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Businesses

Hotels Using NFTs To Create a StubHub for Lodging Reservations (wsj.com) 52

Posted by msmash from the closer-look dept.
Some resort owners think they have found a way to avoid getting stuck with excess inventory when guests cancel at the last minute. It involves converting room nights for sale into nonfungible tokens, or NFTs, that can be bought or sold by hotel guests, similar to the StubHub market for concert and sporting event tickets. From a report: Owners say this ensures they get paid for the rooms because guests would sell their reservation in the market if they decide not to go, and appeal to the crypto-enthusiastic traveler. "We can reach another consumer that maybe isn't booking through traditional means," said Jason Kycek, senior vice president with Casa de Campo Resort & Villas, a Dominican Republic resort, who is planning to soon begin booking rooms with NFTs.

Casa de Campo has signed with the startup Pinktada, which recently launched a booking system that includes hotels in the Caribbean, Mexico, San Francisco and Hawaii. Hotel guests can reserve rooms at those properties by buying NFTs through Pinktada. By using this system, guests can book a room at a discount to what the hotel would charge for a refundable reservation. The sale is final from the point of view of hotel owners, so their revenue is guaranteed whether or not the room is used. If travelers change plans, they can use the tokens for other Pinktada hotels or sell them to another traveler in the Pinktada network. Pinktada (the name is a reference to a type of pearl oyster) promises to be the buyer-of-last resort if another traveler doesn't buy it.
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Hotels Using NFTs To Create a StubHub for Lodging Reservations More

Hotels Using NFTs To Create a StubHub for Lodging Reservations

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  • Great idea? (Score:2, Offtopic)

    by splutty ( 43475 )

    Right up til the point where your fuel cost becomes more than the price of the room..

  • Hilarious Results incomming (Score:5, Insightful)

    by Matt321 ( 9371829 ) on Thursday May 26, 2022 @10:09AM (#62567672)
    Someone will buy all the rooms for a particular set of days and sell them at a profit! Jokes aside, this may have the result of causing "rooms at a popular hotel" to behave like an active market. Lets say I have a vacation planed for a year from now. In that time, a concert is planned for the area. The cost of the room is 10x. Now I sell it for a huge profit and take a vacation at home in my underwear instead.

    • Re:Hilarious Results incomming (Score:5, Insightful)

      by OzPeter ( 195038 ) on Thursday May 26, 2022 @12:37PM (#62568104)

      Someone will buy all the rooms for a particular set of days and sell them at a profit! Jokes aside, this may have the result of causing "rooms at a popular hotel" to behave like an active market. Lets say I have a vacation planed for a year from now. In that time, a concert is planned for the area. The cost of the room is 10x. Now I sell it for a huge profit and take a vacation at home in my underwear instead.

      The concert gets cancelled because of Covid-XXXX, and you can't sell the hotel rooms because of the latest lock down, as no one is traveling. So you get left holding the bag over your "investment" and the hotel walks away happy because they already have your money.

      IMHO this scheme is shifting the cancellation risk from the hotel onto the guest (or whoever bought the NFTs). There is no guarantee that there will be a market for the rooms that you are trying to sell. Most hotels that I use have cancellation policies that allow you to cancel up until 6pm the day of your stay - that is a genuine guarantee that I can rely on.

      • Re: (Score:2)

        by xanthos ( 73578 )
        and do you want to be the poor schmuck manning the front desk when Karen comes down to rant that she paid big bucks for the room on the secondary market only to find that there is only generic bottled water in the mini bar?
      • Exactly this, I guaranty this is their selling point to hotels, this will fail miserably. I travel a lot for leisure and you can go fuck your NFT.

    • Someone will buy all the rooms for a particular set of days and sell them at a profit! Jokes aside, this may have the result of causing "rooms at a popular hotel" to behave like an active market. Lets say I have a vacation planed for a year from now. In that time, a concert is planned for the area. The cost of the room is 10x. Now I sell it for a huge profit and take a vacation at home in my underwear instead.

      Well, sounds like you are happy (or you would not have sold the room). The guy going to the concert thinks he's going to be happy. The hotel is no worse off as the room was already sold.

      Whats not to like?

  • Jumped the shark (Score:5, Insightful)

    by kulaga ( 159303 ) on Thursday May 26, 2022 @10:09AM (#62567674)

    Blockchain and NFTs are nothing but solutions in search of a problem. Tell me again why all the computational overhead is needed and this can't be solved by a simple database.

    • Re:Jumped the shark (Score:5, Informative)

      by j-beda ( 85386 ) on Thursday May 26, 2022 @10:19AM (#62567710) Homepage

      Blockchain and NFTs are nothing but solutions in search of a problem. Tell me again why all the computational overhead is needed and this can't be solved by a simple database.

