Exploring The Potential of Web3 for Shared Loyalty in Travel

A Point of View on How Loyalty in Travel Could Evolve from Web2 to Web3

Generation Z is transforming travel. They crave community and shared experiences, expecting rewards beyond traditional loyalty programs. In response, businesses must reinvent their offerings to satisfy these evolving needs while strategically increasing revenue. Since businesses and clients of the travel industry are presenting new needs to be addressed, this shows the need for a transition into web3 as imperative, then it raises an important question: can established B2C travel platforms, with their robust ecosystems, adapt to these new trends?

Understanding the Needs of Gen Z Travelers

• Crave belonging: Gen Z seeks immersive communities, not just travel deals. They expect co-creation initiatives, sustainable adventures, and exclusive access.
• Seek Shared Rewards: These travelers expect to earn and redeem benefits across all service providers within the platform, including the ability to transfer benefits as points or gift cards, purchase and save points for future adventures, and gift lists for special occasions.
• Look Beyond Points: They desire unique experiences as rewards, not just discounts. This could include early access to products, gamification elements, voting rights, and the opportunity to contribute to social impact initiatives.
• Value Amplified Voice: User-generated content plays a key role and reviews and confirmations are of great value.

The Role of Service Providers

How do these evolving needs impact service providers?

• Small players, big challenges: For most smaller, independent travel companies, in-house traditional loyalty programs are expensive and difficult to implement. The cost involved with tech, personnel, and marketing can be costly. Participating in a shared platform allows players to overcome these challenges collaboratively, reach new markets, grow together and address the evolving needs of travelers.
• Big brands need agility: Bigger brands will need to expand beyond their existing customer base and enhance brand loyalty by offering unique rewards and personalized experiences, not just in their current loyalty platforms, but beyond the needs of their target. By expanding with innovative loyalty initiatives designed around Gen Z's values like exclusivity, social impact, co-creation, gamification and personalization, these big travel brands can enhance loyalty, and go beyond serving the needs of the traditional target markets.

B2C Travel Platforms

• Moving beyond traditional ads income, B2C platforms will need to develop differentiated offerings to fulfill those new needs. Meanwhile, they will need to increase their revenue through transaction fees, commissions, and memberships.
• Unlocking Web3 Potential: Platforms need to start exploring rewards that can be converted into NFTs to provide access to exclusive experiences, gamify travel experiences, and personalize experiences. Additionally, they can offer innovative ways to plan, book, share, and experience travel.

We can address these new needs primarily in two main ways:

1. Pure Web3 Collaborative Communities: In this model, all stakeholders co-create a decentralized travel platform. This approach, however, might require significant collaboration and infrastructure changes.
2. B2C Travel Platforms Embark on a Journey from Web2 to Web3:This approach involves enhancing existing models by enabling a blockchain-powered loyalty program for all members, allowing these platforms to integrate Web3 elements into their business models gradually.

This second option presents a significant opportunity for B2C travel platforms. Established B2C travel platforms, with their robust ecosystems, can adapt to these latest trends and integrate emerging technologies like AI and AR to differentiate themselves in the competitive landscape further.

This approach leverages observed trends in blockchain adoption. While several consortiums played early roles, many lost the interest of investors and participants. Conversely, single-company initiatives continue to demonstrate success. Based on these observations, B2C travel platforms have a unique opportunity to reshape the travel landscape by fostering trustworthy communities for Gen Z and generating revenue through this approach.

It's important to note that this model, designed with Gen Z preferences in mind, is not intended for traditional corporate travelers who are loyal to existing loyalty programs. We are only concerned with identifying unmet needs and proposing a new approach to cater to those needs, rather than changing established preferences.

The Ecosystem

B2C travel platforms boast robust ecosystems fostering transactions between travelers and service providers.

The blockchain-powered loyalty program could transform the currently transactional ecosystem into a community that fosters a sense of belonging and ownership for Gen Z travelers while simultaneously boosting revenue for all service providers, large and small if platform growth is ensured.

This solution should transform every traveler interaction (planning, booking, reviews, confirmations) into valuable points redeemable across the platform. The following chart provides a high-level overview of the ecosystem, detailing the initial main functions and incentives for each member.

