Airline woes give teleconferences a lift

— -- Sales consultant Bailey Allard of Chapel Hill, N.C., is offering more Web sessions to please Fortune 100 clients with slim travel budgets.

Bence Boelcskevy, a pharmaceutical industry executive who lives in Columbus, Ohio, plans to keep cutting travel and increase videoconferences.

And business development executive Raja Suresh, of Bloomington, Minn., has moved his division's internal meetings to the Web in the last four months.

The teleconferencing industry has been growing steadily since 2000, but sweeping flight cutbacks this fall by many of the USA's biggest airlines, paired with rising airfares and the overall weak economy, are expected to fuel it further.

It's the kind of environment that can make travelers — and managers — replace a marginal meeting and meet remotely instead.

"With the additional threat of flight cuts, everybody's going to do what they can to not travel," says Scott Etzler, CEO of Chicago-based InterCall, the USA's largest seller of conference call services.

He expects to see more clients restrict travel in the coming months and conduct more meetings on the phone, the Web and with video cameras.

Mike Kourey, chief operating officer of Pleasanton, Calif.-based Polycom plcm, the USA's largest provider of group voice and videoconferencing systems, says that because so many business travelers are already fed up with the amount of time that flying requires, additional hassles could drive more remote meetings.

"With good implementation of video, you can start cutting back on travel," Kourey says.

Missing the personal touch

Still, many meetings require a real handshake.

Arthur Manask, a food service consultant based in Burbank, Calif., who recently visited clients in Puerto Rico and Philadelphia in a single week, helps culinary schools and restaurants improve their operations. So far, none have asked for remote sessions, as "much of what we do has to be done in person," he says.

And conferencing has its own set of problems.

Suresh says he misses body language and a certain energy during remote meetings.

"It is cumbersome when you don't have eye contact and face-to-face contact," he says.

As much as Boelcskevy believes in conferencing's potential, it often leaves him frustrated. Even simple conference-call devices often "hum, buzz and burp," he says.

"They want this stuff to work as easy as picking up a phone and making a phone call," he says. "But the lines get dropped, and when you're doing videoconferencing, the picture disappears. You would have more people who would use this technology if it was dependable."

Re-running the experiment

This isn't the first time that the airline industry has driven businesses to experiment with conferencing tools.

For three months after the 9/11 attacks, conferencing usage rose as people stayed off planes, says Elliot Gold, a conferencing industry analyst based in Altadena, Calif. In 2001, teleconferencing industry revenue hit $3.2 billion, a 12% increase over 2000. Growth rates remained below 10% until 2007, when innovation in videoconferencing fueled sales, he says.

Whenever airfares or flying hassles rise, companies usually try to discourage air travel and "lead (employees) either to the telephone, Web or to the videoconferencing room," says Gold, president of TeleSpan Publishing.

Most people who try conferencing or increase use this year will try to use either a phone or the Internet, Gold says.

Old-fashioned conference calls account for the most remote meetings, because they rely on the easiest and most convenient technology. They're seeing a surge as more people hold conference calls on their cellphones.

"You'll find people in their cars, in airports, in their homes on conference calls," Gold says. "They're taking conference calls with them."

The use of Web conferencing has also been soaring, as people find more choices, easier technology and improved functionality.

At WebEx, the USA's largest Web meetings provider, acquired by Cisco csco last year for $3.2 billion in cash, usage jumped 40% in the first six months of 2008 vs. 2007, says Doug Dennerline, Cisco's senior vice president who oversees its WebEx unit. Usage has soared as more people get discouraged by higher gas prices, higher airfares and the economy, he says.

Future path uncertain

What an uptick in conferencing could mean to airlines in the future, however, isn't clear.

Gold believes that the airline cutbacks will drive greater conferencing use in the short term, but ultimately, it won't replace airline travel.

When the economy and airlines rebound, he says, most of the new converts to conferencing will keep conferencing — and return to previous levels of flying.

"If a supervisor says you can't travel, then you find another way of meeting — and that way is conferencing," Gold says.

"But when pressure is off and it's easier to travel, then you do both. The total number of meetings will be up."

Allard, who's worked as a consultant for 17 years, hopes he's right.

When she teaches sales presentation skills, she says, it's better to be there to coach people personally. But she worries that clients who try Web conferences this year will get too accustomed to the travel savings.

"There is a danger for people to swing the pendulum too far to the other side," she says. "And you can't learn to present or get good coaching unless you actually practice."