Top Ways Blockchain Technology is Transforming the Hospitality Industry 

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Written by
Shivani Tripathi
Published on
March 29, 2023

The pandemic of 2020 changed the hospitality industry forever. During global lockdowns, the hospitality industry was one of the worst affected. It experienced immense business losses, supply chain disruption, and loss of customers and staff.

As the world began recovering from the impact of the pandemic, digital transformation became a key activity across all sectors and industries.

The reality is not different for hotel chains across the world. Hotel chains are investing in technology to transform operations to build efficiency and profitability into their business.

Blockchain in hospitality, which operates on decentralized distributed ledger technology (DLT), is a promising value-add for the hotel industry. Blockchain's time-stamped single-version-of-the-truth approach makes it difficult to manipulate, thus delivering safer digital transactions and eliminating potential fraud.

In this blog, we unpack the current challenges in hotel chain management and the benefits of blockchain technology in the hotel industry.

Top Hotel Chain Management Challenges

One of the top challenges faced by hotel chains is that it has many middlemen eating into profits. They offer booking services and have built a monopoly on their networks. However, their activity often results in double bookings, lowering consumer trust and leading to a loss of revenue for hospitality providers like hotel chains.

Food wastage is another major issue concerning hotel management chains. A large amount of food consumption is the norm across hotels. But it is challenging for management to track the movement of food across the supply chain with efficiency. This results in wastage, duplication of supplies, and poor quality of food.

Most hotel chains offer some kind of loyalty program. However, the effectiveness of such programs is often lacking. While consumers are often aware of such programs, they are unaware of the benefits or find it challenging to leverage rewards in exchange for perks and discounts on services and products.

Unsafe and insecure payments due to the growth of cybercrime is another major challenge. Since the ticket size of the payment is typically large, consumers need to feel more assured of safe payments. They also need to feel confident that their booking has come through.

What is Blockchain Technology for Hospitality?

Blockchain technology is essentially a public ledger, which is difficult to hack into or manipulate. Every transaction is time-stamped and has a permanent record.

Blockchain technology for hospitality refers to the specific application of blockchain to bring more efficiency, transparency, and accountability to hotel chain management.

For instance, the introduction of blockchain has the potential to completely eliminate the middleman in the hotel chain business. It can encourage direct transactions between the consumer and the service provider. Hotels will also be able to track food movements across the supply chain and leverage this data to ensure zero wastage and optimal usage of food resources.

Payments is another area where blockchain tech increases security and enables challenging transactions, such as overseas payments, to be done securely. This is a win-win for both consumers and hotel chains. The introduction of blockchain also has the potential to transform loyalty programs and build customer stickiness in a volatile consumer climate.  

Use Cases for Blockchain in Hospitality

In a survey conducted by Deloitte, over 53% of respondents see blockchain technology as a critical requirement for their respective organizations. Here is a snapshot of three use cases for blockchain in hospitality.

Blockchain-Supported Hotel Bookings

The rise of the internet was expected to reduce the number of intermediaries engaged in the travel industry. However, this was not the case, and a number of middlemen continued to proliferate, thus taking away revenues from travel providers.

Blockchain hotel booking and reservation systems are designed to generate smart contracts, which automate the transfer and disbursement of funds when a booking is made. They help eliminate human error and duplication and reduce the time needed to process payment.

Hotels no longer need to register on third-party platforms as this system is centralized. The blockchain in hospitality ecosystem makes tracking expenses, allocating and planning budgets, and optimizing revenues relatively easy for hotel chains.  

For example, Winding Tree, an open-source demand and supply-side marketplace, is innovating by creating a decentralized travel distribution network by leveraging public blockchain technology.

Winding Tree's blockchain technology revolution aims to enable travel service providers, such as hotels, airlines, and tour guides, to split the costs with the travelers, leaving out the middlemen from the equation. Savings will be transferred to travelers, who can get more bang for their buck.

Blockchain in the Restaurant Industry

Blockchain is also helping solve a number of traditional challenges faced by restaurants.

  • These include streamlining the food supply chain. With the transparency of blockchain updates, restaurants are able to optimize the freshness of the food served.
  • Another common challenge is the seamless management of restaurant relationships with their suppliers, who can range from farms to corporations. Blockchain technology makes it easy for large hotel chains to check transactions and supplier compliance. The immutable nature of blockchain information makes it difficult to manipulate.
  • Restaurants are also able to optimize they are loyalty programs by enabling the usage of blockchain utility tokens across hotel chain restaurants. They can leverage instruments such as non-fungible tokens (NFTs) to deliver novelty in terms of rewards to customers through their loyalty programs. For example, a restaurant can bring out an NFT that offers a free room upgrade. However, it can be also sold or traded at an NFT marketplace. Essentially it offers consumers the power of choice.

Top benefits of Blockchain Technology in the Hotel Industry

Here's the three top benefits that impact the spectrum of hotel chain management functions:

  • Since blockchain is a peer-to-peer network, it brings a high amount of transparency to transactions, which becomes easy to trace.
  • Blockchain brings immutability of records, i.e., transaction records cannot be tampered with. Encrypted duplicate records are available at every node.
  • The usage of blockchain makes transactions and records highly secure and challenging to hack. With cybercrime becoming common in the business world, hotel chains seek security and safety in their digital operations.


Over the next few decades, blockchain technology for hospitality will become a highly adopted application due to the multiple benefits that address key industry challenges. The blockchain infrastructure market share is expected to grow to $725.2 million by 2026, at a compound annual growth rate of 45.26% for the forecast period between 2021 and 2026. Hospitality is among the top 10 industries to be impacted. By partnering with a blockchain development specialist like Spydra, hospitality businesses can access the full stack of blockchain developer-friendly APIs, accompanied by hassle-free integration. Start a conversation with us today, and transform your business.

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