Everyone is talking about NFT
(non-fungible token) technology, and businesses are spending big bucks on
massive opportunities for bringing this technology to the hospitality industry.
In fact, last year over $2 billion was spent in the first three months. While
the global luxury hotels and resorts industry is expected to be a $160 billion
market by 2031, the experience economy is forecast to reach $8 trillion, with
the metaverse market opportunity a mind-blowing $13 trillion.
It is no wonder that excitement has reached fever pitch, and big brands are
jumping on board. It's not difficult to see the potential of this technology
and what it could bring to a hotel, as the possibilities are endless. Leading
hotel chains are already releasing their versions of NFTs with actual use cases
to benefit their clients worldwide.
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In 2021, Marriott
International was among the first brands to benefit from the value of NFTs in
the form of hotel technology to reignite a passion for travel following a long
lockdown period. The hotel partnered with digital artists TXREK, JVY and Erick
Nicolay to create unique digital images that owners would claim as their
original artworks. During the Art Basel Miami Beach 2021 event, the hotel
unveiled a collection of artwork with NFTs awarded to individuals who could
redeem them for travel experiences. It inspired people to start traveling
again. Marriott saw where people were hanging out during lockdown and knew they
had to be there too.
The most successful metaverse
and NFT projects will be those that build, engage and appeal to communities. Initiatives that tap into the growing experience economy are key for any
business venturing into Web3. Wyndham Hotels partnered with a crypto startup
to create a Bitcoin rewards program for their guests which allows them to claim
bitcoin rewards for cash or loyalty perks.
However, even with the
emerging rise of technology, the basic business model of the hotel industry
requires an in-person experience. At the end of the day, hotels need guests to
physically visit their locations and stay in "real" rooms.
Some hotels are considering
selling reservations as NFTs. The idea is basically that a customer books a
room and receives an NFT. If they can't use the reservation, they can resell it
to someone else. It will enable them to make their money back, and the hotel
doesn't have to deal with an empty room. It sounds good in theory, but
ultimately this will lead to chaos.
This model will likely
encourage a secondary market for popular tourist destinations. Scalpers will
buy up nights in advance, then resell them for a profit when tourists run out
The biggest problem, however, will be the impact this has on the local economy.
If a business buys up nights to sell at a hugely inflated price, they may stop
selling once they've made enough profit. This would leave many rooms empty,
which would lead to staff losing their jobs. This will trickle down to local
businesses, bars and restaurants that will lose thousands from non-existent
guests. The solution could be that other industries, such as airlines, move in
to buy up the NFTs; however, this would affect the smaller players that don't
have the resources to do this.
Metaverse technology, if
utilized correctly, should enhance and complement the "in real life" hospitality
and travel experience, not try to replace it. The potential of this technology
is limitless; however, before we get carried away with the possibilities, it
needs careful monitoring and agreed rules and systems from the outset.
About the author...
Fred Bean is founder and CEO of HotelPORT