Building an ecosystem for travel – Tomorrow Explored Podcast

2023-06-12

Tomorrow Explored Podcast ventures into the utility of Web3 with guest speaker Pablo Castillo from Chain4Travel.

Camino Network aims to become the definitive Web3 ecosystem for the travel industry. Pablo explains why the industry requires blockchain solutions, the use cases for Web3 in travel, and their vision of the network’s future.

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Transcript of the “Camino Network: The Web3 Travel Ecosystem” episode

Ari Ojanperä, TX: Welcome to another episode of the TX podcast where we dive into the utility side of Web3. I’m your host Ari Ojanperä and today as my guest here we have Pablo Castillo, the CTO of Chain4Travel, who is working hard on the Camino network, a travel industry focused ecosystem.

How are you doing, Pablo?

Pablo Castillo, Chain4Travel: Thank you very much. Nice to be here.

Ari: Great to have you here. As a quick introduction, what’s your background in in travel and also in Chain4Travel and coming to Camino Network from there?

Pablo: Yes, happy to share that. So, my name is Pablo. I’m Spanish, living in Switzerland and I have worked all my life actually in the travel industry.

I started selling trips. That was actually my first job for a tour operator called Kuoni, and then made my way through IT help desk to e-commerce because at the beginning of the millenia actually internet happened and I found that interesting so I went to the internet department.

At that point in time a lot of tour operators and companies did not know where to put the internet department. In our case, it was the facility management where we were reporting to because they said, OK, it’s not marketing, it’s not sales, not product, what is it? And there was only one other business unit left.

Then gained a lot of traction obviously, and more and more I was engaging in international projects., also e-commerce projects on international scales mainly focused here in Europe. And that’s where I actually learned that our child industry is super fragmented and every market has complete different systems, different tech stacks, distribution wise, but also sourcing wise. And that it was not so easy to scale.

So the past 10 years of work that the number one tour operator called Hotelplan and I was working as a CIO, then board member, and there also basically we have different kind of entities worldwide, where we try to leverage the same technology which was quite the challenge. Then actually I got a little bit fed up with the travel industry and the lack of innovation in it.

So, because I could not imagine myself for the next 25 years doing again replacing APIs, replacing ERP systems, doing websites. So, ok, there must be more. And the first thing I did was actually I went travelling with my family after Corona succeeded for a year and during the trip my other two co-founders called me up and said hey, do you want to join Camino and Chain4Travel: We are building a platform for the global travel industry to solve some of the issues I just mentioned. And, yeah, why not be part of the solution instead of all this nagging about the problems we have?

So that’s more or less my background and how I ended up in Chain4Travel.

Ari: Building something new instead of updating the legacy systems and so on.

Pablo: It’s always more fun to build new stuff, right? I mean, we are learning a lot of course because it is completely new technology. So there’s not so much experience around. There’s also no competitors we can orient or benchmark ourselves. So, it’s a little bit uncharted territory, I would say.

Ari: Yeah, you always need the first one in the field. Starting more on the personal level, what does travelling mean to you?

Pablo: Actually, it’s one of my favorite hobby. As I mentioned before, was recently on the road with my family. And yeah, actually most of my free time and money goes into travelling the world and finding and working off my bucket list honestly.

Ari: What do you have next on your list that needs to be crossed over?

Pablo: I would love to revisit Argentina because that was one of the few countries we were not able to enter. They were still under COVID and yeah, Middle East and also a lot in Asia still to be visited.

Ari: Are there some things that kind of frustrate you when you’re travelling around the world? Something that could be better?

Pablo: Well, the fun thing is I think it’s. Yes, definitely. I mean, there’s a lot of things we can improve, starting from reentering over and over again your information. I mean you make a reservation on a note or on the hotel platform or in travel agency. You arrive at the hotel. You have to again register. There’s a lot of topics, of course. Also the data currency, so be it. Where is the hotel located or if you arrive at the hotel that the price has changed, or even if you are trying to book that, it’s not available anymore. So I definitely think we can do better, right?

