Crypto 'Checks In' to the Travel Industry
Not only does it have the capacity to reduce check-in times and queues at airports (a fingerprint or retina scan could replace documentation, for example), luggage can be tracked more efficiently and decentralised systems can prevent duplicate or erroneous bookings.
Blockchain can also assist with review platforms and customer loyalty programmes, simplifying the process and helping to combat fraud.
With an estimated 106 million people globally now holding crypto (up from 73 million last June) savvy merchants are making sure they are ready to accept it for everyday transactions, including for travel.
Its applications can range from serving as a global ledger, making bank payments more simple and secure, to allowing travel companies to accept payments using Bitcoin and other cryptocurrencies.
A mass adoption of crypto would mean increased freedom for travellers too: searching for optimum exchange rates would be a thing of the past, along with procuring local fiat currency. Yes, you’d need a mobile phone to access it, but ownership of smart devices around the world is on the rise, with highs in developing economies at 90% or more (97% of adults in Vietnam own a mobile phone) and lows of around 70% in the likes of Venezuela, India and the Philippines.
For obvious reasons, Cryptocurrency also appeals to younger generations – think Gen Z and Generation Alpha.
Alex Simon, co-founder and CEO of soon-to-be-released travel app Elude, tells CNBC that next-gen holidaymakers “are looking for modern ways to plan and book trips.”
“The ability to purchase your airline ticket or hotel through bitcoin or other cryptocurrencies is inevitable,” he added. “Though the travel industry is antiquated, the new generation of travelers, Gen Z and Gen Alpha, will demand new forms of payments and alternative ways to purchase travel.”
Set to reach two billion consumers by 2025, Generation Alpha (now aged 10 and under) will be the wealthiest, longest-living and most formally educated generation (IOL, 2019). This cohort is already shaking up travel and hospitality with its eco-first mindset, digital fluency and adventurous spirit and brands must win their favour now to foster lifelong advocates.
Cash or crypto, madam?
The hospitality industry’s slide into crypto is accelerating at pace with several premium brands across different verticals now accepting digital currencies as a form of payment.
Pavilions Hotels & Resorts became the first global boutique hotel group to accept Cryptocurrency from any country for hotel bookings this summer, via a partnership with global crypto-payment gateway, Coindirect.
Enabling customers to pay with Bitcoin, Ethereum and 40 other virtual currencies confidently and securely, 24/7, “guests can take advantage of paying in the Cryptocurrency of their choice, based on the currency and location they are situated in at the time of booking, offering more freedom and a contemporary, personalised service,” says CEO and Co-founder of Coindirect, Jesse Hemson-Struthers.
The group joins the likes of US luxury chain Kessler Collection, the five-star Chedi Andermatt in Switzerland, Nevada’s new Resorts World Las Vegas property and Nashville’s Bobby Hotel, all of which are open for business via crypto.
According to VOLT, a premium newsletter by travel trend forecaster Globetrender, the latter is one of the first independent hotels in the US to accept cryptocurrency payments for overnight reservations and events, an endeavour brought to life in partnership with cryptocurrency payment service provider BitPay.
Guests can spend Bitcoin, Ethereum, Dogecoin and Stable Coin either on the premises (by scanning a QR code upon check-out, allowing for payment through their individual crypto wallet) or via email in advance.
Confused? As the hotel explains to VOLT: “Essentially, a guest will make their reservation and get a total in USD including taxes. If they opt to prepay via cryptocurrency, the Bobby Hotel will send them an email with the total due in cryptocurrency and a link to pay via BitPay. BitPay, in turn, is linked to their personal cryptocurrency [account] and a transfer is made.”
Jeff Crabiel, area general manager of the Bobby Hotel, continues: “We envision this payment method will start off strong with our young professional clientele, as they are likely to be the most familiar with the process and product itself. As cryptocurrency continues to grow, so will the guest portfolio that chooses this option. While the Bobby Hotel will continue to accept standard methods of payments, cryptocurrency does provide users with different transaction benefits, such as the removal of a third party, no risk of inflation and typically reduced transaction fees in comparison to most credit and debit cards.”
