Reducing Travel Costs

The fundamental reason for many organizations investing in video conferencing equipment is to save on travel expenses. In a recent survey of business organizations 80% of the respondents said they use or intend to use video conferencing to reduce travel costs. Respondents confirmed that by diligent use of video conferencing travel cost savings of between 35-40% can be achieved by avoiding repetitive and unnecessary trips.

Trips for initial contact, closing a deal, running a presentation etc are obviously much more productive if you can meet face to face. However internal regular monthly events such as sales meetings, financial reviews can be minimized and replaced by video conferencing, which can save the company serious money especially if several people are required to attend each time.

Large multi national companies have been reported to save many millions of dollars by replacing travel with video conferencing and have done so for several years. Today with advances in technology these economic benefits, in relative terms, are now available to most companies to save travel costs or avail themselves of new distant opportunity.

In an attempt to put the savings in travel costs into perspective the following table is based on the following two equipment scenarios. The first is using video equipment that allows a single office to conference with one other at any one time (point to point). The second is for more expensive equipment that enables several offices to have conference simultaneously (point to multipoint). For the purpose of the exercise we are allowing for three offices to conference together. The economic logic being that if you can pay for the equipment out of the savings in travel costs then the other benefits, which there are many, are a bonus.

	Point to Point	Multipoint
Average equipment cost per office	$12,500	$15,833
Number of offices	2	3
Travel costs day return	$650	$1,300
No of trips needed to be saved to pay for video conferencing equipment	39	37
Travel costs overnight stay	$1,000	$2,000
No of flights needed to be saved to pay for video conferencing equipment	25	24

This model assumes you have sufficient network capacity for video conferencing. The equipment costs are estimates subject to options and variations in exchange rate
The travel costs estimates are Flights $450 return, Hotel $350 and other travel costs $200 per trip.

If you would like our assistance to determine the potential savings in travel costs for your organization CLICK HERE