Coinspeaker
IBM, Travelport and BCD Travel Develop Blockchain Solution for Hotel Commission Reconciliation

In the travel industry, one of the major problems the travel supply chain must solve is hotel commission processing – usually a pretty expensive challenge for travel agencies and hotels that also influences the booking experience for travelers.

Nowadays, with today’s endless options for booking accommodations, the agencies that support travelers and drive these hotel bookings may not be receiving compensation from commissions owed due to the manual processes required for hotel fulfillment.

As shared with the Coinspeaker, today, ET Travelport and IBM announced their partnership in order to resolve the above mentioned issue and improve the complex commission process by using blockchain.

Following an IBM Garage engagement, the two companies, along with BCD Travel, developed a pilot solution that manages, tracks and accounts for commission payments owed from hotel chains for services purchased by travelers via booking agencies.

The solution allows for reuniting between agencies and hotels on a distributed ledger, providing visibility into booking status and commissions to enable faster payment and transactions. With this new approach, blockchain capabilities are replacing manual processes with an automated hotel commission settlement process.

Blockchain technology behaves like an online ledger with the ability to collect data, build upon that data in real-time, and then independently and securely report information to any number of parties based on permission.

Ross Vinograd, Travelport’s Senior Product Direct said that blockchain technology applied to commission reconciliation has the potential to deliver real ROI to both a travel agency and the hotel.

He said:

“Traveler modifications at property, no shows, and complimentary room nights are just a few examples that drive commission discrepancies which in turn generate escalations, cost, and revenue loss. Our aim is to put the lifecycle of a booking on the blockchain and we believe doing so will drive transparency, trust, and ultimately booking volume.”

Hotel commission reconciliation processes include a range of challenges from the operational lack of audit trails driving escalations and manual data mapping, to the financial impairment of revenue forecasting, to the more commercial impact on commission flexibility and duty of care.

Solving for this current friction is critical to ensure all stakeholders in a hotel transaction are duly compensated and ultimately to ensure customers receive an optimal travel experience; and, blockchain is an ideal solution to address this. Travelport and IBM are currently working in partnership with industry stakeholders to evolve the solution into an active pilot program.

Kurt Wedgwood, IBM Blockchain Leader, commented that global distribution companies and providers would benefit from this use of blockchain technology to remove their never-ending work of reconciliation to spend that time adding new experiences and insights for the traveler.

He added:

“Eliminating the hours spent addressing dollars in dispute or the timeliness and accuracy of information allows all participants to focus on what matters most: the traveler.”

Few weeks ago, IBM introduced a blockchain-based supply chain verification network named “Trust Your Supplier” (TYS). As we already wrote, this is a blockchain-based platform that simplifies supply chain management and improves supplier qualification, validation, onboarding, and life cycle information management.

As such, TYS will help reduce the risk of fraud and errors and establish a connected environment among global suppliers. With more than 18,500 global suppliers, IBM will begin using and onboarding 4,000 of its North American suppliers to the TYS network within the next few months.

IBM, Travelport and BCD Travel Develop Blockchain Solution for Hotel Commission Reconciliation

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