Metaverse research propositions: Online intermediaries

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:

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.