Widely acknowledged as a buzzword circulating in the hospitality industry in 2022, the intriguing and often elusive new technological concept of NFTs has left many to wonder: Are they real? Are they worth it? Are they here to stay? Finally, and perhaps most importantly, many are wondering what exactly are NFTs?
As part of HFTP’s core purpose to lead and advance the hospitality profession by providing a forum for continuous learning and knowledge sharing, the association enlists research conducted by industry experts, research scholars and graduate students in higher education hospitality programmes to explore the latest hot topics and emerging technologies. And, lately, NFTs have been on their minds.
Uses of NFTs in the hospitality industry
Shubham Khemka, graduate student in the master of science in global hospitality business programme, a partnership between EHL, the Hong Kong Polytechnic University and the University of Houston.
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, favourite 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 traveller, 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’. 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 fulfilment. Similarly, the luxury hotel brand Venetian became the first hotel to accept reservations for their rooms through NFTs and even auctioned a room on the OpenSea platform that is used to buy and sell NFTs.
Restaurant brands like Pizza Hut and Taco Bell are exploring tokenisation of reservations through NFTs, 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 really excited me. I began wondering if there are deeper and more meaningful uses of this technology. As I got more sensitised to the topic, there are aspects of this technology that started to excite me as a student of hospitality. The three characteristics that NFTs base themselves on are: scarcity, smart contracts and community. These three characteristics can revolutionise loyalty programmes from what it is today, with its benefits of speed and secure transactions.
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 NFTs 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, they 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. Market leaders like Marriott have a diverse range of benefits and partnerships attached to their existing loyalty programme, and can use NFTs to revolutionise them. NFTs should not just be expensive and over-priced pictures of monkeys and cartoons, but the technology can create an online global travel community like never before and I, for one, am all for it.
Are NFTs the next big thing in hospitality?
Rochak Khandelwal, research scholar with the HFTP Middle East Research Center and student at the Emirates Academy of Hospitality Management in Dubai, UAE.
Because the technology is still new, NFT hospitality marketing is still under-explored despite having a great deal of potential by improving customer engagement, product promotion, brand awareness and business collaborations. NFTs are gradually establishing themselves as a viable and preferred choice in the Dubai hospitality sector. You can see how NFTs are being used as a hospitality marketing tool in Dubai and how some restaurants, hotels and celebrity chefs are making use of this technology to enhance their presence in the industry and attract new customers.
Alexandros Sperxos, an award-winning Dubai chef who has taken on NFTs, is the first in the world to create a series of seven digital artworks of glow-in-the-dark food, and even an NFT of himself. Sperxos was named an official ambassador of Greek gastronomy in the UAE in 2019 and has promoted Greek cuisine around the world. Now the chef has entered the NFT market and customers can bid for the NFT collection online. These dishes will be served at a private glow-in-the- dark event held at The Alley in Al Quoz, Dubai, where bidders will also be able to meet Sperxos.
I recently visited a new Vietnamese restaurant near my university, Goi Rolls. The restaurant has found a new way to attract customer loyalty by selling its own NFTs. Customers buying these tokens get half the amount back to spend on food at the restaurant. As per Hayder Nashie, general manager of Goi Rolls, it is not only a way of publicising food but also a utility, as they are giving back value to the purchaser of these tokens. It is a different way of engaging with your customers. The sushi rolls NFT from Goi Rolls can be purchased with Ethereum and NFTs on the OpenSea marketplace. One is priced at ETH0.0221, or $52.52 at the current rate, with the caveat that cryptocurrency prices have fallen as a result of Russia’s actions in Ukraine.
In March 2022, Dubai adopted a new law designed to regulate virtual assets, protect investors and provide international standards governing the virtual asset industry. Soon after this announcement, we have seen increased interest in NFTs from various businesses. NFTs in hospitality could be a game-changer. With new laws regulating the technology, many people and investors who originally viewed NFTs as a scam are interested in adopting this technology to promote and grow their businesses, not only in food but also in travel and accommodation.
