Can blockchain turn hotel program nightmares into sweet dreams? BCD Travel thinks so.

BCD and its partners are experimenting with how blockchain can add accuracy, efficiency and simplicity to hotel commission reconciliations.

Cumbersome expensing processes, incomplete traveler profiles and inaccurate bills—these are the kinds of complexities that hinder robust hotel program management and undermine traveler experiences and corporate budgets. BCD Travel is partnering with travel tech company Travelport and IBM on a solution.

The companies are experimenting with ways blockchain can simplify back-end corporate travel processes, specifically hotel commission reconciliation, which ensures all providers who work together to deliver travel experiences are compensated.

What is blockchain?

Blockchain is basically a digital ledger that stacks transactions in a chronological sequence. Each transaction becomes a block of data that’s encrypted for security. Every time a new transaction is made, a new block of information gets added to the chain.

These individual blocks of information can’t be modified. Need to add more data? Add another block to the chain. Blockchain collects the full story of the sequence of transactions, so the data is indisputable. It independently reports information to multiple parties. Data transparency and process efficiencies get much, much better.

An industry disruptor

BCD, Travelport and IBM have discovered that complex hotel commission processes can be accurately and quickly settled by using a blockchain-enabled ledger to store and distribute the data that determines hotel commissions.

Marwan Batrouni, Vice President of Global Hotel Strategy, BCD Travel

“Currently, management of hotel data is a challenge—and not just for BCD Travel. Hotel data is a challenge across the board,” said Marwan Batrouni, vice president of global hotel strategy for for the travel management company. “The traveler can modify their booking multiple times, leaving room for information to go missing. For example, if a traveler arrives and then extends a hotel stay, that information might not make its way back to us as booking data. But with blockchain technology, we can capture the data from other sources, so there are no gaps. This greatly improves reconciliation of hotel commissions and ensures our clients are getting accurate bills.”

Blockchain improves transparency and reporting because it captures data from:

  • Non-card payments
  • TMC settlements
  • Anywhere, anytime money transfer
  • Improved reporting
  • Greater transparency

“Blockchain has the potential to provide real ROI with hotel commission settlements and benefits to corporate travel programs,” said Travelport’s Ross Vinograd. “With travelers having endless options for accommodations, a booking alone is not enough to provide a commission to an agency or TMC. With blockchain, we’re able to reduce costs and ease burdens for all parties involved by improving transparency, accuracy and efficiencies to enhance the process.”

Focusing on travelers

Several major hotel brands are participating in the BCD-Travelport-IBM project. They see benefits in streamlining back-office processes and in using reconciliation data that companies and travelers trust. Blockchain has the potential to significantly decrease the time spent creating and haggling over bills.

“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,” said Kurt Wedgewood, who leads IBM’s blockchain initiatives in North America.

And that, Wedgewood said, is the real value of blockchain: “Global distribution companies and providers are shifting their never-ending work of reconciliation to a period of adding new experiences and insights for the traveler.”

How to reduce the pain of expense management

Check out BCD Travel’s latest Inform paper, Payment and Expense, Emerging Technology and Travel Management. The paper includes a timeline for when travel managers can expect to begin using the new technologies and addresses potential challenges associated with their implementation.

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