Bad Systems Will Cause you to Lose Sight of Customers Best Interest - Travel/Hospitality Edition

**SPEAKER_2** (0:03)
The Bliss Business Podcast, the show about empathy, connection and consciousness in business. Today's episode is brought to you by Zero Company, your paid search, social media, and programmatic ad experts.

**Stephen Sakach** (0:17)
Hello and welcome back to the show. We are once again diving into scandal today. When business systems go bad, the last scandal edition we covered the health care industry today. We jump into the travel and hospitality sector, which a lot of us can relate to. Maybe you're even listening to this now. Well, your flight is overbooked and they're trying to get people to not fly. I'm Stephen Sakach here once again with Tullio Siragusa and Ash Maher. Hey guys.

**Tullio Siragusa** (0:49)
Yes. Let's do it. Let's do it.

**Stephen Sakach** (0:51)
Let's get into it.
Hello. We're diving into scandals and systems gone sideways in order to spot trends on where these systems broke down, and we're also looking at the solutions some of the companies took after the scandal, which are often really forcing them into this somewhat of a conscious capitalism approach. Yes, they may go kicking and screaming into the night during this process, which brings us to our first scandal today, where United Airlines dragged the doctor off a flight because they overbooked. We're going to talk about that. Then we're going to touch on Airbnb and then look at the cruise industry. Let's get into the airline overbooking policies. A little background here on this case I just mentioned. So in 2017, it was a normal United Airlines flight from Chicago to Louisville that turned into a nightmare for Dr. David Dow. The flight was overbooked. Common practice in the airline industry where more tickets are sold than seats are available, United wanted to make room for crew members who needed to get to another flight. And when not enough volunteers came forward to give up their seats, then they resorted to involuntary removals. Dr. Dow was one of the passengers selected to leave the flight and he refused saying he needed to see his patients the next day. What happened next went viral. Security came in, officers forcibly removed him from his seat. The video footage of this showed him being dragged down the aisle, bloodied and distressed. And the video spread all over the world sparking kind of massive public outcry and raising some serious questions about airline policies and passenger rights. And the incident not only led to, rightfully, a PR disaster for United, but highlighted the significant flaws in the system. So let's jump into why airlines overbook flights in the first place and how this inherently flawed system can lead to such extreme solutions. Ash, why do airlines overbook as a practice? What's the reasons here?

**Ash Maher** (3:05)
Well, if the audience guessed it, it's always the main culprit, it's always the maximizing profits, right? Minimizing losses, maximizing profits, profit first model.
So the reason why this ended up happening, typically airlines are trying to avoid the amount of no-shows that come up. And this was a pattern that they've caught on to. They're like, okay, we have a certain amount of no-shows, they have predictive modeling now, we're able to track this data of predicting how many people are typically going to no-show. And they have this system in place where they overbook to counterbalance the no-shows. And typically, this has worked for them. Emphasis on the word typically, right? Until 2017 came to light showing that this is not a model that is effective, especially when you're caring about the satisfaction and the experience of your customers. So unfortunately, Dr. Dow was one of the victims of this scenario where they were overbooked and the typical scenario did not occur. In this scenario, everybody was there and they started to involuntarily pull people out. The part that's mind-boggling about this whole thing is that they were so focused on what the industry standard was, the status quo, which is all the airlines do this, so you as a customer have to understand. Because this is the standard. So get either hop on the wagon or get off, right? And that's essentially what was the situation, which thankfully today they were able to, or at the time, they were able to record it. Thank God for social media, and it was able to bring this to light, and the industry was able to make an adjustment to that. But it all came back to try to maximize those profits.

**Stephen Sakach** (4:33)
Yeah, I can see. Okay, you got all these different flights come in, and all these different people coming to go, and some are late, some don't arrive. And then there's those, of course, just some people who just don't show up to the airport and miss their flight. So there's that. But there's the other side on here is, hey, a reservation should be a reservation, right? You can take the reservation, but you can't keep it.