Doug Logan

Attracting Travelers with Web3 Technologies

How Innovative Hotels are Embracing the Future of Hospitality

Web3 represents a fundamental shift in how we interact online. It has the potential to upend every industry imaginable — including the travel and hospitality sectors. Brands that embrace these opportunities have the ability to cut operational costs while also boosting customer satisfaction. Those that cling desperately to the status quo, however, will soon suffer frustrated consumers and a whole host of other issues.

Now is the time to join the Web3 revolution. If you're feeling intimidated by all this change, relax; with the right resources, this transition might not be as daunting as you assume. Keep reading for inspiration.

What Is Web3?

How Does it Relate to Travel?

The term 'Web3' describes a new digital era, dominated by decentralization. This version of the web will rely on open-source software, a Zero Trust security framework, and, above all else, blockchain technology. This paradigm shift has already had a huge impact in sectors such as healthcare and finance — and now, it's about to change our perception of travel.

Web3 represents the inevitable followup to Web2, in which user-generated content reigns supreme. Its travel-based iteration has put more control into the hands of consumers, who count on review websites, online booking tools, and social media to create a more participatory take on travel.

Terms such as Web represent the current state of the digital world, but they won't be relevant for long. An even bigger paradigm shift lies in store, marked by greater openness than consumers ever thought possible. Already, a few specific iterations of Web3 have emerged in the travel sector, as highlighted below:

Cryptocurrency as Payment for Hotel Stays & Services

The first big shift of the Web3 era is already well underway: many luxury travel companies now accept cryptocurrency in lieu of traditional payments. Examples include:

  • Palazzo Versace Dubai. Setting the stage for the crypto market in the United Arab Emirates (UAE), the Palazzo Versace Dubai announced a partnership with the crypto exchange Binance in 2022. The result? Customers can use bitcoin to pay not only for hotel stays, but also, for dining, spa experiences, events, and more.
  • Pavilions Hotels & Resorts. As the first international hotel group to accept crypto-based bookings, The Pavilions Hotels & Resorts revealed in 2021 that it had partnered with Coindirect to accept dozens of cryptocurrencies. Founder and owner Gordon Oldham explained that this would improve bespoke services while also providing consumers greater peace of mind.
  • The Kessler Collection. Representing yet another exciting partnership with a crypto exchange, The Kessler Collection works with BitPay to accept a variety of crypto payments. This shift made The Kessler Collection the first US-based luxury hotel group to provide consumers with the ability to pay exclusively via crypto. When announcing this initiative, CEO Richard Kessler referred to the hospitality crypto movement as one of the most innovative concepts in the hospitality industry right now.

Loyalty Programs

Today's top luxury chains rely on loyalty programs to secure return visitors. Unfortunately, these programs can be difficult to implement and even more challenging for travelers to navigate. Enter the blockchain, which promises to streamline the overarching loyalty ecosystem while providing simple and secure verification.

Perks of a blockchain-based loyalty system include:

Redeeming Points With Third Parties

While customers are happy to apply accumulated points towards additional hotel stays, many would be thrilled to use them with third parties — especially if they can score further experiences while they're on vacation.

For example: a comprehensive loyalty program could help frequent travelers use their points on gourmet dining or even shopping trips. Blockchain technology facilitates this by assigning a specific value to loyalty program points while also ensuring that these points will be accepted by external vendors as payment. All this would be built into Point of Sale (POS) systems to make redemption seamless on both ends.

New Opportunities for Loyalty Programs

Loyalty programs have long been a central component of the travel experience, providing a win-win opportunity for travelers and major hospitality brands: travel companies secure repeat businesses while vacationers score savings and other perks. This setup isn't about to disappear, but it may look a bit different moving forward.

Upcoming changes are hinted at in results from a PwC Traveler Sentiment Survey, which reveal that today's vacationers are more apt to explore different loyalty programs —particularly if they're able to secure extended expiration dates for their points or miles.

When asked why they might switch loyalty programs, 44 percent expressed a simple interest in experiencing new brands and benefits. Web3 solutions can accommodate these desires by extending the reach of top loyalty programs.

Early opportunities are beginning to emerge, including the founding of the startup Blackbird. Described as a new loyalty, membership, and payments technology company, Blackbird will focus on restaurant chains but could be a compelling concept to watch as hotel chains explore Web3-oriented loyalty programs. Blending the best of Web2 with Web3 solutions, it provides a powerful reminder that a seamless and highly flexible transition to Web3 is possible.

NFT-Based Hotel Bookings

Non-fungible tokens (NFTs) are a big deal in many areas of the luxury industry, including fashion, real estate, and motor vehicles. Now, this concept promises to change how we book hotels and handle other aspects of the travel planning process.

This approach looks a bit like StubHub's willingness to let everyday individuals sell concert tickets. Under this approach, hotels get paid for rooms, even when hit with sudden cancellations that would otherwise prompt serious losses.

Casa de Campo Resort & Villas (left) has explored this model by partnering with the esteemed platform Pinktada. Guests can use room night tokens (RNTs) to make reservations.

On the hotel's end, this solution produces guaranteed revenue — but it's also beneficial for consumers, who enjoy a greater level of flexibility as they book rooms or adjust their plans.

Pinktada co-founder Mark Gordon explains, You give hotel owners certainty of income, but give travelers the flexibility if their plans change to sell or swap tokens.

One of the first American hotels to embrace NFT as a travel perk was New York's NoMo SoHo, which offers curated NFTs alongside stays of between three and six nights. Travelers can secure significant discounts simply by investing in NFTs that depict key parts of the contemporary hotel. NFT artwork options include the archway at the entrance (known as the Tunnel of Love), as well as the NoMo Kitchen's gorgeous Lovewall.

Virtual Hotels

While many of the opportunities highlighted above aim to bring extra convenience and luxury to traditional in-person travel, we're poised to enter a new frontier in the near future. This will encompass a completely different definition of travel: instead of serving purely as a physical means of exploration, the term will also come to describe virtual escapes. We're not quite there yet, but the early signs of this metaverse transition are beginning to appear.

Travel enthusiasts are already familiar with this concept. Many use travel planning as a temporary means of escape when they need a brief distraction from everyday stresses. The success of today's travel influencers points to this; even when they have no intention of visiting specific locations themselves, followers enjoy immersing themselves in new worlds via YouTube, TikTok, or Instagram.

These virtual escapes are ready to take a step up. A recent initiative from the acclaimed hospitality brand Leven reveals that this is more than possible.

Leven's metaverse-based lifestyle hotel will be situated on a virtual plot at Decentraland's Fashion Estate. The brand promises that its virtual hotel will embrace freedom of design, with the traditional hotel spaces of elevator, lobby, guest room, spa, and gardens reimagined, often defying physics and logic. Meanwhile, guests receive numerous opportunities to boost their physical, emotional, and spiritual health.

The Promise of Web3

Embracing the Hospitality Industry of Tomorrow

If the inspiring examples outlined above are any indication, the Web3 revolution is already well underway. Now is the time to explore the many new opportunities enabled by decentralized solutions. Soon, these systems won't merely deliver a competitive edge — consumers will expect the seamless experiences they provide. Exceed these expectations, and there's no telling what the hospitality industry of tomorrow can accomplish.

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