Some resort owners think they’ve found a way to avoid getting stuck with excess inventory when guests cancel at the last minute.
It involves converting room nights for sale into non-fungible tokens, or NFTs, that can be bought or sold by hotel guests, similar to the StubHub market for tickets to concerts and sporting events.
Owners say this ensures they get paid for the rooms, as guests would sell their reservation on the market if they decide not to go, appealing to the crypto-enthusiastic traveler.
“We can reach another consumer who may not be booking traditionally,” said Jason Kycek, senior vice president of Casa de Campo Resort & Villas, a Dominican Republic resort that plans to book rooms with NFTs soon.
Casa de Campo has signed with the startup Pinktada, which recently launched a booking system that includes hotels in the Caribbean, Mexico, San Francisco and Hawaii.
Hotel guests can reserve rooms at those accommodations by purchasing NFTs through Pinktada. By using this system, guests can book a room at a discount to what the hotel would charge for a refundable reservation.
The sale is final from the point of view of hotel owners, so their income is guaranteed whether the room is used or not. If travelers change their plans, they can use the tokens for other Pinktada hotels or sell them to another traveler in the Pinktada network.
Pinktada (the name refers to a type of pearl oyster) promises to be the last resort if another traveler doesn’t buy it.
“You give hotel owners security of income, but give travelers flexibility if their plans change to sell or exchange tokens,” said Mark Gordon, co-founder and chief hospitality officer of Pinktada.
Another startup using NFTs is Stay Open, which converts unused retail and office space into hostel-like accommodations. Stay Open began selling 10,000 NFTs for one-tenth of an ethereal coin each earlier this spring, in part to raise capital to add new venues.
Each NFT includes one “stay token” for a free night at one of Stay Open’s existing properties in Venice Beach, California, or others the company plans to open. NFT holders will also get tokens to use the co-working space and other benefits of Stay Open.
Token owners can use, gift or sell them, said Steve Shpilsky, co-founder and CEO of Stay Open. If demand is high in the local lodging market, “you could even make some money,” he said.
NFTs, which live on the blockchain like cryptocurrencies, made headlines last year when digital pieces sold for eye-watering sums, such as $69 million for a collage called “Everydays: The First 5000 Days” and $2.9 million for Twitter’s first tweet including†
co-founder Jack Dorsey.
This year, the volume of NFT sales has fallen sharply along with the highly speculative cryptocurrency market, which has been plagued by rising interest rates. But many artists and startups remain enthusiastic about NFTs, especially those with utilities like hotel reservations.
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In the real estate industry, NFTs are also used by groups to raise capital to purchase golf courses or land, giving token buyers a stake in the projects. And NFTs are used by metaverse firms to sell digital land in virtual worlds like Sandbox and Decentraland.
A growing number of proptech startups, backed by Fifth Wall, one of the largest real estate venture capital firms, are exploring the use of NFTs, said Dan Wenhold, a Fifth Wall partner. “This is a conversation that comes up more regularly in board meetings,” he said.
Some hotel owners may be reluctant to sell reservations in the form of NFTs that can be resold for fear of not knowing the identities of their guests, according to some participants in the hotel industry. Pinktada said it addressed this concern by allowing only its members, who sign up for free, to participate in the marketplace and by making membership details available to owners.
Noble House Hotels & Resorts, a hotel management company, has signed an agreement with Pinktada so that travelers can use it to make reservations at its two San Francisco hotels, the Argonaut Hotel and Hotel Zoe.
“This is somewhat uncharted territory,” said Stefan Muhle, the region’s general manager. “We’re as curious as anyone to see how it’s going to shake out.”
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