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Cryptocurrencies and the Tourism Sector

THR's opinion

Cryptocurrencies and the Tourism Sector

What on earth is cryptotourism?

The tourism industry relies on a complex chain of intermediaries and transactions all working in tandem to satisfy the requirements of the tourist end consumer.

The dozens of digital transactions in this equation play a significant and increasing role in the success of the tourist enterprise, with many now being revolutionized by blockchain technologies.

Many organizations in the tourism sector, especially those swept up in the industry-wide digital transformation that resulted from Covid, are starting to embrace blockchain technologies.

This is especially true for a cryptocurrency known as Bitcoin Cash, which is now being used by some destinations to improve transaction security and efficiency, and reduce the number of intermediaries.

What is Bitcoin Cash then?

Bitcoin Cash, which originated from bitcoin - the first-ever cryptocurrency - in 2017, is a digital currency type based on blockchain technology.

What distinguishes it from basic bitcoin is that more transactions can be processed in a single block, meaning that processing times are much shorter and transaction fees are lower.

How does Bitcoin Cash relate to tourism?

Just like cash, Bitcoin Cash enables reliable, fast, and affordable peer-to-peer transactions, becoming a valid alternative to Visa and Mastercard payments in tourist destinations.

It can be used to pay for basic services while on vacation, but also the subject itself is of increasing interest as a novel tourism product, for example on cruise ships that offer lectures and classes for passengers by Bitcoin Cash experts.

As such, many Online Travel Agencies (OTAs) including Travala and Booking.com - which recently linked an agreement with Crypto.com - are integrating cryptocurrencies into their payment options, supporting the development of crypto tourism as an emerging trend.

What are the benefits of Bitcoin Cash for the tourism sector?

Cryptotourism is still a novel concept and many, including those working in the tourism sector, aren’t aware of the possibilities of Bitcoin Cash.

  • By paying with cryptocurrencies travelers don’t have to worry about standard currency conversion or ATM fees.

  • Bitcoin Cash, as an international currency, can be employed by travelers regardless of location.

  • Destinations that position thems as Bitcoin Cash-friendly can attract a different and interesting additional consumer segment, e.g. a new generation of younger, more digitally-sophisticated travelers.

Are there potential downsides?

Cryptotourism, as with any new innovation, does come with some challenges:

  • The global number of individuals who use cryptocurrencies, while increasing, is still limited, even more so in non-financial sectors such as tourism.

  • A number of destinations have already specifically banned them. China, Egypt, and Vietnam for example fear that increased cryptocurrency adoption might affect fragile national currencies.

  • The fluctuating value of cryptocurrencies also discourages total adoption by tourists, since purchasing power may shift from one day to the next.

  • Traditional transactional intermediaries in the tourism value chain, threatened by cryptocurrency innovation, will need to readjust their business models.

In sum

Despite the increasing adoption of blockchain technologies in many destinations, there is still significant foundational work to be done to systematize and improve consistency across the cryptocurrency and specifically Bitcoin Cash ecosystem. It remains to be seen if destinations need to incorporate novelties such as Bitcoin Cash into products, services and business models, and if there is an attractive enough incentive with a limited segment to make these substantial infrastructure changes.