Expanding the Model

To further enhance the initial concept of this innovative shared loyalty program, the travel platform could gradually implement:

Blockchain-enabled Features

1. Additional features for loyalty points:

• Gift card-style transfers: Allow travelers to transfer points directly to each other, similar to gift cards.
• Celebratory gift funds: Facilitate the creation of "gift funds" where travelers can contribute points to help others celebrate special occasions like weddings, birthdays, or other milestones. These points could contribute towards dream honeymoons, memorable experiences, or travel-related gifts.
• Savings for future adventures: Enable travelers to purchase and store points at equivalent US dollar values for use towards future travel bookings.

2. NFTs for exclusive access, enabling travelers to:

• Unlock unique and sustainable experiences with loyalty points.
• Gain early access to new offerings from service providers.
• Earn voting rights to co-create travel experiences.
• Verify the sustainability of adventures.
• Participate in gamified experiences based on review quality and social impact.
• Access to virtual souvenir collections or exclusive access to VR events and activities.
• Access to a tipping system for travelers to reward valuable video reviews they find helpful.
  
  

3. Verified identity for a trusted community:

• Government partnerships: While beneficial, this might require further exploration of legal feasibility; However, some countries have that service enabled. Verified identities can significantly strengthen trust and foster a more collaborative environment.

Virtual Reality-enabled Features

4. Video reviews and ommersive experiences:

• Travelers and serviced providers could share detailed experiences through video reviews alongside photos.
• Travelers could verify and confirm reviews through video comparisons.
• Remote exploration and pre-trip immersion with VR to transform travel planning.
• Provide unique virtual experiences with remote interaction between the community of travelers and with service providers allowing travelers to ask questions or request personalized recommendations virtually.
• Interactive confirmations using VR to verify aspects of reviewed services, adding another layer of engagement and trust.
• Service providers can sponsor video reviews or highlight their offerings within popular videos.
• Enable collaboration between travelers to create multi-perspective video reviews on a single experience.

Artificial Intelligence and Analytics-enabled Features

5. Data-driven personalization with AI-powered suggestions (AI-enabled features):

• Predictive budgeting:By combining analytics with AI to analyze past spending patterns and travel plans, suggest realistic budgets and potential cost-saving opportunities.
• Dynamic pricing adjustments: Travelers receive personalized offers based on their preferences, travel dates, and real-time demand, potentially enabling access to better deals.
• Immersive experience customization: AI suggests personalized activities, tours, and local experiences based on interests, pace, and travel companions.
• Gamified travel challenges:Travelers earn points and unlock rewards for completing personalized travel challenges or participating in community-based activities.
• Targeted marketing and promotions: AI helps craft personalized marketing campaigns and tailor offers to specific traveler segments based on data analysis.
• Demand forecasting and dynamic pricing:AI predicts travel demand and suggests optimal pricing strategies to maximize revenue and optimize resource allocation.
• Content optimization and engagement insights: AI analyzes user reviews and feedback to help service providers refine their offerings and create more engaging experiences.
• Sustainability impact measurement: AI tracks the environmental and social impact of travel choices, allowing travelers to make informed decisions while service providers can showcase their sustainable practices.
• Multilingual AI assistants: AI-powered virtual assistants provide personalized travel guidance and support in multiple languages, breaking down language barriers and enhancing accessibility.
• Biometric personalization:AI analyzes travelers' biometrics (e.g., heart rate, stress levels) to recommend suitable activities and experiences based on their emotional state and physical capabilities.
• Hyper-localized experiences: AI suggests activities and attractions based on the traveler's current location and real-time events, offering a truly immersive and dynamic experience.

Building Upon Existing Models

6. Co-branded credit cards

• Travelers could gain points with each purchase.
• Members are incentivized to spend more with this card, so banks get additional transaction fees.
• B2C travel platforms can generate significant revenue through transaction fees associated with card usage and increase traffic over the platform.

Key Takeaways

1. Decentralization is the primary value proposition of Web3. To build strong communities and encourage collaboration within the travel landscape, the use of blockchain technology is a strategic approach. It further enriches the user experience by employing additional tools and resources like virtual reality, artificial intelligence, and co-branded credit cards.
2. While consortiums played a significant role in the initial stages of enterprise blockchain adoption, many lacked sustained investment and have since faded. Conversely, implementations initiated and nurtured by single companies are more likely to thrive.
3. B2C travel platforms present a wide opportunity to evolve loyalty programs for travel experiences by leveraging existing ecosystems. A blockchain-based shared loyalty program could be a starting point.