Transcript: Rana Mukherji Joins the Bench Impact Podcast With Host Jonathan Worsley

This podcast examines the applications of blockchain technology in the hospitality industry. Listen in as Rana discusses how blockchain helps travelers take back control of their experience and data by cutting out greedy middlemen and remedying the inefficiencies which have plagued the industry for decades.

You can listen to the full podcast here.

Jon Worsley: (00:05)
Welcome to the bench impact series. I’m here in Dubai with a very good friend of mine, Rana Mukherji. I’m delighted that you’re on our impact series. We like speaking to people who are making a difference in our industry and you certainly are making a difference and I’m delighted that you’re going to be presenting your product at AHIC on the 9th of April. Welcome.

Rana Mukherji: (00:33)
Thank you. Thank you Jonathan. It’s a pleasure to be part of AHIC and to be associated with you.

Jon Worsley: (00:39)
Well delighted. Now, tell us a little bit. You need to explain this as blockchain for dummies. So explain to us how blockchain is going to disrupt our industry.

Rana Mukherji: (00:54)
The blockchain is an enabler. It’s an enabler between two parties, When a transaction is made on the blockchain there’s no middle man there, right? That’s what blockchain does, it removes the middle man, gives each transaction more clarity and secures it. So that’s what blockchain does. What we did is we tried to take the best from the present industry and the blockchain industry and created a hybrid system. And as blockchain is a product, it keeps evolving. Like Ethereum, there are various kinds of blockchain. We are sitting on the Ethereum blockchain. So we made a unique marketplace with smart contracts, which is powered by ERC 20 tokens. The blockchain is increasing our productivity and making business more seamless.

Jon Worsley: (01:51)
Is that important for our industry?

Rana Mukherji: (01:54)
It improves productivity because of the way the world is moving. The world is becoming smaller day by day and we are doing transactions in Whatsapp and Telegram, so all these transactions need to be in one point.

Jon Worsley: (02:11)
And how much more efficient can the industry be by engaging with blockchain technology?

Rana Mukherji: (02:20)
Let me give you one example because we all relate well to them. What blockchain does, is it stops the leakage. The leakage means that there are various middle parties who take various commissions. The bank takes commission. There’s a forex exchange that goes through the credit card exchange. So with all these different middlemen, on average, a hotel loses nearly 25 to 30% the transaction value just to get the business in the door. What blockchain does is it allows A and B to have a transaction without all these middlemen. So all of a sudden, your businesses is becoming more efficient because now you have more money to invest back in the business so it can grow. That’s the first point. Second is, once you have a KYC approved buyer, that means there’s a legitimate buyer which can’t be fake, so it addresses fraud as well. So it solves challenges which we have in the hotel business of fake booking, cancellations — all these go away, right? Third is face to face negotiation, which we do in our decentralized hotel room marketplace, where face to face negotiation is actually replaced with the ask and bid option and the legacy contract signing, which happens in the storage of the emails. Sending emails, signing in docusign, all get replaced with smart contracts. With this increased efficiency, the hotel will be able to do what they do the best, which is making the customer happy and creating a more engaging experience. Usually there is about 20 to 30 people who take care of the background stuff at a hotel. Some places even more, which includes the accounting, which includes just verifying the transaction. The blockchain removes these aspects to make it more efficient.

Jon Worsley: (04:33)
What about the distribution side? Do the hotels still need to use the various OTA’s in order to fill their rooms?

Rana Mukherji: (04:43)
The audience will stay because the internet is there. But will the Internet be in the same form? May or may not be, because the Internet is also quite challenging at this stage because all the big boys, like Google are there. Right? So you have to pay. So you have to be on top of that. Those things the blockchain is trying to solve in a way that everyone has equal power. But to answer your question, will booking.com and the other OTAs stay? Yes. But I think they will all evolve with time.

Jon Worsley: (05:31)
So this is a real win-win for the hotel industry. We’re going directly from the consumer to the retailer, to the hotelier in this case, so it looks like a win-win. So are you beginning to see engagement with the industry? Are they adopting this technology? Are they doing it themselves?

Rana Mukherji: (05:52)
Yeah, it will take time because blockchain is still sitting in 1994 in the .com era. So, we are well ahead of time. But many other industries like banking sectors have already started bringing it together. Right? Recently I think JP Morgan just issued their coin as well. What I’m trying to say is that the industry will acknowledge it in a matter of time, but right now there are a few other things that blockchain has to answer before the industry takes it on full. Like the usage of blockchain in our businesses is nearly 10%, not more than that.

Jon Worsley: (06:35)
Okay. And who do you see developing it at the moment? Are the global brands starting to look at this?