And yeah, if you travel for a long time, you know the problems around payment as well. I mean if your credit card gets stolen or lost or copied and it’s blocked, then suddenly you are stranded somewhere even if you have money in your bank account, you cannot easily access it.

I think technology is definitely helping there with a lot of new concepts which we can improve travel experience as well. It must be more seamless. I think that that’s basically the main topic we are working forward to that travelers, independent where they book stuff, that experience is always more or less the same, and also that this kind of connected trip it’s also one of those buzzwords we have been talking about in our industry since more than 20 years, which so far actually was not feasible because every company is working with different kind of systems and interface and data standards – that must be much more easier in the future.

Ari: Yeah, maybe it will converge in the in the very near future. But then yeah, from the from the travel industry, the business perspective, what are the most common problems they have in terms of trying to make things more seamless?

Pablo: Yeah, I think the one inside is definitely payment on the other side is the booking process itself. Then also the experience when you check in: Why do I need to queue if I have already have the car? I think there’s a lot of automatization happening, starting from airport infrastructure as well. I mean, you need to still go to security, show your passport. I mean, there’s a lot of possibilities today and most of our partners are already investing in that.

If you look at airports and airlines specifically that they can actually more and more use video AI and also sensoric IoT to basically make it as hassle-free as possible. Sometimes, I think the biggest pain points apart from the booking experience in my opinion, is especially when something happens some kind of disruption so that you receive information.

I mean most of our partners know where we are as a traveler, we they know we are at the airport, but still some airlines do not manage to inform the customer beforehand. It’s always some guy that needs to show up in front of the crowd who is already angry because they have been waiting for information and it’s this kind of experience is where I think, hey, definitely we can do better as an industry.

06:30 Ari: Sure. So how does Camino work? How is that going to be the solution in this big picture?

Pablo: So basically first of all, I mean no technology is a silver bullet for all problems, right? I mean one has to be fair there.

What we have built is, or what we looked at when we engaged in Chain4Travel and building Camino is “ok what kind of technologies are around there, which is proven and can actually help to improve the collaboration in the travel sector?” We ended up with blockchain, which at the beginning was a little bit like surprising because a lot of people put blockchain equals crypto. And it isn’t because blockchain technology is used in more than 65 different industries today on a day-to-day basis without even customers knowing, and I think this is actually one of the keys that we should reach as an industry.

We spend a lot of time talking about technical solution, but not from a customer perspective and it should be seamless from a customer perspective. Customers care if it’s blockchain below that or.

Ari: I mean the application isn’t awesome just because it runs on blockchain.

Pablo: Exactly. And basically what we tried to do is to use blockchain. Why blockchain? Because if you zoom out from the travel industry, it’s basically a huge supply chain. There are many parties interacting with each other, right? And so it’s frictionless.

So you can actually create an ecosystem of different kind of partners who work together. What we did specifically with Camino is to create the blockchain so-called layer one blockchain only for the travel industry.

We call it a consortium blockchain, which is operated and run by travel industry members. So there’s not a thirteen years old kid with his gaming PC mining and validating blocks in our network. Those are all vetted parties. So we have also KYB process in place. We added some additional security. And what’s also novel, in my opinion, is that every party has exactly the same stake. In a lot of blockchain projects or blockchains out there like Ethereum, Avalanche and so on: the more stake you buy, the more power you have in the main in the network, meaning that you receive more transactions to validate or you receive more voting power because you have bought a higher stake in the network, which makes sense. On our end because our industry is similar to the Web3 industry also marked by some dominant players like the GDSs (Global Distribution Systems), huge OTAs (Online Travel Agencies) who actually have deep pockets, right? But the majority, I would say 90% of the players in our industry are small and medium-sized enterprises.

So in order to level that playing field, we said ok, we are going to do a very Swiss democratic approach. Basically everybody has exactly the same stake, which leads to everybody having exactly the same voting power and also number of transactions. So basically one company, one validator, one vote.

Ari: How do companies feel about that? The more democratic approach?

Pablo: Actually it’s well received, I would say, and I mean the interesting part we’ll see now we are live since last April. So the consortium is starting to work slowly together, and we are also releasing in the next bigger update this summer the so-called consortium features so meaning that then the validators who actually are the governing party of our Camino blockchain will then step by step vote on more and more items till they take completely over.

