The web3 industry is a rapidly growing sector that is revolutionising the way we interact with the internet. So why hasn’t the real estate and hospitality industry caught up?
Fraught with decade-old processes
Web3 may not be a new technology anymore, but the concept is still relatively new to an industry that’s highly regulated. It has many laws and regulations governing how properties can be bought and sold, and in order to integrate technologies like blockchain and smart contracts, regulators need time to catch up and develop a framework for real estate transactions.
Resistance is likely a factor too. Established players in the industry are comfortable with the current way of doing things, and are likely hesitant to adopt new technologies that could disrupt their business models.
But the pros severely outweighs the cons — web3 creates a more open, secure, and transparent internet that is accessible to everyone, regardless of their location, wealth, or technical knowledge.
Web3 is revolutionising the industry
Here are just a few examples of how web3 is changing the real estate and hospitality game:
- Property ownership and transfer: Web3 technology allows for the creation of digital assets that can be bought, sold, and transferred on the blockchain. This means that real estate properties can be represented as tokens on a blockchain, making it easier, faster, and more secure to buy and sell properties.
- Fractional ownership: Web3 also enables the creation of fractional ownership models, allowing multiple parties to own a fraction of a property. This can help make real estate investments more accessible to a wider range of investors.
- Smart contracts: Smart contracts are self-executing contracts that automatically enforce the terms of an agreement. They can be used in real estate transactions to automate processes such as property inspections, payments, and title transfers.
- Decentralised booking systems: In the hospitality industry, web3 can enable the creation of decentralised booking systems that connect guests directly with hosts, eliminating the need for intermediaries like booking platforms.
- Loyalty programs: Web3 can also be used to create decentralised loyalty programs that reward customers for their loyalty with tokens or other incentives.
There are already some innovative companies exploring the use of web3 technology in real estate, such as using blockchain-based platforms for property listings, smart contracts for real estate transactions, and tokenization of real estate assets.
One real-life example of blockchain technology being used in the real estate industry is in Sweden, where the government and a group of several banks have been testing the use of smart contracts in property sales. The pilot project, called Lantmäteriet, uses smart contracts to record and manage property transactions. The pilot project, called Lantmäteriet, uses blockchain technology to record land registry transactions, and it has been successful in reducing the time and cost of transactions, as well as increasing transparency. According to the Swedish Land Registry, the use of blockchain technology has made it possible to complete property transactions in 24 hours, compared to the traditional process which could take up to several months.
Meanwhile, over in the hospitality side, companies like Travala and Emirates have also partnered with blockchain startups.
Travala partnered with Binance Pay to allow customers to book hotel stays using cryptocurrency. The partnership means customers can book hotel stays using a range of cryptocurrencies, including Bitcoin, Ethereum, and Binance Coin. The use of blockchain technology provides a secure and transparent way to process transactions, eliminating the need for intermediaries such as banks or payment processors. This significantly reduces transaction costs and increases efficiency.
On the airlines side, Emirates is proving its tagline ‘Fly Emirates, Fly Better’. In 2020, the airline company announced its partnership with blockchain startup Loyyal to develop a blockchain-based loyalty program. The program allows Emirates customers to earn and redeem loyalty points across a network of participating hotels, car rental companies, and other travel partners — reducing the effort involved in reconciling separate systems. The use of blockchain technology also provides a secure and transparent way to track and manage loyalty points, eliminating the risk of fraud and errors.
In fact, according to a new survey from CasperLabs and Zogby Analytics, 90% of the businesses reported to have deployed blockchain in some capacity, while 87% said they’d invest in the technology in the next year. The businesses surveyed were in the United States, the United Kingdom and China.
While Web3 still has certain challenges to overcome, we shouldn’t confuse it with the powerful uses of digital assets — and its transformative effects on the industry.
How Staynex Helps
Staynex is a next generation vacation membership platform that gives members the usage rights to resorts globally on an annual basis, and the ability to earn rewards by holding onto the membership. By using blockchain technology, we are able to tokenize ‘stays’ and to embed them onto Non-Fungible Tokens (NFTs), which represents your membership and a number of nights allocated to you at the property.
But that’s not all. At Staynex, we’re not just targeting the travellers and the globetrotters — we want to make it easy for anyone to invest in real estate.
With the use of smart contracts, LABS automates the process of buying and selling property by automatically transferring ownership and funds when certain conditions are met. This can reduce the need for intermediaries such as lawyers and real estate agents, potentially lowering costs and increasing the speed of transactions.
Accessible to A Wider Range of Investors
Lowered costs mean more investors can invest in real estate. Historically, only the rich can afford to invest in real estate as it requires a large sum of capital. With Web3, it’s possible to do fractional ownership, where you own a portion of the real estate. Accessibility is important to Staynex — in the Staynex marketplace, you can easily invest in properties around the globe.
More Avenues for Passive Income
Traditional agents only allow you to invest in real estate properties, but at Staynex, you can invest in real estate properties and hotels and resorts. It works like any investments typically do — when the hotel or resort generates revenue, you do too. That means NFT holders have more avenues to earn passive income, and no longer have to follow the archaic rules set by the industry years ago.
This new era of the internet is creating a more open, secure, and transparent world that could transform our lives in ways we can’t even imagine yet.