In theory, it's possible for this technology to by-pass hotels altogether, and to disrupt the corporate meetings business. However, the authors of a recent Industry Perspectives report at the Cornell Center for Hospitality Research (CHR) see a definite role for hotels in this growing business. Using the example of Cisco's TelePresence service, Howard Lock and James Macaulay explain the current state of virtual meetings and examine how this technology can harm or help the hotel industry. Their report, "Hospitality Business Models Confront the Future of Meetings," is available at no charge from the CHR. Lock is director of Cisco's Internet Business Solutions Group, and Macaulay is an internet software designer, also for Cisco.
The corporate drive to save money on travel expenses has coincided with the blossoming of virtual meeting technology, and large companies are willing to make the investment to install a Cisco TelePresence room or other virtual meeting technology. While there's almost no chance that in-person meetings will go out of style, it's also true that virtual technology can handle increasing numbers of participants and site nodes. With that, there is a strong potential for hotels to include virtual meetings as a part of their services. Marriott, Taj, Starwood, and Rendezvous are among the hotel brands that have already entered the virtual meeting business.
The technology now can deliver real-time voice and video communication that mimics personal contact, and allows for additional support from web-based applications. In their report, Lock and Macaulay discuss how Cisco has conducted 74,000 virtual management-level meetings that avoided travel and saved the company more than $400 million in direct expenses. This was good for Cisco, but perhaps not so good for the hotels that did not get that corporate meetings business.
Acknowledging the expense of entering this business segment, Lock and Macaulay suggest the following steps for hotel firms that are considering the virtual technology business. First, examine whether your firm has the core competencies needed to offer this service, including the physical space and the complementary services that would be required. Second, build skill sets for this new business, which may cannibalize some existing services. Next, identify potential new needs, some of which may involve additional investment. Finally, focus on monetizing this service. Determine how to charge for the service, whether à la carte or as a bundle of services, for instance. You will also need to determine who you will work with as a business partner.
In conclusion, although video and virtual meeting technology appears to be yet another disruption of existing business models, it's also true that virtual meetings present an opportunity (just as the Internet created disruptions and opportunities). The key is to be aware of the technology and what it can do, and then determine how it will work as a new part of your hotel or conference center's business plan.
Glenn Withiam is director of publications for the Cornell Center for Hospitality Research.