Written by Custard intern Nicholaus Harrington.
From robots in kitchens to fully automated stores, the hospitality industry has never been one to shy away from innovation and new technology.
However, when someone mentions blockchain, it’s easy to get lost in the seemingly endless buzzwords around ‘cryptography’, ‘decentralised ledgers’ and ‘peer-to-peer networks’, with no real explanation of what the blockchain actually is – but also how it can actually help those within the hospitality industry.
Despite its complexity, blockchain has numerous uses for hotels, venues, restaurants and more. Let’s break down what blockchain is, and some of its uses.
What is blockchain?
Remember a time when guests staying at hotels were tracked using a physical ledger that sat at the front desk at reception? The blockchain is essentially a digital version of that very ledger, except that it contains far more information than just the names of the hotel’s current guests. Essentially a massive database, the blockchain can store masses of information relating to all sorts of different transactions that a hospitality industry would need to have available in the day-to-day running of the business.
The key difference from a traditional database however is that data on the blockchain is decentralised, meaning instead of being localised in one central location, there are numerous copies of it that are continuously being updated as new data is entered. Because the database is not stored in one single place, it cannot be easily manipulated. What’s more, all the data is secured using cryptography, an advanced form of encryption that also enhances security and helps prevent any personal data from being viewed or accessed by unauthorised parties.
How can blockchain be used in hospitality?
Alongside being a more secure way of logging and tracking data, blockchain offers hospitality businesses numerous ways of utilising that data to help them across various areas of the business, such as verifying online reviews, improving the management of the supply chain, as well as offering new marketing opportunities.
Reviews are a great way to add credibility to your hotel business and can often be a key deciding factor when people are considering whether to book with you. However, many reviews, be it through your business’s own Google My Business page or through a third-party website, are still prone to malicious reviews from individuals who may have not even visited your business at all.
With blockchain, all reviews can be tracked to specific customer visits and transactions, ensuring reviews can be verified as actual customers, lending credibility to their reviews and ensuring no fake or malicious views can arise.
Supply chain management
When it comes to the supply chain, there are often many spinning plates involved which can end up making it difficult to keep track of everything. With blockchain, everyone involved in its management can view and keep track of all the different steps along the supply chain.
Not only does this help improve transparency but having all the transactional data in one place can work wonders when it comes to making improvements to your supply chain. With the data to hand, it’s easier to identify logistical efficiencies, opportunities for optimisation and cost reduction, as well as to identify potential resource misuse or unnecessary complexity.
Enhancing marketing efforts
The transparency and traceability of data within blockchain also makes it an amazing resource for hospitality businesses looking for ways to improve their marketing efforts.
Consumer data, for example, can be utilised to create highly targeted marketing campaigns based on customer’s previous purchases and activity. This data can also be used to enhance customer loyalty programmes, ensuring you are offering rewards that are tailored to specific customers’ wants and needs, ensuring they are more likely to utilise the reward on offer and visit again.
The future of blockchain
While these are just a few examples of blockchain usage within the hospitality industry, one of the most exciting things is seeing how the technology will advance over time and how hospitality businesses will look for other ways to utilise the blockchain for success.
We may still be a way off from mass adoption of the technology, but these real-life examples are hopefully a sign of things to come for the industry as it continuously looks to innovate.