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Abstract

One of the sectors with the fastest growth rates worldwide is the hospitality and tourism industry, although the pandemic caused losses and setbacks for the industry. The potential of the metaverse and virtual travel could lead to the emergence of a brand-new sector. Thus, traditional online travel agencies may need to change their utility model in the future to accommodate the new technology. This virtual transformation in the metaverse entails more flexible travel options, customized consumer services, and improved entertainment. The employment of augmented and virtual reality technology in the metaverse may enable seamless interaction between users in real and simulated surroundings. As such future developments in metaverse technology may enable fully immersive experiences. Customers can now get real-time price changes, availability, and promotions bypassing third-party distribution platforms. This research note aims to introduce the metaverse’s enormous potential and to define three research proposals for additional investigation.

Keywords

Metaverse online travel agencies blockchain virtual reality hospitality tourism

Introduction

Let us begin with a thought-provoking query: will online travel agencies (OTAs) still be in the traditional sense in the future?

Since online travel agencies emerged, we have experienced steady transformation in the hospitality and tourism sector over the years, placing OTAs constantly at the forefront of consumer wants. Lately, a revived starting point of this vision was the formation of blockchain technology, where some OTAs were working to reinvent their traditional operation by building new innovative platforms. Several authors (see, Treiblmaier, 2020; Filimonau and Naumova, 2020; Ampountolas and Chiffer, 2022) initially considered that the hospitality and tourism sector have new prospects expecting blockchain technology to offer consumers and online travel agencies a reliable platform. Similarly, this newly proposed metaverse transformation is an integrated, immersive ecosystem in which participants can seamlessly migrate between the virtual and physical environment, interacting and socializing through simulated shared experiences (Meta.com, 2022). The metaverse might envision a new travel world that does not require intermediaries, that is., online travel agencies, allowing hotels and related stakeholders several options while using a network of digital spaces based on virtual and augmented reality to facilitate direct social interaction with the consumer to the final booking stage.

The metaverse hype is already transforming hospitality and travel companies, creating future business directions. TUI Group is offering a metaverse experience pioneering this virtual world with some of their hotels in AltSpace (RIU Hotels & Resorts), introducing innovative solutions that merge real features and digital amusement (TUI Group, 2022). Although TUI is not precisely an online travel agent because they own hotels and airlines, it provides a roadmap for the future by capitalizing on immersive technologies. However, promoting the metaverse as a revolutionary force that will positively impact people’s employment, leisure, and social exchanges can be challenging. Similarly, Millennium Hotels & Resorts introduced M Social Decentraland, earning it the first hospitality organization in the world to manage a hotel in the metaverse (MullenLowegroup.com, 2022). It is promoted as a social hub for customers eager to experience new adventures and meet people who share similar interests. Customers can engage with an avatar who greets and leads them on a discovery-based tour around the hotel. Once a customer reaches the top of Decentraland and posts a snapshot of their avatar with a specific hashtag on social media, a hotel gift is earned. Also, airlines are investigating their opportunities in the metaverse. Emirates recently declared its goal to introduce NFTs and engaging metaverse services for its customers and employees (Emirates, 2022).

Theoretically, a world without OTA’s is still possible in the future—or altered the OTA purpose by a variety of operations. In this context, the metaverse, where the physical and digital spheres intersect, might become the next travel advancement. Despite this, is metaverse just a new hype similar to blockchain, or is there a high earnings potential behind it? How will the metaverse affect the dynamics of the online travel agencies business model?

The first occurrence of the word metaverse was observed in 1992 when Neal Stephenson, in his novel “Snow Crash,” imagined an alternative virtual-reality-based successor to the Internet where people were trying to escape from the physical world by adopting digital avatars (Stephenson, 1992). This idea is reflected in the meaning of the name where Meta stands for Transcending, and Verse comes from Universe. Since the origins of this concept, the metaverse has evolved, taking more defined characteristics as an integrated and immersive ecosystem encompassing virtual reality, blockchain technology, and avatars, all parts of a new way to combine the real and virtual worlds (Wei, 2022). The metaverse can be thought of as an alternate dimension where people can interact, work, and enjoy.

To this point, researchers have begun to study the multiple ramifications of an operational immersive metaverse in the hospitality and tourism industry, where users might easily engage across various networks between the virtual and physical worlds (Buhalis et al., 2022; Dwivedi et al., 2022). For example, Buhalis et al. (2022) point out that introducing a metaverse in hospitality will lead to a dynamic transformation of the hospitality ecosystem, resulting in a complete reengineering of the business processes at the operational and strategic hospitality management level. However, applications for online travel agencies are limited. Therefore, the existing literature is based on the theoretical perspective of future research and its transformative effect on many aspects of the metaverse from social and institutional perspectives. This might be because of the novelty of the subject and the challenges to understanding how this new environment can work due to the fact that hospitality is made of tangible and intangible experiences (Kandampully et al., 2022) that cannot be separated to ensure the entire customer experience.

