieve these and other benefits from both the customer to the tourism and hospitality organisations. This research, therefore, is exploring the ways Blockchain could be applied in the industry as well as increasing the frontier of knowledge in the area, which tourism experts, scholars and students could make use of in the field of studies.

Research Gap and Novelty: The study identifies the potentials of Blockchain, and how the technology could help in fostering trust in the industry. This reveals how a new technological tool ‘Naplozz’ could be used, as a cutting edge, to leverage technology for convenience in hospitality businesses. Furthermore, it presents the future trends of the technology in the industry. The technology, will therefore be used continuously for convenience and security. The study presents the potentials of adopting the Blockchain technology that previous researches did not reveal in the past.