In a move that separates it from the pack and provides a further signal that cryptocurrencies are moving mainstream, earlier this month, luxury hotel chain The Kessler Collection announced that it would begin accepting cryptocurrencies at eight of its high-end boutique hotels. While such a move might seem like little more than a publicity stunt, PYMNTS spoke with The Kessler Collection CFO Fravy Collazo and found that the benefits go far beyond a bit of good press. In fact, he said, there are several business-level advantages to adding crypto as a payment channel at their properties.
Each of the eight corporate-owned hotels in the collection will take bitcoin, Dogecoin, Ethereum and four stablecoins, among other tokens, effective immediately. Kessler-owned properties include JW Marriott Savannah Plant Riverside District, Mansion on Forsyth Park, Grand Bohemian Greenville (future property), Grand Bohemian Hotel Charlotte, Grand Bohemian Hotel Asheville, Elliot Park Hotel, Casa Monica Resort & Spa and Beaver Creek Lodge. Each property will provide an emailed invoice that will let guests make payments from their digital currency wallets using BitPay. Clients will have the capacity to make payments through DOGE, ETH, BCH and BTC, in addition to PAX, GUSD, BUSD and USDC.
While The Kessler Collection hotels that will accept cryptocurrencies are all based in the U.S., the company’s clients come from all over the world. Enabling crypto takes advantage of the universal, global nature of cryptocurrencies, noted Collazo. People are able to pay using the cryptocurrency in their digital wallets without having to worry about conversion rates or bank fees assessed on foreign transactions.
“Obviously we do cater to a lot of international clients, and there is no other universal currency out there,” he said. “You can’t use U.S. dollars everywhere in the world. You can’t use euros or really any currency anywhere in the world. Crypto is that universal currency. And we see that space just continuing to grow, especially as the larger institutional companies like Tesla and Square start to pick that up.”
As The Kessler Collection is the first major vacation-oriented operator to accept crypto, Collazo expects that customers will welcome the chance to use their digital wallets to pay for their getaways. It opens another avenue – and a fairly mainstream one, at that – that adds value to digital currencies beyond simple speculation. That happened in the sports world earlier this month, as the Dallas Mavericks basketball team announced that they would begin accepting Dogecoin.
Just as cryptocurrencies save clients’ money by eliminating foreign transaction fees, The Kessler Collection benefits from lower fees as well. BitPay, the processor with which the hotel group has partnered to handle the crypto payments, simply charges less to process payments than traditional credit card companies – a fact that Collazo hopes will drive down processing fees.
“I’m hoping that more and more companies start doing what we’re doing, because just from a competitive standpoint, credit card fees will have to come down, because right now you don’t have an option,” he explained. “You have Mastercard, Visa, Amex and a few of the other really small guys, and you’re stuck paying your average of 2.5-2.6 percent. If I’m transacting with crypto at 1 percent, let’s think about how much better I am than that. And so I think that will help in the long term to squeeze those interchange fees down.”
Collazo also pointed to the fact that accepting crypto payments eliminates chargebacks, which subsequently helps from a cash flow perspective. On top of that, incoming payments are much faster than with credit cards. Traditional credit card payments can take up to six days to process, he noted, while crypto transactions pay out within 24 hours.
And what about the volatility of cryptocurrencies? Bitcoin alone has gone from closing at 29,374.15 on Jan. 1 of this year to 59,267.43 on March 15.
Collazo noted that using BitPay as a processor has him covered. He simply has them deposit all crypto transactions into the company’s bank account as U.S. dollars. That allows The Kessler Group to accept cryptocurrencies without actually holding any of the wildly volatile tokens. As the crypto market continues to mature, he can then shift the payouts to include a mix of cash and crypto if he sees more stability in the market. He believes such flexibility will eventually draw others to the world of crypto payments.
“Other companies might not be ready to hold cryptocurrency because of its volatility,” Collazo explained. “But as long as you are able to shelter your risk – and have that risk burdened by BitPay – it will be a huge attractor to others trying to get into this space.”
Collazo is based in Orlando, Florida, home to a serious collection of amusement parks. He visits those parks regularly to see how people are spending their money – and that certainly isn’t through the quickly aging method of cash, which isn’t accepted at any of the major venues. Instead, Collazo sees cryptocurrencies rapidly moving mainstream, with the ability to use them no more complicated than current tap-to-pay smartphone methods.
“It’s an evolution,” he said. “I think within a year or so, it’ll be common that people are using these methods to pay. It won’t be much different than how it took people a few years to get comfortable using Venmo or Zelle to pay interchange dollars. It’s just like anything else – it takes a little while. Once people start getting comfortable with it – and again, with major institutions getting in on it – I think it’s just going to continue to grow.”