Are NFT hotel room packages the future?

If at any point you have found yourself mumbling the words, “what on earth is an NFT?”

Well, you are not alone. While the modern world has set an undeniable precedent for digital adoption and knowledge in the face of frequent innovation, the introduction of the metaverse and, around the same time, the popularization of cryptocurrency and NFTs left some of us feeling confused. Seemingly overnight, NFTs (short for non-fungible tokens) became the talk of the town, with individuals vying for a piece of this exciting new digital pie. Given the recent events of FTX, Celsius and other bankrupt cryptocurrency exchanges, everyone is taking a step back to include the NFT world. That said, let’s discuss the possibilities as this new “store of value” weathers the current storm.

As explained by Forbes, NFTs are digital assets that can come in the form of art, music, in-game items, videos, and more. NFTs are bought and sold online, often with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos. Since “non-fungible” indicates that an asset is not fungible, non-fungible tokens are digital assets that have a unique value. A decentralized blockchain verifies the value of each NFT, and as the non-fungible name implies, no two NFTs in the world can be exchanged for a smooth trade.

According to recent statistics, the global value of the NFT market is currently $21 billion, and the market is expected to reach $174 billion by 2026. By 2026, 25% of people will spend at least one hour daily in the metaverse, reports Gartner. T. In addition, around 30% of businesses must have metaverse products and services ready by 2026.

And while some individuals may shy away from the blockchain sensation due to its perceived complexity, many businesses are eager to take advantage of the allure of NFTs within their business model. Hospitality, it seems, may be the latest industry to venture into this territory, which begs the question – can NFTs play a role in the future of hospitality?

Where NFTs and hospitality collide

Marriott International was one of the first hotels to integrate NFTs into its marketing strategy with the development of its “Power of Travel” campaign. The world-renowned hotel brand teamed up with digital artists TXREK, JVY and Erick Nicolay to create three NFTs that debuted at the Art Basel Miami Beach 2021 event. During the event, attendees were entered into a draw that yielded three winners, each of whom went home with an NFT and 200,000 Marriott Bonvoy points.

Another widespread example of NFTs entering the world of hospitality can be found in Dream Hotels. Hollywood Hotel has launched an exclusive NFT membership program called Social Club, which members can access through purchasable NFTs. Members of the club are treated to exclusive events, access to pools, cabanas, lounges, fitness rooms, co-working spaces, VIP concierge services and metaverse events. Members also get a plus one throughout the experience. In many ways, Dream Hotel harnesses the power of FOMO to create a new type of VIP club that will pique the interest of young and/or digitally savvy travelers within the experience economy.

While both of these examples lean towards the loyalty side of the hospitality segment, it is important to recognize that the utility of NFTs is not necessarily limited to the expansion of traditional loyalty programs. In fact, there may be a future where NFTs are used to drive revenue for hotels.

What would an NFT room pack look like?

If NFTs show persistence among consumers, we could see a significant industry shift towards a booking model that allows guests to book stays via blockchain, specifically NFTs. Within this model, hotels will offer guests access to exclusive or discounted rooms (or room packages with exclusive experiences or add-ons) that are not available in the same capacity via traditional booking channels. A working example of this can be observed via Casa de Campo Resort & Villas, which recently partnered with Pinktada, a “member-based hotel marketing and reservation platform that allows guests to reserve rooms with transferable room night tokens (RNTs) using blockchain technology.”

When asked to explain the benefits of this booking approach on the hotel side, Casa de Campos senior vice president of sales and marketing notes that Pinktada bookings represent guaranteed revenue. “On the hotel side, the platform delivers guaranteed non-refundable revenue as well as a proprietary interface unlike any existing [online travel agents] platforms currently offer,” he shared. “This allows us to offer our guests greater flexibility, online experience and guaranteed income.” This model follows other platforms consumers know and love, such as StubHub. Instead of canceling a reservation through the hotel (representing a loss of revenue), this will place the responsibility in the hands of the guest, as they can trade, exchange or sell back RNT on the exchange platform.

Similarly, NoMo SoHo, the 26-story, 264-room property in midtown Manhattan, has launched “NFTStays,” a collection of specially curated NFTs packaged with three- to six-night stays at NoMo SoHo. By booking with these NFTs, each depicting a part of the iconic hotel, guests are granted access to luxury guest rooms at exclusive rates, late check-out, complimentary breakfast, welcome amenities and more. The best part? These packages are not dependent on a specific date; rather, they must only be redeemed within 12 months of purchase (with the exception of certain blackout dates), giving guests greater travel flexibility.

When considering the additional income segment of the hospitality industry, NFTs are an exciting and profitable proposition. Ancillary revenue, as any hotelier knows, refers to the revenue from sources other than the primary product offering (the rooms). While ancillary revenue streams have traditionally included F&B services, entertainment, wellness and more, NFTs can be a perfect addition to the mix.

Web3 will revolutionize how guests discover, engage and build loyalty with hospitality and travel brands globally. In fact, metaverse technology will dramatically change every step of the journey. As hotels look to sort their additional sources of revenue into packages that appeal to specific traveler demographics and customer segments, such as mixed travelers or millennials, NFT packages can become an enticing, FOMO-centric offering that captures travelers’ interest and generates additional revenue for hotels.

Could NFT hotel room packages be an integral part of our industry’s future? For now, I think it’s still too early to tell – but it’s certainly a new technology and innovative idea that hotel brands should keep an eye on as we move into 2023 and beyond.

About Above Property Services (APS™)

Above Property® is leading the charge to deliver innovative, scalable and service-oriented platforms for the global travel industry and other related verticals. We think differently and we enjoy all the time. Above Property Services (APS™) offers the only platform that can evolve seamlessly in response to industry demands, courtesy of a microservices architecture that enables continuous development and refinement.

The APS ecosystem is built from the ground up and provides continuous development and refinement of your critical business processes via a unique microservice architecture. Designed for performance, flexibility, security and stability, the future-proof framework is up and running quickly, delivering a scalable, cost-effective solution that can work with or replace existing tools and investments. APS is a platform that adapts to you – not the other way around.

By running both large and small companies, we understand the industry’s challenges in the past, and we have developed a platform that is suitable for the future.

Steve Lapekas
APS® (Above Property® Services)