So we have set up to Camino network foundation in Switzerland which is actually a nonprofit organization which funds us as Chain4Travel for the developing part of the of the blockchain and we and the Camino network foundation are actually one validator as well within the network.

So we see ourselves, more as facilitator and are handing it over now step by step to the travel community validators who run actually the network.

Ari: So when you talk about validators and so on, which are the different stakeholders or the operators that you want to see in part of the network.

Pablo: So currently we have roughly 150 different companies listed as a supporter, I would say 2/3 of them are planning to or have already signed up and bought the stake to run a validator and it goes across the whole spectrum of the travel industry. So we have airlines, we have like Lufthansa for instance. We have loyalty programs like Miles & More, also from the Lufthansa group. We have tour operators like TUI, DER Touristik, Hotelplan, Alpitour. We have alternative accommodations startups, we have smaller startups who aim to become the decentralized TripAdvisor and actually also car rental companies, hotel chains. What more, we also have some service providers like K3M and content providers.

Plus, what we also added is a lot of technology providers who are already in the travel tech space who will help those companies who have not internal skills when it comes to Web3, like for instance writing smart contracts or understanding blockchain to facilitate implementing their projects.

So what we wanted to avoid is actually that it is a one-sided network so that only airlines are in there or only hotels are in there. That’s why our effort was to broaden a little bit the spectrum and some of the verticals we have in our industry. We have not even yet touched like, for instance, the cruise industry. So that’s also on our road map.

11:45 Ari: What type of use cases do you have for Camino?

Pablo: So the use case is currently, it’s also quite broad. Honestly, that makes it sometimes a little bit difficult to explain what Camino can be used for. I mean it starts by leveraging the power of blockchain technology. What’s new, for instance, what’s definitely new is at the topic of secondary marketplaces, you may have heard of that. So, when you make a reservation on certain platforms today, it’s already possible to generate an NFT. You as a buyer, as a customer, you own that NFT. And if the supplier does allow you, in case you cannot travel, you can resell that. So it’s like eBay or Amazon, so to say.

But the big advantage of you doing that on blockchain technology is that, contrary to Amazon or eBay, you have the security that it’s transferred in the same microsecond because blockchain technology ensures that if you make a transaction from one wallet to the other wallet, that not only the digital assets, so in this case the booking is transferred but also the money is transferred in the same thing.

And here it’s definitely also one of the bigger use cases. A lot of companies are looking into that: “Ok, how can you improve my two days payment cost and payment pain points?” I mean as an industry we have like 24 billion in per year in credit card frauds and chargeback, that’s a huge number. And actually, if everybody would use blockchain technology, it could be reduced to a really, really low number in that that perspective.

Also, if you will look at the classical payment terms like credit card fees in average, depending what kind of credit card and bank institute is used and where is the bank located, you have like 3% payment cost of the turnover of the booking. So that’s a lot. I mean we are talking from the industry which the average APT margin is 1%. If you improve to 3% you basically that means you double or triple the APT. And stuff like that. So those are payment use cases.

Then we also have use cases in the sustainability area. Sustainability is one of the big topics in the travel industry in general. Not only since Corona, but it started before Corona. But today actually we see a lot of greenwashing. So, customers are or companies are investing into projects and they are not sure does the money really arrive. Here, the transparency for blockchain can of course help by saying ok, I’m investing in that project and I want to see that the project really reaches this, let’s, assume reforestation situation project in Amazonia and you can track that on the blockchain, right?

So basically a lot of use cases are now currently built around the power of blockchain itself and the features that it delivers. There are other use cases already working with digital identity. I mean we know that most of the governments worldwide. Are working on some kind of digital identity solution for their citizenship.

Here in Europe, for instance, by 2030 80% of the European citizens should have a digital identity. The same applies as well to digital money. So a lot of central banks are exploring the possibilities of CBDC, so central bank digital currency. And if you only take those two puzzle pieces the way customers and also businesses within each other will interact to book a trip will completely change and also and then we have all this information on our devices in future where we think OK wallets will play an integral part.

