Tourkrub aims to bring all the tour agencies in the Mekong region under its wing

Jakapan Leeathiwat, Founder of Tourkrub

Bolstered by rising affluence and broader, as well as more affordable, travel options, Asian tourists are flocking abroad in larger droves. In 2015, outbound travel from Asia was 7 per cent higher than the previous year, according to a UNWTO report.

And while millennial tourists, seeking tailored experiences, are accustomed to using digital travel services and apps to plan their holidays, there are still tourist segments — especially older folks and travellers with families — who would be more comfortable relying on tour agencies to plan every step of the trip.

Thai startup Tourkrub is a company that wants to help tour operators in the country bridge the digital divide, especially since internet penetration in the country is high and growing by double digits each year.

“Most of the tour companies in Thailand are mostly offline and the way they do it is super traditional,” says Jakapan Leeathiwat, Founder of Tourkrub, in an interview with e27.

“The digital age is coming, and it’s harder for customers to find tours. Newspapers and exhibitions are dying out, so you can hardly find them [tour package advertisements],” he says.

“And when you go online, it’s so fragmented; no one is combining it into one platform, and the tour package detail is massive and the user experience sucks,” adds Leeathiwat.

Bring tour operators online

These pain points drove Leeathiwat to build an online platform to connect tourists with travel agencies. He notes that these platforms already exist in China, where travelling via tour packages remains the most popular form of leisure travel. But in Thailand, there are no such platforms.

“I think in Asian culture, we travel with group tours more often than other cultures, such as Europeans, etc. It’s much more cost-effective and safe to travel as a group because these tour companies book the hotels and flights in advance. It is cheaper than booking by yourself,” says Leeathiwat.

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“Our target market is broad … when you have a family you don’t want to do everything by yourself — it’s too complicated. And for the elders, they have retired already, so they don’t want to drive, they don’t want to go into trains; so they purchase tour packages,” he explains.

“And also, people who don’t speak English also prefer going on tours, In our culture there are still a lot of people who cannot speak the language except Thai.”

Tourkrub offers tourists digitised itineraries segmented by their destinations. But it does not come fully loaded with other e-commerce features. There is no inventory or e-payment feature; customers have to make bookings by calling Tourkrub’s call centre. Tourkrub then receives a 5 – 10 per cent cut for every booking.

Sustaining high-profit margins

Since it was launched in January 2016, the 500 TukTuks-backed company has already earned THB 250 million (US$7.56 million) in revenue. That translates to 2,000 tour packages, or about 7,000 customers.

“There was positive unit economics since the first purchase, so we are profitable,” says Leeathiwat. “The tour agency travel segment has higher profit margins than other travel products because one travel batch size is bigger. For example, one customer may spend up to US$10,000 on one trip.”

Additionally, Tourkrub does not have to contend with competitors. Having the first-mover advantage allows it to acquire customers relatively fast and cheaply.

Future plans

Having cornered the Thai market, Tourkrub has set eyes on its Mekong neighbours, where the tour package industry is less competitive than that of Thailand’s. Leeathiwat says tour operators in Myanmar, for example, number at around 200 and they charge high prices; so much so that many Myanmar tourists prefer to travel to Thailand to buy tour packages.

Besides regional expansion, Leeathiwat will also scale up the platform with its 21-person team and make it more user-friendly.

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“We are building an end-to-end system for tour operators to use. Soon, they will be able to transform their itineraries into searchable digital ones within 10 minutes. We will also have a system to allow them to update [itineraries],” says Leeathiwat.

The new-and-improved SaaS platform will also eventually include an e-payments function. Tourkrub is currently consulting with relevant players, such as Thai banks and payment gateway Omise, on this matter.

So expect to see a Tourkrub turn into full-fledged tour package marketplace within the next couple of years or so.

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Image Credit: Tourkrub

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