Rana Mukherji: (06:42)
You see, there’s the rumor that Facebook is coming out with their own coins. Uber is coming with their own coin. The blockchain can add value wherever there’s an infrastructure, which needs a token to enable it. Does this coin exist at this stage? It doesn’t exist in coin form, but it actually exists in the point form. So, like Marriott has their own points and the same points are actually within their ecosystem. They accept there’s a value of the points in which they have, right? So if you stay in some hotels, it’s 35,000 points, some hotels 25,000 points. It’s a value which they have created, right? But the value is being created by Marriott, Right? Cryptocurrency does the exactly same thing for the ecosystem and that’s what we are trying to do. In more of a helicopter view, we are trying to have the same coin for the entire ecosystem, not only for one brand. Because when everybody comes together, who wins? Hotel owner wins, the brand wins, the traveler wins. And at the same time, in our platform, what we started doing is rather than giving points back as a reward, we are giving our coin as a reward back. So the more tokens we give, the valuation of the coin keeps going up as well. Your points can be monetized in over a period of time as well.

Jon Worsley: (08:08)
But this only begins to work when you have critical mass and you have the industry behind you, right?

Rana Mukherji: (08:15)
Coming back to the question you asked first. Right to start with, we have 170,000 hotels in our ecosystem.

Jon Worsley: (08:22)
170,000 hotels?

Rana Mukherji: (08:24)
Yes.

Jon Worsley: (08:25)
But that’s a huge number of hotels to launch a product with. How have you managed to get to so many hotels, so quickly?

Rana Mukherji: (08:35)
These are the various partners, right? We connected through the various APIs and you know the way the internet is, everything is connected. You connect to their database, their active inventory… However, because you asked me, I’ll answer a bit more specific. We have 142 direct contracts with hotels at this stage and the others are through a third party. So what happens, we take inventory from a third party and then we put the pricing, and our team developed the entire back-end mechanism to have a cash back for all parties. That’s the way we grew in the beginning. And now we are establishing through the direct contracts.

Jon Worsley: (09:23)
So I’d imagine you’re starting to deal with the independents and smaller operators at the moment?

Rana Mukherji: (09:30)
Yes. Through the third parties we have all the big hotel brands, right? You name it. Because they have partnered with the different third parties, and through them we are connected. With the one-on-one ‘street’ contracts, it’s mainly the small operators because we are recruiting them by offering them an upgrade in their technology. We’re giving them a property management system. We are giving them the door lock technology, which comes built-in with our partner’s solution. So that’s what we are trying to bring to the table, because that’s an untapped niche market and it still needs a branded solution in an unbranded way. So that they still keep their identity, but they get access to the infrastructure they need to flourish. So that’s our recruitment model. That’s our team motto, technology belongs to everyone.

Jon Worsley: (10:29)
So this is really a holistic answer to some of the challenges that both the consumer faces and the hotelier faces. So you can check in and it’ll take you straight through to your room, use your phone to unlock the door…

Rana Mukherji: (10:46)
Let’s start following the data from the time you log in, right? Let’s say you booked through booking.com. You put your credit card, your name, your details, everything. So all this data goes to booking.com and the reservation details goes to the hotel, right? But once you go to the hotel, you start the story all over again. They again ask you to fill your passport. They ask your passport copy. Then you give the credit card and that takes another 10–15 minutes and then you go into your room. So what we are trying to do, or actually it will be done from the day we launch… Once Jonathan is registered in our platform, your profile will be KYC-approved by a third party. A selfie of yours with a passport, credit card details and everything. So those details go directly to the hotel, right? So you’re already approved, you are already verified and the hotel will get access to that as well. And we are trying to enable you to do that with your preferences as well. You own your data and can update your own preference… I’ll give you one simple example, right? You may like a bottle of red wine when you’re on vacation with your family. But when you’re on a business trip you don’t want that as your preference. You can update your preference just before booking. We went through the flow to ensure that all that data, those leakages, are actually solved with the blockchain. And it can be done now, which was never possible before. That’s why we don’t want to position ourselves as if we are another OTA. If you see our team, we are hoteliers. We are all ex hoteliers. So this product is made by the hoteliers, for the hoteliers. And with the customer as a focal point, right? The traveler. Because none of the OTAs allow the customer to get the cash back, or allow the customer to get rewarded. You know, you have to stay with one specific brand to get your points. You can stay anywhere in our ecosystem. Like for instance, right now you can stay in 170,000 hotels. You get your reward, irrespective. So we are giving the power back to the customer. That’s blockchain biggest mantra. The blockchain’s mantra is to be holistic for the community. Everybody has to win.

Jon Worsley: (13:45)
A huge benefit here is service. Is enabling service with your clients. And the communication process as well. And secondly, you’re incentivizing your clients as well, which is a very attractive thing to do.

Rana Mukherji: (14:00)
Yeah. Because whatever money we make, we put it back in the system, right? So for us, the ecosystem needs to run by itself. That’s our model. And then we have the cryptocurrency. That’s where the company also wins with the valuation of the coin. But at the same time, the travelers who also owns those coins. That’s the only reason we could afford to do a price model like this, which was not possible before. Because to be fair to OTAs, we critique them and say that they’re charging such high fees. But they have high recruitment costs and high data costs. If they are taking credit card payments, those costs also add up. Let it be a Forex Exchange. Let it be a credit card, which we know take between 3–5%. But we don’t know it because there’s never been a solution. In three to four years from now if we listened to this conversation again, we are going to realize the power is driven by the traveler because that’s the focal point. But that’s the way the business cycle will evolve. And considering the entire blockchain community, what I see is that it’s a very compact community, which I have never seen in my life. I’ll give you an example. I had a challenge with one of the top companies. There was an issue, which I wasn’t sure if it was real or not. I wrote to the CEO of the company on Telegram and he replied back, no I think this is a scam, stay away from that. The entire community is helpful and in it together. Yes, there are a few speculators. There are a few scams here and there. But at the same time, when I sit on those meetings, I realize it’s very tight-knit. All are focusing on one thing, build the community.

