The past two years have been brutal for the Hospitality Industry. Between covid variants and lockdowns, the business has been hit repeatedly. Foreign visitors are daunted by the idea of getting stranded in a new country, business travellers have adjusted to zoom calls, and many travellers are petrified of infection from public spaces. Millions of hotel rooms lie unoccupied, and hoteliers have struggled even in the anticipated high season.
We witnessed glimpses of revenge travel towards the end of 2021, but the rapid onset of Omicron pushed people back into their homes. With the New Normal, we are seemingly farther away from the good old days with every passing year. In times like these, it becomes critical for businesses to discover what’s next, creating an edge over competitors, and allowing them to not just survive, but thrive.
TURNING TO TECH
Unless you spent 2021 under a rock, you would have definitely heard the word “NFT” at some point. Yes, the year Blockchain became accessible to mainstream audiences, crypto became a legit investment option, and Cryptopunk NFTs became the new Rolex. Over the past year, we witnessed many NFT launches by celebrities, brands and businesses. It hasn’t mattered what industry they come from - entertainment, sports, tech, or FMCG. NFTs are proving to be the latest way for companies to show that they are in sync with the times, and capable of adapting to the latest technology.
So, what are NFTs & how do they affect you?
NFT stands for Non-Fungible Token, a unique digital asset that represents ownership on the blockchain. Anything digital can be an NFT - from artworks to music, to land deeds or entry tickets. From the moment of creation, the NFT becomes recorded in the permanent ledger of the blockchain, and it’s ownership can be traced in every transaction. This creates transparency and authenticity, reducing fraud and allowing for rightful ownership.
The Non-Fungible aspect means any NFT cannot be replaced or exchanged with another. Each NFT carries an individual code - so even if you have two copies of the same NFT, they can be identified with their respective code. This makes NFTs different from cryptocurrency tokens (which are fungible and can be interchangeable), as well as, as digital art (where copies cannot be authenticated).
NFTs are a true revolution in bringing a complex technology to global audiences in such a simplified manner. Every industry is now gearing up to leverage NFTs to grow their business, and the Hospitality Industry is not lagging behind.
NFT IN HOSPITALITY
The Power of Blockchain is such that it entitles every business, big or small, to leverage technology with equal opportunity. With NFTs coming into the limelight, the traditional hospitality market is ripe for disruption - and it needn’t commence from the big players. From the announcement of first NFT restaurant opening in 2023 to hotels and restaurant brands accepting crypto currencies, one can use NFTs to promote, elevate and grow your business. What matters more is how early you adapt to this tech advancement. The first-mover advantage will be significant as always, and you can almost compare this time to the Social Media boom of 2010’s.
When Instagram first came in, not many could understand the utility of business accounts. But today, Insta-savvy hotels and restaurants are creating a revolution in the space. We are at a similar cusp in technology today with NFTs. Businesses that learn to harness this technology will move ahead of competition, and expand their business to new verticals.
EXPLORING NFTS FOR YOUR BUSINESS
If you are convinced to jump onto the NFT bandwagon, let’s talk about some tangible use-cases for NFTs for the Hospitality sector. As of now, most NFTs we see in the market are collectibles - whether they are graphical artworks, celebrity pictures, or brand photography. They are based on aspirational value, and create an investment opportunity for collectors. Now ofcourse, you can also go down the Collectibles route by photographing your property, creating artworks of your rooms etc, but there wouldn’t be much incentive for collectors to value them.
Collectible NFTs were the norm for 2021 but going into 2022, Utility is going to become a keyword. What does the NFT do, what are the uses, why should I value this NFT - these are going to be some salient points to answer. Here are 9 ways to bring NFTs into your business:
As people continue to stay home, virtual travel is gaining ground quickly. People can explore different spaces across the globe with their virtual avatars - and this is becoming more popular as the Metaverse. Hotels can harness this digital experience to improve the customer’s first interaction and discover new audiences. Replicating the property as a virtual asset, hotels can allow travelers to tour the hotel, view and choose rooms of their choice, and make the booking receipt as an NFT.
By giving visitors a chance to evaluate the property beforehand and explore the hidden gems, smaller hotels can attract more audiences. The traveler can even swap/sell the reservation NFT if their plans alter - this P2P NFT Sale also reduces the pressure on hotels to rebook for cancellations.
For decades, the golden customer has been the recurring customer. Hotels thrive on loyal customers who keep coming back, and spread the good word. Hotels build strong Loyalty Programs to retain their customers, but it does become a massive data operation.
