How luxury travel operators are charting a new post-pandemic path with NFTs

How luxury travel operators are charting a new post-pandemic path with NFTs

While NFTs’ explosive popularity last year can be attributed in part to both retail investors and luxury collectors getting in on the action, in the months following this spring’s crypto crash, many companies have largely reversed the NFT bet towards luxury audiences. Media coverage of non-fungibles has often been dominated by either Web3-native PFP collections (such as the popular Bored Ape Yacht Club and Azuki) or the art, fashion, and luxury world’s forays into digital collectibles.

These are diverse and many. Luxury liquor brands sell NFTs in million auctionswhile high-end fashion houses drop coveted digital goods. It’s only natural: Tokens have become a new way for high net worth individuals to discover and enjoy luxury products and experiences. And therefore travel suppliers will now also be in the game.

From tokenized room stays to offering exclusive benefits and memberships via non-fungibles, luxury travel operators are exploring how to leverage blockchain technology. The results are exciting – they symbolize the arrival of an inherently physical industry into the virtual world.

Unlocks a secondary market for travel

The nature of NFT blockchain technology – as a certificate of ownership – allows for a secondary market for travel bookings, which would have been impossible before. Room stays can, for example, be packaged into digital coupons in the form of NFTs which can then be resold to other travelers if the original holder’s plans change.

Companies such as Pinktada and Takyon emerged in 2022 to take advantage of this very opportunity. In partnership with the Dominican Republic’s luxury resort Casa de Campo, Pinktada launched one of the industry’s first “room-night tokens” (RNT), a cryptographic representation of a hotel reservation. Venice is luxurious About Di Dio and New York’s hip NoMo SoHo hotels issued similar NFTs last year.

NoMo SoHo uses SolidBlock’s technology, NFTStays, to package a selection of NFTs with three to six night hotel stays. Photo: NoMo SoHo

“This allows our guests to take advantage of special rates that hotels normally only make available for firm bookings but, crucially, without the risk as they will have the option to sell or exchange their RNTs if they need to,” said Jason Kycek, senior vice president of sales and marketing at Casa de Campo.

See also  Amazon to Enter Crypto NFT Space: What Does This Mean for Sandbox, Decentraland and Dogetti?

The resort will also give guests who have booked via RNTs a commemorative NFT, customized with photos and videos from the holiday. The token can become a tool to support long-term branding and marketing initiatives beyond the holiday itself, giving travel operators a new point of contact with their customers.

“Post-pandemic, travelers have become accustomed to making flexible travel plans, and rightly so, this is a trend they want to see continue,” explained Kycek. “From the hotels’ operational perspective, this new technology allows us to offer our customers greater flexibility, with the added benefit of having guaranteed income. It’s a win-win for all parties.”

Digitizing IRL travel experiences

NFTs are also emerging as stores of value for avid travelers, such as for reward points and exclusive memberships.

Last year, global hotel chain Marriott became one of the first major hospitality brands to create its own NFTs, unveiling digital art inspired by its recent worldwide “Power of Travel” campaign. The NFTs – as well as 200,000 Marriott Bonvoy points – were won by three people during an event at the exclusive international art fair Art Basel.

“NFTs have an inherent and real value attached to them, making them worth owning at any level. For specific luxury, it must unlock experiences or value that money cannot buy and that others cannot access. The rarity component becomes even more important,” said Nicolette Harper, vice president of global marketing and media at Marriott.

Although the company did not share specific details, it plans to expand its NFT strategy in the future. Harper stated that they will use the space to “enhance” their current offerings. “These platforms and infrastructures can evolve the travel space from experiences to currency and loyalty programs. We may see NFTs move beyond their role of representing authenticity of ownership to one that provides access to the world while protecting the user’s identity,” observed she.

Other operators are taking digital membership a step further by offering exclusive memberships only available via NFTs, opening the door to a membership resale market. San Francisco-based Sho Club is set to offer NFT membership which will go for up to $300,000 (RMB 2 million) a year. These will give access to exclusive benefits and events — and even give a share in the club’s revenue.

American entrepreneur, investor and super-influencer Gary Vaynerchuk (also known as Gary Vee) is behind the Fly Fish Club in New York City, which uses a similar model. It offers NFT membership to its exclusive restaurant-come-omakase room for its jet-setting clientele. The restaurant also allows employees to rent out their NFT memberships on a monthly basis, potentially creating a recurring income stream from what is a fairly illiquid digital asset class.

A match made in Web2.5 heaven?

Luxury travel rests on guaranteeing a unique and valuable experience. Industry players believe that NFTs can ensure that the industry maintains its exclusivity while remaining relevant.

“The potential of NFT for luxury travelers looks at its uniqueness: in the ability to claim ownership through this uniqueness, and to harness the artistic side of NFT to create memories by adding photos and videos,” maintained Antonio Picozzi, managing director and co – founder of Takyon, an exchange for travel NFTs.

But most travel consumers – even luxury consumers – have yet to embrace the world of NFTs and Web3. Picozzi has a solution for these: Web 2.5. “That means we’re leveraging the capabilities of Web3, especially the ability to create true digital ownership, without forcing the customer to live a Web3 experience.”

This could mean leveraging elements of both Web2 (such as social login and paying with fiat currency) and Web3 (using a wallet and paying with cryptocurrency), Picozzi imagined, adding that “companies should work to hide the technology so as much as possible.”

Given the damage to Web3’s hard-earned confidence the collapse of the crypto exchange FTX earlier this month, in addition to stagnant NFT volumes in recent months, we may still be a long way from the day when NFTs and Web3 become fixtures in luxury travel. But the industry players are nevertheless preparing for what they consider to be an inevitable development.

“If the digital world manifests itself in the way we expect, we can start thinking about what virtual hotels might look like, how real-world experiences translate into the digital, and how we can create virtual experiences that might not be possible in the real world, Marriott’s Harper confirmed.

And while the future is never certain, Harper remains confident in the impact of technology. “The development of these types of experiences will certainly change the industry as a whole and result in a more interactive and accessible space,” she concludes. An exciting road awaits.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *