Who are the travel monopolies?
Travel monopolies include the likes of Airbnb.com, Expedia, and Booking.com.
These are platforms that may have been considered “decentralized” in the past, but a further look sees that they are far from it. Before online booking, brick and mortar travel agencies were the most popular way to book flights and accommodations. Big hotel companies had the advantage to plug complete monopolies over particular travel agencies, adding large percentages of commission for the middlemen who would book everything.
Online platforms like Expedia.com and Booking.com aren’t much different, but they offer a few more options and have tightened up the ship. Then came Airbnb.com, which made renting spaces easier and more affordable. It single-handedly disrupted the hotel industry giving people another, more p2p option.
How are these options not fully decentralized?
While Airbnb undercut the market by cutting out many middlemen, the operation itself is still centralized.
Airbnb is the middleman and charges vendors a high booking fee price. Booking.com, Expedia.com, and Airbnb take 15-45% booking fees from their vendors, causing vendors to up their prices to accommodate. The vendor and renter both share the weight of these fees in the price of the fees. Airbnb, for example, takes up to 12% in guest service fees and additional 3% service fee from the host.
These are all “middlemen fees:” fees to pay lots of people who run the database, as well as run the offices.
How can blockchain help decentralize the process?
Blockchain can cut out middlemen.
Blockchains are sleek, slim, and fast. They can perform many of the jobs that companies currently are paying people to do. Smart contracts help to create trustless systems that do not need intermediaries or escrows. Digital identities can track people via the blockchain to keep loyalty points in order from airlines. Global ledgers can settle payments with less bulk to make airlines cheaper.
They can cut out a lot of middleman fees, like at 15% from Airbnb.
How would that work?