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Case Study

The Travel Industry

Aggregation - a proven concept in the travel industry

Other more mature industries have progressed through a very similar period of growth and managed to successfully remove similar barriers through the use of intuitive aggregator technology. An example that is particularly widespread and familiar to many is the approximately US $9 trillion global travel industry.

Early days

In the past, the use of a travel agent intermediary was all but essential to book flights and make other travel purchases. The general public did not have access to the systems to search for and book airfares and hotel accommodation. And even if they did, the complex procedures would have made successfully completing a purchase all but impossible.
A parallel could be drawn to the beginning days of blockchain technology in the early 2010s, when the space was even more challenging for the public to safely engage with.

Growth phase

Coming back to travel, mass adoption of the internet facilitated simple purchases directly on suppliers’ websites. While specialised knowledge was not necessarily required, it was initially not a straightforward exercise, and being limited to purchasing from a single supplier at a time made effectively comparing different options all but impossible. Takeup of this booking channel was rather limited as a result, with many consumers still preferring to engage a travel agent intermediary.
In the crypto world these simple early online travel purchases could be considered a rough parallel to a DEX - direct purchases on a single chain but a still somewhat unpopular option by the general public, with many preferring the additional safety and ease of use provided by an intermediary (ie preferring a CEX).
When dealing with complex multi-faceted travel itineraries, one of the many online travel agent (OTA) intermediaries would need to be used. These websites were still an improvement, with intuitive UI allowing users to independently browse and select their preferred option; however, with the OTA still making purchases on behalf of the user, there was certainly no guarantee that the optimal outcome would be achieved, due to varying prices and fees charged by different OTAs.
The blockchain parallel here is the different CEXs which can offer a broader scope but with no guarantee of the best outcome due to varying prices and fees.

Mature phase

A considerable leap forward for the travel industry was achieved with the introduction of aggregator systems. This saw brands such as Skyscanner (GBP311m 2019 revenue, valued USD1.7b in 2016), Kayak (valued USD2.1b in 2013) and Google Travel, bring together all of the offerings from both different companies’ websites and OTAs and present them in a single location. For the first time, users could compare options via an intuitive interface and easily review and decide on their optimal solution.
Aggregators themselves also began to incorporate some degree of OTA behaviour by issuing some tickets directly at a cheaper price and hence undercutting the OTAs. The larger groups that own these aggregator brands and some OTA brands include Trip.com Group (circa US$20bn mcap), Expedia Group (circa US$25bn mcap), and Booking Holdings (circa US$100bn mcap).
ARC seeks to achieve this same outcome in the crypto space.
Last modified 2mo ago
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