One of the major economic changes in recent years is the growing acceptance of digital payment and exchange systems. A non-fungible token (NFT) is a digital asset that may represent a physical asset. This new form of investment or store of value is based on cryptography and blockchain technology. Here are revolutionary ways NFTs are used by hotels and restaurants.
Quick History of NFTs
The first NFT was called Quantum, introduced in May 2014 by Kevin McCoy and Anil Dash. McCoy sold the "monetized graphics" to Dash for $4 during a live presentation at the New Museum in New York City. More NFTs began to surface three years later with the emergence of the ERC-721 standard.
One of the early profitable success stories for NFTs was the online game CryptoKitties. By 2020 there was a $250 million market for NFTs, which has created new avenues for digital artists to showcase their intellectual property.
Why Collectors Buy NFTs
The two main types of NFTs are digital collectables and digital assets with useful functions. Many people are spending much of their time online or in digital environments these days, which creates an increasing need for digital solutions. People have become big collectors of digital items without realizing it, as they routinely download pictures from friends online for their personal photo galleries. Anyone who shares digital items such as photos online is a potential NFT consumer.
One of the issues about digital collectables has been the fact that a digital item can be easily duplicated, which limits its value. But an NFT can be a one-of-a-kind item verified by blockchain. In 2021, Twitter co-founder Jack Dorsey sold his first tweet as an NFT for nearly $3 million. An NFT frenzy followed. By June, though, the value of NFTs fell with broader markets including cryptocurrencies relating to inflation and world affairs.
The popularity of online auctions raises greater opportunities for unique NFTs to endure. They can take the form of anything digital from games to videos to songs or tokens for specific products or services. Whether the NFT is a digital item or just a token for something, it's a certificate stored on a secure distributed database, verified by a blockchain ledger.
NFTs in the Metaverse
The metaverse is the environment that facilitates virtual worlds and can be used to interact with people via avatars. NFTs are part of the metaverse, making them useful tokens for playing games or learning new information. There are endless possibilities with buying and selling NFTs via the metaverse. Some of the most enthusiastic players are creating various virtual worlds to sell a universe of digital products including NFTs.
But not everyone is ready for the metaverse yet, as it seeks to merge physical and virtual worlds. It's important to understand the path toward what many call "the future of the internet" will be met with waves of resistance. Many people are skeptical of NFTs, crypto and the metaverse, partly due to the crypto crash of 2022, so it may take time to become mainstream.
At the same time, there's enough excitement in NFTs and the metaverse for hotels to explore possibilities for entertaining guests. The metaverse is still in its infancy, so it's unclear where it's headed, other than you can invest in virtual land and store value through digital assets.
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Hotels Turn to NFTs
A hotel can give away digital prizes to promote its services, which is an easy and seamless way to reward patrons and prospects. NFTs work as digital prizes or as digital merchandise sold to tourists. It may include local digital art that cannot be found anywhere else on the planet. The more unique an NFT is, the more potential value it has if it resonates with collectors.
NFTs open doors to partnerships with local artists, musicians and writers who want to promote themselves to tourists. It's a new way for the hotel to get local recognition for helping the community. NFTs can be digital samples of the local art the hotel hangs on its walls. They can potentially raise the interest level in local or independent art beyond the norm.
Another use that the hospitality industry has for digital tokens is they can be used as digital membership cards. NFTs started out mainly as digital collectables then expanded to become tokens for subscriptions, programs and other digital goods. Through an NFT, number of visits to a digital asset and other relevant analytics are tracked with blockchain technology.
In 2021, Marriott International became the first major hotel to use an NFT marketing strategy. The company teamed up with digital artists to create unique NFTs inspired by "The Power of Travel" theme. Another recent use of NFTs in hotel marketing was for the grand opening of the luxurious Ca' di Dio hotel in Venice, Italy. The company used the world's largest P2P NFT marketplace, OpenSea, to auction off a free private one-night stay at the new hotel.
NFTs Head for Restaurants
One of the reasons restaurants have adopted NFTs is because they've worked in the hospitality industry. Both hotels and restaurants were in the same boat during the pandemic, facing shutdowns with a need to go more digital. Not only do NFTs help facilitate business activity when social distancing is needed, they help brands redefine themselves as more modern.
In early 2022, VCR Group announced New York City's Flyfish Club will become the world's first NFT restaurant the following year. It will be a seafood restaurant for members who own Flyfish Club NFTs. The membership card lets you access the restaurant, but you must still pay for food with dollars rather than cryptocurrency.
Taco Bell launched an NFT campaign in 2021 called "NFTacoBells," which were five different digital art designs. The company quickly sold 25 of these limited collectable tokens. This concept allows a restaurant to constantly promote itself with fresh content, which it can post on social media. A crucial part of branding is associating images with values that resonate with consumers. NFTs actually allow you to monetize your branding through connecting visuals with shared values and experiences.
How NFTs Enhance the Restaurant Industry
Experimentation with NFTs is leading to countless discoveries for new marketing ideas. NFTs can tokenize tables, which will help cut down on losses from canceled reservations. The tokens can reserve a table number for a specific number of people and other factors. Tokenization can be used for restaurant patrons to trade reservations with each other.
There are many more ways to use NFTs that haven't been envisioned yet. One idea on the horizon is for hotels to issue shares of ownership through NFTs. Some of the more advanced uses of NFTs right now include representing physical parts of a hotel. Companies like VCR Group are also using NFTs to innovate smart contracts.
Hotels and restaurants are two industries embracing NFTs for marketing and other purposes. When you team up with the right people, you can create endless NFTs that promote various businesses, products and themes.