Do the Math

Video conferencing now costs less than flying!

Video conferencing has a reputation for high costs. After all, at $175 per hour for a public video room, it certainly looks expensive, especially when you multiply that hourly rate by 4 or 8 hours for those really important meetings. But time marches on. Video conferencing fees have remained fairly stable over the past years; falling network and equipment costs have offset rising facility costs. On the other hand, the cost of travel continues to rise relentlessly.

This analysis runs two scenarios against a set of assumptions. Your mileage may vary, but we’re trying our best to reflect reality. As travel costs continue to rise, we’ll periodically come back to this page and update the figures.

Assumptions

First, let’s set up some baseline assumptions:

• Most trips from Los Alamos or Santa Fe are to either the east or west coast.
• Refundable coach airfare is averaging around $700 for a round trip to either coast.
• Hotel, meals, and taxi costs are hard to keep under $200 per day.
• Forget the rental car; we’re trying to stay inside a budget here.
• Video conference rooms run $175 per hour per endpoint if you’re renting both ends.
• Video bridging runs $50 per hour if the endpoints use incompatible technology.
• Virtually all government agencies, universities, and major corporations now have their own videoconferencing facilities and bridging equipment.

For our small team scenario, let’s say that three people need to attend an all-day, eight-hour meeting, or two four-hour meetings over two days (the math works out the same either way). This will require at least one night’s stay in a hotel, even if everyone is forced to fly the red-eye either up, back, or both. For the video option, let’s assume the other side doesn’t have their own video room, so we rent a public video room on that end as well. To make it a worst case, the two rooms use incompatible technologies and so require a bridging service to make it all work.

With video conferencing, we save money and three people don’t have to endure at least 16 hours of driving and flying each! But we’re in Dilbert’s world here, so we won’t factor that in as any kind of dollar savings.

Solo Travel Scenario

For our solo travel scenario, let’s say that just one person (Mikey) needs to meet for just four hours. Let’s say timing is perfect, and red-eye flying enables Mikey to sleep on the airline instead of in a hotel. Mikey will still spend at least $75 on taxi and meal costs. For the video side, the hosting organization has their own video room, so no need to rent one. Hosting organizations also handle bridging costs thus avoiding that expense.

We still won’t count the costs of burning Mikey out by forcing him to travel essentially around the clock. He can just suck it up. But wait! The video conferencing numbers are better for short, one-person meetings as well!

Conclusion

We’re right at the tipping point. When the meeting goes longer, we wind up staying overnight, and typically we send more than one person to longer meetings. For shorter meetings, the room rental costs drop proportionately while the travel costs can’t go below a certain (expensive and rising) level. If the hosting organization has their own video room, the cost differential for the small team scenario is dramatic. You can run multiple scenarios on your own, but the inescapable conclusion is that video conferencing is now more cost effective than the cheapest, burn-your-people-to-toast travel policy.

So what are video conferences best for? They’re not good for initial face-time and relationship building efforts because that requires a personal connection on a level that video just doesn’t support. However, video works great for relationship maintenance like brainstorming, planning sessions, and status reporting. One should still fly out periodically to connect on a personal level (just can’t beat walking the halls), but you don’t need to do it as often, and you don’t need to drag the whole team with you when you do.

Should you invest in your own video conference gear? It depends on the number of trips you’re saving and whether you have the space and (significant) funding to do it right. Hosting organizations invest a lot in their video conference rooms, and can tell right away when the other end is doing it on the cheap. Cost minimization results in people leaning around each other to see, poor lighting, and audio only a cave troll could love. Attendees have difficulty viewing non-digital content like real paper or objects without the right equipment. And let’s not forget those armpit stains from the heat; two video screens plus a bunch of people in a closed room requires serious additional cooling capacity.

Doing it right requires way more than just buying a video unit and a couple of screens. That’s why Los Alamos Meeting Place has invested heavily in top-of-the line equipment, network bandwidth, furnishings, acoustics, lighting, ventilation, and accessories. Meetings go best when the location, the environment, and the supporting technologies are best-in-class.