About Harsh, “I am currently a 3rd year student in my Bachelor’s in Business Administration at Les Roches, Switzerland. The privilege to be studying in a multicultural international environment has allowed me to be more confident, expressive and adaptable which are qualities I believe one should have working in the hospitality industry. In the near future, I aspire to be part of the International Olympic Committee leading the events department. “
EP proudly provides a platform for the thoughts and voices of the future leaders of the Hospitality industry.
Will cryptocurrency be used more widely within hotels?
Digitalisation has become an increasingly important part of our daily lives, whether it is the constant Zoom meetings or the transactions conducted through phones without the help of physical cards or cash. Think about it, before 2019, did we really engage ourselves with digitalisation the way we do now?
For many, this whole situation has contributed to the rise of cryptocurrencies. Eric Schmidt, CEO of Google, correctly noted this and gave credit to Bitcoin, a product of cryptographic achievement, because making something that cannot be replicated is seen as extremely important in the modern world.
The use of cryptocurrency as a method to pay for hotels sounds a plausible concept. Imagine using Bitcoin, Dogecoin, Binance Coin and Litecoin as a form of payment method to avail services within hotels such as Radisson, Fairmont and Mandarin Oriental.
Nevertheless, many high-end hotels in Switzerland and Dubai have started to accept Bitcoin and ETH tether allowing guests to swap their credit cards in exchange for digital assets. One such hotel is The Chedi Andermatt, a 5-star hotel in Switzerland. Since August 2021, it has offered transactions in Bitcoin and ETH for guests to have a more personalised experience as customers do not have to worry about the expensive conversion rates when travelling abroad to stay in hotels.
However, according to a report published by Triple A, the adoption of cryptocurrency in the market accounts for only 5 per cent with 300 million active users worldwide and is expected to grow around 600 million in the financial year of 2022. One can infer that as of now even though cryptocurrencies provide advantageous features to hotels, their relative prominence is still lacking and is far behind the numbers required to be successfully executed in the hotel industry.
There can be various factors why hotels might not consider cryptocurrencies as a form of payment. One such reason is that their volatile nature poses a risk. There are thousands of cryptocurrencies circulating in the market that come with their own respective twists and turns. This is usually their tendency to experience sudden spikes and drops in value which are primarily dependent on supply and demand economics.
For instance, Elon Musk’s announcement of just his intention on investing either in Bitcoin or Dogecoin led to a massive shift in value for all the cryptocurrencies that have shown how vulnerable the system is for hotels to adopt. Moreover, card frauds and online theft is another associated risk that cryptos bring as there is no system in check placed by governmental organisations of every country.
In my view, the option of cryptocurrency has potential, and under challenging circumstances it has become ever more pressed for alternatives such as these to be applied within the forum of the hospitality industry.
Providing a secure medium of channel for payments not only helps in adding to guests’ satisfaction but for the hotel it is an opportunity to increase the value of their sale. For example, normal debit and credit card transactions usually take about four to five business days for the hotels to receive. On the other hand, crypto transactions depend on the value of how significant it is in the market. If the value of the crypto is high, so is the value of the sale.
To put this into perspective, time will tell whether the inclusion of cryptocurrencies will be accepted as a payment method. Even though there are hotels around the world that are planning or have inducted its usage, for many it is unchartered territory that nobody really knows what lies ahead in the future. Whilst is a concept that has been prevalent for almost a decade now, for many industries it has not been able to transpire successfully.
Harshvardhan Chhetri is a BBA Global Hospitality Management student at Les Roches.