The second DApp review we’ll be looking at on DApp STUDIO is NOMAD. NOMAD is a project that seeks to replace OTAs (Online Travel Agency).
Currently, the hospitality industry records a 6–7% annual growth rate. In 2017, the market cap was about 557 billion dollars, and is expected to grow up to 1.1 trillion dollars by 2030. One of the players in this market are the online travel agencies (OTA), which are extremely centralized, allowing them to accept large amounts of fees from hoteliers and travelers.
Despite the fact that the value that such OTAs have to offer is simply accumulated data of apartments and hotels, they charge up to 20–30% of fees, generating 75 billion dollars in 2017.
The NOMAD team, aware of such deformity in the market structure, decided to work on a DApp project that would eliminate middlemen, win the competition against OTAs, and resolve the issue of structural deformity in the hospitality industry.
NOMAD consists of three big teams: the Business team, IT team, and Digital/Travel team. I’ll be introducing some notable members of each team.
Firstly, there are a lot of former analysts who have studied either economics or business administration in Russia. The founder of NOMAD, Dimitry Lyuyagin is not an exception. One notable member of the Business team is Ross Lukatsevich. He used to work with M&A at Morgan Stanley, and is a senior advisor at Letter One. In NOMAD’s Business team, people mostly don’t have any experience with blockchain or the hospitality industry. Most team members are experienced in business strategy, and Luktsevich, the business advisor, is the only one who has experience investing in mid-late stage tech.
The IT team confronts a similar situation. Unfortunately, besides the advisor, Luzgin, the team has no eye-catching characteristics. Lugzin has interesting, and relevant past experiences with investment banking, federal banks, and the establishment of EOS tribe. Also, for a project that seems to require the implementation of well designed smart contracts, it seems to lack enough developers.
Lastly, the travel advisor Nicoas Villemin works at the sales department in Shangri-la, with past experience as a senior sales manager at Hilton, and sales and marketing director at Hyatt. The other marketing director, Gabor Molnar, is an advisor with past experiences in finance and consulting.
There are certain parts of the 100-page white paper that are notable. The first thing to note is the industry analysis by the NOMAD team. They demonstrate how a fatal flaw in the industry’s price aspect starts with OTAs, ultimately leading to the formation of a deformative industrial structure.
1.A hotel charges 100 USD for one hotel room. They haven’t signed a contract with the OTAs, but are aware of the fact that 70% of their sales will be achieved through OTAs. Thus, they decide to work with OTAs.
2.Considering the fact that OTAs charge a 30% fee, the hotelier feels that getting an ultimate payment of less than 100 USD is unfair. Thus, they raise prices so that even after paying a 30% fee, they can get a 100 USD payment from their customers.
3.Hotels ultimately put their room up on the OTA website for 142 USD.
(142–30%=100)
4.In conclusion, customers must pay a price that is 42% higher.
The scenario after NOMAD is implemented goes as follows. The traveller has 100 USD before making a reservation, and the hotel has an empty room. By making a reservation through NOMAD, the traveller not only gets an empty room, but also a 15 USD cash back, and in the case of the hotel, they receive 85 USD for their room, and 7.5 NSP tokens as a reward for using the network.
NOMAD first plans to initiate the project using fiat currency. 70–85% of the payment will be done through fiat, and the 15–30% cashback will be done through NSP tokens. Later as the demand for NSP token increases, they plan on replacing the transactions done through fiat, to cryptocurrency.
The whitepaper states the impact of blockchain in the travel industry as follows.
1.Transparency: Transparently making public the cash flow in the travel industry.
2.Consensus: Fast and rational agreements can be obtained with smart contracts.
3.Loyalty: The cerdibility of each subject can be expressed numerically (similar to Reputation).
4.Fraud: Fraud is preventable because it is difficult to change the node
5.Identity: Storing traveler’s information on the platform and is available whenever needed
6.IoT: Combine blockchains and IoT to ultimately develop staffless hotels.
7.Overbooking: As with the issue of double payments, overbooking issues can also be resolved.
8.Policies: Smart contracts can identify fees and optimize them
NOMAD is currently undergoing its ICO, so its service is not yet available.
Passed the Howey Test
NOMAD passed the Howey Test, proving that NSP tokens are utility tokens. (Howey test: Test that determines whether certain transactions qualify as investment contracts)
Appealing idea to travelers
The ideas of replacing OTAs, which cause devastating damage to both the consumers and producers of the market by taking a maximum of 30% in fees, is extremely appealing
The right team
Since NOMAD needs to focus on signing contracts with hoteliers, they need a lot of people in the business team. The fact that they have strong, experienced members in business management and strategy can work as a strength.
The Whitepaper is too long
The Whitepaper is about 100 pages long, and made me wonder whether anyone would take the time and effort to go through every single page. Their whitepaper can definitely be more concise and summarized.
No unique selling point to beat OTAs
Their idea is great, but realistically, they don’t have a unique selling point that can drag customers from OTAs to NOMAD. Current OTAs offer unconventional discount events, coupons, cashbacks, etc so NOMAD need to differentiate itself even more.
Not much activity lately, poor community managing
They don’t have much recent news regarding the project, and their community activity on telegram is very poor.
Although hoteliers want to be free from OTAs, it’s easier said than done. NOMAD’s blockchain based decentralized reservation system has the potential to get rid of middlemen in the travel industry, improving not only the business model, but also the general infrastructure of the industry.
This project is still undergoing its ICO, but since they have a clear goal of eliminating the unnecessary fees paid to OTAs, it seems like a promising idea.
Our next review will be on HireVibes, so stay tuned!
Website: http://eosys.io
Medium: https://medium.com/@eosys
Steemit: https://steemit.com/@eosys
Twitter: https://twitter.com/@EOSYS_IO
Telegram (EN): https://t.me/EOSYSIO
Telegram (KR): http://t.me/EOSYSIOKR
