Cryptocurrencies in the travel industry
Did you know that there is more crypto related activity in travel than one might initially believe? Expedia has over 700,000 hotels available for booking via Bitcoin and 30 other cryptocurrencies, while Air Baltic accept the currency based on blockchain as a form of payment since 2014, and Vueling will start accepting crypto in 2023. However, these companies are outliers, crypto is still complicated to adapt for hotels and other travel-related businesses.
“We’ve had one or two hotel groups asked about crypto” – explains James Montague, Senior Director Security & Integrations from the hospitality technology company Shiji – “But once we explained the complications of allowing guests to pay with it, there was no further interest” – he says. For instance, paying deposits at the check-in for mini-bar or damages in the hotel room would be difficult, especially at the time of refunding it, as the value of that crypto could be different.
Fabián González, founder of Forward_MAD, thinks that luxury hotels will be quick to find a way to accept payment in cryptocurrencies, if their customers demand to pay with them. There are many companies already that turn crypto in fiat or real money instantly with no risk. “Right now, it would seem that any demand is really miniscule, but there’s indications that this is growing amongst affluent travellers.”
“Travel companies accepting cryptocurrencies as form of payment use in almost all cases some kind of intermediary platform to manage the payment and to convert that crypto into fiat currency” – says Matthew Chapman, co-founder and CTO of travel booking technology provider Vibe. These platforms charge the companies a small fee for this service. There could be also tax implications for the hotels depending on the jurisdictions, which would also make extra-accounting record necessary. This is something travel companies have to consider if they are thinking of accepting cryptocurrencies as a form of payment.
Other issues related to crypto that hoteliers might be worried about is which cryptocurrencies to accept, fluctuation of the hotel prices to keep up with the latest exchange rate valuation and the cost of the companies providing the IT tools to manage that.
Payments in cryptocurrencies might not be a big thing for hotels yet, but this could change in the future. Alex Barros, Chief Marketing and Innovation Officer from the revenue management and profitability platform Beonprice, is convinced that “metaverse is going to be an ecosystem where crypto is the standard payment format, so hoteliers should keep that in mind too.”
At Forward_MAD, we will be exploring this topic, so prepare to learn more about cryptocurrencies and how travel industry can adopt it from October 5th to October 7th at our event in Madrid.
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