All You Need to Know About NFT Technology in the Travel Industry
The travel and tourism industry is responsible for 6.1 percent of the global GDP. This significant contribution could not have been possible without all the technological advancements the world has witnessed in the past couple of decades, both hardware and software. These innovations made the online existence and activities of travel businesses possible. Some technologies have the potential to revolutionise the entire travel and tourism industry. NFT technology is such a game-changer.
Despite experiencing a nosedive during the pandemic, the travel and tourism industry managed to bounce back and reinstate itself as a lucrative field for business development and a solid investment opportunity. The possibilities for personalisation in booking and other travel services increased due to the inclusion of technologies like blockchain, CRM, and NFT. Hence, they are responsible for the faster development of the tourism network and, in turn, the industry.
NFT has become one of the most discussed topics in the current tech and travel industry. While many are still contemplating the value of NFT artworks, others are still unaware of the important role it plays in the travel and tourism industry. The value of NFT in this sector is often determined by its functionality rather than its collectability. However, both are given importance when you know how to properly use them.
Travel NFTs still might be a new term for many businesses in the industry which is why they are still unaware of how it can create a better tourism experience. This article will provide a brief overview of what NFT technology is in travel and tourism and how it can benefit this sector.
What is NFT in Travel and Tourism?
The word NFT stands for non-fungible token. In technical terms, NFT is a financial security consisting of cryptographic assets on a blockchain. Simply put, they are tradeable, well-protected digital assets backed-up by blockchain technology. Most often, you can find similarities in the blockchain encoding of NFT and popular cryptocurrencies such as Ethereum and Bitcoin.
Although they are not classified as cryptocurrencies, NFTs can also be bought and sold along with cryptocurrencies. NFTs are digital assets which can represent many things in the real world like, art, music, videos, in-game items or in a virtual world. Each NFT is unique and can not be replicated or exchanged, which ensures its security and transparency in tracking and trading. NFTs are often sold at an incredibly high value as the number of tokens in the collection is limited.
In the travel and tourism industry, the true potential of NFT is still being uncovered. However, so far it has demonstrated great developments in travel bookings, payment methods, customer loyalty and much more. These reasons and functionalities alone should be enough to compel travel businesses to incorporate NFTs into their services.
The Benefits of Travel NFT Technology
Even if all the benefits of NFT technology in the travel industry can’t be mentioned in this article, here are some processes in which NFT has made notable contributions.
Improved Travel Marketing
NFTs are known for creating buzz both in the real world and in the virtual world. The popularity of the technology was witnessed by the massive rise in NFT sales by 2020, which was almost 21,000 per cent. And travel companies have taken full advantage of this popularity by incorporating NFTs into their marketing strategies.
As a method for improving their reach, appealing to a wider demographic, and showcasing their creativity as part of their brand identity, collectable NFTs are sometimes created to garner media attention from the news portals. Destination Management Organizations (DMOs) often collaborate with artists at a specific destination to help them mint their art and create limited-edition NFT collections that can be offered to visiting parties..
Increasing Rate of Engagement
When it comes to improving engagement rates at any location, travel companies have their hands tied with limited options. They can only rely on the number of fun activities the destination has to offer, which include entertainment, wellness, hospitality, leisure venues, and other tourist attractions. In this case, NFT can make an impactful change and improve the engagement rate.
NFTs have this interesting feature of storing GPS information, which can be used to organise scavenger hunts by travel companies in any destination. NFT helps prove that a specific tourist has taken part in such activity at that destination. This creates engagement and increases social media mentions by appealing to the thrill-seeking and competitive sides of tourists and making even the least interesting destinations seem more enjoyable.
Improves Customer Loyalty
Any business, whether in the travel industry or not, may face a lot of difficulties in driving in new customers. Their main priority will be turning their current customers into recurring customers. With this end in mind, they try to establish a long-lasting, mutually beneficial relationship with their present clients to make sure they seek them out the next time around. This can be possible if the company has a loyalty program powered by NFT technology.
NFT Technology can help travel companies offer rewards, like discounts or flyer miles, to people who take part in different programs and activities organised by them. These reward points can also be used in place of cash by customers if needed, at an exchange rate. NFT also offers a secure and transparent platform for keeping track of customers’ reward points.
Improving Travel Payment Method
So far, we have discussed several types of values that can be stored via NFT technology. This feature can also come in handy as a new and improved payment tool. Think of the NFT as a preloaded debit card that has some clear rules that ensure its security and can be used for bookings and loyalty rewards.
The two major obstacles faced by tourists are the foreign exchange rate and ATM withdrawal fees, and the reluctance of vendors to dive into the banking system while tourists are unable to pay with their own credit or debit cards. However, both of these problems can be handled by NFT. With this as a payment tool, clients can easily use their digital wallets to make payments anywhere in the world.