Written by: Dominika Duziak
Editor’s Note: This blog post will feature podcast episodes from the HospitalityVerse Podcast, a new series that discusses the latest trends in hospitality technology, including discussions on the Metaverse, blockchain, NFTS and more.
Remember NFT: one of the hottest buzzwords of 2021? Looks like last year’s hype died down — impacted by the “crypto winter” and the FTX meltdown.
Just to recap: non-fungible tokens (NFTs) represent unique digital assets recorded on a blockchain that certifies their authenticity and ownership. Typically, when we talk about NFTs, we think of digital art and collectibles. Christie’s, one of the most renowned auction houses, sold an NFT image for 69.3 million dollars in an online auction. Since then, the NFT market exploded. Projects like Bored Apes Yacht Club and CryptoPunks made millions in a very short time. Big names from sports to fashion such as the NFL, F1, Adidas, Nike, Prada, McDonald’s and Tiffany’s jumped on the NFT bandwagon. At the same time, it has also drawn a lot of criticism.
Some experts have compared the NFT market to an economic bubble or a Ponzi scheme — and in the second quarter of 2022, the market started collapsing, reacting to crypto market volatility and lack of confidence and trust.
So, does that mean the NFTs are over? Not at all. In fact, the value of the NFTs extends way beyond just a trendy or rare image. This value should be derived from the utility associated with the NFT. While most NFT projects in the hotel industry today focus on art and collectibles (see Marriott, InterContinental and Pullman), we can also see some market players experimenting with other creative use cases.
NFTs have been quickly adopted in the sports industry, and the concept of digitizing the access right or a membership card is currently being explored in travel, as well. Air Europa, for instance, announced their ticketing platform will support traditional and NFT reservation processes. NFT ticket holders will be granted more flexibility and allowed to trade their tickets up to 72 hours before departure. Air Baltic decided to link their “Planies” NFTs with their frequent flyer program as the first step of a bigger loyalty program transformation. Companies like Takyon or Pinktada develop online marketplaces with NFT-based tradeable bookings that allow hotel guests to enjoy lower prices on non-refundable rooms with the flexibility to sell the reservation in case plans change.
NFTs offer an opportunity to reimagine loyalty and reward programs and boost brand engagement. In this scenario, NFT acts as a gateway to additional perks in both the virtual and physical worlds. SEM9 eSports hotel issued a collection of NFTs dedicated to gamers. Aside from a cool collectible, the token unlocked access to a free hotel night, limited merchandise, invitations to physical and digital events, and other benefits.
Based on my MBA research and interviews with hoteliers in Dubai, I have found that NFT-redesigned customer loyalty programs resonate well with hospitality managers. But there are other ways NFTs can support the business.
In the Hospitality and NFTs episode of the HospitalityVerse Podcast, we dig deeper into the uses of NFTs, exploring the concept of fractional ownership and cause-driven NFT projects that marry innovation with CSR.
These may seem to be very different, but ultimately both have a positive impact on the triple bottom line. “CSR NFTs” can attract millennials and Gen Z, who expect travel and hotel providers to be more sustainable and authentic. Projects like Unchained Elephants support regenerative and responsible tourism, give back to the community, educate and promote a sustainable brand image of participating entities.
While the digitization of a physical property may still be challenging and subject to unclear rules in many geographies (although there are already NFT platforms like Aqarchain in Middle East facilitating individual investments in hotel properties), memberships, loyalty and rewards or cause-driven projects are easier than you would think.
In this interview with Arek Kwoska, the CEO of NFT start-up Collectico Labs, we bust some myths about the complexity and high costs of NFT implementations. Arek says that in a few years NFTs will become as popular and common as emails — and I agree with this statement. With the evolution of blockchain and transition to Web3, we’ll see more real NFT applications driving value to all stakeholders of the hospitality and travel ecosystem.
Dominika Duziak is a host of the HospitalityVerse podcast. She combines product development and product management skills acquired in banking with a passion for new tech to uncover innovation opportunities. During her MBA program in International Hospitality Management at the Emirates Academy of Hospitality Management in Dubai, UAE, Duziak focused on business applications of Blockchain technology in the hotel industry. This research led to the creation of the HospitalityVerse, where hospitality professionals can learn about the latest trends and developments in hospitality technology effortlessly. Head over to https://hospitalityverse.io/ or listen on Spotify or Apple Podcasts. Follow HospitalityVerse on LinkedIn for daily updates from the hospitality tech world.