The power of the online travel industry is obvious if you've worked a desk job anywhere in Australia, Europe or North America. Messages from mammoth travel websites drop into your inbox with predictable regularity. Just as predictably, they're loaded with dramatic pictures of romantic tropical paradises. They promise escape and offer discounts for booking right now, and in the depths of a dreary winter or during the long summer doldrums at the office, you can't help but click through and dream about a vacation in an exotic locale.

Maybe you take a break from the report you're working on and give in to the daydream. You click through the package deals, scroll through lists of available flights and compare lists of amenities at hotels. For younger travellers, this is how booking travel always works. For a growing share of those who remember the era of face-to-face travel booking -- when you walked into a travel agency and talked to an agent about where you wanted to go -- it's now the preferred way to book a vacation.
On Phuket, online travel planning is big business. Hotels and resorts report that well more than half of their guests use the internet at some point to research or book a holiday. And for a few growing companies, online travel is the entire business. Phuket-grown websites like AsiaWebDirect.com and DirectRooms.com have mushroomed into global concerns that not only bring tourists to Phuket but also share in the revenue that tourism leaves behind.

"You've got to match the business with the location" says Direct Rooms' Alex Lots of the profusion of travel-related websites in Phuket. "For Phuket, this means anything with hotels, tours, water-based activities, etc."

Despite the seeming ubiquity of online travel websites, the industry's growth is just starting to take off in certain parts of the world. In the US, UK and Europe, travel-related online sales now account for a huge chunk of total travel sales. The Danish Centre for Regional and Tourism Research reports that online travel sales in Europe reached 49.4 billion euros in 2007 or 19.4 percent of total travel sales. By contrast, says Wotif.com Chief Executive Officer Robbie Cooke, booking figures in the Australian and Asian markets suggest much lower use of the internet for travel purchases.

"In Australia, it's in its infancy compared to the US," Cooke says. "For calendar year 2006, 12 percent of bookings were being conducted online. In the US in the same period, it was above 30 percent. In Asia, only two to four percent of the transactions are online. So it's a whole step further back than Australia and the US."

In internet parlance, Wotif.com is a "first-mover" among online travel websites, one of the first companies to establish a presence on the world wide web. Since launching the business for the Australian market in 2000, the company has grown exponentially each year, exceeding A$67 million in revenues for 2007. Wotif.com specialises in providing access to last-minute accommodations bookings, up to 28 days ahead of an intended stay, and it ranks at the top in that category in Australia and New Zealand. As in the US, the growth of the online travel booking market will continue to grow by leaps and bounds in Australia and New Zealand during the next few years, Cooke says. And now that Asian travelers have started to book online, he expects that bookings from Asia will start to take off, too.
"Asia's a place where we think there will be a lot of growth in the next five years," he says. "That was one of the attractions of merging with Asia Web Direct."

Like many people who have come to Phuket and stayed, Neil Cumming arrived here without intending to found a business. In 1993, however, he started a computer company that morphed into Asia Web Direct.

"Most of our clients were in the tourism business," he says. "And most of them expressed a very early interest in joining the internet. So I created a bulletin board (a pre-internet way of sending messages between computer systems) that would dial California twice a day. We were very surprised that it got to be so popular. We became an internet hub, and since most of our customers were hotels, we figured the world wide web would be useful for setting up an online reservation system."

Having worked in the UK as a programmer for 20 years, Cumming didn't have any trouble with the technology side of creating a reservations system. And with many hotels and resorts on Phuket, the marketing plan was pretty obvious.

"In 1997 there was virtually no other way for hotels to book reservations other than by fax or telephone," he says. "There was a big need."

Four years later, Cumming saw another need, and his answer to it fueled another period of explosive growth for Asia Web Direct.

"In 2001, hotels were stuck with a lot of inventory," he says. "The traditional method of selling rooms was to give wholesalers a room allotment, and all the rooms that weren't sold by two weeks before arrival would get sent back to the hotel. We built a last-minute booking site and saw it grow 100 percent year on year and now by 150 percent. We just happened to be there at the time low-cost (air) carriers came along a year later."

For Cooke, low-cost carriers are also a key factor pushing the growth of online travel booking across Asia. The region has lagged behind many other parts of world because fewer people have credit cards, and those who do don't have as much confidence about using credit cards online.

"Low-cost carriers are encouraging people to book online," he says. "Booking online is cheaper, and it's going to start to play a larger role in the Asian markets."

Which is exactly what interested Wotif.com in acquiring Asia Web Direct. With 450,000 room-night bookings during 2007, Asia Web Direct has established a strong presence all across Southeast Asia -- and that's the next big battleground for the big online travel companies, Cooke says.

"Asia is quite a different market than other parts of the world," he says. "No player has the first-mover advantage and no one player is dominant. It has the strongest growth potential, and everybody has a focus on Asia. It's a highly competitive series of marketplaces."

For Cummings, the merger was a long time in the works, starting with talks about inventory-sharing three years ago. The partnership was put on hold as Wotif.com went through the process of making a public offering of stock. When the two companies started talking again last year, they started working on a merger.

"Since the most important thing is product, Wotif.com needed a good range of product that's attractive in Asia," Cumming says. "Right now you have to get bigger fast since the big boys are coming -- Expedia, Priceline, Hotline."

Like Cumming, Alex Lots came to Phuket from the UK in 1999 not intending to do business. Having just turned 40, however, he decided to do something different with his life, and he began work on DirectRooms.com. Within a year, the company had launched hotel bookings in Thailand, Malaysia, Singapore and Hong Kong and drew 30,000 visitors every month.

"The location is not ideal for this type of business, but that's what makes it challenging and interesting -- a different package of issues compared to other destinations," he says. "It's a lifestyle destination, and it's not Bangkok."

For the most part, Lots says, Phuket has a capable workforce. Directroom.com has had excellent experiences working with staff who graduated from Prince of Songkla University and Rajabaht University. But still the company "needs to focus on in-house training programs and realize that there are limitations." Over the years, staff turnout has been a low six percent.

"Getting experienced programmers is very difficult, but this is a worldwide issue," he adds. "The Software Industry Promotion Agency is helping with their schedule of computer programming courses, and this week we have three staff attending a one-week course in Phuket. The employment officer does a good job helping to find candidates, and we attend their job fairs, etc."

Eric Haeg also contributed to this story.