Cisco's well publicized and admittedly self-supporting push for virtual conferencingtook a half-turn back to reality as the company now advocates a "hybrid" approach involving both virtual and in-person collaboration, Cisco corporate events director Kathleen Sulgit told attendees to The Masters Program here last week. But participants dared not take the switch as a sign that enthusiasm for travel alternatives was on the wane. On the contrary, some championed coming to grips with the fact that virtual conferencing has made a permanent impact on business travel.
But part of this epiphany, argued Maritz Travel president and CEO Christine Duffy, is that the answer is not black and white. "We have had the great debate: Face to face or virtual; which one is better, and why do you need it?" she said during an introduction to her panel discussion with representatives of virtual technology vendors including Cisco's Sulgit. "I'm happy to say that you will see, and you will hear from people who are clearly in the technology business, that the answer isn't 'either or' at all, but it is about integration using technology to enable and to enhance meetings and events. It is less about what the finance and procurement person's desire or interest is--and frankly as someone being invited to participate or attend an event--it’s 'What’s in it for me?' and 'How are you going to engage me and motivate me?'
"Not every meeting or event that we do has the potential [to be]--nor do we have the desire to make them--virtual," Duffy continued. "Obviously, those programs that require a high degree of touch or are for motivation purposes we will continue to do physically. But I believe that every physical event in the future will have virtual components attached to them, so don't think about it as always a replacement to physical. There is a lot of day-to-day travel that can be done differently and perhaps more productively using technology."
Sulgit agreed. As much as Cisco tried to replace travel, "We found that there are certain things that we can't do online. We can't have all the cocktails that we had last night. We can't meet and have the same kind of connection physically that you can do. It just isn't possible online, but there are also other things that you can't do at a physical event. You can't extend the life of the content. You can't reach 100,000 people, and there are other things that you just can't track. At a virtual event, you can track anything. You know when people arrive, you know when they leave, you know what they do, you know how long they watch the presentation, you can actually tell that they are paying attention or that they switched to their Excel spreadsheet while the webcast was going on. We can tell all of that right now."
Sulgit promoted the benefits of user-generated content and chat rooms in virtual events, as well as the extensive possibilities for participants to rate content, which can help improve it in the future.
Cisco famously was "challenged by our CEOto help reduce travel costs," said Sulgit. "And there were other, more selfish reasons within the company. We sell technology that allows information to flow over the Internet, so the more video, audio or bandwidth-intensive applications that flow across the Internet, the more products we sell. We went into this about two years ago and more seriously since the economic downturn, with the goal and the challenge to make all of our physical events virtual." However, she said, "as great as chat rooms are, and the opportunities that they offer, it doesn’t replace the conversations that you have in venues like this, so we started to shift more toward a hybrid strategy and that is really our long-term strategy. Now every one of our events will have a virtual component. We do believe that there is value to extending the reach and the experience, and keeping that community together during those big events."
Following the experience of running a virtual component for a number of the company's big meetings, Sulgit said, "One thing that we have learned about the hybrid model is that it doesn't replace [travel]. It enhances, complements and broadens it. Thirty-four percent of our virtual attendees said they are likely to attend the in-person conference because of the activities of the virtual conference. We are now going to expect to see higher attendance for the actual event. Fifty-five percent of the attendees are first-time attendees; that means we are going to get a lot of new first-time attendees coming to the next physical conference. So we have learned from this that the hybrid model doesn't cannibalize the in-person experience."
Tell that to industry suppliers, some of whose public comments during the past two weeks have coalesced around the notion that virtual conferencing has permanently suppressed business travel volume--at least in terms of its traditional peg to gross domestic product growth, a relationship that is weakening.
"What used to be 1-1 [ratio] in the 1970s and the '80s is now down to about … hotel demand growth at about 60 to 65 percent of GDP growth," said Host Hotels & Resorts president and CEO Edward Walter, also speaking at The Masters Program. "And where we have seen the biggest change, in my mind, tends to be in corporate travel." Walter blames virtual technology and other communication "options" for effectively "undermining corporate travel a bit. That is a trend that is here to stay. I hope as an owner that it doesn’t necessarily accelerate."
Speaking to reporters separately last week, Carlson Wagonlit Travel CEO Doug Andersonalso cited virtual meeting alternatives as one of the "permanent changes in the way companies think about travel" and a contributor to a "small, permanent step down" in the ratio of business travel growth to macroeconomic growth as measured by GDP.
Back at The Masters Program, American Express Global Travel Services president Charles Petruccelli said, "These technologies have now reached a level of efficiency that makes them truly viable options. I wanted to test the technology on a large scale. Last month, instead of having a physical meeting with 112 leaders of my organization worldwide, I used 15 telepresence locations around the world to allow us to connect real-time with each other in a single four-hour virtual conference. The results were impressive. It was efficient, productive, cost effective and pleasant."
American Express Business Travel, CWTand other services providers have announced solutions to support remote conferencing, and some hoteliers also have installed high-definition videoconferencing suites.
Asked whether Host, which owns more than 100 hotels including many Marriott- and Starwood-branded properties, would invest in virtual meetings, Walter likely summarized the hospitality consensus: "I am scared to death of it, but I need to learn more about it. The short answer is that we are. It's one of those things where it is a little scary because, at the end of the day, to the extent that we make it easier for you to stay in your hometown or in your office and still be part of a meeting, that suggests you won't be traveling as much. Ultimately, you can't just fear something. You have to figure out how to deal with it."
~ Additional reporting by Lauren Darson