Сurrent Market Situation
The hospitality and hotel industry within the Asia-Pacific region is intensely competitive.
While large incumbents from the US, such as Hyatt and Marriott, are in the market, so are regional competitors such as Lotte, Mandarin Oriental, and Nikko and powerhouses like the InterContinental Shanghai Hongqiao NECC.
All of these chains have one thing in common: a robust loyalty rewards ecosystem. Though each program is different, they all seek to encourage customer loyalty (thus lowering the Customer Acquisition Cost) by giving perks and discounts to repeat customers.
This puts a small, independent hotel operator at a disadvantage. The large incumbent hotel chains and regional competitors have spent a vast amount of capital building out their loyalty rewards network.
The major pain point the hospitality industry encounters with loyalty rewards programs is creating an effective Loyalty Rewards Ecosystem (LRE) as loyal customers will want to spend their points on more than hotel stays. This pain point stems from creating an effective network of vendors that accept the loyalty points as payment. Vendors may be skeptical to play a role in the LRE due to fears of late payment from the hotel chain for services provided.
Lastly, there’s also the risk of hacks and fraud which escalate when external networks are involved. There are active Darknet Market communities selling fraudulently obtained LRE points. While a big hotel chain could withstand the added cost of this theft, it would be devastating for smaller chains.
Implementing a Blockchain-based LRE
The key advantage of a Blockchain-based LRE is the streamlining of the creation of a rewards network. The strength of the Blockchain is in its ability to create scalable, interconnected networks, where the data is mutually verifiable by all parties and preserved in a tamper resistant fashion.
Where this helps the hospitality industry is the ability to deploy rewards networks to external vendors, allowing customers to spend points earned at the hotel elsewhere such as a retailer, movie theater, or restaurant. Blockchain technology allows for the hotel to assign a specific monetary value to each point and have external vendors accept it at an agreed upon amount — either at the initial value or lower.
For instance, a luxury retailer could accept the points at a lower, deflated value, while a budget-oriented retailer could accept them at face value. All of this is done behind the scenes — fully integrated into both parties’ Point of Sale (POS) and management systems — providing a seamless experience for the customer and a headache-free points cash reconciliation process for both parties’ accounting departments.
This process works because of a system of public and private blockchains. The private blockchain would hold data regarding the rewards available from the specific vendor / hotels; the public blockchain would hold transaction data as well as quantities available of rewards. These two blockchains would reconcile via a smart contract whenever a customer makes a reward purchase. In addition, implementing NFTs (Non-Fungible Tokens) in this use case, the definitive and transparent reserve systems for loyalty programs will help with turbo charging customer retention, satisfaction, and brand value.
While this may sound complicated, the good news is the entire system is designed to be plug and play. It integrates fully into the hotel’s existing Hotel Management System (HMS) and Point of Sale system.
Utilizing Proton Chain
Proton blockchain is a cryptocurrency project that features instant and free cryptocurrency swaps, no gas fees for end-users, and lightning-fast transactions on-chain¹. The Proton team is currently developing the Proton Wallet, ProtonSwap, and real-world use cases for NFTs backed by Proton ($XPR). As Proton’s partner, announced in September 2020, we plan to utilize their NFT marketplace (among other NFT marketplace providers). In addition we’re planning to utilize Proton’s NFT marketplace in our integration consulting services via our Tokenization Management solutions, under the MyNFTs (MyNFTs.org) branding.
We will take advantage of Proton’s zero gas fees and ultra-fast blockchain via our unanimity BaaS platform to record LRE transactions on chain for hotel chain clients maintaining Ubitquity’s blockchain agnostic mission.
Metallicus, Inc. (owner of Proton Chain, Metal Pay) has also submitted an application² to the U.S. Office of the Comptroller of the Currency (OCC) for a full-service national bank charter while seeking deposit insurance from the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve membership. The proposed bank will be known as First Blockchain Bank and Trust (FBB&T), and would become the first bank in America to allow fiat and crypto deposits side-by-side.
VeChain is a blockchain platform designed to enhance supply chain management and business processes. Its goal is to streamline these processes and information flow for complex supply chains through the use of distributed ledger technology (DLT).³
VeTrust is currently an ideal entry-level application for hotels of all types to access “blockchain+professional services” quickly, efficiently and cost-effectively.⁴
VeChain also addresses numerous other markets, including automobiles, the digital carbon ecosystem, document management, agriculture, IoT production and scalability, and more⁵ including hotels.
Since Vechain has ToolChain™, which is a Blockchain-as-a-Service (BaaS) platform built on top of the VeChainThor Blockchain, we are confident that Ubitquity’s Hotel Loyalty Rewards Ecosystem solution can easily be integrated on ToolChain™ and utilized by luxury hotel chains.
Below are some screenshots of the system. Remember, the system is fully customizable, and built to required specifications. These screenshots are merely meant to be illustrative and not exhaustive.
¹ AMA with Metalpay! 15/03 at 18:30 CET, Marshall Hayner (Co-Founder & CEO) https://www.reddit.com/r/AltStreetBets/comments/m25stn/ama_with_metalpay_1503_at_1830_cet/
² First Blockchain Bank and Trust website, https://firstblockchainbank.com/
³ Investopedia, VeChain, Jake Frankenfield, https://www.investopedia.com/terms/v/vechain.asp
⁴ Medium, VeChain and DNV GL Release VeTrust, A New Blockchain-based Risk Self-assessment Application To Tackle Infection Risk Management For Hotels In China, https://medium.com/vechain-foundation/vechain-and-dnv-gl-release-vetrust-a-new-blockchain-based-risk-self-assessment-application-to-d91fce3d41d1
⁵ VeChain Wallet — Secure your VeChain (VET) assets | Ledger, https://www.ledger.com/vechain