So basically matching, you have a wallet you connect yourself to a front end or dApplication, you book your services. The moment you have to fill out the form, who you are, the data is automatically transferred, the money is already transferred there as well, and what wallets also compass is because cookies are dead. It’s a huge opportunity for personalizing your travel offering as well. So if you are able to understand that the customer gives us the consent what’s to read what’s in his wallet in future? Be it loyalty cards, be some kind of transactions. This opens up a multitude of new possibilities to generate business through personalization, but also through cross-marketing.

And if you look at the system landscape today in travel, I would say 90 to 95% of the applications which are out there cannot support these kind of things I just mentioned. So wallets, digital IDs and CBDC and that’s why we actually invite a lot of travel companies and try to explain them: “Ok you need to prepare as well for the future.

16:08 Ari: Yeah, a lot of the infrastructure is still kind of building the actual service layer for the regular person.

Which do you think will be the first real world adoption from these different use cases? What’s going to be maybe the most used, let’s say in two years?

Pablo: I think what we are seeing also from other partners in the industry, what raises a lot of interest is the topic of a secondary marketplace. So, Web3 brings the possibility to own assets. Ok. And I as the owner, what do I do with that asset? So it is making booking transferable. I think that we will see that more and more and more.

And then the more as it advances in society with digital IDs and so on. The process is like checking the hotel or opening a car automated registration. We will see more and more of that as well and all in wallets. I especially like the idea that we will see a lot of use cases around wallets.

I mean we know that wallet rates worldwide, depending on the data sources, something like wallet itself is around 150-200,000,000 active users. Those are basically crypto wallets, but Vodafone for instance, estimates that by end of this decade, so by 2030, more than 6.5 billion wallets, digital wallets will be used.

I mean, you know, all Google Pay has been renamed to Google Wallet. We know Apple Wallet is already there. Those two American companies are not engaging yet in crypto and NFT because the legal framework in the US is under revision. It’s not yet clear from the SEC, but once that is clear, we will definitely see mass adoption and that will drive a lot of use cases I would say.

Ari: And probably from the perspective of just the regular person, they’re not going to care if it’s working on blockchain or how the technology behind it is. It’s just called a wallet.

Pablo: Exactly. It’s a wallet and whatever is in there can interact in the real world.

Ari: So how do different businesses or other stakeholders come become a part of the Camino network? How’s the process at the moment?

Pablo: I mean, there are actually three ways of interacting with us. Most of the businesses we reach out to or they reach out to us, they are first of all interested in understanding, ok, what are you guys building? We explain that usually in one two-hour workshop. And then I would say 80-90% of those companies sign up as a supporter, like saying, OK, I like this idea. I wanna learn more. Please keep me in the loop. I wanna play around with technology.

The whole project is open source so everything can be found on GitHub. Usually we advise companies to have like one or two persons internally give them resources. Meaning, give them time to investigate a little bit: “Ok, how can this technology help us to agitate some problems? Or what kind of processes can we try out to play around?” We’re also together with partners organizing hackathons. So basically to make it more approachable through technology. That’s the first tier.

The second tier is to become a builder right away. I mean, as mentioned, we work with startups and developers who just want to build something on Camino and that’s maybe also an important note. We as Chain4Travel are currently not building any kind of applications on top of that, so it’s more actually our partners or partners of the partners who build applications on top of that.

You also have a grant program to incentivize the community or also the different companies or individual builders to build an application on community itself.

And then the 3rd way or the 3rd tier definitely is to become a validator. So validate as mentioned is are the government bodies. They are actually the ones steering the network in the future. They are also voting who’s going in as validator, they are voting on transaction fees, they’re voting on the app incentives. So basically it’s a decentralized organization we’re building up.

19:57 Ari: Great. So what is the? The status right now with Camino network, what’s happening?

Pablo: So we started to develop it last year. We had a look at different kind of technologies and then basically we started developing our own solution based on Avalanche. So we forked from Avalanche blockchain and added a few travel specific things, plus also the democratization part. For instance, as I mentioned before.