NFTs can revolutionize this feature by creating a permanent record of visitors on the blockchain. Hotels can issue an NFT for visitors, featuring all the required information in the metadata. Guests can also hold the NFT as their loyalty badge. This can be a critical tool for Hotels with multiple branches as they use the NFT data to assess returning customers and reward them for their loyalty.
Ease of Operations
Apart from Visitor Logs, there is a whole lot of tedious data management for hotels. Tokenization-as-a-service can save you money and time. Hotels can also improve their back-end operations through the blockchain. Creating a perfect replica of your hotel virtually can enable you to manage daily tasks like visitor logs, housekeeping, maintenance, supplies etc.
Using NFTs and Smart Contracts, hotels can automate operations and reduce the workload of their real-world employees. You can foresee hotel managers delegating daily tasks to their digital twin and focus on more pressing matters. This also allows hotel owners to keep a closer eye on operations in their absence.
The New Room Key/ Booking Codes
We have seen the transition of hotels from metal keys to card keys. While losing metal keys could cause a disaster due to limited copies, card keys come with their own set of problems. An environmental burden due to the careless use of plastic, card keys are also frequently lost or erased by gadget contact. At some hotels, the main task of the Reception is to keep reviving these keys.
Now, no one has to lose their key anymore. NFTs will be able to replace the room key, with smart access for the period of the stay, and expiring as the stay ends. The NFT can also grant the visitor access to special areas in the hotel, such as saunas & gyms as per their booking. This NFT can be burnt at the end of their stay, or kept by the guest as memorabilia.
Revamping Hotel Booklets
Another traditional concept that fits well into the world of NFTs is Hotel Booklets. Hotels issue bulky hard-copies of booklets that are an environmental strain and easily lost/damaged. NFT Booklets bring easier management & logistics for both the hotel and the user. NFTs can clearly display the purpose, usage and validity for these booklets, eliminating bulky records and disputes over expiry.
NFTs also allow for easier gifting, and would encourage people to gift Hotel Booklets to friends and family, thereby helping you grow your business.
Promotions & Gifting
Gifting can also be extended to a complete experience. Through the pandemic, more and more people have delighted in offering their loved ones a retreat or special staycation experience. Hotels can leverage NFTs to allow people across the world to gift special stays to their friends and family.
In addition to this, one can also use NFTs for promotional strategies and branding activities like offering a one-night complimentary stay etc.
Tapping Into the Sentiment
The post-covid era has taught us all to cherish life and focus on our emotional well-being. Keeping the sentiment alive, Hotel NFTs can become souvenirs from a memorable stay or meal.
As we go along, NFTs will rise from “what you own” to “what you experienced, where you’ve been” and include other social leverages that come along with it. Hospitality has a chance to make these experiences into a timeless memory.
Optimising High Season
Every Hotel leverages peak seasons, favorable for tourists, by charging premium prices for the period. Ofcourse the pandemic has made this calendar unpredictable. To balance this turbulence, hotels can leverage NFTs and auction rooms rather than flat pricing. You can host NFT Auctions for your premium rooms & suites, and important dates, offering a special experience for the highest bidder.
Fancy yourself a Hotel Owner
The Hospitality industry requires intensive capital to function, along with easy inflow of cash. While traditional models make financing and equity investments a daunting task for property owners, NFTs offer an exciting new model to explore.
Hotels can create new ownership models of Part Ownership & Community Ownership through NFTS. The Property can be divided into NFTs, in terms of area or rooms, allowing people to own a part of the entire property. They can have incentives like free room nights as investment returns. This allows property owners to bring quick cash liquidity into the business, while regular people can enjoy the thrill of “owning” a hotel.
Market in the Metaverse
Hotels are not just about physical advertising anymore. Businesses can advertise on virtual hoardings, highways, and malls within various metaverse projects to bring attention to their property. They can issue special NFTs and NFT advertising to attract clients. With Metaverse blowing up as the next big thing in the tech space, there are a lot of NFT opportunities to leverage in the space.
The Global Hospitality Industry stands at the cusp of the blockchain revolution, where the way we look at it will change forever. We witnessed the rise of NFTs in 2021, and with passing time, it’s safe to say that NFTs are not just a fad, but a game-changer for industries across the board. The question boils down to how quickly businesses can embrace this technology to improve their margins, and attract new audiences. Exciting times ahead !