NFTs Are Not a Loyalty Program Replacement, So Don't Treat Them Like One
Within the last year, NFTs are seemingly everywhere and yet there are still a lot of questions surrounding their existence. However, Aspen Lakes, an NFT-powered luxury golf and destination resort, has found a way to successfully implement this technology. This month, it launched a limited number of Global Founding Memberships that are NFT-based and are valued at more than $20k. These memberships provided a variety of perks including things such as: lifetime access, no annual fees or dues, year-round access to the golf course with priority tee times, free Topflight, and golf cart usage, priority reservations for restaurants and activities, discounts and VIP access to events and concerts, and more. And unlike other memberships, these Founding Memberships can be passed on to loved ones for generations or sold in secondary markets (such as OpenSea).
To learn more about NFTs in hospitality, the type of consumer that gravitates to their use, how they differ from traditional loyalty programs, and to better understand how Aspen Lakes envisions the industry using this technology in the future, Hospitality Technology spoke with Cindy Wyant, CEO of RHUE Resorts.
How are NFTs being used in the travel industry?
NFTs give real-life value to cryptocurrency, and allow owners to spend their investments on real-life experiences that enhance the value of their lives – both day-to-day and in years to come.
NFTs are most commonly used as art collectibles – generating capital and creating revenue streams for token holders. More recently some hotels, like Marriott International and Ca’ Di Dio, have used NFTs in this realm as promotional tools. Ca’Di Dio pushed the concept further and offered a token for auction, where the winner would win both the token as well as an exclusive night in the hotel prior to its public opening. There are plenty of examples like this that demonstrate we are on the cutting edge of Web 3.0, where NFTs will be used in memberships allowing traceable payments, loyalty programs and member check-in’s to be executed seamlessly on the blockchain.
We have yet to see the full potential of utilizing NFTs in the travel industry. It has been very interesting to watch how different brands are offering exclusive experiences and bringing NFTs to life in new ways. We are eager to see what the industry does as a collective and are excited to be at the forefront.
What type of consumer are interested in NFTs?
Any solution to the current hassles that come with owning a property, having a membership, or simply going on vacation is what incentivizes and attracts consumers to blockchain purchasing. While many consumers have developed an understanding for purchasing with NFTs, we still have a long way to go. What we do know is that as a consumer becomes educated on the ease and true, real-life value of using NFTs to purchase these types of things (real estate, membership, travel, etc.), they are quick to reap the benefits; developing a “can’t imagine my life before” mentality. No more red tape, frequent expenses or long processing times.
Membership purchased with NFTs is still in its infancy. There’s no question about that, but we are looking to normalize the experience for potential members. Of course, we want to speak to members who are familiar with crypto, but more valuable to us is being able to educate those who don’t know the first thing about creating a digital wallet. With more education we are making this experience accessible to the masses.
What’s the most interesting thing about using NFTs in the travel world?
To us, the most interesting aspect of using NFTs to purchase anything in the travel realm is that you’re not just buying an experience, you’re buying into the property and into the destination.
Purchasing real-life experiences with NFT’s and having an understanding that these accrue value over time, gives consumers a stake in the resort and surrounding land. We see this model going hand-in-hand with the rise of sustainable, more intentional travel that we’ve seen in recent years. When people have a stake in the game, they are bound to be more responsible and respectful in how they interact with the destination, treating it more like a second home than a Spring Break getaway.
Another interesting aspect is that there are no borders to NFTs and cryptocurrency. For instance, if RHUE Resorts, or any other hotel, membership concept, etc. opened a property in another country, NFTs could be used to check in, access amenities, and take advantage of exclusive discounts.
Also interesting and worth mentioning is that NFTs in the travel space offer more exclusivity and privacy than traditional hospitality concepts open to a world of consumers.
How do NFT memberships differ from traditional loyalty programs?
Many struggle to fathom the concept of owning an NFT. Unlike the traditional dollar that stays in their wallet for maybe a week, an NFT is owned by the purchaser, meaning they can resell it, gift it or rent it out. Loyalty programs give perks for loyalty. Two totally different things.
That said, loyalty programs can be built into the NFTs’ smart contract and used in a way that is much more advanced than existing programs. Loyalty programs in the age of Web 3.0 can offer security to combat fraud and put program management into the hands of individual members. Starbucks just came out with a version of using an NFT as their customer reward system that is quite interesting.
Are NFTs still cutting edge or are they rapidly approaching mainstream? How should this affect hoteliers' adoption of them?
NFTs are expected to hit over $30Billion in revenues by 2030, which in itself brings NFTs to the mainstream stage. In addition, millennials are tired of the middlemen, the expenses and the massive documents necessary to do business the traditional way and are moving towards having more control over their purchases, their assets and the freedom to control them, which is what NFTs offer.
The idea of what an NFT is and how it can be applied to a utility is developing and as a result the potential is super exciting. NFT as a utility is approaching mainstream quite rapidly and we believe gives our members a world of opportunity that is constantly evolving. We will be seeing this usage become more common as hoteliers consider new ways to offer customer experience.