Disrupting traditional travel payments â a legacy ecosystem rife with opacity and inefficiency â 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 PYMNTSâ Karen Webster in the âDigital Payments Flip the Script: 10 Merchants and 10 Visions for Digital Transformationâ 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.
âItâs funny because here we are two years on, and weâre in the same phase again because we see this massive rebound of travel, and volume is out of control,â he said.
Itâs 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 platformâs native AVA token.
By tokenizing traditional loyalty and rewards using the AVA token, he said, âUsers knew, and they still do today, that when they make a booking, theyâre going to get a reward or gift back that is liquid and real, is on chain, they know what it is worth, that itâs not centralized or controlled by what we see in traditional loyalty programs from the existing OTAs.â
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 âthe first of its kind,â saying that 80% of Travala bookings are paid with crypto.
âWe built a technology from scratch to allow bookings with crypto,â he said. âWe only added credit card payment options in 2019. At the beginning, we were only allowing people to pay with crypto.â
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 thatâs not the vision.
âTogether with bitcoin, [AVA is] the preferred payment option,â he said. âIt goes anywhere between 15% and 20% in a given month of the total volume that is paid with a native token.â
For now, he said, suppliers are paid in fiat converted from crypto to stablecoin, but âIâm hoping that at some point in the future, thereâll be more suppliers that will start to accept crypto.â
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, âWe have built all this in the background, [allowing] people to pay with crypto, get rewarded with crypto, interact with NFTs, connect the wallets, and itâs all done in a very seamless way.â
Noting that some $30 billion in venture capital flowed into blockchain startups in the past year alone, Otero said he thinks weâre 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 âis at a whole different level than what it was even a couple of years ago,â which has Travala and others scurrying to add âmore travel verticals, more bookable options and a robust and secure way to continue to book travelâ 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, âYou are only going to be exposed to that price during the time that youâre quoting that conversion, which is a matter of minutes depending on how long that transaction takes.â
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.
âOur mission since Day One [was] to disrupt travel with blockchain technology,â Otero said. âWe wanted to decentralize travel, and this is what weâre doing with crypto payments, with NFTs, with loyalty.
âWeâve 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.â
Thatâs a fascinating convergence of metaverse and crypto use, where oneâs 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.
Itâs leading to a commercial singularity thatâs positioning the metaverse as the new social media, and thatâs where Otero said he sees this trending based on consumer behavior with new tech.
Conjuring a luxury resort in the Maldives, he said, âImagine if you had the opportunity to walk in and experience that with your virtual reality gogglesâ before booking, feeling like youâre on-property, standing by the pool, seeing your room, all before pushing the âbookâ button.
âThe value of that is absolutely mind blowing,â Otero said.
See also: Travala Users Can Use Crypto to Pay for Expedia Bookings