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07/14/2022

Web 3.0 Spawns NFTs, Virtual Worlds and a Giant Revenue Opportunity

If Nike can sell a pair of virtual shoes for $186,000, what will people pay for an NFT that grants them exclusive digital and physical perks at your hotel?
Michal Christine Escobar
Senior Editor (Hotels)
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Woman checking in at hotel front desk

During HITEC 2022, HFTP asked Elizabeth Strickler to take a break from teaching students at Georgia State University in order to teach attendees about Web 3.0, NFTs and the Metaverse. The room was filled with hoteliers and technology vendors alike who were interested in knowing how to correlate the two, but more importantly, learning why they’re important for running a business in today’s world.

To begin with, Strickler described the evolution of the internet in the following way:

Web 1.0 is the original internet where users could only read documents. When consumers gained access to social media platforms and could now read AND write, Web 2.0 was born. The creation of Minecraft and Roblox (ask your kids – or grandkids – if you aren’t sure what these programs are) has put us squarely in Web 2.5 – a rest stop on the way to Web 3.0 where users of the internet will be able to read, write and own their own data while interacting with each other in a virtual reality.

Why is owning one’s data so important? I'm glad you asked.

Data Ownership Becomes Imperative in a Digital World

While many of us would like to assume we own the things we create and post to the internet, the reality is we don’t. Meta, Twitter, tumblr and other similar platforms own our data, and we have no control over how they choose to use, track, manipulate or even delete our work.

This conundrum becomes even greater when the consumer is creating something that can now be stolen and passed off as belonging to someone else (artwork, music, scientific research, etc.)

To prevent this from happening, the powers that be created NFTs (non-fungible tokens) that use blockchain technology to clearly and transparently assign ownership to any given thing and ensure that digital work is protected.

While this seems like an obvious benefit for artists and musicians, and indeed they were the first to grasp this concept and go all in, it also has benefits for you and me – corporate employees. How so?

“As we increasingly move from a physical to a digital world, ask yourself: At the end of the day, what did I create? Was it a PDF? A PowerPoint presentation? An email template? All of these things can be copied. An NFT, however, protects labor. The building blocks of the digital world are digital files and they need to be protected. Don’t allow them to be stolen,” Stickler admonished the audience.

How NFTS Benefit Hoteliers

I’m sure you’re asking, but what does all of this have to do with hoteliers? Stay with me. We’re getting there.

Web 3.0 isn’t just about owning your own data (or as we’ll soon learn, owning digital items) – although that is a large part of it. It’s also about the creation of a 3D virtual reality – a metaverse – that today’s consumers increasingly want to regularly experience. Think of the metaverse as a subset of Web 3.0. However, this virtual reality has very real monetary ramifications for businesses of all types. (This is where NFTs and the concept of ownership become especially important.)

Consider this: Gucci and Nike currently sell “avatar only” goods that consumers purchase with U.S. dollars to wear while they are interacting within the metaverse. In Nike’s case, its virtual shoes sell for between $10,500 and $12,500 per pair. Rare skins can be purchased for $3,500 and applied to these digital shoes to enhance their look, and consumers are going nuts for them. Ina recent article from LAD Bible, Nike reportedly sold a pair of virtual shoes for $186,000 and later a sneaker skin sold for $630,000.

While Nike’s shoes are virtual-only, Cult & Rain – a self-proclaimed “digital fashion brand merging innovative NFT art with exclusive high end physical redeemables” has found a way to market and sell 2,000 4K animated NFT’s matched with 2,000 luxury sneakers that NFT owners can wear in the real world. But as George Yang, founder of Cult & Rain, notesin a blog post: “Increasingly, collectors are seeking out NFTs that have REAL utility, use cases, and REAL value attached.” So the brand also createdan intricate set of “long lasting digital and physical redeemables” to match up with each purchased NFT.

And this idea of NFTs having utility – being tied to both physical and digital benefits – is where all of this talk about Web 3.0 begins to converge with the hospitality industry.

As you’ve probably gathered, NFTs are not just a product that’s for sale – they really represent a new kind of buyer – a new way of thinking about money, loyalty and business. As Strickler says, “These buyers want to fit in AND stand out.”

For hoteliers, creating a set of NFTs could not only generate significant revenue if done correctly but also create significant loyalty. Who wouldn’t want to show up to a hotel as an NFT loyalty owner, receive significant and unique perks, and be recognized as special? That’s what a loyalty program is all about.

During her presentation, Strickler repeatedly told the audience that these concepts were “difficult to grasp” right away and that it takes time to come to grips with this new way of thinking. And at the end of her presentation she had these words for attendees:

“Go slowly. Think deeply about what you can offer and what value it adds. And most importantly, keep an open, calm, cautious mind."