5 years ago
 

TrekkSoft wants to make a splash in the tour and activity payment pool

Swiss company TrekkSoft has lofty ambitions, wanting to muscle in the growing tour and activity marketplace with its own payment gateway system for operators.

So, welcome to TLabs…

Launched in 2010 with a capital investment of Swiss Francs 100,000 ($103,000) from the founders, Valentin Binnendijk (product manager), Philippe Willi (CFO) and Jon Fauver (marketing manager), TrekkSoft is looking at what it says are 250,000 tour and activity companies worldwide, many of which are still using paper and ExCel to manage bookings.

In the US alone, TrekkSoft (via a PhoCusWright study) says only 15% of these operators are using online booking systems, with the figure estimated to be even lower at a global scale.

But with 55 operators already signed up to the system and a further Swiss Francs 100,000 expected to come into the business by way of friends and family this year, TrekkSoft is hoping to take the business to the next stage.

The company admits it has strong competitors in the likes of TourCMS, Rezgo and CheckFront, but says the trio are “a step further with their marketing and branding efforts, but not in terms of product features or benefits”.

Rare fighting talk from the traditionally neutral Swiss, then, but the business plan of 6% fee on all online transactions (includes any credit card fees) though free for offline (over the counter, point-of-sale) is already looking at processing around $10 million in online turnover as the next milestone to achieve.

Q&A with Philippe Gerber, chief technology officer:

How is the way you are solving this problem more special or effective than previous attempts you or the market has seen before and how different do you have to be to succeed?

TrekkSoft offers a unique integrated payment gateway, which none of the competition offers. The big advantage to this integrated payment system is that you do not have to set up credit card contracts or PSP (Payment Service Provider) contracts.

With our system all tour operators are supported, regardless of size.

The system fulfills all requirements of a complex tour management software including capacity management, yield price management, as well as promotional tactics like vouchers and discounts.

Why should people or companies use your startup?

  • We are making business easier for tour operators worldwide
  • In 15 minutes you can set up a mandator for free
  • Our software is already used by 55 tour operators
  • 200,000 customers have been booked through TrekkSoft to date

Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?

Google AdWords in conjunction with targeted landing pages, social media (eg. Facebook/Twitter/YouTube) and direct contacts by email and phone through LinkedIn and Xing.

We are planning on opening a US branch and hiring a marketing/community manager and several interns to kick-start our marketing efforts.

What other options have you considered for the business and the team if the original vision fails?

We would potentially restructure the team and look to revamp our marketing strategies and positioning.

However we would keep the current online transactions and existing 55 active tour operators as the model has already proven to break-even even at its current growth rate.

What mistakes have you made in the past in business and how have you learned from them?

We put all our effort into new functionalities and features for our existing mandators and less focus on marketing and attracting new users.

Therefore the product became very robust functionality-wise, but the user experience was a little tougher to navigate for the non-expert user. We need to focus more on the needs of smaller companies while ensuring we are always incorporating their feedback along the way

What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?

Most innovation in this segment has focused on the hotel and flight industry. There is still huge potential for other segments.

The existing players are not very innovative on the technical front and have failed to address and incorporate new developments in social media and mobile.

Tnooz view:

Given that the ratio of B2B travel startups compared to consumer-facing brands featured on TLabs that have not made it past two years is low, TrekkSoft is naturally in a good spot given its focus is on providing what it hopes is a solution to a pretty big problem in the industry.

Whilst it is difficult to determine if 55 customers that have signed up to use the platform is good or not, proof will be how many the company actually retain and how much those operators are making the most of the technology as a means to enhance their payment strategy.

One challenge will potentially be keeping up with alterations and modifications from suppliers. In the hotel sector there are only a handful of ways of working when it comes to payment and reservation systems (rates, room types, contracts, negotiated deals, etc) but in tours and activities there are arguably dozens – even hundreds – of different ways of working given that the product is often diverse and very complicated to organise.

