Responding to skyrocketing airfares and ancillary costs, reduced airline capacity in some markets and airport hassles--as well as rising hotel room rates in high-demand areas--corporations are pursuing remote conferencing as an alternative to travel.
In a survey conducted this month by the Association of Corporate Travel Executives, 65 percent of 128 travel managers polled said they expect business travelers to ask for travel alternatives in light of airport congestion and crowded airplanes.
"Business travel managers clearly have a point in mind when the cost of travel will determine the viability of each trip," said ACTE executive director Susan Gurley. "Nearly two-thirds of those who responded to our survey believe that point will be reached sometime this year."
Alternatives include videoconferencing and its more advanced sibling, telepresence. Videoconferencing enables corporations to conduct virtual meetings by electronically transmitting via the Internet the audio and video of participants in more than one physical location. Of the travel managers ACTE surveyed, 82 percent said their firms are exploring videoconferencing technology "as a travel alternative," while 49 percent "reported cutting back on travel this year."
According to another June survey--a poll by Orbitz for Business and Business Travelermagazine--42 percent of 610 business travelers said they are exploring such alternatives to travel as video- and webconferencing.
However, travel managers said videoconferencing has pitfalls. Because of possible delays in the video feed and other glitches that can detain time-crunched participants, some large global corporations have upgraded to telepresence technology.
Telepresence creates the impression that both parties are present by displaying real-time images on a plasma or LCD screen in a corporate meeting room atmosphere. In order to support the technology, companies must purchase the hardware and buy or lease the required networking bandwidth.
Cisco Systems and Hewlett-Packard are the main providers, and both use their own products.
Proctor & Gamble travel services manager Deborah Gittinger said her company planned to reduce its travel spend by 30 percent during fiscal year 2008 with an "aggressive rollout" of Cisco's TelePresence. P&G is expected to meet that goal by the end of this month.
"Employees who use TelePresence have a better life balance," said Gittinger. "They are not on airplanes as often, they are able to facilitate their meetings better and they are a lot more productive, as opposed to when they are on the road."
Cisco said about 225 corporations have used the TelePresence system since its October 2006 introduction, making it the fastest-growing product in the company's history. It connects more than 100 cities in more than 30 countries. An average room is used five hours a day, compared with videoconferencing set-ups used two hours a week, according to Cisco officials.
Hewlett-Packard in December 2005 introduced its HP Halo telepresence system, developed with DreamWorks.
"Halo allows you a secure local network in which participants have no delay in audio and crystal-clear images," said Debra Reid, travel services manager for Shell Oil Company at a May ACTE conference in Washington. "It's the corporate Learjet of teleconferencing."
Shell Oil purchased studios in four locations: the United States, United Kingdom, Asia-Pacific and the Netherlands. "The savings of one transatlantic trip can be as much as $10,000 per person," Reid said. "Now multiply that by 10--the average number of participants in a meeting--then by the number of meetings per year, and you have substantial savings."
HP, Cisco, P&G, Shell and others using telepresence technology have mandated that any employee attempting to book a trip through a corporate booking tool fill out a form justifying the reason for travel. If telepresence or videoconferencing can be used instead, the trip may not be approved.
Pricing for telepresence systems can top $300,000 including management fees, but Halo worldwide marketing manager Darren Podrabsky said travel managers often find that the cost of travel outweighs the cost of the system.
Despite the surge in interest for remote conferencing technology, 60 percent of business travelers participating in the Orbitz/ Business Travelersurvey said they are conducting as much, if not more, business travel in 2008 compared with 2007.
"The report reinforces what we've been hearing from our customers: Most clients aren't cutting back on travel; rather, they continue to look for ways to become more cost effective with their managed travel programs in a cost-conscious economy," according to Dean Sivley, senior vice president and COO of Orbitz for Business. The study also found that 68 percent are now staying at less expensive hotels, and 79 percent are feeling pressure to cut travel expenditures.