Hospitality industry and Metaverse 3

See Velma in action! Get to know Velma

Part 3: for geeks

In the previous two articles Metaverse in Hospitality (for dummies and for hoteliers), we saw that the integration of the hotel industry in the metaverse means much more than just enabling virtual visits in a 3D environment and that several prerequisites need to be met to ensure that hoteliers are able to properly establish themselves and make the most of this new opportunity.

In this article, we will address the more technical aspects, including currencies, NFTs, confidentiality, DAOs, and collaborative environments. But don’t panic: we use non-specialist everyday language to explain it all.

1. Transactions in the Metaverse


As soon as commercial transactions are made in the Metaverse, it is important to set up currencies, and what better than cryptocurrencies ? 

Decentralised technology can be perfectly integrated within the Metaverse. Each sector, hotel group or individual hotel can decide whether to use an existing cryptocurrency or to create their own.

So why would you create your own cryptocurrency? Obviously, first and foremost you need to have enough people who own and use the currency to ensure its circulation, which effectively rules out independent hotels. The second requirement is that the currency has associated rights which give it value (DAO, priority access to hotels in the group, loyalty points, discounts on the purchase of NFTs, etc.)

The now famous NFTs (Non-Fungible Tokens)

Now that you have a currency, you need to issue ownership rights, an invoice, or something else which proves that an individual has purchased a service or owns some digital property. This is where NFTs come in.

Now that we have defined what they are (a certificate of ownership), you can forget all the rest. They can be used to authenticate the purchase of digital property (buildings, land, images, videos, music, clothing, etc.). In the hotel sector (rooms, services, subscriptions), this will lead to the emergence of a virtual economy ( or synthetic economy is an emergent economy exiting in a virtual words*) for the trading of digital assets.

* Source: Wikipedia

In the previous article, we saw that for a three-month subscription to a hotel’s metaverse, you could get three nights in the hotel itself…but what if you’re not able to go?

No problem! You can trade the NFT associated with these three nights on a parallel market. This means that you could buy (real) rooms and then sell them on using the NFTs associated with them. If you have booked a room on a given date, you could change it several times before the check-in date.

Property Management Systems will need to keep up with these changes too. It is highly likely that the person who bought the room (whether an individual or a legal entity) won’t be the one sleeping in it. Obviously, this is also the case for hotel rooms in the metaverse.

So where will you pay your taxes?

These new practices have given rise to various questions, for which no satisfactory answers have yet been provided.

  • What tax rules apply to a hotel in the metaverse: those which the hotel itself is subject to or those applied in a place with a more beneficial tax regime (Luxembourg, Delaware, etc.)?
  • How can you repatriate profits made in the metaverse?
  • What VAT levels and tax rates apply?

2. Privacy and confidentiality

My avatars: for nobody else but me!

As we have seen, billions of dollars are now being spent in the metaverses. With such large amounts being invested, it is likely that these universes will end up being controlled by multinationals that will strive to harvest as much data as possible without being particularly concerned about your personal privacy.

Indeed, your avatar’s behaviour (travel, meetings, actions) creates a dataset which could be used to accurately characterise your own behaviour, which could then be exploited for commercial purposes.

Cookies will be a simple sideshow compared to what the future has in store in the metaverses. The question is: how many avatars do we need to have to prevent big brother from keeping tabs on us? You’ll need a professional avatar and two personal ones: an official one and an unofficial one. Just think about it in the same way as the email addresses that you use on a daily basis.

ZKP… what’s that?

Hotel managers are likely to ask the question: how can we be sure of an avatar’s identity? This is where a blockchain technology known as ZKP* (Zero Knowledge Proof or zero Knowledge Protocol) comes in very handy. It works like this: you have a digital wallet containing your personal data and you can authorise certain people to check this information without accessing it.

* In cryptography, a zero-knowledge proof is a method by which one party (the prover) can prove to another party (the verifier) that a given statement is true while the prover avoids conveying any additional information apart from the fact that the statement is indeed true.

( Source : Wikipedia)

For instance, an avatar can prove their age to a hotel owner without having to give their date of birth or show their ID.

It is also likely that official authorities in the metaverse (customs officers, police, etc.) will have greater powers when asking avatars for personal information (nationality, date and place of birth, etc). This begs the question: who will the official authorities be in the metaverse and what law will apply?

In Germany, the Chancellery, the German Hotel Association and groups including Motel One, Deutsche Hospitality and Lindner Hotels, have implemented a system where employees of Deutsche Bahn and Lufthansa, among others, can now check in to hotels with their smartphone using an “ID wallet” based on the blockchain. It’s easy to imagine such a system becoming commonplace in the metaverse.

3. Reinventing the kibbutz

There’s just one more acronym for you (honest!): it’s DAO, which stands for Decentralized Autonomous Organization. This is a contract which allows anyone belonging to an organisation to take part in the decisions taken within that organisation. The rules governing DAOs are well-known and are enshrined in the blockchain, which ensures both transparency and legitimacy.

But how can DAOs be used in the hotel industry?

Quite simply, they will allow people to take part in decisions regarding the hotel in real time. Rather than carrying out random satisfaction surveys, hotels could give those clients who are part of the DAO the chance to have their say.

Gluten-free products at breakfast, a bar by the pool, adult-only weeks or an airport shuttle – these are all decisions which could be approved, ranked or rejected by the DAO.

What better way to create loyalty? People will obviously be more inclined to visit a hotel where they personally take part in the decisions. Admittedly, this wouldn’t make sense for an individual hotel, but it could work well as part of a hotel group’s loyalty programme, especially if it was organised during a convention in the metaverse for hotels.

4. E-commerce in the metaverse

In a world of interactions embodied by the metaverse, it is hard to imagine a hotel doing everything itself. It would be the same as today’s hotels producing their own soap, wine, sheets, furniture and lamps!

Since a hotel is a stopping-off point, it’s a good idea to take advantage of this by showcasing your partners within the virtual environment. This means that guests who take a shine to the hotel’s decor could buy the items they like (lamps, armchairs, pictures, etc.). Of course, this would be the case for their virtual residence as well as their own home. With this in mind, it looks very likely that some hotels in the future will generate a higher turnover in the metaverse than outside it.

In the hope that the hotel sector in the metaverse continues to grow in stature, join us again soon for an upcoming article on hotel industry professions in the metaverse.

See our part 1 for dummies (click here) and part 2 for hoteliers (click here) articles to have a complete overview of the hospitality industry and Metaverse.


Checklist: The Best Direct Booking Strategy
Free Download
10 Best Practices to Boost Direct Bookings
Recent Post
Are you ready to increase your operational efficiency and direct revenue?
Subscribe to our Newsletter
Read more
Optimize your hotel's efficiency and direct bookings
Book a demo