My uncle in Europe often comments when he visits the US that there just are too many choices at the restaurant. Not only does he have pages of options to consider, but then he has to decide which dressing he wants on his salad, which preparation of potato he would like, what side dishes he prefers from a list of 6-8 different options and whether he wants is meat selection grilled, sautéed, roasted, etc.
While there isn't anything wrong with having choices, when does it become too much?
Alvin Toffler introduced us to this concept with his 1970 novel FUTURESHOCK. He noted that as "choice turns to ‘over choice’, freedom of more choices ironically becomes the opposite—the 'unfreedom' ".
Research proves that when we're faced with an abundance of choices, it's much more difficult to make a decision. Scientists have set out to prove the theory behind an idea called "choice overload." According to author Barry Schwartz, the hypothesis behind “choice overload” is that too many options results in one of two outcomes: Either we fail to make any choice at all because we get overwhelmed, or we end up unhappy with our decision because we suspect we could have made a better one.
In the hospitality sector, we offer a lot of choices with each product or service but sometimes I wonder, is too much choice actually hurting our sales?
Not to disparage pricing variation or offering multiple room types. The science of revenue management has clearly increased our sales results in a very positive way and we all agree that not everyone wants the same room configuration. But, while we've been able to manage inventories and maximize revenues in ways we couldn't even imagine a generation ago, I wonder whether our willingness to distribute via more and more channels combined with their approach of controlling pricing and availability hasn’t actually created an environment that confuses our customers and ultimately hurts hotel sales.
In "The Art of Choosing", by Sheena Iyengar, the author describes an experiment she did as a PhD candidate at Stanford in an upscale grocery store. “We put out either six different flavors of jam or 24 flavors and we looked at two very simple things. The first was whether shoppers would stop, look and sample the jam; second was how likely people were to buy a jar of jam."
The results of this experiment made me think immediately of the hotel distribution environment. When there were 24 flavors of jam presented 60% of the people stopped and tasted the samples; only 40% did so when there were six. But when it came to buying only 3% bought a jar of jam when 24 options were presented as opposed to 30% when choosing between six.
I correlate this in the hotel environment to the look-to-book problems we have and wonder whether this increase in choices that we offer our clients is the reason the ratios have skyrocketed in a way that makes us cringe. Are we ourselves creating the shopping monster? After all, more shopping means more likelihood of bringing some systems to their knees. We’re talking the difference between 1.8% vs. 12% conversion.
I'm certainly not advocating going back to the old way of pricing or offering several room types…but I do think there is a lot of value in heeding the advice of an old phrase, commonly quoted in my younger years.
K-I-S-S! Keep It Simple, Stupid!
Would simplifying our rate structures help or hurt?
Perhaps we should be looking for a new and evolutionary approach.
Evelyne Oreskovich is Founder and President of Hospitality Evolution Resources, LLC. With more than three decades of accomplishments in the global Hospitality industry, Evelyne’s diverse experience with reservations and distribution systems; sales and marketing management; project management; and strategic planning coupled with her understanding of North American, European and Asian markets and cultures fosters an environment of positivity and collaboration that effectively bridges the gaps between Management, Operations, Technology, and Sales & Marketing.
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