The travel industry suffered through its worst year on record in 2020, with the U.S. Travel Association calculating that the domestic travel sector lost $492 billion in revenue compared to 2019, “an unprecedented 42% decline.” Business travel bore the brunt of the damage, with losses of 60 to 70% in the US and more than 50% in Europe.
So, how is it possible for an online travel agent to be “growing rapidly,” booking more than $1 million a month and planning for “a lot of pent up demand” in less than four years?
As CFO Drew Currah tells it, Travala.com has managed to buck the ferocious economic headwinds by boldly betting on cryptocurrency to both attract tech-savvy customers looking for lower costs and reduce the friction of the travel booking and payment process.
Banking on blockchain, crypto
Travala was founded in 2017 by a group that combined expertise in the travel industry, blockchain platforms and fintech intending to disrupting the online travel market via a decentralized platform that reduced the friction, cost and time required to book lodging and airline tickets. Last year it merged with TravelbyBit and attracted investment from Binance, one of the world’s largest crypto exchanges, creating a global agency with access to 2 million hotels and 600 airlines.
Travala spells out the rationale for a crypto-centric travel site in a paper that also details the problems with existing travel sites and how it uses digital finance to solve them. The critical point is that cryptocurrency attracts millennials that haven’t developed set brand preferences and are in the peak of their travel years(emphasis added):
Blockchain and cryptocurrency enthusiasts are a consumer demographic which is perfectly pre-filtered for the travel market and whose make-up helps transcend many of the difficulties in consumer acquisition and marketing outreach.
Research on cryptocurrency holders reveals that millennials are the primary demographic (Bogart, 2019). Research on the behavioral characteristics of millennials, meanwhile, demonstrates they are more open to new brands and services than older generations (“Millennials,” 2017) and more likely to travel (“Stats: Millennials To Travel,” 2017).
Travala’s ultimate goal is a decentralized platform that disintermediates the booking process via open APIs using blockchain technology and crypto transactions. As detailed in its white paper, the strategy targets centralized incumbents like Sabre (emphasis added):
The ‘Billion Dollar API’: Global travel technology companies like Amadeus and Sabre are ancient with low-level APIs used by basically all OTAs either directly or indirectly via third-party APIs that resell them. Their business value is that they access an enormous quantity of product across flights, hotels, rental cars, etc., and are integrated with…