Simultaneously, the Travel & Tourism market is on an upward trajectory, projected to hit $927.30 billion in revenue in 2024, with an annual growth rate (CAGR 2024-2028) of 3.47%, ultimately reaching a market volume of $1,063.00 billion by 2028. In this expansive sector, the Hotels market takes center stage, expected to reach a market volume of $446.50 billion in 2024, with an estimated 1,397.00 million users by 2028. As user penetration increases from 25.9% in 2024 to a projected 28.1% by 2028, online sales are anticipated to contribute 76% to the total revenue in the Travel & Tourism market by 2028, according to Statista.

Concurrently, the retail automation market in the hospitality industry is anticipated to soar to $5.73 billion by 2027, emphasizing the need for innovative technologies to maintain competitiveness in the evolving landscape.

Originally devised for validating cryptocurrency transactions, blockchain has evolved into a versatile technology with applications permeating every industry. For hotels exploring the realms of the metaverse and virtual reality, blockchain emerges as a transformative force, promising to elevate their offerings to new heights.

Smart Contracts: Revolutionizing Booking Experiences

At the forefront of this evolution are smart contracts, self-executing agreements with terms encoded into code. These contracts offer a groundbreaking approach to streamline booking processes, providing a seamless “book as you see” experience. Blockchain facilitates the deployment of smart contracts for virtual hotel room tours, allowing guests to explore and dynamically adjust terms and conditions based on their preferences. Real-time updates to room availability and automatic payment execution unfold without any manual intervention, ensuring a frictionless and efficient booking process that aligns with the dynamic nature of the metaverse.

Decentralized Identity for Seamless Verification

Blockchain’s cryptographic signatures and distributed ledgers play a pivotal role in furnishing guests with a verified digital identity. This digital identity encapsulates information traditionally collected through physical IDs, effectively reducing the need for repetitive authentication processes. As guests navigate the virtual hotel landscape, they can do so with confidence, knowing that their identity is secure and verified through blockchain technology.

Immutable Rules: Building Trustworthy Virtual Hotels

A cornerstone feature of blockchain is its immutability, preventing data from being altered once added to a block. Virtual hotels can leverage this property to establish immutable rules for storing visitor reviews and feedback. Utilizing cryptographic hashing, these hotels create an unalterable proof of concept that reflects honesty and transparency. This, in turn, ensures a trustworthy brand reputation, providing quality assurance that resonates with potential guests in the ever-expanding metaverse.

Challenges and Considerations

While blockchain holds promising solutions for the virtual hotel industry, challenges persist, particularly in the realms of governance and interoperability:

Governance

A critical consideration is whether blockchain-based processes align with existing hospitality regulations. As the metaverse evolves, ensuring compliance with regulatory frameworks becomes paramount. Collaborative efforts between industry stakeholders, regulators, and technology developers are crucial to establishing governance frameworks that strike the right balance between innovation and adherence to established standards.

Interoperability with Existing Processes and Systems

Integration with existing processes and systems presents another challenge. Ensuring seamless interoperability between blockchain solutions and legacy systems is essential for a smooth transition. Industry-wide standards and open communication between technology providers can facilitate the integration process, allowing hotels to leverage blockchain without disrupting their current operations.

To Sum up

As the metaverse becomes an increasingly integral part of the hotel industry, blockchain’s role in shaping virtual realities is undeniable. From smart contracts for frictionless bookings to decentralized identities enhancing security, blockchain offers a myriad of benefits. Navigating challenges such as governance and interoperability will be crucial for unlocking the full potential of blockchain in building trustworthy and immersive virtual hotel experiences. The journey towards a blockchain-powered metaverse heralds a new era in the hospitality industry, promising innovation, efficiency, and unparalleled guest experiences.

By Sanjay Ghare, co-founder and CEO, Vervotech