For instance, the metaverse customers can then only virtually experience intangible elements. For this reason, the metaverse cannot be considered a satisfactory replacement for human interaction but rather a tool to enhance the physical experience using the constantly newly developed Virtual Reality (VR) applications. According to a recent study by Booking.com, which employed 24,179 respondents, the metaverse will impact travel in 2023 (Booking.com, 2022). Nearly half of all respondents accepted virtual reality and the metaverse as tools to help them make travel-related decisions. Further, almost a quarter of the respondents indicated they would like to virtually explore a destination before actually deciding to visit the area physically. A further 35% are willing to spend more time in the metaverse getting acquainted with it to make better decisions. However, an impressive 60% of poll respondents asserted that the virtual experience is incomparable to the real-world experience in their area.

Therefore, contrary to the enthusiastic interest of practitioners, most academic communities have been slow to adopt the metaverse and explore its possible ramifications. This research note presents a diverse narrative on the numerous opportunities, difficulties, and constraints that might be faced by organizations, consumers, and entities in general. Moreover, we are trying to identify prospects for transformation on the metaverse’s influence by suggesting a high-level study agenda for the future while acknowledging the originality of the academic discussions on the metaverse.

Metaverse economic impact on the hotel intermediary’s sector

The nature of the metaverse brings many new possibilities. Online travel agencies can use the metaverse to enhance innovation, take advantage of exciting new prospects, and adapt to a constantly evolving travel environment. The experience economy’s services offered by OTAs could extend into the metaverse to enhance consumer perception and promote bookings. The OTAs can create brand-new scenarios for how customers experience travel. There is immense potential for implementation.

OTA might promote a new loyalty program by inviting customers to participate in activities leading to special awards or exclusive offers in a metaverse environment. On the other hand, hotels might benefit from promoting customer experiences by employing the metaverse as a full-service environment for customers to cover every aspect of their travel experiences, starting from booking leisure facilities, such as accommodation, to taking care of entire reservation logistic concerns.

A potential metaverse implementation might be a tool for revenue management objectives, such as becoming an essential element for hotel marketing campaigns where customers might experience the availability of transportation services, accommodation upscales, and various virtual concierge services for purchasing a vast number of services, such as city tours, or theater tickets. The adoption of virtual reality can also be applied to the restaurant business, where consumers can virtually explore the restaurant venue, observe the preparation of the meals in the kitchen, and browse the menu even with a 3D representation of the dishes.

Metaverse is the next hype moment for the hospitality and tourism industry. It offers the industry a rare opportunity to bypass online travel agencies and extend its services to the virtual environment, enhancing its footprint and contacting prospective customers previously out of reach while potentially increasing revenue. However, at this stage, in practical terms, it is premature to predict any kind of massive impact of the metaverse because although it might help hotels increase direct bookings, hotel companies still need to estimate the potential costs associated with building a complete metaverse hotel environment.

Future research propositions

Even though scholarly research on metaverse related to OTAs platforms is scant, metaverse adoption has recently begun to show some initial growth. This research note aims to set the stage for future study by posing three propositions on adopting metaverse on their online travel agencies’ platforms. The following suggestions:

Proposition 1

Cutting-edge technologies like augmented reality (AR) and virtual technology (VR) created a new world where the virtual and real-world merges. In the future, customers might be able to interact, transact, and make purchases by embracing a single, all-encompassing ecosystem and virtual economy. Customers may explore and engage with the places and resorts they have always wanted to visit. Customers will purchase using a peer-to-peer app within the metaverse environment. On the other hand, virtual or augmented reality are no longer novelties. The COVID-19 outbreak has fueled the need for virtual proximity despite physical separation. However, to make virtual technology more widely used, it needs to be enhanced in areas like mobility, resolution, responsiveness, and field of view. Hence, the question arises: Why would hotels invest an unpredictable amount at the moment to establish a presence in the metaverse? There are reasons against it—for example, the highly complex infrastructure, problems with sustainability, or regulatory uncertainties.

Research question 1

Emerging technologies will lead to an interactive exploration of places and resorts. Is metaverse the future of online travel agencies (OTA’s)?

Proposition 2

Both professionals and academic scholars acknowledge that adopting blockchain might increase the effectiveness and reliability of the OTA business cycle. On the other hand, a significant contribution of blockchain to the hospitality and tourism industry will have a detrimental impact on the intermediaries, enabling direct customer communication with hotels and tour operators in the airline and hospitality sectors. Therefore, blockchain technology might work well with various hospitality and tourism service procedures, including services for the airline, the development of specialized tourism, events, and tour operating tourism. However, although many blockchain advocates like Booking Holdings, Expedia, TUI Group, and Marriott made substantial steps with blockchain, broad reservations about this technology still prevail (Higginson et al., 2019). Theoretical and practical propositions are required to respond to the many open questions: a) Is blockchain currently implemented in online travel agencies' platforms, and can it be scaled to an extent? How do we manage computer-based smart contracts? What are the actual risks, and who is responsible for handling them? This technological advancement of blockchain might directly impact the future growth and evolution of the metaverse. The idea of property and related rights within the metaverse has still to be thoroughly addressed. Therefore, future research topics might examine the fusion of blockchain and metaverse at OTAs.

