Are rules losing you revenue?

I’ve recently had two experiences with travel service providers that left me frustrated, and lost the service providers revenue, not because I took my business elsewhere, but simply because their rules and operating model did not allow them to capitalize on obvious opportunities.

The first was with a visa processing agency. To cut a very long story short, we submitted a visa application five weeks before travel, for a family wedding, well within the ‘normal’ (pre-COVID) processing timeline of three weeks, not realizing that the new processing time was six weeks. Admittedly that was our mistake, but the agency and/or the embassy for which they were processing did not offer an express service, so we were in a pickle. We were also not the only ones and have heard many a similar story from friends, family, and colleagues. The result was last minute flight bookings being made (four days after the originally planned travel and the day before the wedding), at exorbitant prices, and a lot of stress. Whilst the volume of applications and staffing shortages obviously have an impact, surely the potential revenue from an express service – we would gladly have paid $500 - could offset these? Or maybe agencies and embassy’s need to leverage technology to help them speed up the process, bearing in mind that the application in question was for someone who had previously been issued with the same visa on three previous occasions. Or maybe they just need to start caring about customer experience, a novel concept for many government agencies.

The second was with a full-service carrier airline, one of the best in the world. My wife was travelling from Manila to Singapore on an economy class ticket with restrictions. I tried to get her an upgrade (I’m sweet like that), on the day of travel, but was told that the class of travel did not permit upgrades “in the system”. Whilst I appreciate fare rules and restrictions need to be in place surely there should be some flexibility when a very loyal customer is willing to pay good money. The administrative and operational cost to the airline would probably be less than $100 to move a passenger from economy to business. Considering that I was willing to pay $1000 for the change, the airline effectively lost $900 in pure profit. If your loyalty customers do not wish to avail of the paid upgrade option that the airlines make available, when business class is not full (in this case it ended up being about 20% occupied), then why not have some flexibility in the ‘rules’? Would you then get loads of folks trying to do the same thing on restricted economy class tickets? Maybe, but why not embrace it. 20 passengers paying an average of $1000 each against restricted tickets and you have another $18,000 in pure profit for the flight. Multiply that by 100 flights and you are approaching $180,000 per day. Extrapolate that out to a year and take a only a 50% uptake of the deal and you have $3,285,000 in additional profit. You would of course have to build in some timeline restrictions to cover catering needs but still, it seems logical to me. Or maybe, in this case, technology is the problem. If so the answer is out there.

Airlines need to start breaking free from processes and systems that are over 50 years old, and adopt modern retail practices that will allow them to be more flexible, adopt modern business models and put the customer at the center.