How metaverse tourism can drive up physical tourism dollars

Lately, the conversation of the metaverse has been hot. The new world has allowed for new space to be created letting us live both virtually and physically. This has seen brands from a range of industries such as Armani Beauty, Nike and SCMP enter the metaverse world to connect with their targeted consumers. In Singapore, we also saw a metaverse wedding when the CEO of Bandwagon partnered up with The Alkaff Mansion in Singapore to hold a virtual celebration.

The tourism industry, which probably was the hardest hit during the pandemic, is also now safeguarding themselves from another such major lockdown by trying to have a go at the metarverse. Certain tourism bodies such as South Korea and Indonesia have already begun their investment in the space.

The opportunities

Prakash Somosundram, co-founder and CEO of Enjinstarter, explained that beyond simply enabling the creation of a virtual Bali or Seoul, the metaverse is part of a larger shift towards community-first thinking. Through the metaverse and other Web3 components like NFTs, a tourism body can engage people across the world, regardless of whether they intend to travel to the country or not.

"The idea that a person must travel to a country to experience it is becoming more obsolete by the day," he said. 

Somosundram explained that another reason for tourism to go into the metaverse is to speak authentically to younger audiences, who may not yet be able to travel on their own. Engaging these younger audiences sets the stage for a long-term tourism relationship.

The obvious opportunity that the metaverse tourism presents is access. Travel costs are rising and pandemic-related restrictions are still impacting travel plans. The metaverse offers a means to experience the best a country has to offer without needing to leave home.

"At the same time, metaverse travel can be gamified. Imagine a scenario in which a person wins physical prizes, such as discounted hotel stays by taking part in metaverse tourism activities in advance of a trip," shared Somosundram. Moreover, the metaverse is also an opportunity for community building. It can be difficult for a tourism body to engage with tourists before, during, and after their stay. Metaverse communities, on the contrary, can provide that conduit. This opens up new and exciting possibilities for promotion, feedback, and long-term loyalty building.

Kunal Robert, client services director and in-house metaverse expert of Construct Digital, shares a similar sentiment and adds that South Korea and Indonesia's tourism bodies recognise the value of investing in tourism and want to have a first mover advantage.

"Indonesia has particularly earned a lot of forex from its Bali tourism and they want to think ahead to maintain their dominance," Robert added.

In such an instance the metaverse ensures a true heightened experience of the respective countries can be curated and planted. This allows consumers to get virtual micro experiences of what the country has to offer, raise awareness and interests.

"I think it's brilliant, as there has been instances of both online and offline integrations in the metaverse, and I believe that is the future," said Joshua Chua, CEO of Aiken Digital. He added that the metaverse allows users to experience speed, flying, diving, and so on. These experiences potentially allow tourism to be far more immersive. Additionally, the metaverse has the potential to reach out to a whole new generation such as Roblox, Decentraland, and the sandbox - these successful platforms are targeted to the younger audience.

In this case, the metaverse tourism can reach a whole new generation of audience that will be the next biggest generation of consumers.

Measuring ROI

To measure ROI in purely financial terms would be doing a disservice to metaverse initiatives, said our panel of experts.

Web3 prioritises community over product, and one metric should be the size and activity and level of the community that develops around these initiatives, according to Somosundram.

Tourism bodies investing in this space can measure ROIs by five aspects, Robert elaborated.

1. To measure it by richer insights on user behaviour and preferences, which given the inherently digital nature of the metaverse, tourism bodies can leverage attributes such as immutability and provenance to better understand digital and physical user interactions through on-chain analytics.
2. To track and measure user engagement from interactions to payment transactions across digital touch-points in the metaverse, other digital channels (e.g. app, website, social), and physical interfaces (e.g. pos, kiosks, check-in gates). The following examples are some implementations that can help measure ROI in the metaverse such as creating digital twins of tourist attractions, cities and unique local experiences that allow tourists to better plan their trip or getting an immutable digital token (e.g. NFT) that provides exclusive content before/after the trip which unlocks exclusive access to attractions/experiences in the real world.
3. The ability to make better predictions about footfalls and demand of certain attractions/experiences over others.
4. To test out new experiences in the metaverse before investing in fully developing it in the real world which is somewhat similar to how businesses have adopted digital twin technology under the auspices of industry 4.0.
5. To have a measurement framework in place from the start which is similar to how individuals might have for any other digital activations.

To put it simply, to measure the ROI of metaverse tourism, put the importance on duration of time spent and unique visitors which can be put side by side with programmatic display to see ROI comparisons, Chua added.

Bridging commercial realities

Utilising the metaverse to strengthen storytelling which helps consumers understand the experiences and history behind locations better will also help drive footfall to physical destinations, said our industry players.

Virtual good sales can go hand in hand with ticket sales which brings to life new merchandising opportunities, said Chua. To bridge the gap, ensure that both metaverse and physical tourism plans start at the same time, as well as being extremely clear with who are your audiences and their motivations.

Somosundram added that the key to bridging the gap is to create experiences and adding value that transcend the metaverse. "In other words, metaverse experiences that add value to the physical world and physical experiences that add value to the metaverse. It can't just be one or the other," he said. However, he added that marketers must not fall into the trap of metaverse initiatives that prioritise hype over long-term community building as these companies miss out on a golden opportunity to engage with potential and existing customers.

"Don’t enter the metaverse for the sake of entering the metaverse. Far too many clients fall into that trap. And in the end, their metaverse looks like an abandoned construction," added on Chua who shares a similar view to Somosundram.

Related articles: 

Bali Metatourism enters the metaverse
Indonesia's tourism ministry and Magnus Digital step into the metaverse
Metaverse for marketers: 'Ignoring it now is like ignoring social media 10 years ago'