Imagine you had an online avatar — a “mini-me” version of you, an identity card that includes your face (albeit in animated form) and a unique code. Instead of presenting your real ID card every time, you attach it once to this avatar and do not have to carry it every time you need to check in to a hotel or flight. Now take it a step further: imagine your loyalty points are attached to this identity — not just for your hotel but for your flights, favorite restaurants and retail outlets, saving you the hassle of noting down multiple passwords and usernames. Since we are now so deep into our imagination, what if the top traveler, shopper or diner was rewarded periodically, beyond just the loyalty credits earned?
If there are keywords that we have heard more in the past couple of years other than Covid-19, they are "NFTs" and "cryptocurrency." For those who have just heard the term "NFT" but still do not understand what it stands for: an "NFT" is a non-fungible token, which means it can be any digital material like a piece of art, video, music or tweet that is unique and cannot be replicated or exchanged. It is like an entry in a digital ledger that cannot be erased or duplicated. Even though NFTs provide you with a certificate for proof of ownership, they do not restrict the sharing or copying of the underlying digital file, much like any piece of art that can be replicated or shared in the real world.
NFTs are being rapidly adopted by a variety of industries. This technology has mainly taken the art, entertainment and gaming industry by storm but is also being adopted by the healthcare industry to store private data. Recently, I was gifted an NFT of the same car that I purchased back home in India. In the hospitality industry, Marriott Bonvoy launched their first NFT collection in Miami Beach Art Basel that showcases how travel leads to emotional fulfillment. Similarly, the luxury hotel brand Venetian hotel became the first hotel to accept reservations for their rooms through NFTs and even auctioned a room on the Open Sea platform that is used to buy/sell NFTs. Restaurant brands like Pizza Hut and Taco Bell are exploring tokenization of reservations through NFT which is similar to using your credit card to get a reservation.
While all of these uses of the aforesaid technology are relevant, none had excited me to the fullest — and I began wondering if there are deeper and more meaningful uses of this technology. As I got more sensitized to the topic, there are aspects of this technology that started to excite me as a student of hospitality. The three characteristics that the concept of non-fungible tokens bases itself on are scarcity, smart contract and community. These three characteristics can revolutionize the loyalty program system from what it is today, with its benefits of speed and secure transactions.
The hospitality companies can create these NFT avatars to gift or sell to a select few loyal customers. These NFTs create a “superfan” community and members of this club can use their NFT to not only store them as art but use them as booking tokens with the technology's smart contract feature. Once an NFT has been attached to a reservation, the particular NFT can be given points, as well as access to give a review in the superfan community. This creates an alternate platform where reviews are not only authentic and credible but also sought after. The superfan community can be leveraged by the company to target their choicest customers and reward their loyalty with sensational deals.
NFTs are largely demonized because they are perceived as pictures of apes with high valuations that do not make sense to a lot of people (including me). The varied benefits of the technology, though, make NFTs more than a fad, as a variety of industries are adopting this. Market leaders like Marriott, which have a diverse range of benefits and partnerships attached to their existing loyalty program, can use NFTs to revolutionize it. NFTs should not just be expensive and over-priced pictures of monkeys and cartoons — the technology can create an online global travel community like never before and I, for one, am all for it.
This blog post tied for First Place in the Spring 2022 HFTP/MS Global Hospitality Business Graduate Student Blog Competition presented by the HFTP Foundation. Participants are students participating in the Master of Science in Global Hospitality Business, a partnership between the Conrad N. Hilton College of Global Hospitality Leadership at the University of Houston, the School of Hotel and Tourism Management at Hong Kong Polytechnic University and EHL. The blog posts that received the top scores will be published on HFTP Connect through July 2022. Learn more at HFTP News.
Shubham Khemka is a graduate student currently pursuing the Master of Science in Global Hospitality Business program, which is in partnership of three schools: EHL, the Hong Kong Polytechnic University, and University of Houston.