The only concrete Hotel Blockchain application for the recovery period

Those in the know evangelized the power of the internet way back in 1990. They claimed it would change everything, and it did. Now, a similar group of proselytizers is making use of the many uses of blockchain technologies, cryptocurrencies, DeFi (decentralized finance), CBDCs (central bank digital currencies), DAOs (decentralized autonomous organizations), NFTs (non- fungible tokens) and the metaverse as new gospel.

They’re not wrong, but the main difference between web1 and web3 is that three decades later, the use of the internet is still in the rearview mirror, and we know the dangers of being the first on a bumpy road. Blockchain will inevitably rewrite how almost every industry does business, but such a broad statement is independent of time, place, people and cash.

It’s not a priority right now

Well into 2022, hotels have far bigger fish to fry than worrying about such novelties as building a direct path to accept payments from one of the more popular cryptocurrencies such as bitcoin, ether, cardano or solana. And the metaverse may sound enticing, but until a VR headset is the best-selling gift this Christmas, don’t worry about the huge development costs associated with the digital twin of your fabulous property. Hotel experiences are much more than a virtual walkthrough – engaging all five senses in addition to the human connection element – ​​and these devices are at least a few years away from approaching the uncanny valley.

Admittedly, announcing that your brand accepts crypto transactions makes for good press. But beyond demonstrating that your company has a futuristic mindset—which might be the whole point—how will this help you solve your work problems? Do your maids care about such an advent, or would they prefer some sort of mobile-first automation to help them clean rooms and earn more credits faster?

Then consider the guest’s perspective. Will the crypto bulls and whales really care if you can facilitate direct payments in crypto – as opposed to first converting through a stablecoin to fiat – or do they care more about your brand standards, amenities and wellness program upgrades? For the game that is hotels, service always wins.

In other words, it won’t move the needle on other technology projects you might be undertaking amid rapid occupancy swings and perpetually swamped on-site teams. Blockchain applications are a “nice to have” in post-pandemic travel recovery and not a “must have” as automation tools that can drastically improve productivity or better data integrations to optimize business intelligence decision making.

But it’s still a Gamechanger

Having said all that, we return to the opening statement and the apt comparison with the Internet’s beginnings in the late 90s and early aughts. Yes, the early adapters like AltaVista and Yahoo or Friendster and Myspace are eventually overtaken by the likes of Google and Facebook respectively, with similar stories yet to be fully written for overvalued blockchain companies that lack a comparative advantage. The same applies to hotel companies that move too soon or do not have a clear vision.

Eight to ten years from now, after the next boom and bust cycle of crypto, the diverse tools of the decentralized internet will be fully realized and relatively easy to implement. At that point, however, you may find yourself a late adopter, losing customers to the brands that caught the wave at just the right time and engaged with this technology in a way that meaningfully improved the guest experience. A good vision requires a good plan, and that must start today.

In fact, you need a rough outline of how and when you want to implement crypto transactions, as well as what you ultimately want to do with the metaverse to both increase the experience on the site and monetize the entire venture. This overview will change as these technologies evolve, but getting these goals in place will help align the necessary resources and investments so you’re not left behind. Put together a committee, learn how these systems work and follow the trades so that you are up to date on general customer understanding of it all.

What you will do for the here and now

At the moment, the hype around NFTs is not one to ignore. That’s a lot of fluff, but it would be naive to think of these digital assets as just JPGs. Instead, think of these image files as the visual representation of a tokenized key that gives its owner access to a myriad of pre-defined benefits, such as inclusion in a private Discord channel where you can mingle with a host of celebrities or behind-the-scenes access to a famous the band’s last concert tour in any city.

This is what is called “token gating”. Because all of these tokens are permanently registered on the blockchain as unique, yet totally salable items for interested buyers, hotels can get involved using NFTs to sell exclusive experiences or to enhance their loyalty programs. And that’s where we see immediate gains—using these technologies to expand your location and develop a non-price-based incentive for customers to continue to choose your properties over the competition.

To finish, here’s a little bit of what to consider for an NFT-backed loyalty program:

• Launching a blockchain-backed purchasable loyalty status that comes with physical – and not just those promised as a future possibility – real-world benefits such as access to exclusive lounges in specific locations, discounts on room upgrades or free services such as airport transfers
• Besides the immediate tangibles, part of the allure of NFTs is the promise of the premise, where you offer benefits that can be reproduced today while outlining a plan for implementing future airdrops
• NFTs can also be used to manage unique on-site experiences, such as personally curated meals from the executive chef, the right to try new activities or cultural experiences added to exciting locations or first tours of new property openings
• While immersive VR may be a few years away, imagine an on-site AR integration where loyalty memberships can add a whole new layer of visual extension to your physical spaces invisible to those who haven’t purchased the necessary NFTs
• Cryptocurrencies can also facilitate efforts and crowdfunding to the point where an additional upper tier of your loyalty program can also serve as capital raising to renovate an existing property or build a new one.

Larry Mogelonsky
Hotel Mogel Consulting Limited

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