Goldman Sachs Says Blockchain Could Drive Airbnb To Top Spot For Lodging By 2020
Earlier this week, Goldman Sachs' James Schneider and his team published their views on blockchain technology. Blockchain is a type of environment that acts like "a shared digital ledger of transactions recorded and verified across a network of participants in a tamper-proof chain that is visible to all," according to Schneider.
Of the companies called out in the note, we'll focus on Airbnb for this installment.
Blockchain technology has the ability to offer de-centralized transactions, reduce fraud and improved trust among buyers/sellers, and increased levels of transparency and efficiency. Essentially, blockchain presents the potential to reduce friction in offering, recording and settling transactions.
By improving the integrity of the transaction system, Schneider believes transactions such as those embarked upon by Airbnb participants would improve as transactions and online reviews would be better tracked to the parties. This would prevent false reviews, altered price for service, and would be the catalyst that compresses the performance of Hotel RevPAR further.
Schneider lists is expectations as follows:
- "[B]lockchain could help accelerate the adoption of P2P lodging and generate $3-$9 billion in incremental revenue opportunity through 2020."
- Electricity markets sees blockchain facilitating secure transactions driving potential for individuals to act as distributors of power, which Schneider pegs as a $2.5-$7 billion opportunity, annually.
- Title Insurance could see U.S. cost savings of roughly $2-$4 billion by reducing errors and manual effort.
- Cash Settlement of securities may see upwards of $11-$12 billion in savings.
- Anti-money laundering could save $3-$5 billion will improved levels of trust and less need for manual assessment.
Blockchain could be the next catalyst that drives Airbnb, HomeAway, Inc. (NASDAQ: AWAY), etc. benefits through accelerated growth rates as blockchain helps to improve the appeal of non-hotel types of business offering lodging services. Naturally, if Airbnb and HomeAway accelerate growth rates that would be bad for the hotel names.
To wit: "However, user authentication and reputation is particularly challenging for lodging. With a secure, tamper-proof system based on blockchain, users can more easily credentialize themselves, which could increase ease of use and security for guests and hosts alike, driving accelerated adoption."
Given the weight Goldman is applying to the potential impact of the blockchain technology on lodging, it comes as no surprise the bank says "Airbnb could be a top lodger by 2020."
The only question remaining after reading this glowing note is: When does Goldman start underwriting the Airbnb IPO?
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