In a surreal twist on the times, the first NFT hotel has been unveiled by hotel management company, UNYCU. The luxurious 100-room ‘Crypto Hotel’ exists only in digital form, on a blockchain powered by Ethereum. Weird.
Journey into the Future
While hotels and resorts are relatively new to the crypto party, booking sites were early adopters of this tech. Online travel agent Expedia started accepting Bitcoin payments in 2014 but stopped four years later, only to reboot this method of payment (via more than 30 cryptocurrencies) in 2021 through partner agent Travala.
In February this year, 68% of all travel bookings on travala.com were made with cryptocurrencies, “indicating a growing appetite among consumers to spend crypto on real-world goods and services”.
Airfare website Cheapair.com, Latvian carrier Air Baltic and Richard Branson’s Virgin Galactic have also long accepted bitcoin, now joined by Berlin-based tours and activity booking site GetYourGuide, which began taking dogecoin, processed via BitPay, in June as part of its expansion in the US.
Cryptocurrency transactions “will really matter for travel” and his firm is looking at accepting other coins going forward, Johannes Reck, CEO and co-founder of GetYourGuide tells CNBC.
“People want to put their crypto back into the system [and] travel is one of the biggest categories there is,” he added. “We take dogecoin now into the real world; you can apply it and actually get a real-world, kinetic experience.”
PrivateFly was the first global private jet company to accept payment in Bitcoin in 2014. Today, the company states that the popularity of buying flights with cryptocurrencies has soared, rising from 1-2% of flights per month in recent years, to 12% in December 2020 and 13% in January 2021.
Hot on its heels is a collaboration between Swiss luxury hotel The Dolder Grand and US private jet company BitLux, which allows guests to book a private flight from any airport globally and any length of stay at the hotel using cryptocurrency.
As remote workers embrace long-term visas and hotels as offices, US cruise company Ocean Builders is tempting digital nomads, crypto-enthusiasts and techpats to board the MS Satoshi, a luxury residential cruise ship named after the alleged founder of Bitcoin, Satoshi Nakamoto.
The brainchild of COO Chad Elwartowski, a Michigan-born software engineer turned bitcoin trader, MS Satoshi aims to gather wealthy, educated minds in the spirit of the advancement for ocean technology, engineering, sustainable living and experimentation.
Moored somewhere off Panama, the 804ft vessel can carry up to 2,020 passengers and crew, with 777 cabins priced between $25,000 and $50,000. Entrepreneurs will be encouraged to set up their own businesses on the ship to help run activities such as fitness classes and upskilling events. Naturally, all transactions on the ship will be accepted in US dollars, Bitcoin and other mainstream cryptocurrencies.
Looking to spend your crypto on something more bijou? The 72-metre Azteca superyacht is currently available for sale via Bitcoin-only, with an equivalent price tag of €65 million.
As if cryptoland could get any more surreal, American-Sengalese star Akon is pioneering an eponymous mixed-use development on the Senegalese coast, powered by ‘Akoin’ – the singer’s own cryptocurrency.
‘Akon City’ is slated to feature a skyline of futuristic skyscrapers, luxury eco resorts, residential condominiums, a hospital, live events stadium, and state-of-the-art AI research centre. The $6 billion project was promised this year but construction has yet to begin.
There is, however, progress in cities such as Seoul, Santiago de Chile, Toronto, Tel Aviv, Oslo, Milan and Stockholm, all of which are developing blockchain-based infrastructure in a bid to become more efficient, transparent and sustainable. In Dubai, the Emirates Blockchain Strategy 2021 aims to transform 50 percent of government transactions into the blockchain platform by 2021.
Leading the charge for technological innovation within the travel industry is the state of Queensland in Australia. Not only has it designated Brisbane airport as the first in the world to have 30 merchants accept cryptocurrency, in the town of Agnes Water, more than 40 businesses now accept crypto, allowing visitors to use Bitcoin to pay for accommodation, meals and even tours of the Great Barrier Reef.
The Bottom Line
Digital currencies have the potential to revolutionise the way we pay, borrow, lend – and travel. As global financial institutions, investors and payment firms further align themselves with crypto, the travel and hospitality industry will be forced to adapt and follow suit. Smart operators will make the move now.
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