Chain4Travel has raised funds to promote blockchain-based travel sales, but the track record of success is short, and the technology’s comparative advantage over what travel agencies currently use remains unproven.
Swiss start-up Chain4Travel argues that hotels need to be on the blockchain bandwagon and just raised its first round of venture capital to help prove it.
Based in Baar, about 35 miles from Zurich, the company has raised about $4.5 million (CHF4.3 million) to develop blockchain technology to process travel purchases, from hotel rooms to microtransactions. like a cup of coffee on an airline flight. Supporting data such as maps, Covid policy updates and regional tourist information will be available in the form of non-fungible tokens, or NFTs, a digital piece of data, stored on a blockchain-based network, which can be bought and sold.
Despite the hype, blockchain has struggled to take hold in the travel industry, said Skift principal analyst Seth Borko. The question is whether a decentralized network like the blockchain, which is designed to more easily accept payments in cryptocurrencies, is really more secure or cheaper than the more centralized networks run by incumbents that favor issued money. by the government.
“As far as I know, there’s no real benefit to a distributed ledger,” Borko said. “The challenge is to build a network. Whether it gets distributed or not doesn’t matter. Expedia connects a bunch of hotels. [Global distribution services like Sabre provide data to travel agents] do this. They just do it with a centralized database.
Chain4Travel is run by a group of industry veterans, led by Ralf Usbeck, who founded Peakwork, a vacation packaging technology company, and Traveltainment, a German booking engine technology provider that was sold to the global distribution service Amadeus based in Madrid in 2006. He continues to hold the position of managing director of Peakwork.
Chain4Travel plans to raise more money later this year by selling its cryptocurrency, the company said in a statement. Going forward, he plans to donate his intellectual property to a foundation that will run the blockchain-based network. A spokeswoman did not respond to an email asking follow-up questions, including the undisclosed identities of her venture capitalists.
The list of blockchain players in the travel industry is short. Perhaps the most successful so far is Travala, a UK-based agency that accepts credit card payments, usually denominated in government currency, and cryptocurrency. Travala says its sales rose 571% in the fourth quarter of 2021 from a year earlier to $17.4 million, driven by the Covid recovery and the addition of a concierge luxury travel unit . He said that 60% of his transactions are paid in cryptocurrency.
But some travel executives, like TUI Group Executive Chairman Fritz Joussen, have argued that blockchain can break the near-monopoly control of booking data by a few giant agencies and global delivery services.
Travala has benefited from a partnership with Expedia, the online travel giant, forged in 2020 and expanded last year, under which Expedia partner hotels can list rooms on the Travala site and app.
Several startups related to temporary housing also announced new capital this week.
>>with hospitality, which offers software services to vacation rental property managers, raised $4 million from a group led by Disruption Ventures to add a mobile app to its offering and expand its sales team. The San Francisco company has now raised $7 million in total.
>>Ukio, a Barcelona-based startup that offers apartment rentals in European cities, said it has raised €2.5 million in debt funding led by Extension Partners, to expand to more cities. It previously raised $9m in a round designed to capitalize on work-anywhere trends driven by the Covid pandemic.
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