How Crypto Continues to Affect the Travel Sector

Can you believe that over a billion people traveled internationally in just nine months last year? The industry also contributed 10 trillion to the global GDP in 2023. With travel booming like this, crypto is taking root in the industry more than ever. It is really changing how we book flights and hotels and how loyalty points are managed and distributed.

In fact, 20% of travelers worldwide would prefer to pay for travel using digital wallets, and blockchain is making that possible. But it is not just about payments—it is about convenience, security, and so much more. As more airlines, hotels, and travel platforms continue to embrace crypto, let's explore how it is shaping travel today and what that means for the future.

Crypto in Travel Payments

The number of payments you have to make when planning trips is kind of crazy. There is transport, food, activities, you name it. With traditional payment methods, the totals can go way higher than needed when you include the high transaction costs and crazy currency conversion rates for international travel.

Thanks to crypto, that narrative is changing. Now, you can make seamless, borderless payments using digital currencies like Bitcoin and Ethereum without worrying about exchange rates and bank delays. But even if a destination doesn't accept crypto directly, using a reputable crypto exchange to swap your digital assets at more friendly rates is always an option.

With more travelers willing to pay for flights with crypto, there is a rise in airlines that have made room for that by either accepting crypto payments directly or through third-party providers. AirBaltic, for example, is known for its crypto-friendliness. Actually, in 2014, it was the first airline worldwide to accept flight payments in Bitcoin. It accepts other cryptocurrencies as well, and recently, in 2021, it started issuing NFTs. Platforms like Alternative Airlines allow you to pay using Bitcoin on over 600 airlines, including Emirates.

Hotel chains like The Pavilions Hotels & Resorts have also not been left behind in this crypto movement. They were the first global boutique hotel group to accept crypto bookings using over 40 digital currencies. Not forgetting travel platforms like Travala and CheapAir that allow you to book almost everything on your trip without having to convert your virtual currencies. As a matter of fact, the recent partnership between Travala and Trivago allows you to book accommodation at over 2 million hotels globally, using over 100 different cryptocurrencies.

Loyalty Programs and Rewards

For a long time, loyalty programs have been the travel industry's special tool for encouraging customers to return and recommend them to others. In fact, over 84% of consumers will be more inclined to a brand that offers rewards. Unfortunately, the traditional way of redeeming those points and rewards, especially in the hotel sector, has been somewhat of a hassle. A report by Morning Consult from a US survey last year showed that only less than half of program members actually felt valued, suggesting that there is a lot of room for improvement.

That is where crypto and blockchain come in, making loyalty programs more flexible and valuable. Blockchain is transforming loyalty points into crypto-based tokens, so instead of being confined to a single brand, you can freely spend them across multiple platforms. Whether you want to use your hotel rewards for souvenirs or your flight miles for a car rental, the choice is yours. You can also opt to trade or transfer them if you don't want to redeem them for travel-related services.

It turns out that about 67% of consumers would actually be more into loyalty programs if they could earn crypto rewards instead of the usual points. Companies like Travala are already making it happen by rewarding their customers who book hotels with cryptocurrencies, such as Bitcoin and their native token, AVA.

Plus, blockchain-based loyalty programs are quite secure and transparent. You can clearly track and verify how you've been earning and spending your points. The technology is also transparent, so you don't have to worry about your points 'magically' disappearing or someone tampering with them.

A Few Challenges

While crypto in travel is exciting, it is not without its challenges. Volatility is a major one because crypto prices can wildly fluctuate, making it tricky for both travelers and traveling businesses to set stable prices. That is probably one of the reasons why more companies are turning to stablecoins like USDT, which offer crypto benefits minus the price jumps.

Also, the regulation around crypto is a bit complex, with some countries embracing it and others making it nearly impossible to use. Plus, there are still a huge number of hotels and airlines that don't accept crypto. Such inconsistencies mean that you can't fully rely on digital currencies for travel just yet until more businesses and countries jump on board.

With all that we have discussed, the future of crypto in travel looks promising. We are already seeing NFT-based travel perks such as exclusive lounge access or VIP event tickets that travelers can own or trade. Some destinations like Slovenia and Dubai are considered friendly for crypto travel, where you can pay for your transport or even coffee in digital currencies. As the technology is growing and more people are embracing it, booking trips with crypto might soon be as effortless as swiping a card.