Five-star hotel accepts bitcoin and ethereum in bid to woo luxury ‘clients of the future’, but is it just a gimmick?
- The move by the Chedi Andermatt in the Swiss Alps is an attempt to appeal to a new, younger and tech-savvy breed of wealthy tourist
- Some experts praise the hotel for giving customers more ways to pay, while others see the decision as just being good for marketing purposes
It is not the first, but a hotel in the Swiss Alps has just become arguably the most luxurious at which guests may use digital currencies to pay for their stay.
“As the digital age continues to grow and cryptocurrency rises in demand, we wanted to embrace these advances and integrate them into our hotel operations,” says general manager Jean-Yves Blatt. “We’ve known for a while that digital payment has a future in hospitality and … we wanted to lead the charge. We wanted to ensure customers have the ability to choose how they pay for their stay – traditionally or via cryptocurrency.
“The guests who use this system differ a bit from our usual guests – and, above all, most other Swiss luxury hotel clients. They are younger [in their 30s] and very trend- and technology-conscious. For us, these are the clients of the future.”
The implementation is in partnership with payment service provider Worldline and Bitcoin Suisse. Payments made in cryptocurrency will be converted into Swiss francs as soon as they are confirmed.
As well as showing that the Andermatt hotel – one of two European properties in the luxury Chedi chain, operated by Singapore-based General Hotel Management – is open to new technologies, Blatt says the move offers his customers a choice while ensuring revenues are not subject to volatility.
“There are plenty of benefits for our guests through paying with bitcoin and ethereum such as fast worldwide payments, low transaction costs, as well as a secure and trustworthy method of payment,” Blatt says.
“We do not hold cryptocurrency on our balance sheet, so we do not need to take a position on its intrinsic value as an asset or store of wealth. For us, it is just a medium of exchange that can be easily and instantly converted into fiat. Therefore, the value it adds to our business is really around offering more choice to our customers, and potentially reaching a younger demographic.”
Cryptocurrencies have surged in popularity even as valuations for digital money have swung wildly and their everyday practicality as a payment system has remained challenging. This has not stopped Switzerland from being among the most enthusiastic countries in Europe in embracing them.
“More and more establishments, from governments to retail or even lawyers, are accepting crypto as methods of payment,” says Jolyon Ellwood-Russell, a Hong Kong-based banking and finance lawyer, and partner at Simmons & Simmons.
“The issues associated with that are not new issues or even necessarily unique to crypto – namely, how will I receive it properly and keep it safe [custody]; will it be worth the same after I receive it [volatility]; how much tax do I pay; and can I earn a yield or redeploy it as an earning asset.”
As for downsides in accepting payments in digital currencies, Wong says hotels will need to strengthen their cybersecurity measures to keep their cryptocurrencies safe, and that “these respective technologies are still evolving”.
Time will tell whether this approach benefits the Chedi Andermatt and other early adopters of cryptocurrency payments in the hospitality industry, but Brian Elders, founder and CEO of financial services consulting platform Sors Digital Assets, believes the pros outweigh the cons.
“It’s currently fashionable, so undoubtedly free PR for the hotel, and there’s no downside to giving customers more ways to pay,” Elders says.
“Substantial numbers of people own crypto, so why not let them use it to pay for your services, just the same as a Swiss hotel taking US dollars or euros to facilitate its clients.
“The client is always correct.”