City Insider: For travel, the next revolution will be televised

City Insider - A City perspective on the travel industry from FT journalist David Stevenson

Internet-enabled TVs will be everywhere by 2013. Tune in and watch shopping behaviour change, says David Stevenson

Journalists are almost always tempted to test the waters of a new year by making some bold prediction or other. It’s long-established form at the Financial Times, for instance, to sketch out what one might sensibly do as an investor in the coming year. Sell everything! Buy gold! Bet big on America!

Back in the real world I dread this crystal ball gazing as I have terrible form – I’m too bearish for my own good. And I’ve already mapped out in this column what I think might happen to the global economy in 2011: slow global recovery, deflationary pressures in the US and even the UK, fast recovery in emerging markets and a depressed consumer sector in the UK.

I prefer to focus on the processes and themes that are already pretty obvious from the preceding year. If I were an investment type I’d be very worried about geopolitical risk in 2011 and in a column for Investment Week (a trade newspaper for advisers and fund managers) I’ve spelt out the major risk of trouble in the Middle East in 2011 based around Iran being stopped in its tracks – the time for action is fast approaching. In short, the Gulf is going to be a tricky place in the next few years.

Putting my travel industry hat on I’d be watching very carefully new efforts to increase green taxes and curb our aviation sector. Most importantly, though, I’d be keeping a beady eye on the most revolutionary development of the coming year, one based around technology and the media.

I’m not talking about Simon Cowell taking X Factor to America or Tui’s share price going up by more than 50%. No, I think we should all focus instead on a technological development which is profoundly important – and it’s happening on your humble TV.

This large, ugly thing has been sitting in your lounge relatively unmolested in a networked sense for decades. It’s had satellite dishes and Blu-Ray machines hooked up to it but it’s not really changed that much.

But 2011 will see the start of a huge transformation. Your TV will become a networked, internet-enabled device.

I cannot repeat enough times how important this change will be. A new generation of TVs will feature middleware-based software applications that allow all manner of internet-based TV channels (including iPlayer and YouTube) to be played effortlessly on a 42-inch screen.

By 2013 every new TV will not only be digital but also networked, and consumers will use them to browse online content in full HD splendour. The effects on the travel industry will be profound as leisure (consuming entertainment) is mixed with conventional consuming (buying not only content but goods and services).

Take the family decision to buy a summer holiday. In the past everyone would gather around a crummy computer monitor and then agree on a shortlist of favourite destinations. This would then be followed by mum or dad traipsing down to the local travel agent.

That order of events won’t change but will be enriched by networked TVs. Everyone will gather around the TV and look at the holiday options, looking for proper rich media content provided by the travel operator free of charge.

Want to stay at a nice complex in Tunisia ? Check the full video out before you visit and pick the resort based on the video. Look at the resort cams. See the reviews, which will increasingly feature user generated video. A few photos and some glossy corporate video just won’t do.

In sum, travel companies will have to sell product via rich content viewed on internet-enabled TVs, especially in the premium/luxury end of the market. If I’m paying £10,000 or more on a family holiday I want to see it in full HD detail well before I talk to my travel agent. Given a choice between a product with a few photos and one with rich content I’m convinced that wealthy consumers will choose the latter.

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