A Â鶹´«Ă˝Ół»company is hoping to capitalize on two emerging economic trends – China’s growing appetite for self-directed travel accommodations and consumers’ increasing skepticism about e-commerce platforms – by injecting a third, blockchain, into the equation.
Cozystay Holdings Inc., a vacation rental platform aimed at consumers in China and other Chinese-speaking markets, said it plans to start using blockchain as a key feature of its service at the end of this year, with a full launch in 2019.
The company is developing blockchain protocols with Singapore’s Share Everything Lab Pte. Ltd. with the goal of creating a system that allows the Cozystay online community to self-regulate.
The platform’s “Know-Your-Member” verification procedure asks users to provide government-issued ID to begin the process, and a peer-reviewed and trusted member of the network would then validate the new user via phone or video call.
The information is then stored online in blockchain so there isn’t a “Big Brother” who manages all of the data collected. Instead, the data is scattered among the platform’s users, making the information linked to users visible to all users in the community, and also protecting it from hackers.
The move, company officials said, stems from the goal of building trust among potential customers and hosts who list their properties with the service.
“There are a lot of angles to solve the trust problem,” said Cozystay chief technology officer Peng Shen. “One way that existing platforms use is to hire more customer service people and introduce more rules into the system, and that reinforces trust through heavy regulation on that platform. But our belief is that … the sharing economy should be something that triggers the goodwill within people to share their properties.”
All of the users’ activities – reviews, bookings, suggested changes of Cozystay’s platform regulations and other miscellaneous actions – create reliable “footprints” that allow other users to know exactly where each review is coming from, thereby cementing trust between travellers and hosts while allowing for instant booking.
With blockchain, “the information a user has belongs to the community itself,” Shen said. “It builds a consent network for the community to govern itself.”
Cozystay, launched in 2015 by founder and CEO Galen Cheng, has 60,000 users and 200,000 listings, with the heaviest concentration of properties located in North American cities like Vancouver, Los Angeles, Seattle and Miami. The company plans to reach a listing inventory of one million by year’s end.
Cozystay not only is seeking to add blockchain to its own platform, but will also look for platforms in other sectors where its technology can be “exported” to other applications through partnership deals.
“There can be different platforms that are involved in different businesses like ride share and bike share that we can partner with,” said Cozystay’s vice-president of business development, Donald Kim. “Our strategy is to not rebuild a lot of these platforms, but to partner with existing companies who want to leverage blockchain technology for their own user base. There are ride shares that can use this system right now, and we are actively exploring partnerships in Asia.”
Kim added that by delegating the platform’s governance to its users, Cozystay can also take advantage of blockchain to lower operational costs. The platform follows the industry average set by big players such as Airbnb Inc. in collecting 15 per cent from every transaction – 12 per cent from booking customers and three per cent from the listing hosts. But the hope is that blockchain’s lower human resources costs will eventually drop the collection percentage to three per cent, entirely from the booking customers’ side.
He also noted that Cozystay’s Chinese-market focus will make a difference in the western vacation rental market: “Yes, you still have the Chinese tourist groups with the guides, but you are seeing more and more younger-generation tourists who want to see the world their own way. And only six per cent of Chinese citizens have passports right now; even if that goes up by two or three percentage points, that would be lots and lots of new travellers.”
