Amadeus and San Francisco-based startup believe Blockchain can revolutionise loyalty programmes 

15 February, 2018

Blockchain technology is poised to become a huge disruptor in the travel industry, and one US startup is believes the technology has huge potential to overhaul the structure of loyalty programmes.

Travel technology provider Amadeus compiled a report on Blockchain in late 2017, and concluded the new database technology "is on the verge of transforming how loyalty schemes operate, making it much easier for travellers to redeem loyalty points across various providers".

Citing particular challenges of airline loyalty programmes, Amadeus concluded in general, airline loyalty points cannot be used beyond booking flights. This creates frustration for both the customer and the industry since any unspent loyalty points reside on airline balance sheets as liabilities, "which can hamper capital raising and investment", Amadeus concluded.

One San Francisco-based startup is attempting to leverage Blockchain technology to improve current loyalty systems. Loyyal aspires to tackle several challenges in current loyal programme structure including simplifying the process of transferring miles between airlines in the same alliance. In some cases, that transfer often requires a phone call and may take up to six weeks to complete.

On the business side, Loyyal wants to make it easier for companies to create loyalty partnerships. "Today if a scheme wishes to partner with another, there is a complex and costly set-up procedure as well as an ongoing file transfer and settlement process happening in the background," Amadeus explained.

Loyyal believes Blockchain has the potential to help travellers access loyalty points in real-time, said Amadeus, citing the example of a passenger landing from a long flight, and then having points credited to an app that could be used to pay for a ride sharing service from the airport.

Additionally, "any points issued via Loyyal technology are unique, are registered on the blockchain and can therefore be tracked" Amadeus concluded. The result is loyalty scheme providers can collect much more powerful data on how travellers spend points to create more personalised customer offers.

While Blockchain's potential seems to expand on a daily basis, Amadeus acknowledges the technology is in a very early stage of development; however, "the industry is in an experimental phase with various actors investigating potential use cases fro the technology and much progress is being made".

Indeed, Amadeus cited data collected by Smith & Crown showing that in late 2017 roughly USD1.8 billion had been invested in block chain startups.