Blockchain and the Hotel Industry
NFTs have been the talk of the town for the last few months. There is so much to know and read about the technology that it’s difficult to keep up. The aim of this article is to provide a very simple explanation of NFTs, which have maybe not been covered by the different sites, podcasts and youtube videos.
NFTs have several potential use cases that have not yet been explored. The focus of this article is the hotel industry. If you are a hotel industry practitioner or an avid reader, I’m sure you’re excited to know how NFTs can benefit the hotel industry.
A Simple Definition
Simply put, non-fungible tokens are digital assets that are unique and non-transferable. You can claim and prove ownership of digital items when you own them. Here is another scenario: You lodged in a five-star hotel; you were given a digital key card to access the room assigned to you. With the digital key card, you will only be able to access your room. It is unique and not transferable.
In a world where it takes less than sixty seconds to screenshot, copy or download digital files, artifacts, or images on the internet, non-fungible tokens (NFTs) come in handy. They are cryptographic assets founded on the blockchain. If you are a gamer or collector, your NFTs usually contain unique identification codes and metadata that authenticate your ownership of digital computer files, images, or audio clips.
The metadata distinguishes one NFT from another. The point remains that no two NFTs are the same. When you duplicate, and mint 1,000 copies of a file or image as NFTs, each of them is unique from the other. Cryptokitties boast of being one of the most famous use cases for NFTs. Created in November 2017, they are digital representations of cats with unique identifications on Ethereum’s blockchain. It allows users to breed and collect HODL kittens created in the chain. Cryptokitties cannot be replicated or destroyed by anybody.
NFTs are useful for several purposes. Our focus would be on the benefits of NFTs in the hotel industry.
Use Cases in the Hotel Industry
NFTs have come to stay, and we have started seeing their impact on the hotel industry. For instance, NFTs have proven to be a permanent solution to the issue of “data-mismatch” errors among customers, hotels, and booking agents. According to Rent LUV, these errors are found in at least 5% of bookings.
NFTs, through the blockchain, create a decentralized platform for hotel bookings. The platform lets hotels list their rooms and prices directly on the blockchain. The main implication is that it helps eliminate third-party booking platforms like Expedia or Booking.com. This way, hotels can save more money while also enjoying considerable control over their pricing and availability.
Similarly, non-fungible tokens can work as digital prizes or merchandise sold to tourists. Hotels can use this system to partner with local artists, writers, and performers who wish to promote themselves. The hotel would also gain some local recognition for being of help to the community. A hotel can utilize NFTs as digital samples of local arts, which can be displayed as a work of art, in the process helping increase interest in local or independent art.
NFTs can also function as digital membership cards in the hotel industry. Marriott International was the first hotel to utilize an NFT marketing strategy in 2021. It was a collaboration with digital artists who helped create unique NFTs inspired by “The Power of Travel” theme. NFTs can be used to tokenize tables and losses from canceled reservations are reduced to the barest minimum.
These tokens can reserve a table number for specific people and the trend has been passed to the food & beverages sector. New York-based coffee shop Lion’s Milk recently became the first NFT-compliant cafe. There are images of NFTs like the BAYC on the cafe’s walls while allowing the possibility of people using cryptocurrency to make payments.
NFTs, because of their unique nature, can be utilized by the hotel industry to establish digital experiences that hotel guests find immersive and engaging. NFTs can be utilized to create virtual reality (VR) experiences that allow guests to explore hotels before arrival. This is an avenue to engage guests deeper, so they feel more connected to the brand.
As an operator in the hospitality business, another idea is to use NFTs to monitor and manage inventories in your hotel. NFTs can help streamline operations and reduce costs. NFTs coupled with location tracking software can also be used to track the movements of your guests within the hotel premises, or monitor the usage of the amenities and services in the hotel. In addition, you can create loyalty programs to reward customers for their continued patronage.
Untapped Potential
Generally, NFTs have several great use cases waiting to be tapped in the hospitality industry. They are powerful tools for technology, and the hospitality industry is one of the numerous industries waiting to be transformed by them. In years to come, more businesses other than the hotel and hospitality industry will embrace NFTs to create unique, valuable, and mouth-watering experiences for their customers.
As NFTs evolve, the possibilities are endless and with the current pandemics and uncertainties surrounding the global economic landscape, it is paramount that the hotel industry start exploring the numerous possibilities around NFTs.
