Innovation continues to drive the travel industry forward. By bringing blockchain technology to the hotel booking space, a recently launched startup is adding a new dimension to the booking process and changing the way the hospitality and event industries interact with their customers.
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 like non-fungible tokens (NFTs) are here.
Liferewards.ai offers hotel reservations and event tickets that are digitized and converted into collectible NFTs. Customers can earn rewards based on their actions, which are easy to track using blockchain technology, as well as sell or trade their reservations in a secondary marketplace, much like StubHub functions as a digital venue for primary ticket buyers to sell or trade their baseball or Broadway tickets.
“By creating liquidity in bookings, both hotels and travelers will get more flexibility and an improved travel experience,” said Eduardo Ibañez, chief data scientist at Liferewards.ai. “With NFTs representing hotel stays or event tickets, Liferewards.ai lets travelers 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’re developing a similar solution for flight reservations, but at launch we’re 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 gets an NFT that functions as a unique reservation that can be sold or traded securely and seamlessly up to 24 hours before check-in. Travelers can pay with their credit card or with cryptocurrency. As soon as the payment is processed, the system mints the NFT, and the traveler can see it in their wallet — then they can use it, sell it, trade it, or just show it off in their wallet.
Blockchain is good at authentication — verifying who owns what and when it was purchased — enabling two people to easily, inexpensively, and securely exchange tokens that represent reservations.
“The option of making 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 rather than 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 should also help hotels lower their customer acquisition costs. For example, large hotels will be able to pre-sell their inventory a year ahead of time, so they can keep their occupancy up and reduce risk.
“The faster they can sell out, the better,” Ibañez said. “We are solving a problem for travelers and for hotels simultaneously by creating value from bookings that are currently dead assets.”
To make sure the platform can compete on price and offer an expansive inventory of hotels, Liferewards.ai is partnering with OTAs and large hotel brands. Ibañez says it can offer lower rates and prices because its customers are in a closed user group. “The discount isn’t displayed everywhere else.”
Eventually, hotels will be able to set the rules of their NFT, so every time the reservation token is traded, the hotel will get a royalty payment. “We’re not there yet, but it is possible, because with blockchain their royalty share can be programmatically coded into the NFT.”
The Loyalty Play
In addition to partnering with hotels, Liferewards.ai is working closely with event and experience providers so they can package hotel reservations with event tickets and offer unique rewards to travelers.
“We’re going to allow travelers to yield loyalty points based on various interactions within the network,” Ibañez said. “The traveler who booked 10 times at a certain hotel might be dubbed the ‘community manager’ of that hotel or destination, and if they provide inside information about that place they’ll get extra points on every subsequent booking. With our decentralized travel platform, all travelers can monetize on their strengths, whether they be the best hotel reviewer or the best tour guide. We provide value for their interactions.”
In a future iteration of the platform, travelers will be able to discover and unlock rewards placed at certain longitudes and latitudes in the real world via augmented reality. An attempt to gamify the reward earning and redemption process, these so-called “quests” might entail going to a certain statue in Rome to unlock an event or hotel discount or going on a whiskey bar crawl curated by local experts in Kentucky.
While Ibañez is concerned that the lack of liquidity in other NFT marketplaces may impact sales volume, he maintains that Liferewards.ai, which operates on blockchain but isn’t solely tied to cryptocurrencies, will not be negatively impacted 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 putting some great partnerships in place,” Ibañez said. “We will grow as fast as we can acquire 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 merely 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, for example, you were at the Super Bowl and stayed at the same hotel as Rhianna.”
If the platform takes off as Ibañez believes it will, those who enjoy bragging about their travel experiences on Instagram will need to up their game.
For more information about Liferewards.ai, click here.