The next hottest market? The Metaverse

For most of us, the metaverse is a cloudy concept that’s hard to understand, let alone visit. How do you get to the metaverse? Is there more than one metaverse? What do you do there and who do you interact with? The answers to these questions are just as complicated as this virtual realm is rapidly evolving. But hotel brands who take the time to understand it will find limitless opportunities to grow their presence, both in the real world and in the metaverse.

Contributed by Juliana Shallcross

“It represents an entirely new economy within the hospitality system,” said David Keen, founder and CEO of Quo Global, a hospitality branding agency based in Bangkok. “It represents possibilities for individual hotels, for brands, for collections of hotels, to present themselves in a way that they’ve not yet imagined.”

The metaverse is a central piece of Web3.0, the term used to describe the next evolution of technology beyond websites, smartphones and social media. Web3.0 includes blockchain, cryptocurrencies and non-fungible tokens (NFTs), which dominated the art world for the better half of 2021. And while these three concepts have been around for several years, it’s only recently that they’ve come together as integral components of a larger digital universe, which many refer to as the metaverse. In October, Facebook recently changed its parent company name to Meta in anticipation of the next iteration of virtual reality.

Yet the metaverse isn’t just one place. It refers to several digital realms where people, using avatars, can game, explore, shop, work or just hang out. The kids who played Roblox non-stop while the pandemic kept them home from school? Those are the youngest users of the metaverse. The rap star holding a virtual concert in the Fortnight game? That’s how entertainment happens in the metaverse. The piece of “real estate” in Decentraland that sold for US$2.4 million? That’s how investing works in the metaverse.

“The opportunities for transactions are insane,” Keen said, adding that the world is only right at the beginning of the metaverse economy. “We have a hell of a long way to go in terms of how it’s going work.”

So far, hotel brands have only dipped their toes into the metaverse, largely through selling NFTs. Marriott Bonvoy unveiled three NFTs at Art Basel Miami which were auctioned off at the annual art show, along with 200,000 Marriott Bonvoy Points. Also at Art Basel, SLS South Beach and SLS Brickell announced a partnership with NFT BAZL to create exclusive NFTs that incorporate hotel perks, VIP memberships and access to other events. The Dream Hotel in Hollywood recently opened an NFT exhibit in their lobby in partnership with The Crypt Gallery to display and sell digital NFTs.

Rendering of a prototypical Roomza in Seattle

But a new hotel brand wants to make the metaverse the place where all of its social programming and meetings will happen. Roomza is a rooms-only hotel concept founded by Curtis Crimmins that’s set to open in Seattle, Washington, Austin, Texas, and New York City in 2023 and 2024. Operating within mixed-use buildings and typically only on two floors, Roomza provides guest rooms but not much else. There’s no lobby, there’s no bar and there’s no meeting room. However, when a guest stays at a Roomza (or opts for a Roomza membership), they will have access to all the Roomza offerings in the metaverse—from virtual lounges and bars to virtual meeting spaces.

“The novelty is when you’re in a Roomza, you can go to our [digital] lobby bar, and you can sit next to someone and have a drink and they’re in Dusseldorf and you’re in New York City,” Crimmins explained. “There could be a cool interactive drink menu that floats in front of you and you could make the same cocktails [in your room] and have a global experience, right from the comfort of your room.”

The opportunity for Roomza to host meetings in the metaverse is also exciting, Crimmins said. Spurred by Microsoft founder Bill Gates’ belief that most virtual meetings in the future will happen in the metaverse, Crimmins has been wondering how Roomza could leverage virtual conventions where thousands of people can visit a Roomza-branded environment.

And as far as providing entertainment for Roomza guests, Crimmins believes the options are limitless, even though the guests will never actually leave their rooms. “As long as you can engage them with eyes and ears, you can do it in the metaverse,” he added.

Indeed, how hotels choose to engage with their audience in the metaverse will be different from current digital marketing strategies. Ana Andjelic, a brand executive and author of “The Business of Aspiration” and the newsletter, “The Sociology of Business,” said hotels should focus on experiences they can offer users in the metaverse, largely ones with tangible rewards, either digital or physical, instead of directing guests to a booking engine.

“I would not necessarily go to the metaverse to book anything. I would go to experience things,” Andjelic said. “The metaverse is less about utility, and more about experience.”

Andjelic said one future scenario for hotels in the metaverse could be a “play-to-earn” model where whatever customers earn in the metaverse can be translated into physical rewards such as loyalty program points or a booking discount. However, the game or the experience has to be rooted in the wider customer acquisition and retention strategy, which is why hotel loyalty programs could do quite well in the metaverse.

“If you’re not looking for ways to add value in the virtual world, or at the intersection of the virtual world and the built world, and I think that you’re, frankly, abdicating your responsibility to innovate.” – Curtis Crimmins

The metaverse also opens up a lot of opportunities for hotels to do partnerships and collaborations with well-known brands like Nike, Adidas and Gucci that have already staked a presence in this realm. And with so many other companies building digital worlds in the metaverse, Andjelic said hotels wouldn’t need to build anything on their own, just simply find the spaces where their target customers are frequenting and launch from there.

While it’s far too early to talk about costs or ROI of a metaverse marketing strategy, Crimmins said Roomza is devoting at least a third of their digital spend to the metaverse.

“If you’re not looking for ways to add value in the virtual world, or at the intersection of the virtual world and the built world, and I think that you’re, frankly, abdicating your responsibility to innovate,” Crimmins said.

And like anything else that concerns technology, there will be some resistance to the metaverse, particularly from older generations. But Keen said regardless of how one feels about the metaverse, you still have to acknowledge that it’s here, study the opportunities it provides and develop your brand’s identity within it so as to reach the generation who has already embraced it.

“We’re not designing for me anymore, we’re not designing for you anymore, we’re designing for the younger generation,” Keen said.