Currently we are live in a restricted main net load, so the main net is live up and running since last month. We selected 16 decentralized validators who helped us now to test and make all the experiences we release management like facing like upgrading, patching, how does that work. Because that’s a definitely a big difference to the IT projects that I had in the last 20 years.

I mean there you have basically one central server you would deploy a patch and off you go and everything. Everybody was happy. Here you have to coordinate with the community of validators. And also then basically gives them a little bit more time to prepare everything right. So, the plan actually currently are also the first dApps being deployed on the main net. So to see is everything works.

So the first use cases are now going live and most probably beginning of June we will opening up without any restriction to everybody who wants to join there is a queue, as I mentioned, of over 80 validators right now, who then will consecutively also join the network and yeah make it bigger and more secure at the end.

Ari: Awesome. What about the long-term view? What’s going to be happening within the next two years, five years? What’s the perspective?

Pablo: So currently of course we are focused on the technical platform itself of adding more features and more releases. One important feature we are building right now is what we call the touristic messaging service. So we are building on top of the infrastructure we have now built, on top of the blockchain. We will have a messaging service, imaging Telegram for the travel industry, and that Telegram is able to talk with all the touristic interfaces out there. Because I mean, currently we have like the situation: “Ok, Camino blockchain is there. But there’s of course a whole lot of legacy builds and systems and APIs out there. So how do we connect that?”

How do we help companies basically make the transition from their today’s legacy world Web2ish into 2.53ish and whatever comes afterward. So we are very much focused now on that concept. Which yeah, we think has a huge potential.

Also if you believe that wallets in future will be actually integral part of our society and that wallets even, there are some concepts around that that wallets will actually replace Outlook in future as well. I mean Outlook, if you think about it, it’s also Web2, you can create and sharing information what’s the basic definition of Web2, but you cannot transfer any assets. Now, if wallets suddenly become the main communication tool and we can connect that to the existing APIs and in-house system of airlines tour operators, hotel providers and so on, then that will become a very, very powerful messaging tool supporting free chat.

Of course, we’re also looking at OpenAI, how can we invest in that and use like free text to send them actually the request to the supplier system. interpret the responses at the personalization part of the wallet content of the customer itself. And what we’re working on for this part in the middle, for the TCM, as we call it, is also on data standards, so touristic data standards, which will then be supported by blockchain.

Our long-term vision is also that we can store the bookings themselves. Most probably not in the blockchain itself, but on a decentralized file server, so that companies that need access to that is basically can access it by a need basis. Of course, everything GDPR compliant. Very possible with zero proof, but that’s more or less our vision. So basically step-by-step increasing not only the business network we have created with more features but adding a new layer to it which then actually will lead to hopefully faster communication help companies scale faster, especially if you want to connect different kind of sources. One of the vision items we have like, connect to one connect to many, so making this kind of scalability much easier.

Ari: So bridging the gap to Web3 and putting that Web2.5 that we need it need in between. At least for businesses to be brave enough to take on something new.

Pablo: Yeah, and also a bit a little bit connecting it to the old world and making it for new partners who want to join or interact with a new party much easier.

Today, there’s a lot of paper process, so if you like a hotelier, want to engage with the OTA somewhere on this planet, I mean everything is a click away. We learned that with Internet. Then basically you have to go to a lengthy paper project, get to know each other, contracts.

Actually, this trust part can be taken over also by technology. I mean one of the big advantages of our network definitely is every validator and every entity is KYB’d. So there has already been a vetting. We know the hotel exists, tour operator exists. If they want to do business together then actually it should be as easy as writing an WhatsApp.

Ari: Sure. Sounds quite utopian, I guess from a business perspective, instead of having, those really long periods of time where nothing really happens, and then suddenly you have a deal.

Thank you so much Pablo for your time and giving us an in-depth introduction to the Camino network and your work as well.

For those who are still here on the on the podcast, follow us on the social media channels and stay tuned for the following episodes. Otherwise, thank you Pablo and see you next time.

Pablo: Thank you, Ari. It was a pleasure.