A new hotel concept is set to go live in September built specifically for a future travel industry that will be dominated by blockchain technology.
Speaking at this week’s EyeforTravel Europe summit in London, David Brillembourg, chief executive and co-founder of The Loop Hotels, said crypto-economics will be the next digital phenomenon.
The Loop Hotels first property with 2,000 rooms is being built in Puerto Rico and will be used as a proof-of-concept for a crypto-designed hotel tailored to the modern millennial traveller.
Brillembourg is also co-founder and chief executive of STEP, a blockchain travel ecosystem setting out to revolutionise how suppliers in travel will distribute inventory and finance their businesses.
“We have created an eco-system of [crypto] coins that solve fundamental problems that a hospitality owner has. It will address how consumer behaviour is going to change in terms of how they consume,” he said.
Brillembourg cited figures that indicate business leaders anticipate 10% of global GDP will be on blockchain by 2025.
He said blockchain will be the next cycle of technological development globally, matching the rise of the internet and dominant OTA’s like Expedia which took a decade to establish themselves.
“It will be a long process but it will get there,” he said. “It’s exactly the same process, the same thinking, the same speed, the same amount of capital coming in from venture capitalists and ICOs (Initial Coin Offerings).”
Brillembourg said in terms of its evolution blockchain is at the point the internet was in 1995, but he said there is massive potential in travel which represents 10.4% of global GDP meaning $1 trillion worth of travel business will be on blockchain within a decade.
Growth is being driven by Investor appetite with blockchain ICOs closing $6 billion of funding in 2017 and the likes of Winding Tree in travel raising $15 million.
“Behavioural change has already happened,” said Brillembourg. “People are living in virtual worlds. Two billion millennials basically already use virtual currency in video games and in their daily lives. For them these things are completely natural.
“The need for transparency and identity protection, fundamentally this is something Blockchain will solve. People will get a sense of belonging. There will be thousands and thousands of different [crypto] coins that behave differently.”
STEP has created two types of coin, a stable one that won’t fluctuate wildly in value to back a common global reservations system and another for investors who want to back the venture.
Hotels using this new eco-system will be able to develop alternative lower cost distribution channels to the current dominant global OTAs and finance their businesses by creating the equivalent of a “futures market” for hotel rooms night that can be used like a currency.
Brillembourg said the emerging blockchain ecosystems with interchangeable crypto-coins will enable suppliers to create next-generation loyalty schemes.
“This is hard to understand today, but eventually it will be totally transparent. It will be like using Expedia or booking.com today. We are starting this process and it will take a decade, but we will have this conversation in 10 years time and we will say it was obvious what would happen,” he said.
Brillembourg conceded some of the hype around blockchain was overblown and some people will lose money, but that there was no doubt it will change the future.
“There is a huge amount of hype. Ninety percent of companies now pushing coins are going to fail if not more. It’s a natural process. Be prepared for that crash top come sooner rather than later.
“Being a hotel owner, it’s a progressive process, it will become an alternative channel. We are negotiating with major owners of inventory, financial and operational, large industry players that own operating companies and brands and travel agencies. We are talking to cruise lines.
“We are trying to trying partner with several companies that have millions of users so we can put in place scale with a few large players from the beginning.”