Cutting through the hotel hype with Blockchain, Web3 and Metaverse |

Now that we are well into the “crypto winter”, it is time for a sobering moment on all the promised hospitality innovations in blockchain, web3, metaverse and non-fungible tokens (NFT). While we are both big proponents of this space, as we see many lucrative opportunities for hotels around the world, these use cases cannot be too far-fetched or inconvenient for all stakeholders, so as not to fall flat.

This article is not intended as an introductory web3 course, but know that for all inventions throughout human history, the innovations that increase convenience will eventually become king. This convenience can be on the customer side, as Apply Pay or Google Pay are currently working to eliminate the need to carry a physical bill. It can also occur for internal stakeholders, such as all the automation tools implemented behind the scenes in hotels to reduce the amount of repetitive work.

With many of the proposed applications for blockchain technologies, it is a good thing to be skeptical. Determining the axiom of convenience is king, the three main questions we ask and answer in any discussion related to the metaverse or NFT are:

1. How is this more convenient for the guest?
2. Why can’t we do this using existing, non-blockchain systems?
3. Will this save money for the hotel organization or brand?

Always check your costs

Let’s start with the third question and work backwards. As any good financier knows, you can control your costs, but top line revenue is always a bit ambiguous, especially with the one-two punch of the pandemic followed by travel recovery that gives us no verifiable short-term historical occupancy and rate data to budget against. Yes, there is a lot of potential revenue through blockchain implementation as well as significant first mover advantage, but there are also no guarantees that the top line promises of NFTs or building a hotel in the metaverse will contribute to the bottom line.

Therefore, you need to keep a close eye on how much these systems cost in terms of both initial setup and ongoing SaaS, as well as the time wasted retraining your teams, the resources required to develop the corporate culture to fully embrace the potential of web3, the opportunity cost there Your IT professionals can focus on other (probably more critical at this point) labor efficiency projects and any customer dissatisfaction that occurs during the onboarding process.

Few web3 experts declare and remove these all these hidden time based expenses (time you probably don’t have right now). To be honest, with labor issues dominating all our thoughts these days, it’s very hard to justify a nice-to-have web3 project, even if the projections show huge upside within five years.

Stack your technology

It’s called a technology stack because it’s built one floor at a time, and each one is built to coexist with the previous, deeper layers. Therefore, knowing how these web3 applications will interact with the existing ecosystem is fundamental to any metaverse or use of an NFT platform that operates using a cryptocurrency. Unless it’s a brand new property that also plans to develop its own software from scratch, most web3s are not yet set up to be “turnkey” for hospitality platforms.

Similar to the current trend towards digital room keys accessible via a mobile wallet or branded app, web3 platforms must offer the same transition flexibility so that those guests who want to stick with the old school plastic key card methodology (and those who don’t have a new enough phone to facilitate these advances) are not forced into a methodology that they perceive as impractical.

Given these interaction difficulties, the second question comes into play. Many of the proposed web3 tools can be followed three-quarters of the way using non-blockchain technologies, albeit with higher labor costs. Still, these existing systems will be easier to deploy, won’t disrupt your corporate culture, and have increased ease of use for the average consumer. For example, given that most travelers do not yet know how a blockchain or crypto wallet works, hotels investigating NFT projects should also look at how they can facilitate payment in USD or another fiat currency with conversion to crypto as for most of it happens automatically and out of sight.

The future is frictionless

For our purposes, consider the word frictionless as synonymous with convenient. Now to practice the metaverse for a moment, let’s consider the value of experiencing a hotel in one of these virtual worlds instead of going there in real life.

A valuable use for the metaverse is that people can pre-experience the digital twin of a guest room or event space before, and thereby stimulate, a booking. This has great potential, both for property familiarization and for additional sales or for visualizing furniture configurations. Metaverse also has lucrative training applications. However, the technologies are not quite practical enough for both sides of the stakeholder equation.

Let’s ignore the fact that most buildings in the metaverse currently look like a glorified Minecraft simulation without any significant gamification to force daily active use. The core obstacle is that most people don’t yet have VR headsets and are thus excluded from the immersive upfront experience, while the controller platforms aren’t easy enough for non-tech vendors to operate. To sell rooms online, isn’t it more convenient for hotel teams to just film and then upload a short virtual tour? And to visit an event venue, wouldn’t it just be easier to hop on a video call with a sales manager who can walk you through the space, all with live Q&A?

On the training side, remember that part of hospitality is the familial bonds that develop among employees—an important non-salary incentive for employee retention. Yes, the metaverse can help offer some more flexibility in terms of a work-from-home model. But onboarding usually involves a lot of quality, personal time between trainee and trainer, and moving a lot of this to a colder, less personal channel like interacting primarily in a virtual world can demotivate some employees from staying with the job.

A dream of the crypto spring

All these current hurdles aside, we remain bullish. A lot of capital (both financial and human) goes into developing the platforms that will make NFT buying or token trading more convenient for the average hotel guest, as well as making the metaverse look eerily real so that people will actually hang out there. Humans are terrible at predicting exponential trends, so expect this to happen far sooner than you think.

To repeat from the beginning, always evaluate technologies in terms of what will give your customers more time to enjoy themselves or your teams more time to focus on other tasks – i.e. convenience. In addition to this as a general rule, also be wary of shiny new toys that don’t come with a paint kit. As we often joke among ourselves, if we got $100 for every time we heard a tech company describe itself as innovative or revolutionary, we’d be retired on a yacht in the Mediterranean. This was the case with the last ICO and NFT boom that then burst where most crypto projects revealed themselves as vaporware. That said, the survivors will flourish.

Look past the buzz words and ask what will drive mass adoption based on convenience and present value. Blockchain will eventually “change everything” and that is something you need to explore then roadmap, but all implementations need to be framed with the view of improving the on-site experience and overall value to customers above all else.

Larry and Adam Mogelonsky represent one of the world’s most published hospitality writing teams, with over a decade of material online. As partners of Hotel Mogel Consulting Limited, a Toronto-based consulting practice, Larry focuses on asset management, sales and operations while Adam specializes in hotel technology and marketing. Their experience includes properties worldwide, both branded and independent, and ranges from luxury and boutique to select service. Their work includes six books “Are you an ostrich or a llama?” (2012), “Llama’s Rule” (2013), “Hotel Llama” (2015), “The Llama is Inn” (2017), “The Hotel Mogel” (2018) and “More Hotel Mogel” (2020). You can reach Larry at [email protected] or Adam at [email protected] to discuss hotel business challenges or to book speaking engagements.

This article may not be reproduced without the express permission of the authors.

Are you an industry leader with a point of view on hotel technology that you would like to share with our readers? If so, we invite you to review our editorial guidelines and submit your article for publication.

Related