Transforming travel and tourism: exploring the intersection with Web3

Written by Dr Jane Thomason

Web3, the future of the internet, integrates decentralized finance, non-fungible tokens, decentralized governance, cloud services and self-sovereign identity. It can also offer decentralised booking platforms, smart contracts, payment systems, social media, tourist information platforms and tokenisation of tourism assets. This paper explores the implications for both the demand and supply sides of tourism and the role of community-owned economies and social tokens in shaping the future landscape. It discusses specific applications of Web3 in hospitality and tourism management, providing use case examples and insights into their potential impacts on the industry. By examining the potential benefits for both tourists and tourism destinations and the transformative possibilities for hospitality management, this post provides insights into the future of travel and tourism in the Web3 era.

Web3 applications in hospitality and tourism management

In relation to booking, information and loyalty in the context of Web3, non-fungible tokens (NFT)-based bookings and travel packages offer travellers secure and efficient arrangements while ensuring transparent ownership and the potential for resale. Decentralized hospitality marketplaces facilitate peer-to-peer accommodation rentals, activity bookings and local service discovery, bypassing traditional intermediaries. Gamified loyalty programs leverage NFT-based rewards, community governance and interactive experiences to incentivize and reward customer engagement and loyalty. NFTs will provide authenticity and ownership rights. Hotel room keys, tickets, and other elements can be represented as non-fungible tokens. NFTs will allow hotel companies and customers to profit by further trading these digital assets. Hospitality businesses facilitating loyalty rewards and incentives through NFTs will help brand recognition. Using NFTs, hotel brands can allow customers to tour their properties, book rooms of their choice and receive NFT receipts as proof of booking. For customers, in case of cancellation, the NFTs do not lose value and can be further traded at a standard price, and they make the rebooking process highly simplified. Traditional metal or card room keys are replaced with smart access NFT keys. Companies can also use NFTs for complimentary gifts and perks. NFTs in hospitality can provide value to hotel assets during and long after a stay. These NFT assets may be found as room keys or local art on a hotel’s wall. NFT collections can offer unique solutions to the sector’s inherent complexity and provide revenue-generating opportunities. These technologies can attract a younger demographic, enable virtual representations of properties for cost-effective global sales, transform marketing and customer service, and revolutionise membership systems through token-based memberships. Luxury brands are already entering the NFT space with limited-edition collections, and numerous hotels, like Le Bristol in Paris, have already launched their own NFT programs.

There are now many examples of using Web3 for travel and tourism. For example, CitizenM is pioneering DAOs for fractional hotel ownership and community-driven governance. CitizenM’s “We Are CitizenM” project allows fractional ownership through NFTs. CitizenM launched a Decentralized Autonomous Organisation (DAO) project, allowing token holders to participate in the decision-making of hotel design and guest offerings. Travala.com is a blockchain-based booking platform that leverages cryptocurrencies and NFTs for travel bookings and loyalty rewards. SITA, the leading airline industry provider, expects to see Web3 as commonplace at leading airports, playing a vital role in optimising processes, avoiding disruption, and facilitating intuitive, immersive control of intelligent airports. Private clubs and loyalty programs will create token-gated experiences, perks and benefits instead of pushing customers to provide their emails, personal details and phone numbers. Examples include Mandala Club in Singapore, Club3 in Los Angeles, and Drunken Monkeys Members Club in London. A Drunken Monkey NFT allows lifetime access to a luxury concierge membership spanning 20 global destinations. The digital membership model means that every membership (represented by a one-of-a-kind NFT) is tradable on the secondary market, allowing members to enjoy elite perks and explore the potential for investment and further financial gain. Shanghai aims to generate $6.9 billion annually by establishing a comprehensive Web3 tourism ecosystem. This involves integrating blockchain, AI, virtual reality and other cutting-edge technologies to offer tourists immersive experiences and decentralized travel services. The city actively seeks collaboration with prominent blockchain companies, technology providers and industry stakeholders to develop and implement transformative Web3 tourism projects. These initiatives include digitizing cultural artefacts, loyalty programs and providing secure and transparent travel services. Shanghai’s Web3 tourism strategy also aims to promote sustainable tourism practices and safeguard its rich cultural heritage. China has a broader drive to use Web3 to attract tech-savvy travellers to curated and personalised travel experiences.

