October 12, 2017

Why OTAs will line up against blockchain adoption


Don’t expect online travel agencies to necessairly rush into any decentralizing technology such as Blockchain. The reality is the online travel agencies sit at the top of the 50-year-old distribution-food chain.

They are beneficiaries of the barriers to entry that the modern distribution environment places on access to content. This is compounded by an increasingly expensive customer acquisition landscape.

Viewed within the context of greater historical decentralization that has been driven largely by the Internet, Blockchain — or future iterations of the technology — feels like an inevitable progression. It’s a technology that allows for the dispersal of functions, powers, people or things away from a central location or authority, while importantly maintaining trust.

The global distribution systems delivered significant transformations in content access and booking ease, followed by a wave new entrants such as the online travel agencies piggybacking off of Internet and mobile disruptions. Fundamentally, however, they’re built off of the base of the Distribution 1.0 model that provides significant incentives to online travel agencies and along with it market power that makes it extremely difficult for new players, under the current system, to break in.

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