Ways That Hotels Can Make Money from the Metaverse (Part 1)
The metaverse seems to be all the rage right now, but is it just hype or will it actually take off and have a viable economic purpose within the next few years? Of note, we are looking at the next few ‘years’ and not the next few ‘decades’.
Right now, the skepticism is palpable. Many see the entire ecosystem of cryptocurrencies, NFTs and the metaverse as one giant Ponzi scheme built upon the promise of a libertarian future as led by hyperintelligent futurists with innumerous other young, get-rich-quick wannabes drinking the YouTube Kool-Aid. The doubters raise some good points, but ultimately our sentiment is that the bulls will win because blockchain applications for businesses are too lucrative to disregard.
Never ones to recommend artificially derived beverages like the aforementioned Kraft Heinz-owned pop culture icon, our purpose here is instead to look at these new technologies through the clarity of a refreshing freshly blended fruit smoothie, preferably consumed on a tropical beach somewhere. The hospitality applications specific to the metaverse are indeed manifold in terms of building the plumbing for revenue streams based on strong guest demands within the ‘next few years’. Therefore, it’s important that you know what can be in order to see what you should do in the here and now.
As a caveat emptor, the most apt word is ‘plumbing’; with any investment in this space, you are banking on a future that is still gestating with the focus on laying the pipe that has the versatility to enable your organization to seize upon that future with a first-mover advantage.
While we’re always available for a consultation to see what’s applicable for your property and your brand’s specific needs or budget, the first step is to list off some of the ways that the metaverse can be used to initiate new revenue streams, serve as add-ons to current sales models or as cross-selling tools.
- An Extension of the Experience Economy. We’re both keen acolytes of Joe Pine and Jim Gilmore’s ‘The Experience Economy’ which goes at lengths to describe how businesses will benefit most from looking at the customer’s time as the most-limited resource. When you think in terms of ‘time well spent’, it reframes all your operations from the guest’s exceedingly shrewd and hasty point of view. Guests value their time above all else and will therefore gravitate to those brands that in turn treat it with adoration. In this sense, the metaverse can be seen as merely the shiny new toy in the experience economy, whereby creating a virtual reality (VR) space for your hotel to exist in is but one more way to augment your service offerings and increase perceived value to drive bookings.
- Digital Twinning for Maintenance Efficiency. There are a lot of great tools out there right now to help with preventative maintenance and the streamlining of work orders. The metaverse can help by imbuing a stronger sense of predictability into your engineering department via a ‘digital twin’ which is a clone of your physical property and all its mechanical components in the virtual world so that you can better monitor FF&E wear and tear. And with better monitoring, you can then develop better models for anticipating when certain devices will need repairs, all to limit negative reviews, optimize labor and reduce purchasing costs.
- Digital Twinning for Spatial Orientation. Distinct from the previous use case, with a digital twin you can map out the flow of guests and staff through your property to improve route planning for various operations or optimize the furniture orientation of other revenue verticals like your lobby bar and pool area. Which tables or chaises get the most traffic? Do those seating arrangements correspond with the highest spends per guest? Having a digital twin can give you an extra overlay to evaluate how customer positioning and traffic flow relate to F&B sales. While the maintenance use case is more about cost savings, this latter case can also help to increase the in-room experience by identifying the dead spaces or A/B testing alternate orientations to drive ADR and guest satisfaction.
- New ways to sell and enhance meetings and events. The pandemic has thrown the groups segment through the ringer but recovery is as inevitable as Thanos himself. That said, group sales may never be the same as 2019 and will favor those hotel brands that can have all the technology in place to move as quickly and as cheaply as the post-pandemic world requires. Of course, a big part of this is your sales management platforms and electronic contract technologies in place to expediently turn a lead into a sale, but the latest craze can help, too. It starts with enhanced virtual site visits whereby a metaverse clone of a hotel can be passed along to prospects so that they can ‘window shop’ a venue for a corporate retreat or wedding reception in lieu of or as an adjunct to a guided virtual tour and physical site visit. Then for the event itself, there are those who can’t make it and are currently reliant on videoconferencing options. For these remote attendees, the metaverse gives you the option to replace a laptop camera feed with a wholly immersive environment.
- The Layering of Augmented Reality Experiences. There’s that word again – experiences. While not strictly an application for the metaverse per se, this would involve the coding of certain additive features into a hotel space that are only visible using augmented reality (AR) glasses. An extension of this would be to create a mixed reality (MR) experience that incorporates aspects of a virtual world with the actual world via AR. For those experiences, a hotel can charge a guest via a rental fee for a pair of Apple Glasses (still a rumor but hopefully to be unveiled later this year) or a hotel can just act as the chef to a BYO(AR)D experience where any AR device owner can hop on and get the benefit via a gated – that is, paid-for – access code.
Stay tuned for five more applications in the second part…
