The Role of the Metaverse in travel brands : Hype or Hope For Investors & Brands?

The Rise of Metaverse Tourism: Reimagining Customer Experiences

The conceptualized idea of the Metaverse has been gaining traction for several years with promises to revolutionize industries - everything from digital workplace gatherings to retail commerce to tourism.

A concept first coined by sci-fi novelist Neal Stephenson in 1992's Snow Crash, the Metaverse is a virtual space that allows users to socialize, explore, and interact as if they were physically present. While the concept ignited the imagination of many, it is only recently that technology has caught up with this groundbreaking vision.

Of the many industries that stand to benefit from this technology, the travel industry is particularly well-positioned - considering the potential to bridge physical distances, create new experiences and ultimately strengthen customer relationships. But the billion-dollar question remains: Is the hype of Metaverse Tourism real?

To answer this question, we’ll examine how brands can use Metaverse to offer enhanced pre-trip experiences, build awareness for their products and services outside of actual trips, and increase operational efficiency.

Current Growth Trends of Metaverse Tourism

Interest in the metaverse market from travel brands is responding in step with the growth of the technology itself. Recent reports show the market growing at a strong 26.01% CAGR, with many experts predicting that by 2026, the market will witness an incremental growth of USD $188.24 billion.

North America's tourism industry stands out in adopting metaverse technology, with a remarkable 37% global market share. This growth can be attributed to various reasons, including increased investments in Augmented Reality technology, consumers' increasing adoption of advanced applications, and extensive research to enhance the scope of metaverse applications.

As a result, we will witness significant changes in the travel industry in the coming years, with many new experiences and opportunities becoming available to travellers. This trend is expected to significantly benefit both travelers and the tourism industry, paving the way for a more immersive and interactive travel experience.

How Can Brands Utilize the Metaverse?

The metaverse application for travel brands and businesses can be divided into five main areas: marketing campaigns, loyalty programs, engagement strategies, brand awareness initiatives, and operational efficiency.

1. Marketing Campaigns:

The Metaverse provides an opportunity for travel brands and businesses to build powerful campaigns that engage their customers in ways unimaginable previously. This includes digital events, immersive marketing experiences, virtual tours of destinations, and online promotions to reach new prospects outside of the physical realm.

For example, Millennium Hotels and Resorts has created an interactive virtual tour within the metaverse environment Denectraland that allows its customers to explore the intricate details each of their properties has to offer. They hope to engage with potential customers, generating interest and building brand awareness.

2. Loyalty Programs:

Travel brands can use the metaverse to develop loyalty programs that innovatively reward guests for their patronage. This includes discounts on trips, access to exclusive events, virtual tours of destinations, or redeemable points for rewards.

Companies like Disney are at the forefront of this trend, recently hiring Mike White as Disney's senior vice president for Next Generation Storytelling and Consumer Experiences - a role overseeing how Disney connects their in-person resort experiences to online environments and experiences.

Carnival Cruise Line is entering the metaverse by launching its NFTs, entertainment, online marketplace, and retail store services featuring virtual goods. It will also provide travel agency services to enable customers to book their reservations in virtual environments. The company is looking to make a mark in this new digital realm by providing unique experiences for its customers.

4. Brand Awareness Initiatives:

The Metaverse offers a unique platform for travel brands and businesses to build their brand presence in the digital realm.

The opportunities can include creating a digital twin of a hotel/resort in the metaverse that allow for virtual tours, digital marketing, and...