Goodbye, waiting – hello, instantaneous.

In the travel industry, consumer expectations generally center around brand authenticity, personalized experiences, reliable on-demand services and the removal of traveler friction. Hotels aspire to meet these high expectations – thanks to standards set by popular brands such as Amazon, Starbucks, Apple and Google, who are leading the customer experience front and are setting the bar high.

So what can hoteliers do to meet the demands of their guests? One major step is to transform loyalty programs to fit the needs and expectations of a new generation of customers. These loyalty programs provide a measurable way of interacting with customers across the entire travel ecosystem – from transportation to airport lounges.

Traditionally, travelers have to visit a vendor’s website to use their miles. But in the future, they will be able to transact their miles for goods and services in real time. For example, a passenger could use airline miles from their last flight for a purchase at an airport bookstore.

Adding in blockchain technology improves loyalty programs even further, by its design providing vendors with seamless payment settlements across all parties involved. With the use of wallets for front-end and online transactions, customers receive total control over spending their hard-earned points. And having partner networks increases participation, as members can share and exchange points with others.

Additionally, these programs allow other businesses to join easily, which is otherwise uncommon. With local businesses participating in the same networks as massive corporations, both benefit by extending their pool of shared customers – offering a seemingly endless amount of enticing rewards.

Overcoming the roadblocks to modernized loyalty programs

Unfortunately, loyalty programs are both difficult and expensive to build, maintain, and promote. Customers like being rewarded points for their brand loyalty – but if too few retail partners accept them, unclaimed points pile up and become a liability on an organization’s balance sheet. Typically, this is addressed by having points expire, but that can have a negative effect on loyal customers. Moreover, having multiple loyalty programs is not the answer: too many can make it difficult for consumers to participate consistently.

Our Solution: A blockchain-based loyalty platform

Leveraging a permissioned blockchain-based distribution ledger, hotel companies can create a consortium of partners to take their loyalty programs to a whole new level. For one thing, blockchains provide easier onboarding, which reduces IT and network costs: simply join the network and host a node. And programs set up with points (or token currency in this case) of varying value can be spent across an ever-expanding variety of products and services. This makes it easy to award points of different values – say, for coffee vs room rental – on the same platform.

Customers also benefit from instant gratification, on-demand services and functionality expected in today’s fast-paced world. And since tokens are easier to manage and trade than typical points, this reduces unclaimed points and lessens charges on an organization’s balance sheet.

Overall, participating in a multi-organization blockchain-based loyalty program is easier for merchants and more attractive to consumers because it:

• Enables more secure transactions
• Increases the amount of opportunities to redeem loyalty points
• Expands income prospects by selling additional services such as movies or meal discounts when loyalty points are used
• Makes it possible to share and gift loyalty points with family and friends, improving brand awareness

How does it work?

A blockchain provides loyalty partners with highly secure, immediate updates to the loyalty program balance. These updates include points earned from credit card companies, airlines, retailers and more. And due to the incentive for members to make more purchases with loyalty points, this promotes the hotel’s brand and creates potential opportunities to form new business partnerships.

Since loyalty points on a blockchain are calculated instantaneously after completing a travel-related transaction, a customer can access their newly obtained points immediately to benefit from other services and products: such as buy lunch, call an Uber or even book their next flight. Moreover, spending points is done through a wallet seen in real time by all involved systems, so there’s never a discrepancy of available points.

Leveraging Luxoft’s blockchain expertise and travel industry experience, hotels can add significant value to the services they provide while enticing partner network expansion, thanks to technology that (among other features) promotes real-time customer gratification, therefore leading to higher satisfaction.

But that’s not all we offer. With our combined technology and cross-domain expertise, we bring companies further into the digital age.
Maxim Zhdanov
Max is head of the travel vertical at Luxoft and a skilled leader with 10+ years of managerial experience in commercial IT. Here he manages mission critical IT projects around highly transactional, multi-user, highly available systems. Max leads distributed international teams in North America, UK, Central & Eastern Europe, and Asia. He has a deep understanding of business development, account management, and client-facing functions along with a strong technical background.