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Hotel Tokenization Explained
2 Min Read
Total Words: 248
Alberto Marchi
Community Engagement Manager
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- Published on December 2, 2022
- Location: USA
Tokenization is the next big opportunity in the hospitality industry. If you aren’t familiar with it, don’t worry: we are here to explain what tokenization of physical assets is and how it works.
Tokenization is the process of transforming owner of an asset digital format which is then represented by a token. In real estate tokenization, the ownership of the real estate asset is digitized, which allows for digital ownership and transfer. The token is similar to a share of a company. These digital tokens are used to represent the ownership of a real-world asset which is recorded on the blockchain. This allows real estate owners to trade, store, and transfer shares of their properties in the digital world.
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The main advantage of using tokens instead of shares is that tokens can be traded without waiting until the investment reaches maturity. Most private asset investments, like real estate, are generally held for the full term or length of the investment. Many investors have life-changing events over five or ten years and may want to cash in on their investment before the end of the term. Tokenization enables that.
The benefits of hotel tokenization
- 1. Low minimum investment threshold
The amount of investment required to buy a real estate asset is extremely high. However, tokenization can lower the minimum investment needed opening up investment barriers which is a welcome change. This allows any investor to diversify their portfolio and enter previously exclusive markets.
- 2. Unlocking the value of illiquid assets
The traditional illiquid nature of real estate presents a unique challenge for investors. People who are looking to make investments face difficulty in finding high-quality, liquid assets that fit their investment requirements. Tokenization allows the opportunity to trade out of an investment which gives flexibility.
It is an exciting new way to unlock the liquidity of traditionally illiquid assets and make them tradeable on secondary markets. This allows a much larger base of investors to participate in this ecosystem.
- 3. Less administrative burden
Tokenized assets allow faster and more efficient transactions while reducing the administrative burden on all parties involved. Smart contracts streamline many cumbersome manual processes, while clearing and settlement can become simplified and more efficient.
- 4. Real-time traceability and validation
Tokenization allows for improved traceability and transparency by creating an immutable record of ownership. Every transaction is recorded and shared across a distributed ledger or blockchain—a database that records the history of activities performed over an asset. This enables all parties to have the most up-to-date ledger of ownership records and also have a clear view of any changes.
- 5. Global Reach
Tokenization removes physical barriers and geographic or infrastructure boundaries. Working within each country’s regulation, tokenized real estate investments allow investors to create a global portfolio.
Tokenization process flow
- The combined price of all shares must be equal to the value of the real asset
- Digital or blockchain tokens are released for trading in the digital shares
- Individuals can purchase tokens as a share of ownership in a given asset
In conclusion
Hotel tokenization is digital shares of a hotel investment. The benefits of tokenization include a lower minimum investment threshold, unlocking of value, less administrative burden, real-time traceability and validation, and global reach.
If you’re looking to diversify your portfolio and buy hotel-tokenized investments, GreatX is offering an invite-only opportunity. It is a Global Real Estate tokenization company offering GreatX Tokens to open the door to hotel investment. These tokens are backed by the US Treasury Bonds that capital protection. They are structured as modern-day contemporary instruments with an institutional-grade structure.
GreatX Tokens create an opportunity for global investors to fulfill their aspirations of owning a hotel room in world-renowned brands. All this, with risk protection and assured minimum returns.
Disclaimer
This commentary is provided as general information only and is in no way intended as investment advice, investment research, a research report or a recommendation. Any decision to invest or take any other action with respect to the securities discussed in this commentary may involve risks not discussed herein and such decisions should not be based solely on the information contained in this document.
Statements in this communication may include forward-looking information and/or may be based on various assumptions. The forward-looking statements and other views or opinions expressed herein are made as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated and there is no guarantee that any particular outcome will come to pass. The statements made herein are subject to change at any time. GreatX disclaims any obligation to update or revise any statements or views expressed herein.
In considering any performance information included in this commentary, it should be noted that past performance is not a guarantee of future results and there can be no assurance that future results will be realized. Some or all of the information provided herein may be or be based on statements of opinion. In addition, certain information provided herein may be based on third-party sources, which information, although believed to be accurate, has not been independently verified. GreatX and/or certain of its affiliates and/or clients hold and may, in the future, hold a financial interest in securities that are the same as or substantially similar to the securities discussed in this commentary. No claims are made as to the profitability of such financial interests, now, in the past or in the future and GreatX and/or its clients may sell such financial interests at any time. The information provided herein is not intended to be, nor should it be construed as an offer to sell or a solicitation of any offer to buy any securities. This commentary has not been reviewed or approved by any regulatory authority and has been prepared without regard to the individual financial circumstances or objectives of persons who may receive it. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.
About the Author
Alberto Marchi
Community Engagement Manager
Alberto is an experienced business development and people management professional. He has deep experience in sales and attracting top talent in the recruiting industry. Alberto is a semi-Pro football player, where he brings the strategies of football from the sports field to the office in marketing and team dynamics.
About the Company
GreatX is a new-age wealth creation digital asset backed by the full faith and safety of U.S Treasury Bonds. These digital tokens are revolutionizing legacy products with modern instruments to open global avenues, especially for investors across the globe who are interested in investing in the U.S. GreatX enables global investors to own real estate in the U.S and earn guaranteed returns, assured security, and unmatched benefits. GreatX are smart securities democratizing wealth through decentralization and opening the gates of opportunity to a global audience.
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