Travelport, IBM and BCD Travel develop blockchain solution for hotel commission reconciliation

Travelport, a technology company serving the travel industry announced the development of a blockchain solution to enhance the hotel commission reconciliation process.  Working with IBM Services and leading travel management company BCD Travel as well as a number of high-profile hotel chains, the blockchain technology solution aims to optimize hotel commission processing on a distributed ledger by managing reconciliation, tracking and accounting for commission payments owed from hotel chains for services purchased by travelers via booking agencies . By creating an accurate and shared view of the booking status and commissions – all parties stand to win.

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. Following an IBM Garageengagement, Travelport and IBM Services, together with partner BCD Travel, developed an MVP solution using distributed ledger technology to streamline commission reconciliation between BCD and three high profile hotel chains. 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.

Commenting on the technology, Travelport’s Senior Product Director, Ross Vinograd said: “Blockchain technology applied to commission reconciliation has the potential to deliver real ROI to both a travel agency and the hotel. 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.”

Kurt Wedgwood, IBM Blockchain Leader - Travel added: “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. 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.”

“From my perspective, there are data standardization issues throughout the ecosystem from all parts,” Dan Stephenson, Regional Process Owner and Shared Services Director at Hyatt commented during the GBTA panel. “One of the things that has attracted me to this particular project, is I see this as a potential solution – one of the only ones that I am aware of that could actually work to solve for some of those standardization issues. Frankly, I have two goals when it comes to our payment process - that we pay accurately, and that we pay as quickly as we can. The less time we’re all spending thinking about getting to the right answer, the better off we all are.”