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Travel NFT's - How are they sold and how do they work?
Travel NFT's - How are they sold and how do they work?

So, there's this Italian hotel group called R Collection, and they've decided to step up their game by teaming up with an Italian technology company called Takyon, which has already won several awards for the best startup in 2023. Why? Well, in the post-Covid era, travelers want two things: flexibility and a great deal. Takyon has come up with an NFT platform where you can buy and sell tokens, i.e., hotel bookings which are resellable. Or so they say.

This nifty Italian startup came up with something called the "Resellable Rate" using blockchain technology. It's like turning hotel reservations into digital collectibles (NFTs).

How does it work?

Well, the process is quite simple. You book a room at a lower price, which they say is roughly 15% cheaper than a regular reservation, and you keep some flexibility to change your plans. So if you can't make it, no worries! You can resell your reservation on the platform until the day before check-in and maybe even make some money in the process. However, read on to find out that the process is a little more complicated than it sounds.

But what's in it for the hotels, you ask?

Well, it's all about cutting out the middleman. Takyon helps hotels collect their money instantly and guarantees it. No more waiting around for payments, for example, Booking.com, which apparently had a difficult year actually getting payments out to middlemen and hotels. Plus, they handle all the messy resale stuff, so hotels can focus on making your stay awesome.

Since R Collection started using the Resellable Rate in October 2022, it's become a hit. It went from being just 3% of their bookings to a whopping 15%. That's over 280 bookings and around €450 thousand in value. And here's the kicker – the cancellation rate dropped by 30%. Happy customers, even happier hotels!

The best part is that R Collection saw its profit margins increase by 17%. That's more money in their pockets, all thanks to this clever pricing strategy and an increase in direct website bookings. Take the Gran Hotel Victoria on Lake Como, which is by no means a budget accommodation at nearly €1000 per night. However, for that amount, they will throw in breakfast, access to their SPA, and probably a small glass of prosecco and parking your car. The same nights can be booked on Booking.com for €1035, which apparently excludes the prosecco and SPA. The nights booked at the resellable rate of €920, although the hotel may want to check the spelling of resellable, 'Prepaid, non-refundable but resalable until 24h before the check-in.' I mean, if you're selling a room for €1000 euros a night, you can afford a speller. The terms of your booking read as follows:

Within 24h from the booking, the customer will receive an e-mail from Takyon with instructions on how to resell it. By choosing the resalable booking, the customer authorizes the creation - through the technology of Takyon S.r.l., to which the customer's data will be transmitted - of a digital product (non-fungible token) with which the reservation will be associated. By booking the resalable, the customer declares to know and accept the Terms of Service governing the Takyon Platform and the circulation of the digital product (accessible at the link https://takyon.io/termsconditions).

However, the hotels saw a 40% boost in bookings through their website, saving €70 thousand in commissions to online travel agencies, read Booking.com. That's money they could reinvest to make their hotel even fancier.

Genius move

And here's the genius part – customers prefer booking directly on the hotel's website because they get a 100% flexible rate, just like that NFT magic we talked about earlier. No need to deal with third-party booking sites. More money for the hotels and more flexibility for you. In conclusion, it's a win-win situation. R Collection Hotels are making more money, and you, the traveler, get a sweet deal with flexibility. And this Resellable Rate thing? It's not going anywhere. R Collection, which only has a handful of hotels, plans to keep using it and even introduce it to their new hotel opening in 2024. So, in the future, when you're booking a room, you might just be trading NFTs along with your vacation plans.

Redeeming your magic hotel ticket

After its creation, each Booking NFT will be hosted in a centralized wallet owned and managed by Takyon (“Takyon Wallet”). The Owner of the Booking NFT could decide to leave the token in the Takyon Wallet or to connect his/her own wallet to the Travel Exchange and request the transfer of the Booking NFT on his/her own wallet.

This is important because when you buy one of these Resellable Rates, your money actually goes into the centralized wallet owned and managed by Takyon. Leaving it in the Takyon Wallet basically means if they ever go bust, you'd probably most definitely lose your money. However, putting it into your own crypto wallet (which you can) has some limitations as well because you can only sell it on the Polygon blockchain (secondary market) or Takyon's Travel Exchange (Wall). If you do choose to sell your token NFT, your resellable rate will be available for anyone to see without any selling price (showing only the first purchase price you paid). If someone chooses to offer you more, great, but if someone offers you less, you still may be inclined to sell it. That's up to you.

Since a lot of people, like me, find the whole process of trading NFTs inexplicably difficult to understand, we asked ChatGPT to explain it to us like we were a 5-year-old. Its reply was this.

Okay, imagine you have a special ticket that lets you stay at a hotel. This ticket is like a magic card, and it's called an NFT. But there are some important things you need to know about using this magic ticket.

  1. When you want to use your magic ticket to stay at the hotel, you have to do something called "Redemption of the NFT." It's like saying, "Hey, I want to use my ticket now." But if you bought your ticket directly from the hotel's website, you don't have to do this step.

  2. To do the "Redemption of the NFT," the person who owns the magic ticket (it could be you or someone else) has to go to a special website and tell them who's going to stay at the hotel. This person is called the "Final User." If the Final User is not you, you need to make sure they're okay with giving their information.

  3. Once the magic ticket is used, it can't be given to anyone else or sold to other people. It's only for the Final User, and the magic ticket becomes like a regular ticket.

  4. When you use the magic ticket, you have to give some important information about the Final User. This includes their first name, last name, email address (where they can get important messages), and sometimes other stuff like ID card details if it's for a flight.

  5. After you do the "Redemption of the NFT," the Final User will get an email with all the details about their hotel stay. It's like getting a confirmation that everything is set.

  6. When you get that confirmation email, you or the Final User (if it's someone else) need to know that the hotel now has the information you gave. So, if the Final User needs to talk to the hotel about anything, they can.

  7. Once you use the magic ticket, you can't change the name of the person staying at the hotel unless there's a small mistake (like a typo), and you have to ask the hotel directly to fix it.

  8. The company that makes these magic tickets, Takyon, has a Privacy Policy that explains how they use your information and the Final User's information. They might have to share it with the hotel to make sure everything goes smoothly.

So, using this magic ticket comes with some rules about sharing information and who can use it. Make sure you're okay with all of that before you use your special NFT!

It's a brave new world out there!