The thesis of this article is based on three assumptions:
- NFTs are digital items representing something of value on the internet.
- The availabilities of a property are valuable digital items.
- Availabilities can be properly represented by NFTs.
The Legacy Booking Process
Before we go down the NFT rabbit hole, let’s ask ourselves a basic question: what happens when you book a place today?
The answer, out of many possible interpretations, is:
When you make a booking you buy a non-transferable digital contract which gives you, and only you, the right to stay at the property at a certain date.
The most important words here are: non-transferable.
In fact, you are the owner of that night in that property, but there’s no secondary market for your booking.
If you want to cancel the booking, it’s either free or it costs you some money (e.g. 30% of the total price).
Obviously you will prefer to book with a free cancellation.
Why? Because it’s too much of a commitment.
How can you be 100% sure you’ll be able, or willing, to go?
The property owner, on the other end, prefers to sell you a non-refundable, token.
If you booked 6 months ago and cancel a month before the arrival (for free) the owner has just lost 5 months of potential bookings.
She may now need to sell it cheaper, because there’s little time left to find new guests.
If the cancellation happens a day before arrival, it’s even worse.
You held a digital asset for 5 months, made it lose value and gave it back.
It’s like buying a bunch of peaches, a few weeks later changing your mind, going back to the shop, giving them back and getting a refund.
Who’s going to buy those peaches now?
In fact, you could have booked 10 places with free cancellation for the same date, thus creating a sizeable aggregate damage, with exactly ZERO downside for you.
With the current system, you could even do that just for fun.
The whole thing is obviously much more complex and nuanced, but that’s the basic idea, and we can work it from here.
Let’s go back to the booking you just made: it is a digital asset, but it has no market, ‘member? 🫐
You can’t resell it.
It has no liquidity.
Wait… liquid availabilities? It’s getting interesting, isn’t it?