Trippki Aims To Disrupt OTA’s With A Blockchain Loyalty Play

Trippki is a blockchain-powered hotel booking platform aiming to deliver value to hotels and guests in three areas:

* A reduction in hotel booking commissions

* Guest loyalty rewards paid in TRIP cryptotokens

* Elimination of ‘fake travel reviews’ using ProofOfStay – a blockchain-verifiable confirmation that the reviewer did actually stay at the hotel

According to the Trippki whitepaper, ‘hotel booking has become increasingly centralised and is dominated by a small number of OTAs. While on the surface they provide convenient aggregation portals, in truth they distort the free market in travel accommodation. This results in a sub-optimal marketplace with low margins, high commissions, low customer retention and difficulty in reaching new customers.’

Loyalty & Reward Co have consulted to a number of hotel and travel companies and their core strategic challenge aligns with that summarised by Trippki. OTA’s have become essential channels for generating bookings, but they charge very high commission (anything from 10-30%) which erodes much of the hotel’s margin. Hotels do their best to encourage direct bookings by guests via engagement with their loyalty programs, but these tend to mostly be patronised by guests who are already committed to being loyal to the hotel. The real opportunity is to disrupt the OTAs, which is what Trippki is seeking to achieve.

Trippki will actually work in a similar way to an OTA:

1. Guest visits Trippki and browses hotels

2. Guest makes a booking

3. Hotel receives 90% of guest payment

4. Guest receives 7.5% back in TRIP cryptotokens as a reward

5. Trippki received 2.5% commission

When laid bare, Trippki isn’t likely to be a complete saviour for hotels for two reasons:

* While the commission fee of 2.5% is significantly lower than OTA’s, the hotel is also required to cover the 7.5% TRIP token reward, making their total cost 10%, which is at the lower end of an existing OTA commission fee

* There’s nothing stopping the guest from redeeming the TRIP tokens with a competitor hotel.

That being said, it’s likely many hotels will consider ranging their inventory on Trippki for the chance to save on commission, even if it’s just a few percentage points. It all adds up, and any competition in the market may help force the major OTA’s to review their commission structures.

One additional challenge for hotels is Trippki requires them to acquire and hold TRIP tokens in anticipation of awarding them to a guest. As the reward rate is set at a flat 7.5% this is a potential risk for the hotel, particularly if they acquire TRIP tokens and the tokens decrease in value. For blockchain loyalty programs, Loyalty & Reward Co recommend a process structure where the merchant (in this case the hotel) isn’t exposed to the exchange rate risk of the token because they’re never required to hold the token. A better process would be if the platform conducted a real-time exchange purchase at the time of the member transaction and gave them straight to the guest.

The Token Sale commenced in July 2018. There will be a total of 200 Million TRIP tokens (ERC-20 tokens), of which 40% will be made available for purchase with a hard cap of around US$11m. Trippki are only accepting ETH for the ICO.

We wish the team at Trippki all the best in what is a very competitive industry.


Philip Shelper is a specialist loyalty consultant based in Sydney, Australia who obsesses about everything to do with loyalty and rewards. His company Loyalty & Reward Co are a leading loyalty consulting firm.
Phil is the author of “Blockchain Loyalty: Disrupting loyalty and reinventing marketing using cryptocurrencies.”
www.blockchainloyalty.io is a global resource centre for everything blockchain loyalty.
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