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Dale Jackson

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Better than the real thing

Dale Jackson

TORONTO (GlobeinvestorGOLD) In the days immediately after the tragedy we now know as 9/11, commentators repeated over and over again that the world would never be the same. The fact is, the world would have never been the same even if the attack hadn't happened. That's especially true for the business travel industry, which was already being squeezed by a market downturn and tight corporate travel budgets.

Advances in communication technologies in the early 1990s planted a seed in the minds of bean-counting managers, and 9/11 was a super-grow fertilizer. Two and a half years later, however, there's no sign that technology will advance to replace the perceived need for face-to-face business meetings, and therefore travel.

Fallout:

Last December top airline, hotel and other travel industry executives sat down in Hollywood, Florida for the first ever Active International Travel Advisory Board Meeting. Their objective was to gauge the long-term impact of 9/11 on the travel industry. Two conclusions emerged that seem to contradict each other. The first was that the travel industry as a whole had underestimated the impact of third-party Internet sites. The second was that the hotel industry downturn is beginning to even out, as travellers start coming back. They admitted the role of 9/11 was hard to gauge, because the business cycle was trending down even before September 2001, with double digit decreases in revenues for two consecutive years.

The hotel industry has made attempts to find a peaceful coexistence with the virtual world, but for the most part the plan has been to wait out the downturn. In early February, Hilton Hotels Corp. chief information officer Tim Harvey told U.S. teleconferencing trade magazine CPM TechWeb that the teleconferencing trend will slow down once companies feel more comfortable spending money to have people meet in person.

"When people have a little more money, they'll still want to go see other people," he said. He uses historical evidence to make his point, showing that over the past 80 years, business travel cycles have been linked more closely to the availability of money than technologies like the telephone.

Even the telecommunications industry agrees to a point. A study released in early January by major U.S. telecom provider MCI admitted business travellers are returning to the skies, but said technological alternatives had carved out a niche since 9/11 and are here to stay. The study found three-quarters of business travellers surveyed had participated in a Web conference within the past 12 months twice the number in a similar 1999 study. Thirty-nine per cent of the business travellers who had participated in a Web conference during that year had done so for the first time.

The study also found business professionals now take a blended approach to meetings: travelling for some, using technology for others.

Technical alternatives:

Web conferencing appears to have emerged as the business travel alternative of choice over basic video-conferencing, which involves establishing expensive infrastructures from scratch and paying expensive connection fees. Services such as WebEx allow as many as 100 users to meet anywhere in the world with an Internet connection. Technology has taken face-to-face meetings one step further by providing visual aides such as whiteboarding, where diagrams and flowcharts can help make a point. An optional video feed lets participants see reactions and gestures so they can interpret what face-to face advocates call "body language." Denise Persson, an executive with Web company Genesys Conferencing, recently told trade publication Mobile Business Adviser that the workplace is definitely evolving into a mix of real and virtual. "The long-term implication is that demand for integrated multimedia conferencing will continue to grow, not because it replaces travel, but because it enhances communication and productivity", she says. Other enhancements include the ability to record everything that takes place during a meeting to resolve any discrepancies.

Service-based Web conferencing companies usually charge either a monthly fee or collect on a by-the-minute basis. The cost is about 35 cents (U.S.) a minute, or $80 per user per month. Service packages available in the market include Cisco MeetingPlace, FVC Click-to-Meet Express, Genesys Meeting Center, IBM Lotus Instant Messaging and Web Conferencing, and Microsoft LiveMeeting.

Web Conferencing Players:

There aren't many large publicly traded Web conferencing companies, but a lot of large publicly traded companies like Cisco Systems Inc., Microsoft Corp., AT&T Corp., and International Business Machines Corp. have acquired Web conferencing startups to provide the service to their customer bases. The service hasn't exactly become a gold mine in post 9/11. If you compare the stock movement of the telecom sector with the broader Nasdaq Composite, there's no evidence to suggest 9/11 started anything that wasn't already moving.

Even the few larger public companies that do specialize in Web conferencing such as WebEx Communications Inc., with a market cap of just over a billion dollars, show an upward spike immediately after 9/11 followed by a trend that more closely resembles the broader index.

There's no shortage of small private companies offering Web conferencing services, and the biggest users tend to come from the technology sector. The big challenge for teleconferencing going forward is to get the old Dow-listed stalwarts out of their boardrooms and in front of their computer terminals.

Dale Jackson has been a producer at Report on Business Television since its launch in September 1999.

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