While NFTs’ explosive popularity last year can partly be attributed to both retail investors and luxury collectors getting in on the action, in the months following the spring crypto crash many companies have largely turned their NFT efforts towards luxury audiences. The media’s 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 worlds’ forays into digital collectibles.
These are diverse and numerous. Luxury spirits brands sell NFTs in million-dollar auctions, while high-end fashion houses release sought-after digital items. It’s only natural: Tokens have become a novel way for high-net-worth individuals to discover and savor luxury products and experiences. And so travel providers, too, now want in on the game.
From tokenized room stays to offers of exclusive perks 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 to the virtual world.
Unlocking a secondary market for travel
The nature of NFT blockchain technology — as a certificate of ownership — offers the possibility of a secondary market for travel bookings, something that would have been unfeasible before. Room stays, for example, can be packaged into digital vouchers in the form of NFTs that can then be resold to other travelers if the original holder’s plans change.
Companies like Pinktada and Takyon appeared in 2022 to exploit precisely this opportunity. Working with luxury Dominican Republic resort Casa de Campo, Pinktada launched one of the industry’s first “room-night tokens” (RNT), a crypto representation of a hotel reservation. Venice’s luxurious Ca Di Dio and New York’s hip NoMo SoHo hotels released similar NFTs last year.
“This allows our guests to take advantage of special rates that hotels normally only make available to fixed bookings but, crucially, with none of the risk, as they will have the option to sell or swap their RNTs if they need to,” said Jason Kycek, senior vice president of sales and marketing at Casa de Campo.
The resort will also provide guests who have booked via RNTs with a commemorative NFT, customized with images and videos from their holiday. The token can become a tool to support long-term branding and marketing initiatives beyond the vacation itself, giving travel operators a new touchpoint with their customers.
“Post-pandemic, travelers have become accustomed to making flexible travel plans and, rightly so, this is a trend that they wish to see continue,” Kycek explained. “From the hotels’ operational perspective, this new technology allows us to offer our customers greater flexibility, with the added benefit of having guaranteed revenue. 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 large 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 individuals during an event at the exclusive international art fair Art Basel.
“NFTs have an intrinsic and real-world value attached to them, making them worth owning at any level. For luxury specifically, it needs to unlock experiences or value that money can’t buy and other people can’t access. The rarity component becomes even more important,” remarked Nicolette Harper, vice president of global marketing and media at Marriott.
While the company didn’t share specific details, it plans to expand its NFT strategy in the future. Harper stated that it will use the space to “enhance” its current offerings. “These platforms and infrastructures could evolve the travel space from experiences to currency and loyalty programs. We might see NFTs moving beyond their role of representing authenticity in ownership to one that gives access to the world while still protecting the user’s identity,” she observed.
Other operators are taking digital membership one step further by offering exclusive memberships available only via NFTs, opening the door to a market for membership resales. San Francisco-based Sho Club is set to offer NFT memberships which will go for up to $300,000 (2 million RMB) a year. These will give access to exclusive benefits and events — and even grant a share in the club’s revenue.
The American entrepreneur, investor, and super influencer Gary Vaynerchuk (also known as Gary Vee) is behind the Fly Fish Club in New York City, which adopts a similar model. It offers NFT memberships to its exclusive restaurant-come-omakase-room for its jet-setting clientele. The restaurant also allows associates to lease out their NFT memberships on a monthly basis, potentially creating a recurring revenue stream out of 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 the industry maintains its exclusivity while staying relevant.
“The potential of the NFT for luxury travelers regards its uniqueness: in the possibility to assert ownership through this uniqueness, and to exploit the artistic side of the NFT to create memories by adding photos and videos,” maintained Antonio Picozzi, CEO and co-founder of Takyon, an exchange for travel NFTs.
But most travel consumers — even luxury ones — have yet to embrace the world of NFTs and Web3. For these, Picozzi has a solution: Web 2.5. “It means that we are exploiting the opportunities of Web3, especially the possibility of creating real digital ownership, without forcing the customer to live a Web3 experience.”
This could mean leveraging elements of both Web2 (such as social login and payment by fiat currency) and Web3 (the use of a wallet and payment by cryptocurrency), Picozzi imagined, adding that “companies should work to hide the technology as much as possible.”
Given the damage to Web3’s hard-earned trust following the collapse of crypto exchange FTX earlier this month, as well as stagnating NFT volumes in recent months, we might be still far away from the day when NFTs and Web3 become fixtures in luxury travel. But industry players are nonetheless preparing for what they regard as an inevitable evolution.
“If the digital world does manifest in the way we expect, we can start to think about what virtual hotels might look like, how real-life experiences translate into the digital, and how we can create virtual experiences that may not be possible in the real world,” affirmed Marriott’s Harper.
And while the future is never certain, Harper remains confident about the impact of the technology. “The advancement of these types of experiences will absolutely change the industry as a whole and result in a more interactive and accessible space,” she concludes. An exciting road lies ahead.