Jon Worsley: (16:11)
Looking five years down the road, what will you be saying?

Rana Mukherji: (16:16)
The standalone hotels, particularly standalone hotels, will have more power in their ability to build a sustainable business in this tough environment. At this point of time, they are actually barely surviving. So that will be changing, I would say in five years time. Because with AirBnB, they got exposed, right? Particularly 10 to 50 bedroom hotels. That’s the area which will be unified, which will be far more organized. The OTAs charges and all those commission will all start coming down as well. However, as far as the data — the customer, the profile — those things will change. Because right now, your data belongs to where you are coding. If you put your data in booking.com it’s gone to them. If you put it in the Marriott, it belongs to them. Five years from now, the data will belong to you. That’s my perception. That’s my vision as well. With us, the data actually doesn’t belong to us. We are just the facilitator. We say it belongs to you, the people who are actually providing the data. So the business would be far more holistic in a way, but the ecosystem is actually the thing that will keep us moving.

Jon Worsley: (17:52)
Given the additional rooms coming into the Dubai market, for example, some 30,000 new rooms coming on. And the pressure on costs. This is certainly one avenue to reduce your costs to run the business going forward.

Rana Mukherji: (18:07)
Dubai also committed that by 1st of January, 2020, they’ll be in the blockchain. And when I meet the blockchain community out here, they are very focused on that goal. So the entire government, rather than saving cost through nefarious ways, they are making it more productive and efficient. Right? So to answer your question, yes. That’s the state of the world anywhere. But Dubai is the leader so far. They are trying to get into the blockchain. Yeah, definitely. It’s one of the answers.

Jon Worsley: (18:59)
I suppose with 5G coming on online as well. That’s going to help speed up the process.

Rana Mukherji: (19:05)
Yes. But blockchain is a bit different, right? Like with Ethereum, they are trying to do a few more transactions because right now scalability is the biggest challenge. How many people per minute can do that smart contract and execute a transaction? So the entire community is trying to put that together. So scalability is one of the key issues for blockchain and the other is the cross-pollination between two blockchains. For instance, I’ll give you one example. You have a dude’s telephone number from the provider, Vodafone and somebody has a phone from Etisalat. Both are not able to talk at this stage, right? Because both are operating in their own ecosystem. Like we are sitting in the smart contract, the smart transaction. So those are things the blockchain has to solve. But this will be solved over a period of time. And that’s where the industry is focusing on finding those solutions.

Jon Worsley: (20:14)
Okay, great. One last question. Hotelier Coin, is there anybody else that’s doing this in our industry at the moment,

Rana Mukherji: (20:22)
There are a few, particularly in B2B, not B2C model. Where if you have a cryptocurrency, you come into the ecosystem and try to book it. What makes us different is our holistic approach. Because we have the unique cash back option for hotel owners and we give one-third of the profits to the hotel owner and we give one-third to the traveler and we keep one-third. The second is something which I believe will change the way hotels sell bulk inventories, is the decentralized hotel room marketplace. Or an exchange, where hotel room nights can be bought, sold, and resold. I tried to keep it simple. So what we did is we replaced the old voucher systems with a token. Voucher or a Groupon system. We replaced the face to face negotiation with the ask and bid option. And we replaced the old contracting procedures with smart contracts. As well as within the smart contract, with the way it’s written. So your credit team, which right now want 20 or 60 days that they have to call to make the payment. That also goes away as well because we have created a small escrow where the money gets put on hold and when the customer comes and stay, you automatically get paid. So that’s the decentralized exchange we have that’s sitting on the testnet right now. We are testing it and that’s where you can treat hotel rooms like a commodity for the very first time.

Jon Worsley: (22:07)
How fascinating. You know we could go on and on because it’s so interesting. But you’re certainly making an impact on our industry and congratulations to everything that you’re doing. I’m looking forward to listening to your pitch at AHIC on the 9th of April and in having you around and explaining how we together can embrace this new technology for the better of the industry.

Rana Mukherji: (22:36)
Thank you for giving me this opportunity because I think as a startup, as an entrepreneur, to get a platform, particularly like an AHIC to present your thoughts is a dream and gives us a platform to excel. Thank you for your support. It means a lot to me and my team.

Jon Worsley: (23:03)
Excellent. Well, thank you and look forward to seeing you very soon at the Arabian Hotel Investment Conference. Further details on arabianconference.com. Thank you so much.

Rana Mukherji: (23:15)
Super. Thank you.

Hotelier Mart coming soon! Follow our progress at hoteliercoin.com and on Twitter @ hoteliercoin.

*Original podcast aired by the Bench Impact podcast.