In this paper we introduce the Xeni travel ecosystem which migrates the current travel supply chain monetary settlement process to a more efficient, transparent and faster access state. This paper also outlines potential DeFi and travel inventory tokenization opportunities it sees as value adds to its ecosystem.
1. Summary of Key Facts
2. Trends and opportunities
- Travelers and travel professionals require a significant upgrade to existing travel software infrastructure.
- Travel suppliers require more inventory distribution channels
- Challenges with payments in the travel industry
- Overview: solving the four major pain points in selling travel online
- Xeni revenue model
4. XeniCoin Token
- Primary use case
- Launch and initial token distribution
- Token unlocking schedule (vesting)
Summary of Key Facts
Xeni is a Web 3.0 travel ecosystem that democratizes access of wholesale (net rate) inventory to travel resellers and powers web-based selling. The travel transactions generated on Xeni’s ecosystem will represent a captive market for our blockchain settlement engine.
The Xeni ecosystem is comprised of three major elements:
The ecosystem addresses the major pain points in the travel supply chain specifically involving the sale of online travel inventory. These pain points are: accessing wholesale inventory, selling travel online to travelers, account reconciliation, reduction of travel payment fraud, cost, and settlement time.
Xeni (travel ecosystem)
Xeni’s ecosystem offers benefits to every constituent in a travel transaction, as follows:
- Access to a full suite of travel inventory at wholesale rates
- Complete control over their commissions
- Ability to receive an instant settlement of commissions
- Ability to accept online payments
- Ability to offer their travelers a modern, online experience with a no-code solution
- High-touch service without paying a higher price vs. published rates
- Gain the luxury of having a travel service provider coupled with the convenience of logging in to a modern online travel agency
- A new distribution channel to reach more resellers of travel
- Reduce their customer service and tech team costs
- Receive payments at significantly reduced cost vs. the current virtual credit card-based payment system
- Faster settlement: instant settlement once booking becomes non-refundable
XeniPay will be used to track and settle transactions that occur in the Xeni travel ecosystem.
Trends and Opportunities
Travelers and travel professionals require a significant upgrade to existing travel software infrastructure
There has been very little software and payment innovation in the travel industry since the 1990s. The last large landscape change was when Online Travel Agencies (OTAs), the direct-to-consumer business model in travel, made their debut. Since then, most innovation in travel software has focused on B2C experiences.
However, evidence suggests most consumers are not actually happy with their DIY (do it yourself) booking experience when customer service is required. OTA net promoter scores are low; Expedia’s is a 3. Booking.com fares even worse, at a -1. For comparison, Apple’s is a 47, and Costco’s is a 79.
1 For trips with any complexity, including multiple-city itineraries, re-booking or cancellation, a high-touch experience is needed.
Especially since the onset of COVID, consumers have been increasingly seeking out high-touch experiences when booking travel (involving the use of a travel professional). The most significant increase in intent-to-use for travel professionals is Millennials – consumers aged 18-38.
But travel professionals do not have the technology infrastructure to service Millennials in the manner to which they have become accustomed. Millennials want an online experience – a login, a DIY option, the ability to pay online – all of these are out of reach for most travel professionals who cannot afford the high price tags such solutions require (in the hundreds of thousands to millions of dollars). The travel industry will need to demonstrate significant innovation to meet the needs of the Millennial and younger generations.
Despite the myth that the OTAs have put travel professionals out of business, the existing market for travel professionals remains robust. There are over 100,000 travel agents in the U.S. alone and over 1,000,000 globally, who collectively booked a notional value of ~$330 billion of travel in 2019.3 That segment has also returned to growth after losing share to the OTAs after many years. 4 Additionally, the rise of social media has created a generation of travel influencers who may seek to monetize their audience by selling travel online.
Xeni allows travelers to get high-touch service while enjoying the same online convenience the OTAs provide.
- https://customer.guru/net-promoter-score/priceline-group https://customer.guru/net-promoter-score/expedia-inc
- Washington Post (Bailey Berg), “Why 2021 will be the year of the travel agent”. May 13, 2021
- IBISWorld March, 2020
- Credit card fraud: nearly 5% of global online air travel bookings are fraudulent, costing airlines alone up to $5 billion. Airlines reject up to 25% of legitimate orders to avoid fraudulent bookings. Overall, fraud is a $20 billion a year problem for the travel industry. Travel is particularly prone to fraud because it features high ticket goods primarily bought online. The cost to a travel professional of bearing fraud is enormous – they might earn a 10% commission on a given trip, but if the trip is fraudulent, they must bear 100% of the COGS; that means they will need to book ten more trips (of the same value) just to make up that loss.
