Current Hotels and Rentals Market Overview
Gone are the days when an individual would to frequently physically go to hotel or the rented place, to book a room for staying during a trip. Nowadays in the ubiquitous internet and smartphone age, people prefer checking online for vacant rooms, and booking them online. Things have become quite easier for the end user to a certain extent. But the main point to be noted is that with such comfort being provided, the end user is made to pay in return for the same.
For example, people look for hotel rooms through online websites like Booking.com or Airbnb. They look for the rooms online and book them, paying additional charges to the intermediary website including payment gateway charges if any, which may be in the range from as low as 15% to a high of 25%. The website churns money from both the players i.e. the hotel owner and the customer.
LockTrip is the right place to enjoy cheaper travel without paying hefty commissions to the middlemen. The Company functions with the underlying power of blockchain technology. Transactions inside the marketplace are performed via a cryptocurrency token LOC. The Company maintains a decentralized open source bookings ecosystem or the decentralized LOC Ledger. This makes the Company as the first system which allows end customers and property owners to deal with each other without any fee or commission. The existing intermediaries charge as they are centralized platforms.
Decentralized LOC Ledger – The Backbone
This is the main engine behind all the operations performed by the Company while establishing direct connections between the hotel owners and the customers. This LOC Ledger will record and regulate all the transactions. The ledger is driven by smart contract triggers and understands only LOC token, hence the accepted currencies is converted in terms of LOC token during the process execution.
Source: LockTrip Whitepaper
The decentralized LOC ledger is expected to perform various activities like booking placement, booking confirmation policy (instant/or after review), deposit holding, deposit release/ refunding upon check-out, check-in requirements & upgrade possibilities, dispute trigger & dispute terms, and many more. This will hence act as the smart backend of the system from where the data is pulled in and out.
In this manner, the decentralized LOC Ledger in combination with the LockTrip.com web-based marketplace provides a user-friendly self-sufficient platform.
The concept of multiple marketplaces and one worldwide database is the main highlight of the decentralized LOC Ledger. As people keep adding their properties, let’s say A adds 1000 properties in January, an in the same month B and C to adds 1000 properties each. This culminates to 3000 properties altogether. Here the system clubs all the regional data together into a single accessible database. Rather than making a separate system for each different country, the data is moved to the same database.
This can only be a possible thing when the system is decentralized, autonomous and not under any influence, organization or management risk. Tremendous risks remain while having a centralized system which is highly prone to any sort of attacks harming the privacy concern of the data owners. The decentralized LOC Ledger will be completely autonomous and as it does not charge any commissions, things will be pretty cheaply priced.
Business Model – How They Earn Money?
Let’s say, John books a hotel room using his credit card in which the currency is EURO. With the help of a certain inbuilt algorithm, the EURO is converted into equivalent LOC tokens, over which the transactions take place in this marketplace. As the system supports decentralized LOC Ledger, there are no charges incurred and hence the transaction happens at 0% commission. The LOC token is again converted into fiat currency relevant to the hotel owner’s location and transferred to him/her at 0% commission. This amount is transferred after the check-out only if there is no disputes and issues regarding the stay, which is the deciding factor for the Smart Contract entailed with it.
So the question is: the company doesn’t have a stream of revenue; if everything is done at 0% commission on both the ends.
For the time being, the model is providing freemium facilities to the users. This means everyone will be able to use the system for free. The Company tries to earn money by highlighting the listings made by the hotel owners which leads to some additional charges for the users. And in the same fashion, users can unlock and avail a variety of new features by upgrading to premium plans. The Company believes to optimize trade between property owners and end customers, but never on the cost of quality and fair trade.
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