Disrupting traditional travel payments — a legacy ecosystem rife with opacity and inefficiency — is potentially a killer app for cryptocurrency, availing new ways to book, pay and admit entry to a rapidly forming metaverse where pre-travel experiences promise to be truly immersive.
As Travala Co-Founder and CEO Juan Otero told PYMNTS’ Karen Webster in the “Digital Payments Flip the Script: 10 Merchants and 10 Visions for Digital Transformation” series, a PYMNTS and PayPal collaboration, the pandemic cost the crypto-based travel platform 90% of its booking revenue when it first hit.
In 2022, the company is looking at the opposite issue, as two years of demand is unleashed.
“It’s funny because here we are two years on, and we’re in the same phase again because we see this massive rebound of travel, and volume is out of control,” he said.
It’s a good problem to have, and in getting a piece of that action for his blockchain-based online travel agency (OTA), Otero said price, selection and transparency play a role, as does the platform’s native AVA token.
By tokenizing traditional loyalty and rewards using the AVA token, he said, “Users knew, and they still do today, that when they make a booking, they’re going to get a reward or gift back that is liquid and real, is on chain, they know what it is worth, that it’s not centralized or controlled by what we see in traditional loyalty programs from the existing OTAs.”
In January, the firm moved to non-fungible tokens (NFTs), announcing a partnership with NFTb Marketplace allowing NFTb token holders to book, earn and redeem with Travala.
Otero called it “the first of its kind,” saying that 80% of Travala bookings are paid with crypto.
“We built a technology from scratch to allow bookings with crypto,” he said. “We only added credit card payment options in 2019. At the beginning, we were only allowing people to pay with crypto.”
Volatility is still an issue, with some users not wanting to spend their bitcoin because of price fluctuations, which is when the corporate cards come out. But that’s not the vision.
“Together with bitcoin, [AVA is] the preferred payment option,” he said. “It goes anywhere between 15% and 20% in a given month of the total volume that is paid with a native token.”
For now, he said, suppliers are paid in fiat converted from crypto to stablecoin, but “I’m hoping that at some point in the future, there’ll be more suppliers that will start to accept crypto.”
See also: Travala on the Onboarding Challenges of Cryptocurrency Payments
Volatility Gets Grounded
A study in the flexibility of crypto in the travel industry and outside of it, Travala is pushing the boundaries of decentralized finance (DeFi) with its native AVA token and new Travel Tigers NFT collection.
With a user experience (UX) that Otero compared to Booking.com or Expedia, he said, “We have built all this in the background, [allowing] people to pay with crypto, get rewarded with crypto, interact with NFTs, connect the wallets, and it’s all done in a very seamless way.”
Noting that some $30 billion in venture capital flowed into blockchain startups in the past year alone, Otero said he thinks we’re at the start of the wave Travala has been waiting for, now breaking with higher adoption of this new way to book, pay and get rewarded for travel.
He said adoption “is at a whole different level than what it was even a couple of years ago,” which has Travala and others scurrying to add “more travel verticals, more bookable options and a robust and secure way to continue to book travel” when pent-up demand breaks out.
Even so, crypto payments are in their infancy, and kinks remain, like that volatility issue.
Saying that many payment gateways have already solved for this, Otero explained that bookers using Travala and paying with any crypto asset it accepts are shielded, at least somewhat.
Painting a hypothetical scenario in which a traveler is quoted $100 in bitcoin for a hotel room, he said, “You are only going to be exposed to that price during the time that you’re quoting that conversion, which is a matter of minutes depending on how long that transaction takes.”
Read also: Travel Company Travala.com Accepts Bitcoin Payments
Go There Before Getting There
Times are still challenging for world travelers, with the Russia-Ukraine war and COVID-19 variants making headlines. Maybe metaverse travel can benefit from these IRL snags.
“Our mission since Day One [was] to disrupt travel with blockchain technology,” Otero said. “We wanted to decentralize travel, and this is what we’re doing with crypto payments, with NFTs, with loyalty.
“We’ve been doing a lot of work on the metaverse as well. We have a presence across multiple different blockchain-based metaverses. We are about to release the first digital travel agency in the Decentraland metaverse, which is the first of its kind.”
That’s a fascinating convergence of metaverse and crypto use, where one’s avatar can walk into a faux brick-and-mortar travel agency in the metaverse, browsing virtual magazines and brochures that take you straight to the booking.
But it gets better.
It’s leading to a commercial singularity that’s positioning the metaverse as the new social media, and that’s where Otero said he sees this trending based on consumer behavior with new tech.
Conjuring a luxury resort in the Maldives, he said, “Imagine if you had the opportunity to walk in and experience that with your virtual reality goggles” before booking, feeling like you’re on-property, standing by the pool, seeing your room, all before pushing the “book” button.
“The value of that is absolutely mind blowing,” Otero said.
See also: Travala Users Can Use Crypto to Pay for Expedia Bookings
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