Is blockchain technology a watershed for tourism development?

ABSTRACT

The rise of blockchain technology could radically disrupt the global economy. As an emergent technology, blockchain is of broad and current interest in the tourism industry. Small island economies are at the forefront of adopting this digital asset and technology. For instance, the Caribbean economies are launching their first digital legal tender, and Aruba is developing a blockchain platform to boost tourism revenue. Given the velocity of adoption, blockchain technology holds significant implications for tourism development. This research letter provides a discourse on the adoption of blockchain technology among small island economies concerning the opportunities and potential challenges faced and offers practical implications for tourism stakeholders.

KEYWORDS:

• Blockchain technology
• cryptocurrency
• Bitcoin
• Ethereum
• tourism development
• economic impacts

Acknowledgments

The authors are grateful to the editor and anonymous reviewers for their valuable feedback in improving the paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Andrei O. J. Kwok http://orcid.org/0000-0002-2733-9931

Notes

1 Among the emerging technologies surveyed by PwC (2017), hospitality and leisure are poised to receive the largest share of investment in blockchain technology. Hospitality and leisure broadly covers travel, tourism, vacation, and lodging related activities. Survey statistics for emerging technologies are fluid. Especially as blockchain technology adoption intensifies, significant shift can be expected among the various industries.

2 See Global Legal Research Directorate Staff (2018, June) on the regulation of cryptocurrency by country worldwide. For tourism-related application, some local authorities in major economies such as Japan (Nagata, 2017) and Germany (Kasanmascheff, 2018) are beginning to accept cryptocurrencies as legal tender for payment of hotel and travel services to promote tourism in specific locations.

3 Correspondent banks are international banking institutions that act as intermediaries for domestic banks in less developed economies due to lack of access to the global financial networks.

4 For example, from the regulatory and political perspective, the Chinese government bans retail cryptocurrency trading (Lam, 2017). Nonetheless, considering the opportunities presented by blockchain technology, it promotes institutional blockchain development to better align with state development (Dong, 2018).