Mark Jacob is the Managing Director of the 175-bedroom Dolder Grand Hotel in Zurich, Switzerland and has been involved in the hospitality industry ever since he was a boy at his parents’ hotel in St Moritz.
Earlier this year, the Dolder Grand became the first luxury hotel in Switzerland to permanently accept Bitcoin as payment. In this interview, Jacob explains why they took that decision and what he feels the benefits have been.
Click.: How would you describe Bitcoin to someone who doesn’t know?
Jacob: It’s a decentralised payment system away from central banks, based on digital technology. It’s like a virtual wallet that you can have in an app on your smartphone. It works as easily as a credit card and you can pay peer-to-peer or to a business.
Click.: Why did the Dolder Grand decide to support the cryptocurrency and what was your reasoning behind it?
Jacob: We have two blockchain and crypto hubs near to us, one in Zug and one here in Zurich. These communities remind me of Silicon Valley 30 years back when everything started in garages. Nowadays, they’re not in garages but they have the same can-do attitude and the sense that anything is possible. Since they’re so close to us we thought it was a great idea to become part of that environment, and also to offer them an opportunity to apply the solutions they’d developed.
We don’t want to replace credit card payments and I don’t see Bitcoin as competition to that. We weren’t the first Swiss hotel to accept crypto payments, but that hotel gave up after six months, whereas we have an average at the moment of one payment in cryptocurrency every other day. We wanted to be part of that ecosystem and to tap into a new network of startups.
Click.: How easy was it to integrate as a payment method? Was it an easy or difficult process?
Jacob: The technological part was quite easy. I think it’s a matter of having the right partners on board. We found people in the start-up community who we trust and who wanted to work with us towards the same goal. That was the key element, finding the right people. There was no solution out there that had a proven track record, so we found partners who wanted to develop it with us. One did the application, payment and user interface and another did the transactions and conversions.
Everything took place within about six weeks…all the required hardware was installed, the internal processes were put in place and it was all seamlessly integrated so people could pay at any profit centre within the hotel and not at just, say, the reception desk. It all worked quite flawlessly from the beginning.
Click.: What are the pros and cons of accepting Bitcoin?
Jacob: I don’t see any cons, really. Perhaps there’s a risk of fluctuating exchange rates that you can see with cryptocurrencies, but to hedge that we have another company on board to convert directly into dollars, euros and Swiss francs. We have a window of about 45 minutes to guarantee the exchange rate so the price marked in francs for a bottle of wine on our menu, for example, is exactly what we receive. So, we have zero risk when it comes to losing on the exchange rate.
The pros are that it’s an additional service and added value for guests. And internally it’s another element for us to embrace digitalisation. It’s a very easy payment form. It’s brought us new sales leads, new marketing opportunities and new visibility.
Click.: What has the response been?
Jacob: We’re a classic hotel that’s been around a long time, so not a lot of people expected us to be first movers. That created a lot of positive impact. The whole cryptocurrency world is one you don’t know or hear about until you become part of it…so it’s opened up new business opportunities as well.
Click.: What would your advice be to other hotels thinking about accepting Bitcoin?
Jacob: You need to see cryptocurrencies within the bigger picture, not just in terms of transactions. The value is through the partnerships and the new networks you’re able to tap into.
- Cryptocurrencies aren’t going to replace credit cards – it’s an additional service for guests
- The value from them is through the partnerships they bring and the networks hotels can tap into
- Accepting cryptocurrencies can bring new sales leads, marketing opportunities and visibility
- A classic hotel adopting cutting-edge payment technology can create a positive impact, steering away from a fuddy-duddy image