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RETAIL CRYPTO REPORT: Expedia: A Cautionary Tale For Cryptocurrency In Travel

Traders Magazine Online News, March 15, 2019

Luke Fitzpatrick

Expedia started accepting bitcoin for hotel payments in 2014, and for a long time they were a prime example of mainstream cryptocurrency usage. Unfortunately, this story came to a sad ending when the company decided to stop accepting bitcoin in the summer of 2018.

With that being said, there are some interesting things that the blockchain community can learn from the reasons why Expedia started using bitcoin in the first place, and why they ended up canning it to return to fiat-only.

The interesting thing about the “Expedia case” is that not only does this relate directly to the travel industry in general, but to the wider blockchain community as a whole. That’s because the same problems are prevalent in travel and other segments. Here’s what you need to know.

Why did Expedia start using bitcoin?

In June 2014 Michael Gulmann, the global vice-president, issued a statementto the press acknowledging that the company was in a unique position to “Solve travel planning and booking for our customers and partners alike by adopting the latest payment technologies.”

The idea behind this was for Expedia to capitalize on alternative methods of payment, and since Expedia customers had customers already requesting bitcoin as a form of payment, the company made a move with Coinbase to integrate bitcoin payments into their hotel booking system as its payment processor.

Why did Expedia stop using bitcoin?

Likely, there is are an abundant amount of reasons why Expedia stopped using bitcoin, however, I believe it can be summed up as the unstable nature of cryptocurrencies, the lack of commercial adoption and businesses who are using crypto prefer fiat.

Here’s a more detailed look at why Expedia stopped using bitcoin.

1) Unstable nature of cryptocurrencies

Cryptocurrencies in their own inherent nature are unstable. For that reason, Expedia treated bitcoin primarily as an “experiment,” relying on Coinbase to convert bitcoin payments to U.S. dollars, which were then deposited inExpedia’s bank account due to the price volatility of bitcoin. 

Fast forward to 2018, Coinbase reached a conclusion and suspended custodial solutions for merchants. In effect, this made it a lot more difficult to process bitcoin payments for Expedia, which was when Expedia quietly announced that they would stop using bitcoin. Around the same time, Cointelegraph reports that Expedia’s competitor “CheapAir switched to BitPay from Coinbase for this very reason.”

Glenn Checkley, CEO of TravelOnline, says, “Bitcoin is simply too unstable to use for travel transactions, as evidenced by Expedia dropping it as a payment method last year. And recently there has been more instability with bitcoin and we can not see this coming back in the near future. Different payment options are increasing by the day and they all involve well-established stable currencies.”

Key learning: Cryptocurrencies are not only unstable because of the pricing volatility, but also instability may arise due to technology decisions made by others, like the case of Expedia / CheapAir and Coinbase.

2) Lack of commercial adoption

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