From Bitcoin to Boarding Passes: The Impact of Cryptocurrency on Travel
Travel and luxury hospitality companies are adopting cryptocurrency payments to meet the needs of crypto users seeking convenience, with benefits including faster transactions, lower fees, improved conversion rates, privacy, security, and innovative reward programs.
From airlines to luxury hotels, we’ve recently seen companies exploring the possibilities of crypto and blockchain in improving traveling experience. For instance, in early January 2023, Spanish Airlines Vueling announced a move to accept crypto payments for its services. Another recent case is that of a luxury hotel, the Novotel Bahrain Al Dana Resort, that also announced a similar move.
To some, travel and hospitality sectors may not seem like the obvious industries to show appetites for crypto adoption or benefit from it, but practice shows otherwise. A poll conducted last year by Airbnb CEO Brian Chesky asked respondents what they wanted to see from the company launch in 2022 and showed that crypto payments were the top suggestion. Another study by Traders of Crypto indicates travel as the biggest crypto-friendly industry.
All this suggests that travel is one of the convenient ways for crypto users to spend their earnings. Consequently, many companies in the travel industry are jumping on the crypto adoption bandwagon to fulfill this particular need.
Travel Companies Are Actively Adopting Crypto Payments
It might surprise you to hear that the usage of cryptocurrencies in the travel industry actually started nearly a decade ago. In 2013, CheapAir emerged as the first online travel agency to accept crypto payments in the form of Bitcoin. A year later Air Baltic followed suit and became the first airline worldwide to accept Bitcoin payments. In addition to that, Switzerland and US luxury hotels Kessler Collection and Dolder Grand introduced Bitcoin as payment options for customers in 2019 and 2021, respectively.
Other notable companies that have joined the bandwagon and adopted crypto in their businesses include Mirai Flights, Peach Aviation, LOT Polish Airlines, Vueling Airlines, and Norwegian Air. On top of that, there are examples of third-party platforms allowing flight ticket purchases with crypto, such as Travala.com and Destinia.com.
It is exciting to see more and more players from the travel industry adopt crypto. Universal Air Travel Plan (UATP), one of the world’s leading airline-owned payment networks, has been working to bring cryptocurrency payment options to over 260 airline members and travel merchants. The company also outlined that cryptocurrency purchases are in significant demand in the travel industry.
So why is it that the travel sector, and luxury travel in particular, shows such prominent potential for crypto adoption? Firstly, most crypto investors seek ways to spend their crypto earnings without converting them into fiat currency. And they see paying for luxury travel experiences like yachts, private jets, and luxury hotels as an appealing opportunity. Secondly, crypto payments offer lower fees and better conversion rates on international purchases, in addition to providing privacy and convenience.
Above all, there are some luxury services that are only available through the usage of crypto payments. One such example is Mirai Flights, a private jet company, that allows customers to book a private flight anywhere in the world at any time of the day via crypto.
What Are the Benefits of Crypto in the Travelling Industry?
Adopting crypto usage in the travel industry benefits both customers and businesses in a number of ways.
First of all, there is the matter of convenience. Unlike other forms of transactions like wire transfers, crypto transactions don’t take hours or days to be completed. Speed is essential for travelers, especially when doing a big transaction. Also, with crypto payment, travelers can pay for services anytime in any region without worrying about converting one currency to another, especially in foreign countries.
Another matter to consider here is the transparency and security of payments. With crypto, travelers can pay for services/products at lower fees through a decentralized booking system that does not rely on intermediaries. Moreover, through blockchain technology, only authorized parties can access sensitive information, and each transaction on a block has a time stamp, making tampering with data hard. As a result, there is trust in the transaction for both sellers and buyers.
There is also an additional advantage that comes in the form of crypto redefining loyalty and cashback programs. In the travel industry loyalty programs are a big thing for customers and businesses. A crypto reward program is an excellent way for businesses to engage with their customers and stand out from their competitors.
From a customer’s perspective, cryptocurrency rewards are based on a decentralized system, and their value depends on market demand. Therefore no central entity controls their value like in traditional loyalty programs. From a business perspective, companies can use blockchain technology to track reward usage and prevent fraud.
As cryptocurrencies and blockchain usage go mainstream, I see the travel industry set to reap significant benefits. We are already seeing various businesses adopt crypto payments, which have allowed travelers to easily charter private jets, book flight tickets, pay for hotels, etc.
As more travelers embrace crypto in the coming years, increased demand for blockchain solutions that align with users’ needs will likely occur. That will also mean more businesses in this industry will have to adjust to stay competitive.
Dmitry Ivanov is a professional trader and an expert in crypto adoption. Over the past four years, Dmitry developed CoinsPaid from an average startup to one of the largest companies in the field of crypto payments and processing. Thanks to his expertise, the company today has over 800 merchant clients worldwide and over €23 billion processed in crypto transactions.
The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.