      It is not even clear that there is a "problem" in the first place. If you have cancellations eating into your profit as a hotel, then just require a non-refundable deposit or similar. If you want to give people a way of getting back some or all of their non-refundable payment, then offer to kick-back a percentage if the cancelled room gets re-sold - maybe give them an option to relist it at the hotel website for a higher or lower price. None of this needs blockchain.

      • Agreed. The "solution" here seems to presume that the NFT market for this type of good is surely more efficient than simple measures like deposits, with incentives to "return" the deposit for a possible partial refund. For 99.9% of the possible clientele, this surely cannot be true -- it can only be true for people who already are set up financially to play on the NFT market.

        It is pretty clear that the hotel is hoping that crypto and NFT enthusiasts are so mind-bogglingly dumb that they will happily pay m

      • A friend was in the hotel biz. I was surprised, I always thought a booked room with a no show was charged. But, not always the case. Often the customer refuses payment, and disputes the charge with the CC. More often than not the hotel caves. It is one of the reasons hotels overbook. They expect people to no show. I think the idea in the article is to push the problem to a third party. The third party charges you for the NFT, which is delivered and paid for ahead of time. Then you have to find a buyer for y
        • Makes a lot of sense if they push the finances to the third party and guarantee a certain amount of money for themselves. It takes them entirely out of the "cancellation probability estimation" actuarial business. That money can then go into a budget, and that budget can be apportioned to deliver their (nominally) core competency of providing a certain level of functional lodging.

          Bonus if the NFT is designated as no longer valid for conversion to an actual reservation after noon on that day -- the NFT's

      • Well, there's no such thing as a simple database, especially if it has to interact with the public or multiple other organizations who are shoehorning it into their database somehow.

        This seems like a not *entirely* stupid use of NFTs. I'm still skeptical though. It seems the company is somehow going to at least attempt to restrict resale except through their site or something similar, which loses most of the theoretical benefits of NFTs. Still, adding liquidity to a market is at least theoretically somethi

    • Re: (Score:2)

      by mjwx ( 966435 )

      Blockchain and NFTs are nothing but solutions in search of a problem. Tell me again why all the computational overhead is needed and this can't be solved by a simple database.

      It's worse than that.

      They want to sell a non-refundable product and then be able to resell it when a customer is unable to use it. So they get some extra profit by selling it twice.

      They've just added some buzzwords like "blockchain" and "NFT" to what is essentially hotels scalping their own rooms.

  • non refundable reservations (Score:3)

    by zlives ( 2009072 ) on Thursday May 26, 2022 @10:17AM (#62567700)

    ok wow what an inventive idea.

    • Nothing new here. Its the same with Airlines. I don't think I've ever booked a non-refundable room for my own trips. For work yes, but thats their $$ not mine. For my own holidays, I always get tickets, rooms, cars, etc. that I can change. Far enough in advance, the price difference is usually not that much. Once my Mum came to visit me in the USA, and had problems with flights because she booked non-refundable ticket. It was only solved by me buying another day-of ticket for her :-(

      For those unaware, nev

    • Re:non refundable reservations (Score:4, Insightful)

      by thegarbz ( 1787294 ) on Thursday May 26, 2022 @11:12AM (#62567824)

      No. This is new. It's Non-refundable reservations *WITH BLOCKCHAIN*.

      Patent Pending.

  • The next step in this is we need to remove this middleman.
    Hotels need to offer me the right to cancel up to a one or two days in advanced for maybe a small extra cost of 2-5 dollars or for members of reward programs do it for free. That way if I do decide I don't want the room I can just contact the hotel and don't have to worry about finding a buyer for my NFT and I don t have to pay this middleman to handle this transfer.
    I don't see any way for me to make money off of this so anyone is free to use it.

    • The next step in this is we need to remove this middleman.

      The hotel doesn't want the middleman removed, because they want to reserve the right to deny guests. If the reservation is sold without their input then they get into a position where they may be sued for refusing to honor it later.

      Hotels need to offer me the right to cancel up to a one or two days in advanced for maybe a small extra cost of 2-5 dollars or for members of reward programs do it for free.

      You need to refuse to book a room anywhere that's not the case, then.

      • The hotel doesn't want the middleman removed, because they want to reserve the right to deny guests. If the reservation is sold without their input then they get into a position where they may be sued for refusing to honor it later.

        I would bet a large amount of money that the fine print puts the hotel in the driver's seat, and that NFT is much less of a contract than you might think it is.

