When Guests Become Revenue Managers. Of Blockchain, Tokenization, NFTs, and the Democratization of Travel

Blockchain technology allows for secure, decentralized, and transparent data recording, making it an attractive solution for various industries, including ours. It can be used to track and distribute rewards points, coupons, or other loyalty program benefits, verify customer identities, prevent fraud, and improve the efficiency of supply chain management. Another potential use of blockchain in travel is in the area of customer identity management to create secure and decentralized systems for storing and sharing customer information (such as passport and visa details), not to mention the obvious use of digital payments and transactions, luggage tracking, NFTs rewards, tokenization, collaborations with crypto-artists, utility NFTs, and so on.

In the hospitality and airline industries, moreover, decentralized systems can be used to manage the distribution of hotel rooms and flight seats, leading to better pricing and inventory management and -eventually- increased revenue. Several companies, such as LockChain, BeeToken, and Winding Tree, are already combining the blockchain and the travel spaces. They have been using decentralization to improve various aspects of the industry for some time now. However, it’s been only over the last couple of years that I've seen the technology's most intriguing (and possible) potential outside of the usual hype.

Takyon

The first company that piqued my interest was Takyon, a "Travel Exchange" that allows guests to buy and sell travel as easily as they would a bag or an iPhone. The platform offers a "Resellable Rate" feature, a prepaid, non-refundable booking that can be purchased directly from hotel websites at an average of 20% cheaper than refundable rates. Users receive an email with an NFT representing their booking when they purchase it. This NFT can then be connected to the Travel Exchange, where users can resell their travel at a price of their own, creating a virtuous circle of decentralized micro-economy.

We're creating something new: a secondary market for travel bookings. We're not building a booking platform, as there are already hotel websites and online travel agencies where people can book rooms. Instead, we're enhancing the customer experience by upgrading the non-refundable rate to a resellable rate, allowing travelers to resell their rooms, just as they would with any physical goods, on our Travel Exchange. All this is being done while removing the traditional barriers to Web3 adoption, such as the need for a wallet or crypto payment. We believe that NFT and blockchain should enable, not block, innovation. Antonio Picozzi, CEO and co-Founder of Takyon

Pinktada

The latest edition of Florence BTO, the leading event in Italy for digital tourism, innovation, and training, allowed me to meet with Lyon Hardgrave, CEO and Co-Founder at Pinktada. Like Takyon, Pinkdata leverages blockchain technology to revolutionize how people book hotel rooms. The platform provides guests with virtual hotel room tours before making a reservation and allows for the exchange or sale of reservations in the event of a change in plans. This user-centric approach also benefits accommodation providers by allowing them to receive full payment upfront and showcase their facilities and unique features. The main distinction between Pinktada and other platforms is using tokens to represent individual hotel nights, which can be combined or decomposed to create or modify a hotel reservation. For example, a guest could book a 7-night stay (7 tokens each representing a specific date and room type) but then sell back the last two nights if they need to leave early. If there is an increase in the sale price, Pinktada shares 30% of the profits with the hotel, and the transaction is transparent and secure through blockchain. Hotels have complete visibility and access to the secondary marketplace and can even bid to buy back their rooms for special events or groups. In a secondary trade, hotels have no downside, and they can receive a portion of the profits if the reservation sells for a higher rate.

With room tokenization, both hotels and travelers benefit. The system offers the combination of a non-refundable rate with complete flexibility to exchange or sell bookings on the marketplace. Each hotel night is represented as an individual token (RNT), making reservations decomposable and allowing travelers to sell or exchange them, fully or partially. By eliminating intermediaries, moreover, the marketplace is highly efficient and less expensive than online travel agencies. Lyon Hardgrave, CEO and Co-Founder at Pinktada

The main idea behind these blockchain-infused destination marketplaces is to reduce friction in the hotel booking space and create value from bookings that are currently "dead" hotel assets. By creating bookings liquidity, hotels, and travelers can benefit from more flexibility and an improved booking experience.

All these companies aim to democratize travel and hospitality through blockchain technology and machine learning. In addition, they aim to eliminate friction in the hotel booking process and eventually reduce dependency on third-party platforms such as OTAs, bedbanks, and wholesalers.

Decentralized marketplaces aim to allow people to purchase rooms that may not be purchasable in a traditional market. Currently, if a hotel is fully booked, users have no access to the property, and there is no secondary market like traditional ticketing to increase the price and acquire a room. Travelers can purchase rooms ahead of time and sell them at a higher price, creating liquidity and allowing them to become revenue managers.

These marketplaces' primary adoption blocker may be the lack of a seamless user experience. Users should be able to sign up with a wallet, and the flow should be consistent with the current booking path. The wallet is the entry point, and the marketplace operates similarly to eBay. The UI needs to be user-friendly and familiar to non-crypto users.

However, from a European perspective, the main issue is that many properties still run on old legacy systems, and there are challenges with integrating channel managers. Although revolutionary, it is difficult to see an on-premise, spaghetti-code PMS integrating with a decentralized distribution system anytime soon.

The idea of decentralized marketplaces is revolutionary. For instance, if a hotel sells a room for $200, and an event or concert comes up, the price for that night can increase. If the traveler who bought the room resells it for $500, will it create value for the hotel and the reseller? The procedure benefits resellability, and this is an excellent benefit for the end user that does not exist currently. Although there is a need and demand for it, it has yet to be technologically feasible for scalable use.

This could be considered the normal evolution of room distribution, particularly for crypto-native generations. If we look at the evolution of ticketing, for example, most people no longer go to the direct primary market to book a Depeche Mode concert ticket; they go to a third party like Ticketmaster. This has evolved into secondary markets. Decentralized marketplaces could follow a similar evolutionary path.

Decentralized marketplaces could become the Ticketmaster of the travel and hospitality industry. If this will be a good or a bad thing, that's another story, and time will tell.