Web3 is the vision of a future generation of web technology, evolving from our current Web2.
Technology has advanced rapidly in recent years, and the transition to Web3 could completely transform how we use the internet.
But, how will Web3 impact the travel industry and how can your tour operator prepare for it?
Read on to find out.
What is Web3?
To put it simply, Web3 is set to be the third generation of web technologies.
The term “Web3” was coined in 2014 by Ethereum co-founder Gavin Wood, and according to the company, “Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership.”
Web 1.0 occurred in the 1990s and early 2000s in a mostly read-only format, before our current Web 2.0 technology began with the emergence of social media.
Web 2.0 evolved to be read-write rather than read-only, and allows for engagement and user-generated content.
However, despite the possibility for internet users to create, post and share their own content, critics of our current web technology explain that most online activity is controlled and monetised by only a few top tech companies.
For example, Google currently controls almost 84% of the global search market.
The rapidly increasing volume of data is also a concern for web users, and one of the core features of web 3.0 is its aim to empower users by ensuring data security, removing centralised ownership and allowing users to have control over their own data.
Web 3.0 is not a regular advancement in technology – it is forecast to be a revolutionary shift in the entire way we experience and use the internet.
Functionalities of Web3 in travel
Rather than running on a single server, Web 3.0 applications run on blockchains, decentralised networks or a combination of both.
And, instead of being controlled by large companies, Web3 is built, operated, owned and managed by web users themselves.
Some of the core values of Web 3.0 are:
Ownership is distributed equally amongst web builders and users.
- Permissionless access
Everyone has access to participate in Web3 – there is no governing body.
Web data is encrypted, protecting personal and sensitive data from being harvested and monetised without consent from the user.
- Native payments
Cryptocurrency is used for spending and sending money online.
Uses incentives and economic mechanisms and doesn’t rely on the support of trusted intermediaries.
All transactions and identities are verifiable by secure third-party authentication without the need to provide or expose sensitive details.
Examples of Web3
Some examples of Web3 technology include:
- Blockchain technology
- Initial Coin Offerings
- Non-Fungible Tokens (NFTs)
- Decentralised apps
- Smart contracts
- Distributed computing
- Decentralised autonomous organisations
- Machine learning and AI
- The metaverse
Web3 and travel
The emergence of Web 3.0 is set to disrupt a number of industries, and travel is no exception.
According to Trips Community, “Web3 will eat travel.”
The way consumers plan, book and enjoy travel has changed drastically over the past 10-20 years, and this will transform even further with the introduction of Web 3.0.
And, travel giants such as Airbnb are already investing in Web3. The company is currently looking into enabling cryptocurrency payments – a feature highly requested by its customers.
Chain4Travel explain that Web 3.0 will offer many opportunities to travel companies, such as improved reconciliation processes, more personalised traveller rewards and loyalty programs, increased security, more efficient processes and better payment and settlement solutions.
The tourism industry relies heavily on the exchange of information and financial transactions between companies and customers.
The use of blockchain technology could help to make these transactions more secure and traceable, in turn making business models more efficient and streamlined, saving costs and increasing competitive advantage, as well as benefiting travellers themselves by allowing for more seamless and autonomous travel experiences.
According to Phocuswright, decentralised computing will bring a new level of transparency to companies and intermediaries within the travel industry:
- Airlines – greater customer intimacy is possible as barriers created by intermediaries are removed.
- Hotels – decentralisation can bring faster settlement and commission tracking for accommodation providers.
- Corporate travel – greater transparency, accurate rate usage and simpler, faster settlement.
- Ground transportation – fleets could connect directly with customers.
- Tours & activities – decentralisation can empower smaller providers.
Although decentralised computing minimises the role of intermediaries, the aim of Web3 is not to eliminate these companies. Rather, it will ensure that travel intermediaries do not act as gatekeepers of information and add extra costs that do not give value to the consumer.
NFTs in the travel industry
NFTs, or non-fungible tokens, are digital assets that are bought, sold and traded online, usually with cryptocurrency, and are stored using blockchain technology. They can come in the form of art, music, in-game items, videos and more.
NFTs have been around since 2014, but their popularity has hugely increased over the past few years; the market size of NFTs reached a value of $41 billion in 2021.
Hotelmize explains that NFTs can be used to improve the travel experience, drive engagement rates, be more engaging and build stronger customer relationships.
Some examples of NFTs in the travel industry include:
- NFT airline tickets
- Customer rewards & loyalty programmes
- Promoting social good
- Hotel membership programmes
- Exclusive experiences
Travel companies such as Marriott and AirBaltic have already begun to use NFTs, and it is likely that other businesses within the sector will follow suit.
How can your tour operator prepare for Web3?
According to recent data from TravelTech Show, 74% of business experts within the sector plan to use Web 3.0 as a marketing tool.
While Web3 technology is still new, travel companies should be prepared.
Forbes listed some of the ways companies need to prepare for web3 and decentralisation, that include:
- Ensure secure access for users
- Embrace automation
- Adopt a multi-cloud strategy
- Plan to invest in edge computing
- Prepare for trust through cryptography
- Ensure your team understands decentralisation
- Try out the technology
- Take potential disadvantages into account
What do we think about Web3 in Travel?
Here at Nezasa, we are passionate about technology and how it will impact the future of the industry.
At the recent World Travel Market London, our co-founder Manuel Hilty explained that AI and machine learning technology “will help to address the challenges that are yet to come, as well as solving problems that exist today.”
That is why we are constantly developing our products in order to provide the most innovative travel technology to our customers.
While the transition to Web3 is still at a very early stage, we do believe that this type of technology will hugely influence the travel sector going forward.
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