Hotel Industry Profits from Decentralization


The current state of the hotel industry has seen a fall in profit due to the likes of Airbnb and other sharing rental housing startups. Considering the value in these often-vacant hotels it leads one to wonder what can be done to draw clients back. Independent hotels have struggled most, faced with multiple drawbacks including the online hotel marketing sites. To be represented on sites such as all hotels are charged commission by the Online Travel Agents. The rates charged makes up as much as 25% of the booking revenue per guest. Hotels are in a battle with booking agencies some referring to them as “—parasites that force prices up." Hotels must raise their room prices to cover their losses as major sites charge customers 15% to 25%. The global hotel industry is approximately valued at $500 billion per year with $125 billion in unnecessary costs that are annually shared by hoteliers and guests. To confront the challenged faced by independent hotels while benefiting the industry, dApp’s can resolve many of the challenges on trust and affordability and incentive.

The dApps run on a peer-to-peer system of various PCs as opposed to a singular computer. It is designed to run on the internet without the interference of control by a singular user. You will own your data and with a token integrated user can earn money for their information. In an effort to push our present internet into a more efficient and secure alternative more dApps need to be created for all services that would benefit from the community aspect, the more users the faster the transaction can go forward. As data is the natural resource of our time, dApps provide a perfect venue to create value to ensure economic security and growth. In this case, online travel agencies can take the data from the customers and sell it to marketers without their consent nor is the wealth generated distributed back to the client. As autonomous mechanisms take third party, labor-intensive and customer services job away, one's personal data will be of necessity to guard to have a store a wealth.


To build public trust in the boutique hotel and larger franchises, blockchain must replace the traditional method of distribution for pay. One positive use case is CREDITS, founded by Igor Chugunov who in a recent interview, emphasized the low cost of entry into the blockchain space. To benefit the smallest of market players Igor focused in on the need for a decentralized solution with a user-friendly interface for the convenience of non-experts.  The company provides an all-in-one hotel management service through its decentralized application (dApps) to include booking, loyalty program, real property, and inventory accounting.

By providing a decentralized diary, the user will have a new booking mechanism that will benefit all parties including the Online Travel Agents (OTA), hotels and the customers. The database will include information on the hotel lists, all hotel information, guest reviews, transaction history, history of loyalty programs for customers to find their perfect room. In addition, all points earned by guests under the loyalty program is encrypted ensuring security, privacy, and trust. The public key recorded using the application enables all open data to be viewed; transactions, preview bookings, review. While the author of entries is not in view, only accessible through a private key that opens access to confidential information.


Former Uber programmers have been exploring the asset of tokenization in the home sharing application. Bee Token aims to be much like Airbnb but guests here will use site-specific tokens to rent rooms purchased using either bitcoin or ether (paying for tokens using credit cards will become possible at a later date, the startup says). Much like the online travel agency (OTA), Airbnb charges hosts 15% on every transaction on its platform. While Bee Token does not charge the host or hotel any fees to rent out their rooms. The money will be allocated from licensing its technology to other startups, and by charging fees of 1%-2% if users choose to pay for rooms using bitcoin or ether instead of buying tokens. These tokens are released to the host when the guest leaves and indicate their satisfaction with the room, there is a demand among customers and interest in hosts to work with tokens as a form of trade.


Like CREDITS, Bee Token wants to move to a fully automated system where smart contracts replace the role that Airbnb plays with its conventional website. As a legal arrangement in written code, smart contracts are more secure and remove the third-party costs Airbnb must cover by charging customers more. It encourages members to manage their own agreements but if requested a manager will step in, collecting information from both parties in finding a compromise. The company is presently raising about $15 million in a multi-stage ICO, already contacting Airbnb super-hosts asking them to switch over. Uber also wants to get in on the blockchain efficiency but the former programmers for the company are waiting for the right project to come along to make the challenging goal a reality.

A perfect candidate to embrace the decentralized application and the tokenization option is Oyo Hotel a startup providing an alternative to Airbnb, guaranteeing quality rooms, cleanliness, safety, and affordability. Existing investors include Softbank Vision Fund, Sequoia Capital and Lightspeed Venture Partners have put down $800 million with plans to provide another $200 million. Ritesh Agarwal the 24-year-old, founded the company five years ago starting in India expanding to China and Europe. With more startups of such nature embracing the dApp model, more customers will enter the space and shift the hotel industry in a direction that benefits the guest as much as the host or hotelier.

Written by Shermineh Saleh Esmati

As the CEO and founder of Cyrus BC Inc. Shermineh provides advisory services to promote the interests of her clients through the application of innovative products. One focus of Cyrus BC is to bring deliverable blockchain initiatives to the attention of investors focused on the security and socio-economic benefits of the technology.

With a background in foreign policy and intelligence analysis, Shermineh has been using her grasp of geopolitics to aid blockchain companies to best pursue growth while respecting international cryptocurrency regulations and blockchain policy. To ensure the expedited adoption of fintech products she is working with Blockchain Intelligence Group, New Economies DLT and building collaborative efforts for AI blockchain projects soon to be announced.

Shermineh has experience advising intelligence agencies, political leaders, management consultancies and human rights organizations. In the pursuit of developing an expertise in international security, Shermineh obtained her bachelor’s degree with a Specialist in Political Science at the University of Toronto and is completing her master’s degree in Government at Harvard University. To further Canada’s efforts in emerging technology she is also a member of the Blockchain Association of Canada and an Advisor to the Open Source Data Committee at the Treasury Board Secretariat in Ottawa, Canada.