• Adrien Book

Why hotel NFTs are a terrible idea

There was a lot of noise this week about hotel chains considering selling reservations as NFTs. The idea is theoretically simple. A customer books a room and receives an NFT. If they cannot make it, they have to resell their reservations to someone else. That way, they can make their money back, and the hotel doesn’t have to deal with an empty room. Here’s why that’s a terrible idea, in less than 300 words.

  1. This system will inevitably lead to a thriving secondary market for popular tourist destinations. Scalpers will buy hundreds of nights way in advance and resell them for a profit once tourist get desperate enough.

  2. This is bad news for local economies. If a poacher buys 100 nights at $100 each, they can probably resell 20 at $1,000 each when the busy season comes around. With a $10,000 profit, they will not have any incentive to resell the other rooms. In this scenario, 80 rooms go empty. That means people in hotels lose their jobs. Moreover, surrounding bars, restaurants and night clubs miss out on thousands in revenues, leading to even more layoffs.

  3. To counter this, airlines and theme parks may resort to buying the NFTs themselves to sell them alongside their regular offers. This would of course kill off smaller players unable to do this.

  4. You might argue that all this is positive for hotels anyway : they make their money AND get a percentage of all secondary sales (thanks, smart contracts!). But they will have to mint one NFT per night per room, right? If we estimate $50 dollars per mint (that’s the lower end), Merriot, with its 1.4M rooms, would have to pay $70M per day in minting fees alone.

This is just the latest iteration of the hotel industry trying to turn into Airbnb. Except that it’s bad for hotels, bad for customers, and bad for cities. Classic crypto.

Good luck out there.

Bankrupt hotel NFT

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