Digital Transformation, Part II: Blockchain equals Liquidity

You’ve seen the memes and heard the*Experts* talking about how the Covid-19 pandemic is going to finally prompt companies across all industries to bite the bullet and implement digital transformation in order to survive the crisis – but what does that really mean? What does digital transformation look like for your company specifically, and your industry specifically?

Last month, we dove into the ways in which automation is going to be a critical driver of the digital transformation necessary for the travel industry’s recovery from the Covid crisis, which is affecting businesses in the industry through an ugly mix of disappearing demand, increased requirements to invest in cleaning and sanitization enhancements, uncertainty about the timeline for recovery to the next normal, and myriad other threats. But all of that ugliness flows into one overarching problem – how does your travel business preserve and maintain financial liquidity to get through the immediate effects of the crisis and thrive in the post-recovery world?

Digital transformation of accounts receivable, accounts payable, and any other financial settlement activities via blockchain is the best answer to addressing short-term liquidity challenges and positioning your business for the (uncertain) future.

At Clear Chain Travel, we’re using blockchain as the lynchpin of a digital transformation process to help reduce costs and increase the accuracy and speed of settlements for payments and transactions from hotels and tour & activity providers to vendors, agents and planners. Here’s how we’re doing it:

Extended payment windows have given rise to an alternative funding industry that wouldn’t be necessary if hotels and other providers could always pay their bills on time, which didn’t happen even in the best economic conditions. Implementing smart contracts on blockchain can eliminate issues with merchants holding hotels’ cash on booking transactions for extended periods of time and breakage for those accounts where hotels must still invoice providers to get their money.

Clear Chain’s blockchain solution provides smart contracts that facilitate liquidity via a neutral, transactional cryptocurrency that eliminates much of the friction from manual settlement processes that inhibit the efficient flow of funds from vendors and other providers to customers and vice-versa.

Our industry has already seen the collapse of previously thriving companies such as Thomas Cook and Bookit due to sharp disruptions in their ability to maintain cash flow and liquidity when their partners were unable or unwilling to pay their bills. Travel companies of all sizes with cash flow issues can benefit from the B-to-B transactional model inside the Clear Chain blockchain platform, eliminating debt from their balance sheets and putting cash into their accounts to maintain operations.

As the Covid crisis grinds on with no identifiable end in sight, it’s more important than ever for hotels, tour operators, meeting planners, group travel providers, and any travel company that relies on transaction-generated revenue to optimize its A/R and A/P systems to ensure maximum liquidity. Blockchain provides that optimization, and the ROI achievable from implementing blockchain systems can be an ideal first step into a future of digital transformation.

Let us know how we can help get your business in position to thrive post-crisis.