Research question 2

How can we combine blockchain technology with the metaverse so that we can establish a viable alternative to the traditional OTA platform?

Proposition 3

In light of the metaverse evolution, let us consider that online travel intermediaries will continue to play a significant role in the future. Even on this assumption, we expect the OTAs market to alter. Major operators, such as Booking, Expedia, and TUI, to name a few, invest substantial funds in blockchain and metaverse technology while introducing innovative solutions that combine reality and digital recreation (TUI Group, 2022). The advancement of blockchain technology itself might be the underlying mechanism playing the role of aggregator that captures the promotion impact of technological progress to the metaverse. Thus, a hospitality and tourism industry without intermediaries like the OTAs would be revolutionary. Metaverse, as an immersive technology, provides significant potential to eventually serve as the foundation for both consumers' and brands' digital presence. Probably, metaverse technologies might eliminate the need for online intermediaries; however, there continue to be numerous unaddressed questions concerning how the hospitality and tourism industry might develop together with metaverse and change over time. For example, how will consumers assess and perceive, for instance, the quality of the services provided, and the level of personal attention they receive, although the use of blockchain might support using smart contracts for their privacy and security, as well as other significant metaverse concerns?

Research question 3

How will metaverse transform if implemented and in which way the OTA operation?

Conclusions

Whether the metaverse will come in the OTAs, when it comes, and in what form is difficult to be predicted. A Booking.com report indicates that the metaverse will already be influential in vacation planning during the following year. It seems that the potential of the metaverse ecosystem is endless. Simultaneously, it presents significant potential and challenges for the hospitality and tourism industries because of the highly complex infrastructure and related costs. Tourism and hospitality businesses might gradually employ the metaverse to develop hybrid virtual and authentic experiences such as TUI Group or Millennium Hotels, allowing customers to interact with them and other tourists before, during, and after their visit. Various research opportunities might also occur for adopting and operationalizing the metaverse. Eventually, as with any trend, one should not overestimate it in the near and not underestimate it in the long run.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Apostolos Ampountolas

Author biographies

Apostolos Ampountolas, PhD, holds a PhD in Management from the University of Exeter, UK. Prior to joining academia, he enjoyed an 18-year successful international career in travel and hospitality and provided consulting services to the industry sector. He supported European hospitality firms specializing in pricing optimization models and revenue performance. His research focuses on hospitality finance and data analytics, including pricing optimization, consumer behavior, risk management, forecasting model analyses, financial analysis of companies' performance, investment markets volatility, and high--dimensional big data analyses using machine learning techniques and consumer choice models. He is an active member of the International Institute of Forecasters (IIF), the Association of Accountants and Financial Professionals in Business (IMA), and the INFORMS Revenue Management and Pricing Section.

Dr. Giuseppina Menconi holds a PhD in Computational Chemistry from the University of Durham (UK), followed by a Post-Doctoral Research position at University College London and a Degree in Mathematics from the University of Piemonte Orientale in Italy. She obtained a Post Graduate Certificate in Higher Education from the University of Derby, and her dissertation became the subject of her TEDx talk, which she presented in Lucerne in 2015. During her PhD, she published several articles in peer-reviewed journals, and currently, she works at Cesar Ritz Colleges Switzerland, where she teaches several scientific and quantitative courses. Before joining Cesar Ritz Colleges, she worked in investment banking in London for several years.

Gareth Shaw is a Professor of Retail and Tourism Management at the University of Exeter Business School. He was formerly a Professor of Human Geography at Exeter and has a BA and PhD in Human Geography. Professor Shaw has worked on numerous research projects related to retail and tourism development, all of which have been funded by major grant-awarding bodies. In the past 5 years, he has completed an ESRC project on innovation in the hotel industry and an ESRC follow-on project on Sustainable Travel and Social Marketing. In addition, he has written widely about tourism and produced key texts on tourism studies. Professor Shaw has acted as a consultant for many local, national, and international organizations; these include UNESCO, American Express, Coca-Cola and Amoco Oil, Visit England, and South West Tourism. He is an elected member of the Tourism Research Centre at Modul University, Vienna, and the International Academy of Tourism. In addition, he was also an Innovation Fellow at the Advanced Institute of Management and a currently a member of the Innovation Caucus, which is an initiative funded jointly by Innovate UK and the ESRC. He was the Chair of the EU COST Action on Tourism, Wellbeing and Ecosystem Services (2012–2017) and also the Leader of Theme 5 on the EU Smartline project, which involves the development of SMEs and e-Health in the Cornish economy (2017–2020).

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