For starters: What is an NFT? An NFT (non-fungible token) is a digital asset, which takes the format of a picture, video, animation or audio file - basically anything that can exist in the digital space. With its blockchain-backed technology, an NFT cannot be copied, as it’s been created with a unique identifier.
NFTs and cryptocurrencies like Bitcoin use blockchain technology, so it’s no surprise the rise of crypto has led to a surge in attention for NFTs. Most large brands, especially in the luxury and fashion segments, have issued NFTs and are experimenting with how to best integrate them into their marketing efforts. One of the challenges using NFTs as part of marketing, is the impact creating (or “minting”) an NFT has on the environment, due to that blockchain technology. As this technology becomes more efficient, we expect the impact will be significantly smaller. However, the environmental footprint is something brands need to consider in their NFT strategy calculations.
How can NFTs be used in the travel and tourism industry?
- Be part of the conversation: Few activities have earned brands as much attention in the beginning of 2022 than issuing NFTs. Companies like Marriott have already partnered with artists to create NFTs that were then given away. Destination marketing organizations can easily do the same. Create awareness and earned media for your destination by collaborating with local artists and highlight the unique attributes of what your region has to offer.
- Proof of attendance for meetings and events: One interesting use case for NFTs is giving them out as “proof of attendance.” Think of this as the digital equivalent of a physical ticket to a Big Game that will be framed. Now, event organizers are giving out digital bragging rights, and consumers are actively collecting. We predict increased adoption of this for both large-and small-scale events, and those destinations that rely on meetings and events must pay attention. Why not offer meeting planners or convention groups NFTs that have elements highlighting the destination? When Sparkloft spoke at the DMA West Tech Summit this year, we created an NFT for everybody who came to our session.
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- NFTs as part of destination development: Some destinations feel that repeat visitors are not only more likely to travel to a wider range of places throughout a destination, but are also more vested in the destination, and subsequently behave more responsibly. This raises the question of the role visitors can (or should) play as part of destination development. Should visitors have a say? If so, which visitors, and how?
In the future, NFTs may play a role because they’re not just simple digital assets. NFTs can be programmed to include specific perks or powers, and tourism organizations could award NFTs to selected visitors (or locals) who earn the opportunity to have a voice in destination development. Of course, there are other ways to do this (such as a customer advisor board), but as NFTs evolve over the next years, they certainly have the potential to become a more elegant way to involve stakeholders. - Rewards for visitation: Many destinations have programs that reward visitors who go to specific places, e.g., passport booklets where stamps are collected by going to specified local partners. Remember when location-based social media - think Foursquare or Gowalla - were the latest rage, and users raced to become “mayor” by checking in the most times? NFTs will enable destinations and businesses to reward visitors by gifting them a digital token for bragging rights, which could potentially increase in value.
So, what should DMOs do?
There is certainly no need for all DMOs to immediately start creating and distributing NFTs. The space is changing rapidly and there is a lot of hype surrounding NFTs at the moment, with prices reaching astronomical levels and sinking extremely quickly. But, if you book beyond the current frenzy, it is safe to assume the underlying technology will impact more and more parts of our lives, including how NFTs will be used in destination marketing.
At a minimum, marketers should pay close attention, understand the technology and start experimenting for themselves. For DMOs that move quickly and issue “destination NFTs” (e.g., in collaboration with local creators), there are significant earned media opportunities. And in the meetings and conventions space, planners and associations will look favorable on destinations that proactively offer them NFTs that can be given to attendees as proof of attendance.