How blockchains are disrupting online travel agency models

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Innovation continues to drive the travel industry forward. By bringing blockchain technology to the hotel booking space, a newly launched startup is adding a new dimension to the booking process and changing the way the hospitality and events industry interacts with its customers.

Liferewards.ai

As travelers become more comfortable with cryptocurrencies and wallets, the online travel agency (OTA) model is ripe for disruption by blockchain technologies. Ready or not, hotel reservations that can be bought and traded as non-fungible tokens (NFTs) are here.

Liferewards.ai offers hotel reservations and event tickets that have been digitized and converted into collectibles. Customers can earn rewards based on their actions, which are easy to track using blockchain technology, as well as sell or trade reservations on a secondary marketplace, much like StubHub serves as a digital arena for primary ticket buyers to sell or trade baseball or Broadway- tickets.

“By creating liquidity in bookings, both hotels and travelers will gain more flexibility and an improved travel experience,” said Eduardo Ibañez, Data Scientist at Liferewards.ai. “With NFTs representing hotel stays or event tickets, Liferewards.ai allows travelers to showcase where they’ve been, where they are and where they’re going – and allows them to trade those bookings in an open marketplace. We are developing a similar solution for flight reservations, but at launch we are focused on hotels and events.”

What does it mean when your hotel reservation is an NFT?

As soon as a hotel is booked, the traveler receives an NFT that acts as a unique reservation that can be sold or traded securely and seamlessly up to 24 hours before check-in. Travelers can pay by credit card or with cryptocurrency. As soon as the payment is processed, the system stamps the NFT and the traveler can see it in their wallet – then they can use it, sell it, exchange it or just show it in their wallet.

Blockchain is good at authentication – verifying who owns what and when it was purchased – enabling two people to easily, cheaply and securely exchange tokens representing reservations.

“The option to make the reservations tradable on secondary markets is attractive to many travelers, especially if their plans change frequently,” Ibañez said. “Hotels also benefit from having a secondary market.”

The benefits for hotels

Liferewards.ai promises to help hotels manage revenue more seamlessly and solve the problem of high cancellation rates by creating bookings that can be traded on secondary markets without losing value instead of being canceled when travelers’ plans change.

“If a hotel has a cancellation policy where you can cancel 24 hours in advance, it’s better if they don’t have to worry about discounting the room to get someone else in,” Ibañez said.

The platform will also help hotels reduce customer acquisition costs. For example, large hotels will be able to pre-sell their inventory a year in advance, so that they can keep occupancy up and reduce risk.

“The faster they can sell out, the better,” Ibañez said. “We are simultaneously solving a problem for travelers and hotels by creating value from bookings that are currently dead assets.”

To ensure the platform can compete on price and offer an expansive inventory of hotels, Liferewards.ai partners with OTAs and major hotel brands. Ibañez says they can offer lower rates and prices because the customers are in a closed user group. “The discount does not appear everywhere else.”

Eventually, hotels will be able to set the rules for their NFT, so every time the reservation token is traded, the hotel will receive a royalty payment. “We’re not there yet, but it’s possible, because with blockchain, their royalty share can be programmed coded into NFT.”

The loyalty game

In addition to partnering with hotels, Liferewards.ai works closely with event and experience providers so they can bundle hotel reservations with event tickets and offer unique rewards to travelers.

“We’re going to allow travelers to give loyalty points based on different interactions in the network,” Ibañez said. “The traveler who has booked 10 times at a particular hotel can be called the ‘Community Manager’ of that hotel or destination, and if they provide insider information about that place, they will earn extra points for each subsequent booking. With our decentralized travel platform, all travelers can monetize their strengths, whether they are the best hotel reviewer or the best travel guide. We provide value for their interactions.”

In a future iteration of the platform, travelers will be able to discover and unlock rewards located at specific longitudes and latitudes in the real world via augmented reality. An attempt to gamify reward earning and the redemption process, these so-called “missions” might involve going to a specific statue in Rome to unlock an event or hotel discount or going on a whiskey bar crawl curated by local Kentucky experts.

Looking forward

While Ibañez is concerned that the lack of liquidity in other NFT marketplaces could affect sales volume, he claims that Liferewards.ai, which operates on the blockchain but is not only tied to cryptocurrencies, will not be negatively affected by recent volatility in the crypto market. .

“Our technology stack is built, we have access to millions of rooms of hotel inventory, and we’re launching some great partnerships,” Ibañez said. “We want to grow as fast as we can get customers.”

In terms of marketing, that means focusing on attracting younger, more affluent travelers who like to go to events—and then focusing on the nearby hotels that are popular with those travelers.

“For some travelers, our NFTs will simply represent the record of their reservation, while for others they will be collectibles. There’s something to be said for flexing and sharing where you’ve been and what you’ve experienced. Your NFT will prove that you for example, was at the Super Bowl and stayed at the same hotel as Rhianna.”

If the platform takes off the way Ibañez thinks it will, those who like to brag about their travel experiences on Instagram will need to up their game.

For more information on Liferewards.ai, click here.

This content was created in collaboration by Liferewards.ai and Skift’s branded content studio, SkiftX.