Cryptocurrencies have been gaining increasing momentum in recent years as an alternative source of payment and as an investment asset. This has not been lost on the travel industry which has begun to explore how cryptocurrencies can be adopted as a means of facilitating more efficient and secure travel transactions. Here will explore the impact cryptocurrencies have had on the travel industry so far, as well as what the future might look like for the travel industry.
Growing Adoption
The number of companies embracing crypto is growing, with those such as Starbucks, AXA Insurance, Tesla and Mastercard allowing customers to use cryptocurrencies as an accepted payment method. More recently, we have seen travel companies opening their doors to the world of cryptocurrency payments and decentralized blockchains. Those companies include Cheap Air & Bitcoin Travel. Travel companies such as Staysure, the UK’s largest provider of travel insurance, have also shown their interest in the currency, creating their interactive site ‘My Bitcoin Holiday‘ to display the rapid rate of bitcoin growth over the past decade.
Cost Saving Benefits
Due to the decentralized nature of the currency, cryptocurrencies remove the need for an intermediary, such as a bank, in the process of a transaction. This can mean potential cost savings due to as involving an intermediary usually incurs translation fees. Cryptocurrencies are also easily transferable and can be used around the world without having to convert currencies, saving holiday-goers time and money on foreign transaction fees.
Enhanced Privacy and Security
Travelers may also benefit from the enhanced privacy and security offered by cryptocurrencies. When paying for a trip, travelers can sometimes be required to provide personal information such as credit card details in order to make a transaction. Fortunately, with cryptocurrencies, travelers can career out transactions anonymously and without having to provide personal information. This makes it much more difficult for hackers to access sensitive information
Rewarding Loyal Customers
As crypto adoption within the travel industry continues to grow, many travel companies are now offering loyalty programs that reward customers in the form of crypto tokens. These tokens can then be used to pay for future trips, or exchanged for fiat currency, providing travelers with an additional incentive to book with certain travel companies by helping them reap the rewards later down the line.
Are there any limitations to mass crypto adoption within the tourism industry?
Nevertheless, payments with cryptocurrencies can also present limitations. One such limitation is the high cost of energy consumption associated with mining. Mining refers to the process by which new coins are created and transactions are added to the blockchain; generally this process is highly energy-intensive and can be costly, which could have a negative impact on the environment. Cryptocurrencies are also subject to extreme price volatility, which can be risky for travelers who are relying on them to pay for travel expenses.
There is also the question of regulation. Many countries have yet to set clear regulations for cryptocurrencies. There are still no uniform laws that regulate Bitcoin. For example, while some developed countries allow Bitcoin to be used, such as the U.S., Canada and the UK, Bitcoin is illegal in countries such as Egypt and China. A lack of uniform laws could ultimately cause confusion for travelers and financial institutions until adoption becomes more widespread.
While the future of cryptocurrencies use within the travel industry is not yet certain, many believe adoption will become more widespread as the technology matures and regulations become more defined.