Building and augmenting communities

Significant benefits will come from the emergence of community-owned economies and social tokens with Web3. In a Community Token Economy, communities can be global and will be able to exchange network tokens for contributions to the ecosystem. Social tokens will be essential to developing two-way relationships between travel companies and consumers. The brand community can receive discounts, incentives and upfront experiences with their brands, and the tokens will allow the community to connect and feel like part of the community. There are massive Web2 travel networks, which are ripe to benefit from Web3. Marriott has 196 million members, up 10% in the last 12 months; Hilton has 180 million members, up 19% in the last year; and World of Hyatt has 30 million+ members. Other engines, such as Booking.com, have a large user base, Airbnb has a decentralised model and TripAdvisor has active community engagement and potential for personalised recommendations. These can be migrated to Web3, offering many new ways to build brand loyalty. Web3 allows anyone to create gated gardens and rally people around via distributed governance and new incentive structures. Influencers who succeed will be able to cultivate deep relationships, foster trust within their networks and provide utility to their followers. User-generated content is an excellent way for tourists to remain connected after a trip. Web3 supports users in engaging with places they have already been, sharing user-generated content in immersive platforms and staying in contact with people they have met, motivating repeat visits and loyalty. Decentralized tourist information platforms can provide more accurate and up-to-date information. Tourists can access information about local attractions, accommodations and events without relying on centralized platforms. This reduces the influence of advertising and empowers tourists to have a more authentic and localised experience.

Building stronger brands

The tourism industry has traditionally relied on centralized platforms for reviews and bookings, and Web3 can disrupt this model by providing more decentralised and personalised options. Hospitality and tourism typically use third parties to manage user information, and the third party can delete or restore valuable customer feedback. Third parties also carry out transactions, which lead to costly fees, and customers may experience delayed payments or fraudulent transactions. An intermediary always owns and controls things — for example, the whole organisation’s website functions on someone else’s hosting platform. Marriott is exploring blockchain, cryptography and data privacy to create the Known Traveller Digital Identification program, which eliminates security vulnerabilities by storing all information in one data lake. Marriott has identified that a more secure and efficient ID would facilitate the continued growth of international travel.

Web3 allows for decentralized and personalised reviews not controlled by centralized platforms such as TripAdvisor, Yelp or Google Reviews. Decentralized reviews increase trust in users, as they are less prone to manipulation and censorship than centralized ones, whereas personalised reviews allow for a more customised experience. This means that service providers can tailor their services to the needs and requirements of individual customers. Decentralized social media platforms that are not controlled by centralized platforms, such as Facebook, Instagram or X (Twitter), are one of the many benefits of Web3 With decentralized social media, users have more control over their data, which, in turn, means more privacy and security. Travel Brands can use Web3 to offer gated content, products or experiences accessible to those with certain NFTs and build and augment communities by incentivising users through co-creation and ownership. Brands can monetise the brand by releasing limited digital collections and empower destination awareness, positioning and branding, coordination and management through digital twins. It also provides opportunities to support trip planning, interaction and engagement, effectively transforming consumer behaviour. Virtually visiting and engaging with destinations is expected to motivate authentic travel rather than replace it. Web3 can also empower the tourism industry by tokenizing assets such as hotels, restaurants and attractions. Tokenization allows fractional ownership, increasing liquidity and reducing service providers’ costs. It also allows tourists to participate in the ownership of tourism assets, increasing engagement and loyalty.

Web 3 decentralization can reduce intermediary monopolies, reduce transaction costs and foster more equitable market dynamics. It can also enable investment in tourism infrastructure and assets, promoting community ownership and participation. Web3 can potentially enhance the hospitality industry through decentralized and personalised experiences, reducing reliance on intermediaries and lowering operational costs. It offers security, trust, traceability, automation and authenticity through blockchain, NFTs and decentralised social media platforms. Web3 can strengthen business processes through decentralized booking platforms, smart contract automation, payment systems and tokenization of tourism assets. And all that, before exploring the Web3 Metaverse — a world of immersive experiences!