Cryptocurrencies in Travel and Tourism - Thematic Intelligence

Cryptocurrencies in Travel and Tourism - Thematic Intelligence
Summary

The globalization and digitization of travel and tourism are both driving the demand for easy-to-use and cheap international transaction processes and payment systems. Blockchain technologies are predicted to substantially transform the tourism industry. Tourists are beginning to discover that cryptocurrencies offer such opportunities—by simplifying cross-border transactions and overcoming the associated foreign currency exchange costs. At present, cryptocurrencies are the most advanced application of public blockchains that promise benefits such as a universal means of payment and minimal fees through the removal of intermediaries. Trust is fundamental in the use of cryptocurrencies. Although there are no intermediaries to be trusted, users need to trust the payment system as a whole, as perceived trustworthiness determines the use of cryptocurrencies.

In the tourism industry, although many tourism vendors have been accepting cryptocurrencies and the potential of using cryptocurrencies in travel-related consumption has been intensively documented, existing knowledge about travelers’ intention to use cryptocurrencies for payment purposes is limited. Traditional models do not account for the idiosyncrasies of cryptocurrencies and are therefore less appropriate to foster the understanding of travelers' adoption of travel-related payments. Blockchain technology, which by itself consists of a multitude of protocols, platforms, consensus mechanisms, and cryptographic primitives, is far from being fully developed.

The crypto market is immature and constantly evolving. It includes established cryptocurrencies such as bitcoin and ether and newer entrants like Solana and Avalanche. In addition to these cryptocurrencies, numerous companies offer a wide range of supporting services. As the crypto market evolves, new players will emerge, and the landscape will change significantly over the next two years.

Key Highlights

Cryptocurrencies, primarily used as a form of payment, often possess additional functionalities. They can be used in incentive schemes for blockchain infrastructure. The nodes (blockchain participants) get rewarded (in, e.g., bitcoin) for running and updating the blockchain network. Moreover, cryptocurrencies fund and encourage the development, governance, and use of decentralized applications (dApps), thus shaping user behavior and supporting blockchain economies. Bitcoin, the first and most well-known cryptocurrency, was created in 2009 by Satoshi Nakamoto, an anonymous individual or group.

A core feature of blockchain technology and cryptocurrencies is decentralization. However, true decentralization is more of an aspiration than an easily achievable state. Most cryptocurrencies involve centralized services or elements. For instance, trading often occurs on centralized exchanges like Finance and Coinbase. Nodes are frequently hosted on centralized cloud infrastructure like Amazon Web Services (AWS) and stablecoins, which aim to keep a stable value relative to other assets, and often rely on centralized parties like Circle to maintain pegs and reserves.

Understanding the interplay between centralization and decentralization in the crypto world is crucial. For instance, the 2022 collapse of major centralized crypto companies like FTX and Celsius led to increased activity on decentralized exchanges and self-custody of crypto assets (meaning people maintain direct control over their assets). While centralized crypto companies may seem incompatible with the core values of cryptocurrencies, they are convenient on-ramps that can facilitate a transition towards or support decentralized products and services, a process often called incremental or progressive decentralization.

Who should buy?

CEOs, Senior Executives, and Marketing Executives within travel and tourism should use this report to understand the highly important theme of Cryptocurrencies.

ScopeThis thematic report provides an overview of the impact cryptocurrencies has on the travel sector and seeks to understand some of the contributory factors.The key trends within this theme are split into three categories: technology trends, macroeconomic trends, and regulatory trends.Several case studies are included to analyze the multiple ways countries and companies have responded to the impact of this theme’s growth and what they are doing to grow with this theme.Reasons to BuyUnderstand the current cryptocurrencies trends within the travel landscape today and how these will escalate in the near future.Assess how travel and tourism companies such as tour operators, OTAs and DMOs are utilizing cryptocurrencies to drive revenues.Acknowledge the necessity of using cryptocurrencies by understanding the social, cultural, and environmental effects on the destination.Discover recommendations for businesses involved in cryptocurrenciesGlobalData’s thematic research ecosystem is a single, integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies in all sectors. It has a proven track record of identifying the important themes early, enabling companies to make the right investments ahead of the competition, and secure that all-important competitive advantage.All across the travel and tourism supply chain, organizations now have an opportunity to capitalize on cryptocurrencies, and there are some notable examples of this. Therefore, all should buy this report to fully understand how this theme will continue to be a key theme in the future travel landscape.