- High counterparty risk: counterparties in travel are paid sequentially after the trip has been completed. For example, if a customer books their hotel on an OTA site, the payment will be processed once the stay has been completed. The OTA then sits on that money until they choose to send the respective payments along to the relevant counterparties, which could include a travel agent owed a commission, and a hotel owed their cost of goods. Each counterparty is at the mercy of whoever accepted the payment – if they elect not to pay or go out of business in the meantime, the counterparties are left holding the bag. Unpaid commissions are a problem for over 40% of agencies.
- Slow settlement times: because of this sequential payment process, settlement of all counterparties can take 30-60 days, a substantial working capital tie-up.
- High payment costs: on average, payments in travel represent ~6% of total booking costs, which are passed along to consumers in the form of higher prices. However, for complex bookings (mainly corporate bookings with many changes and cancellations, or for bookings involving currency translation), the cost can go as high as 12%.
- Complex cancellation and dispute processes: Disputes are a massive issue in travel – the industry’s chargeback rate is more than twice the average of other industries.
8There is no single source of truth for the counterparties in each travel transaction. Invoices and statements come in varying formats, so when counterparties try to reconcile a booking, they may not be able to identify the same transaction. Since they will each rely on their database, they will certainly not be looking at the same data set about that transaction. The lack of transparency in transaction data is the primary cause of chargebacks.
For the reasons listed above, payments represent an anvil around the neck of travel professionals and inventory suppliers. The current payments system simply does not meet the needs of the industry and results in lost profits and higher costs for every constituent. A blockchain-based system could solve all these problems, but a critical question remains: how to transition an entrenched industry into a DLT-based payments system?Because of our value added services, Xeni is able to attract travel buyers, resellers, and suppliers onto our platform; from there, we can directly settle their transactions using our blockchain based system. After demonstrating the value of blockchain-based settlement within our own ecosystem, Xeni can expand this offering out to the broader travel industry.
The Xeni Solution
Without Xeni, reselling travel involves a labor intensive, slow process that represents a barrier to scaling and competing with the OTAS
Xeni revenue model
The XeniCoin token is the native token of Xeni, which will reside on a blockchain network to be determined. It derives its utility from 3 purposes: Payments, Monetization Opportunities, and Governance. The maximum supply of XeniCoin is expected to be 1,000,000,000 (1 billion).
The Token Distribution has been designed to ensure a gradual increase of the circulating supply of XeniCoins and to align the interests of the community, investors, and XENI team members and advisors.
Primary use case
1) Payments: Xeni allows travelers to pay for their bookings in a wide variety of fiat currencies and cryptocurrencies. The preferred currency on the Xeni ecosystem is the XeniCoin, which entitles the buyer to more significant discounts in future travel credits and rewards. Travelers and their travel professionals will receive discounts on travel in exchange for paying in XeniCoin or other Crypto.
2) Monetization Opportunities
Launch and initial token distribution
At the Token Generation Event (TGE) in Q1 2023, the XeniCoin token will be launched on a blockchain network to be determined. The maximum total supply will be 1 billion (1,000,000,000 XeniCoin). We expect the community ownership of XeniToken to increase over time.
Token-gated membership: DAO members must hold a minimum threshold of XeniCoin to be defined.
Governance: specific areas of governance will fall under the DAO immediately. The governance will be conducted through a series of proposals that members of the DAO will vote on.
The XeniCoin DAO, based on current plans, will maintain control of the Defi protocol(s) (such as choosing interest rate and LTV), as well as select other areas of governance, which include:
- Voting rights on supplier and service provider mergers & acquisitions
- Voting rights on inventory additions to the Xeni platform
- Voting rights on supported coins
- Voting rights on exclusive discounts, special offers, and sweepstakes for token holders (for example, DAO could offer access to a week at a luxury villa to token holders on a sweepstakes basis)
- Capital allocation decisions of DAO treasury (including buy and burn decision) Incentives allocated through stable coin