Travel Giant Webjet (WEB:ASX) Enters Crypto through an Unprecedented $4.1M Deal with LockTrip.com
Australia-based superbrand Webjet recognizes the value potential of the blockchain startup LockTrip and joins its mission by securing the rights for up to a 51% stake in what is a unique deal for the blockchain space.
Summary of Article
- Travel Industry Leader Webjet Limited to invest up to $8.3M into LockTrip
- Managing Director of Webjet group himself, John Guscic and Director of Corporate Development, Lynne Oldfield to join LockTrip’s Board
- Webjet to Integrate the LockTrip.com Marketplace and the LOC economy into their OTA (Online Travel Agency) Websites in Australia and New Zealand
- Webjet and LockTrip to Explore the Opportunity to Migrate Booking Verification System “Rezchain” onto Hydra Chain
Webjet (WEB:ASX), headquartered in Melbourne (Australia), has announced that it will be entering the crypto space through a strategic marriage with the blockchain-based travel marketplace LockTrip.com. In addition to its product offering up to 60% savings compared to traditional booking sites, LockTrip is also known for developing and launching the rapidly growing Hydra blockchain, specialized on bringing real-world businesses on-chain.
Introduction to Webjet
Webjet is the world’s second-largest accommodation supplier to the travel industry through its WebBeds division. Across its multiple B2B wholesale brands, the company is supplying more than 44,000 clients with world-wide inventory and has a presence in more than 50 countries. This includes a wide profile of companies such as travel agencies, online travel agencies as well as other wholesale suppliers.
The Inventory supply Brands owned by Webjet are:
- Destinations of the World (DOTW)
- Lots of Hotels
- Sun Hotels
- Fit Ruums
- Total Stay
In addition to the wholesale inventory supply, Webjet also dominates the OTA market in Australia and New Zealand via the retail sites https://www.webjet.com.au/ and https://www.webjet.co.nz/. Listed on the Australian Stock Exchange, the company is currently traded at a valuation of above AU$2 Billion and has recorded a total flights/booking transaction volume of AU$3 Billion for 2020.
The more significant it is to see such a giant and industry leader joining the crypto space through the well known and established blockchain-based company LockTrip and its LOC token.
The “marriage”, as it is called by Nikola Alexandrov, CEO and Co-Founder of LockTrip, is uniquely structured. He comments:
“The LockTrip/Webjet deal is a testament on how traditional tech giants spot opportunity in blockchain technology. Among the multiple synergies, perhaps the most unique feature of the deal is Webjet’s commitment to integrate the LockTrip marketplace on it’s OTA websites. If that condition is met, the LOC economy would be supercharged by the existing business of a global superbrand that has millions of active users. This makes the deal unprecedented in the blockchain space.”
Supercharging the LOC Economy
According to the whitepaper of LockTrip, every booking made on the marketplace results in LOC token being bought from exchanges and permanently burnt, amounting to 3% of the booking value. The fixed supply of less than 18.6 million LOC therefore makes it a deflationary economy. In addition to this, it is also possible to pay for travel bookings directly with LOC to take advantage of the cheapest prices on the marketplace.
The deal is now seeking to expand the LOC burn mechanism towards the leading OTA brands of Webjet in Australia and New Zealand, thus capturing the economy of three distinct travel marketplaces. If the integration is successful, this would be a massive step for the advancement of the crypto industry towards real world businesses.
According to the announcement, LockTrip.com as a travel marketplace and brand will continue to expand towards the global market and allow users worldwide to save up to 60% on their travel bookings by cutting out middlemen and commissions.
Regarding their investment decision, John Guscic, Managing Director of Webjet, says:
“We first made contact with the LockTrip founders in early 2019 to share views on blockchain, given Webjet’s blockchain journey with Rezchain. From the initial conversation, we were impressed with the way the founders approached solving the well-known challenges of a public blockchain, and felt they had a game changing opportunity to utilize the fundamental features of blockchain to improve the hotel distribution landscape”
He then continues:
“Having identified the exciting potential that Locktrip and Hydra could offer, we began to explore a deeper relationship, which has resulted in today’s announcement. We are delighted to be on board with the LockTrip founders offering innovation to travel consumers and suppliers alike”
Potential Migration of Rezchain onto Hydra Chain
The synergies of the deal go far beyond the LOC economy integration to the Webjet OTAs. Arguably, the more significant element of the deal could be the migration of the Rezchain booking verification system onto the Hydra blockchain.
Webjet has been investing in their own commercially viable blockchain-based project branded Rezchain, which aims to prevent data mismatches between various suppliers and intermediaries. Rezchain is a private blockchain, with 100% centralized nodes and is fully operational as we speak. This critical infrastructure could now be migrated onto the decentralized infrastructure of the Hydra chain.
According to its MasterPlan, the long term mission of LockTrip is about solving pressing problems of the travel industry regarding data mismatch, fragmented supplier relationships and inefficient distribution.
“These are exactly the core problems we set out to solve by launching LockTrip. To a certain degree, Rezchain was also trying to tackle the same problems that LockTrip identified. Joining our forces through a marriage with Webjet was the logical thing to do.” says Nikola Aloxandrov.
The long term objective of LockTrip is to launch a distributed database for travel inventory, which could solve many of the problems outlined above. The development of the Hydra chain also had the core purpose of serving this long-term goal, as it comes with all the building blocks needed. Some of these are:
- Fixed transaction fees in $USD
- Wallet-level scalability (parallel processing of transactions allows for a single wallet to process hundreds of transactions per block)
- Network-level scalability with an elastic transaction capacity of up to 540 TPS
- Support for turing-complete smart contracts
- Gas royalty for smart contract creators
- Layer two solution for bigger data amounts
Earlier this year, Hydra was launched as a blockchain that offers real-world businesses a platform to join the crypto space. The fixed transaction fees and gas royalty for businesses were mentioned as key features.
Lynne Oldfield, Director of Corporate Development at Webjet, comments:
“Public blockchains are typically slow, resource hungry and have unpredictable pricing; with the release of Hydra chain, the founders of LockTrip provide a robust, scalable platform for genuine commercial applications and we are excited to invest with them as they grow this opportunity”
If the integration is successful, Rezchain would be the third real-world business to build on Hydra. Aside from Rezchain and LockTrip, a third project named Evedo (EVED token) has also announced that it will be migrating from Ethereum to Hydra later this year. Evedo aims to revolutionize the event industry by connecting parties directly with each other and removing commissions in between.
The biggest long-term potential for the deal between LockTrip, Hydra and Webjet lies in the endgame scenario:
Tokenizing travel inventory, and thus connecting various suppliers, hotels and marketplaces through a globally accessible distributed travel database.
This is a massive vision that could cause tremendous economic shifts across the industry. It is yet to be seen whether the team will be able to accomplish it. The online travel industry grew to more than $700 Billion in 2019. Disrupting such a massive industry will surely not happen overnight. But with Hydra, they have built the tools necessary to make it possible. And with their new partner of Webjet, which is the second biggest travel supplier in the world, they now also have the power to pull it off.
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