        At the end of the day, the hotel already has your money -- it got the funds up front. The hotel has lawyers on retainer to deal with irate guests. Who is going to pay $5k in lawyers fees to probably lose in court over a $1k bill they paid in advance for?

        From my perspective, this is where credit cards as a middle man is a good thing. In my experien

  • I can't judge business value of the concept itself but I do wonder why this is just appearing now on the blockchain if this was such a good idea. Is it really so that this need has been lingering for a long time but nobody dared to launch it on a classical solution (i.e. normal databases, mails with QR code etc). Was there truly a mistrust from guests and hotels in the IT companies (i.e. EVERY IT company) that could have provided this that they don't wish to jeopardy their precious reservations? Was it fear
  • Looking at their web site they have a total of 6 hotel from the same chain available in Hawaii available in July.
    So they cannot be that big. Their main office is a rent a desk in Houston.
    Page design, photos, and reviews look to be taken from or page scrapped from kayak.
    Unless they have some backing from someone big, maybe how they got the article, I would not take a job from them.

  • Say Eve is persona non grata a hotel, her past antics have left the management with no choice but to ban her.
    Adam can not attend the conference this weekend, and sells his room NFT on the market.
    Eve up to her normal antics buys the NFT.
    Eve shows up at the hotel, having paid for the room.

    • No more so than Eve purchasing the room through a travel agency. They would deny her access and call police for trespassing.
      The person still has to check-in but instead of proving who you are you just show something that says you have the reservation.

    • I would bet the fine print covers the hotel, and Eve paid for something she cannot redeem. Tough cookies, Eve. Isn't blockchain awesome?

      And this is a good example of why a credit card company as middle man is a good thing. If I were Eve, either the charges are reverse hotel or credit card company, so I pay nothing for something the hotel will not honor, or I walk away from the credit card without paying for those charges.

  • This is a great example of cryptocurrencies being a "solution" for non-existent problems. Why would anybody buy an NFT for a hotel room, when they could just pay for it with cash or a credit card? All this does is add an extra superfluous layer to a simple economic transaction. And there's already a kind of "token" that can be transferred between hotels if you change your plans - it's called "money".

    • Re: (Score:2)

      by pr0nbot ( 313417 )

      I wondered the same thing... My take is that by representing the reservation as an NFT, it becomes tradable on a variety of existing crypto platforms without the hotel having to build anything. Also, it is digital, which is better than some physical token that needs to be posted around on sale, but not reproducible - it's a unique entry in the blockchain. Finally, it is verifiable, in the sense that when you show up at the hotel you can prove the reservation is yours, because you can prove you own the NFT c

  • ... a reference to a type of pearl oyster.

  • Use a database (Score:3)

    by wakeboarder ( 2695839 ) on Thursday May 26, 2022 @11:51AM (#62567944)

    You don't need to make a blockchain if you can use a database. Use a freaking database, don't waste time and resources using a blockchain if you don't need to. There is no reason that I can think of to use a blockchain over a database for technological reasons in this case.

  • scalping hotel rooms? can they go over max rack rate with something like this?

  • Concert tickets are so consistently scalped on StubHub that Live Nation got into the act and started selling tickets there for higher prices without ever offering them to the public at the listed price.

    This move allows hotels to enable scalpers. If it proves profitable enough, they can start listing rooms directly on the resell site at higher than normal prices in order to increase their profits.

    If it doesn't prove profitable enough, they've still gotten paid the list price from the scalpers who snapped up

  • This is a lot of work to not give refunds for cancelled reservations.

  • No really... why?
  • It's stupid for a many reasons:

    a) It shifts this bullshit onto customers. Are customers going to be happy now that they can't cancel and are instead forced to sell their reservations?

    b) Customers aren't going to know what an NFT is and are going to be so enraged by a) that they probably won't participate in this fucked up plan.

    c) NFTs are doing NOTHING that the hotel chain can't do for themselves, i.e. if someone cancels, why not just relist the room up on their own website where people looking for ba

  • guests would sell their reservation in the market if they decide not to go, and appeal to the crypto-enthusiastic traveler/p>

    Oh please, we are supposed to believe that someone would pick the ability to use an NFT over a hotel's location, price, valet, availability, etc?

  • This is just a transfer of your room to another person. Having this as an NFT is a completely unnecessary step.

  • I can see this a means to separate late purchases between discretionary and non-discretionary buyers

    Hotel reservations are essentially perishable goods, so a last minute sale at any price is better than unsold inventory. However, you don't want to make a low offer to a non-discretionary buyer who really can't settle for no sale at all but the non-discretionary buyer isn't going to identify themselves overtly. By making the reservations transferable rather than cancellable the discretionary buyer will be m

  • I do not for a moment believe this is happening to an extent worth caring about.

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