Web3 is a term that you may have heard about online, but what actually is it and what does it have to do with direct bookings? In a nutshell, web3 redefines the existing web2 internet using decentralized blockchain technology, enabling users to interact with one another directly without intermediaries.
Take the example of the traditional web2 financial system and web3’s most widespread use case: cryptocurrencies. In the traditional financial system, banks act as intermediaries when it comes to your money. The bank has access to your funds, they have the power to approve/decline transactions, and your trust is ultimately placed in a centralized entity to safeguard your assets.
With cryptocurrencies, you are solely responsible for your funds and have complete ownership over them. The technology enables you to make peer-to-peer transactions directly with others without a central financial entity to suspend, block or reverse a transaction.
So, why does web3 matter and, more importantly, how can it help you grow your direct booking business? Read on to find out!
Crypto users are clearly eager to use Airbnb, but just how many of them are out there?
As of 2022, it’s estimated that around 4.2% of the global population—320 million people—owns crypto. Topping this list is the USA with an estimated 46 million owners, meaning about 1 in 7 Americans have crypto.
But what do crypto users have to do with direct bookings?
Well, almost all web3 users today are crypto users, and they’re the early adopters of platforms that are building web3 solutions to solve web2 problems. At the heart of web3 are direct connections. In the context of vacation rentals, web3 allows hosts and guests to interact and transact with one another without any third-parties. No payment processors, no banks, and no booking intermediaries.
So, why would guests want to pay with crypto?
Transacting with crypto is beneficial for guests as it allows them to avoid foreign exchange fees and processing fees while enabling payments to be made quickly and securely. Since the vacation rental industry attracts bookings from customers across the globe, crypto payments offer travelers a significant advantage over traditional payment methods.
Most (if not all) web3 platforms will inherently support crypto payments, but to reach a broader market, traditional payment options must be offered too. Apart from the fact that crypto owners are still in the minority, the other reason for including traditional payment options is that cryptocurrencies are more volatile than many currencies. However, there is a solution that offers the best of both worlds: stablecoins.
Stablecoins are cryptocurrencies that are pegged to the price of fiat currencies and backed by deposits of these currencies, most commonly USD. This offers the benefit of web3 payments without the volatility risk associated with most currencies, and they’ve fast become popular in the industry for this reason. In fact, two of the top five cryptocurrencies are stablecoins: USDT and USDC.
That’s how crypto plays a role in web3, but what role can web3 play in the lives of hosts like you?
Web3 offers vacation rental hosts the opportunity to establish and reinstate the personal host-guest relationship through direct channels without the upfront development cost so often associated with launching a direct booking site.
For example, the web3 vacation rental project Dtravel offers hosts the ability to get a free direct booking site that’s powered by smart contracts. Smart contracts are blockchain protocols that are automated by following a simple logic: “if X occurs, then Y happens.”
E.g.: If a guest makes a valid payment to book a listing with a host (and doesn’t cancel during the cancellation period), then the payment is released to the host.
Incorporating smart contracts is a deliberate choice as it ensures Dtravel is not an intermediary—as it never has access to payments and doesn’t have the ability to enforce any policies—but rather a technology provider that offers a ready-to-use direct booking site with web3 technology at its core. In addition to stablecoins, Dtravel also offers hosts the ability to accept traditional payment options with its Stripe integration.
But what exactly are the benefits to hosts of a web3 travel platform like Dtravel?
There are plenty of benefits for vacation rental hosts to be excited about when it comes to web3, the biggest of which is lower fees. Since there are no booking intermediaries, there’s no middleman taking a 15–20% cut on every transaction. Inst+ead, web3 platforms like Dtravel receive a small fee to support and expand the network.
The second major benefit of Dtravel is its blockchain-based reward system. The project provides hosts with TRVL rewards, Dtravel’s native cryptocurrency. TRVL also enables participants to shape the future direction of the ecosystem, which is in stark contrast to hosts listing their properties on third-party booking platforms that make unilateral decisions without its users having a say.
As the value of the ecosystem grows, so too will demand for TRVL. And because TRVL has real market value, you can use it both within the Dtravel ecosystem and outside of it on cryptocurrency exchanges or other web3 platforms, unlike traditional rewards or points that lock you into one platform. For example, you can use TRVL to book flights on Travala.com.
Other key benefits include:
So, how will these benefits help you grow your direct booking business?
With lower fees and no service fees, you can opt to charge less for the same listing while still earning more than on other platforms, attracting guests to your direct booking site rather than a rental platform.
You’ll also be able to offer both crypto and fiat payment options, unlocking a new market of customers who want to get more bang for their buck by booking direct stays as they also save on the platform fees.
In fact, there’s a high correlation between digital nomads and crypto travelers. Travelers who take five or more trips annually are 3x more likely to own Bitcoin than those who travel less than once a year. Not only are you opening your direct booking business to new travelers, you’re also opening it to travelers who are more likely to become return customers, given the frequency of their journeys.
Last but certainly not least, operating a web3 business means becoming fully self-sovereign. With a web3-based booking site and cryptocurrency payments, you have 100% control over your business, reducing your reliance on OTAs and any disruptions to your day-to-day operations. No one can block your bookings. No one can withhold payments. No one is in charge except you.
Web3 is designed to alleviate many of these complications by removing intermediaries from the equation while allowing greater discoverability for guests. Projects like Dtravel are paving the way to make it easier for hosts to start accepting direct bookings, introducing benefits like lower fees, greater control, access to a new and growing segment of travelers and a more rewarding experience overall.
Interested? Sign up for Dtravel today and connect with Hostaway to save while earning more!