Essay On Travel Industry

Unique Blockchain Soluton for the Travel Industry
Introduction

The travel industry is dominated by a handful of companies which, through market power and industry politics, have created a highly-concentrated market. They are able to charge superior margins, cause double-marginalization, and, in some cases, simply collect rent. Rent-collection and superior margins inflate the cost of supply, with consumers ultimately bearing the artificially increased costs. The consolidated nature of the travel distribution platforms creates a situation where the intermediaries have no incentive to use new technologies. Instead, they spend resources on locking their customers into using systems that were in some cases created decades ago.

Current archaic

Individual travel companies are notoriously out of date in terms of technological adoption: travel companies still rely on fax machines and phones as main communication methods, while others struggle to connect to data sources to power their sales efforts. The concentrated and centralized state of travel distribution bears a strong cost on consumers, while poor currency exchange solutions inflate consumer prices. The problem is particularly acute for travel startups, the main sources of innovation in the sector.

Online Travel Players

Five companies in the travel industry control the most of the travel market. The two largest OTAs (Online Travel Agencies), Priceline Group and Expedia Inc., control 95% of OTA market in the U.S. Amadeus, Sabre, and Tra ve l p o r t , t h e t o p t h re e G D S s (G l o b a l D i s t r i b u t i o n Sy s t e m s), h a ve 9 9 % c o m b i n e d m a r ke t s h a re i n n o n - d i re c t inventory in the air market.
The concentrated structure of travel distribution has also been one of the factors allowing these companies to make record-breaking revenues, with Priceline Group enjoying a decade of year-over-year 40% EBITA growth.

These dominant players lack the economic incentive to innovate because there are only two