The Revenue Dilemma: Why Tech Tools Remain on the Shelf

Why is it that sophisticated software, designed to streamline operations and maximize profits, often goes underutilized across various sectors? This question looms large in the hospitality industry, where the benefits of revenue management (RM) systems are well-documented but not widely embraced.

A revealing 2021 Skift study showed that just 28% of hotels use computerized RM, a figure that drops to a mere 10% without the inclusion of Expedia's complimentary RM system. With evidence that RM can enhance revenues by 3 – 7%, the reluctance to adopt such systems is puzzling. The hurdles are manifold: high costs, a shortage of skilled operators, system complexity, a lack of understanding of the systems' advantages, and a general deficit in RM knowledge.

What businesses are searching for are solutions that are easy to use, economically viable, and devoid of unnecessary complexity – a sweet spot that Expedia's system has started to hit.?

This reluctance isn't confined to the hotel sector. The restaurant industry faces similar challenges. I recall a conversation with the General Manager of a thriving eatery, who confessed to only using the logbook features of his expensive BI tool . The tool's myriad of features remained untapped because they required more time and expertise than he had available, highlighting a common scenario: high-end systems are underused because they are overly intricate.

This trend is apparent in restaurant reservation systems, hotel RM software, and broader BI tools. But why does this happen? It seems to be a classic case of feature creep, fueled by Christensen's theory of technological disruptive innovation. Market leaders pile on features to satisfy a small segment of demanding clients, making their products increasingly complex and inaccessible for others. And when these leaders attempt to create 'light' versions, they often fall short, unable to strip back to the essentials and facing internal pushback.

To build products that customers will embrace, one approach companies can use is design thinking. This process starts with empathy for the users, identifying their needs, and systematically addressing them.

To illustrate the power of design thinking, consider how Airbnb transformed their user experience. Initially, Airbnb struggled to gain the trust of potential customers. To address this, they applied design thinking as follows:

1. Empathize: Airbnb’s team immersed themselves in the user experience, staying in host homes and interviewing both hosts and guests to understand the trust barriers that hindered bookings.
2. Define: They identified the core problem as a lack of trust between strangers. Users needed reassurance about the safety and reliability of staying in or hosting with someone they hadn't met.
3. Ideate: The team brainstormed ways to build trust. Ideas ranged from improved profiles to a more robust review system.
4. Prototype: They prototyped new features like verified photos, more personal profiles, and a sophisticated review system that included both hosts and guests.
5. Test: Airbnb tested these changes, gathering feedback from users to further refine their approach. The new features were iteratively improved upon based on real-world usage and feedback.

Through this process, Airbnb redesigned their platform to include verified photos to ensure listings looked as advertised, creating a sense of reliability. They redesigned profiles to highlight mutual friends and shared interests, which helped to humanize hosts and guests. The review system became a central feature, allowing both hosts and guests to build reputations within the community.

By closely understanding and addressing the user need for trust, Airbnb was able to drastically increase bookings and establish themselves as a trusted leader in the sharing economy.

Similarly, companies looking to improve RM software adoption should engage in such empathetic and user-focused innovation. There's a substantial opportunity for technologies that prioritize user-friendliness and align with the actual needs of businesses, thereby unlocking the untapped potential of RM tools.

It's disheartening to see the vast potential of RM software and similar tools left on the table because they don't align with the users' needs. With a shift towards design thinking and user-centric development, there's a significant opportunity for technologies that not only enhance profitability but are also intuitive and enjoyable to use.

In light of these reflections, I’m eager to hear about your own encounters with technological hurdles or success stories in integrating revenue management tools. Sharing our experiences can pave the way for more intuitive and accessible solutions. Let's collaborate to bring these tools off the shelf and into everyday use, enhancing usability for everyone's benefit. Your insights could be the catalyst for change that makes these powerful tools a practical asset for all involved. Join the conversation and let's make technology work for us, not against us!