Travelport, IBM and BCD Travel team up to develop blockchain solution for hotel commission reconciliation process

Travel industry technology specialist Travelport has confirmed it is working with IBM Services and leading travel management company BCD Travel on the development of a blockchain solution to enhance the hotel commission reconciliation process.

The blockchain technology solution aims to optimise hotel commission processing on a distributed ledger by managing reconciliation, tracking and accounting for commission payments owed from hotel chains for services purchased by travellers via booking agencies.

A number of high-profile, but unnamed hotel chains are also involved in the solution, which by creating an accurate and shared view of the booking status and commissions would be a positive development for all parties.

Many still fail to understand what Blockchain is and why it is beneficial? Put simply, the 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.

In this instance, following an IBM Garage engagement, Travelport and IBM Services, together with partner BCD Travel, have developed an minimum viable product (a product with just enough features to satisfy early customers and provide feedback for future product development) solution using distributed ledger technology to streamline commission reconciliation between BCD Travel 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, explains Travelport.

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, it says. As such, Travelport and IBM are currently working in partnership with industry stakeholders to evolve the minimum viable product solution into an active pilot programme.

Blockchain technology applied to commission reconciliation has the potential to deliver real ROI to both a travel agency and the hotel, according to Ross Vinograd, senior product director at Travelport, with traveller 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,” he says.

The hotel commission reconciliation solution was first unveiled in early Aug-2019 at the GBTA Convention in Chicago, where BCD hotel expert Marwan Batrouni; Dan Stephenson, regional process owner and shared services director at Hyatt; Kurt Wedgwood, IBM blockchain leader – travel and Ross Vinograd and Kurt Wedgwood shared their insights and learnings during a panel session entitled ‘Blockchain: A Welcome Disruptor for the Hotel Industry’.

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