Let’s run a little hypothetical situation. You’re planning a vacation. You’ve been researching for months, you’ve booked the airfare, and you’ve got a room. But a week before the trip, your kid breaks his arm and now you can’t go. You cancel the plane tickets and you call up the hotel and tell them that you no longer need the room so they can re-book it.
“Oh no worries, these things happen,” the concierge tells you. “Just list your room on our NFT marketplace.”
Uh, what? You’re confused. You just want to cancel the booking. “Oh, we don’t do cancellations. We’ve created a secondary market for you to sell a nonfungible token that allows another party to access your reservation. It’s all very simple,” the concierge says. What about a refund? “No need for refunds, another person can purchase your booking from you, isn’t that great?”
It is not great. It is a nightmare. And it’s here. According to a report from The Wall Street Journal, a number of hotels and resorts are working with cryptocurrency companies to turn hotel bookings into NFTs. It would work by creating a token that is associated with a booking, which could then be bought and sold via a platform that would operate like StubHub or other secondary ticket markets.
That sounds interesting for like two seconds, until you think about it. In the name of technology and innovation, hotels have figured out a novel way to pass the burden of cancellations onto the consumer. Instead of just refunding a cancellation — which most hotels charge a fee for if it occurs within 24 hours of the scheduled check-in — and rebooking the room, this NFT model would make the traveler into a seller. It’s now up to you to get rid of that room if you’d like to get your money back. And if you have to sell it at a loss, hey, that’s too bad.
And that’s just assuming that the system works the way that it is supposed to — which it almost certainly won’t, because any time a company creates something like this, someone finds a way to exploit it. It’s not hard to imagine that this secondary market would just create an incentive for scalpers to book rooms, particularly for popular holidays, and re-sell them at a higher price.
That’s exactly what has happened to the sports and concert business, where bots operated by scalpers scoop up tickets to popular events and sell them off at a premium to the very people who they blocked from buying the tickets. The ticket-selling companies, including Ticketmaster and StubHub, have even been accused of colluding with scalpers to drive up prices. It’s not hard to imagine hotels doing the same thing.
And that’s all before you consider the fact that NFTs are an environmental nightmare and minting them typically involves using an absurd amount of energy for something that simply does not need to exist. Turning hotel stays into NFTs accomplishes nothing of value for anyone except the hotel by preserving its profits. It turns the prospect of booking or canceling into a nightmare dictated by scalpers and unreliable buyers. It’s enough to make you never want to leave the house.