But the prospects are enticing in this particular sector of the industry. If TrekkSoft markets the product efficiently and shows solid technical performance then there is no reason why the company cannot move alongside the competitors already in the market and others that are likely to also eye the same opportunity.

Snap poll:

[poll id=”3″]

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Kevin May

About the Writer :: Kevin May

Kevin May was a co-founder and member of the editorial team from September 2009 to June 2017.

 

Comments

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  1. Steve

    A big part of developing a solution is accurately defining the problem. What is a tour operator and what defines a tour? The global travel industry provides a limitless supply of component combinations and permutations which has made it difficult for a software developer to provide a solution to satisfy the fragmented market with international nuances. A number of the major independent tour operators have thus developed their own legacy systems. A number of the airlines and hoteliers outsource to a full service,
    call center solution for their Tour or “packaged” offerings. It will be interesting to see if the technology advances will enable the new start-ups to create a product that will attract significant market share – there is definitely a gap to fill.

     
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  3. Peter Syme

    Interesting and great to see another software operator having a go in the activity tours sector which is ripe and crying out for innovation. Personally not sure payment gateways and getting paid is the biggest issue facing this sector. I am an operator and offer every type of payment system as obviously getting paid is number one priority but is it really that difficult ?

    Paypal is our most expensive route with direct credit cards coming in at 1.5%. A simple process change earlier this year has reduced our credit card payments by 45-57% on a monthly basis and turned them into direct bank payments with all the benefits of this, including instant cashflow and increased profit to the bottom line instead of going to the credit card companies.

    I would argue the greatest challenge and hence the greatest opportunity for tech companies is the issue of distribution. Any operator with have a bit of effort can sort their payment systems and they can get some software in to help run the business from the providers some of which are mentioned but getting increased distribution of their product and services is the real challenge and hence the real opportunity. Just my rambling thoughts.

     
    • Philippe Willi

      Hi Peter, thanks a lot for your reply. Distribution is in fact one of the key factors. Another swiss start up is at the moment focusing on the part of distribution , http://www.getyourguide.com, the comission rates are higher in the case of a distribution model. From a SAAS start up point of view it is diffcult to offer a high quality software, a good payment system AND a hugh distribution network at the same time. Especially because a distribution network is based on “profit sharing” with other multiplicators like websites and other traffic generators (tripadvisor etc.). For our start up (trekksoft) we did priorize to offer different plugins (we are just launching the wordpress plugin in a couple of days) but at the moment we can`t offer a hugh distribution network. For me it looks like a sitution for any start up: we need to focus on one thing and we can`t do everything.

       
    • Jon Fauver

      Interesting comments on two important themes, selling your product and getting paid for your product. Payment solution or Distribution, which is deserving of more focus? That is going to be decided by the individual needs of the tour operator. As has been discussed in other threads, what makes this industry so difficult is the huge diversity in the needs of the companies.

      Payment Gateways
      One of the things that makes Trekksoft so powerful is its’ flexibility. Small owner/operator companies looking to increase direct distribution through an online presence can be up selling their own tours within 30 minutes using the Trekksoft payment gateway. Larger companies are free to integrate their own existing payment gateways at a reduced rate for online transactions.

      Distribution
      As a tour company owner, nothing makes me more frustrated than paying 20% + commission to a third party distribution so that they can out bid me on PPC campaigns and use my content to boost their own SEO. It is a necessary evil, but it still hurts. The more distribution I can acieve myself the better. TrekkSoft has a powerful group of functions to help with distribution and managing our own agents. Integrated Facebook, Agent Codes, and the Partner Network. The partner network allows companies using TrekkSoft to share their products with other TrekkSoft websites. Each partner is free to choose which tours he wants to share in the network, and which tours from the network he wants to sell. We have implemented this with great success between various companies in Interlaken and between http://www.outdoor-interlaken.ch/en/ and http://www.bus2alps.com/en/ . Win/Win for everybody.

      Cost
      The cost structure of TrekkSoft was not well described above. The Software is free to use as a SAAS. There are no restrictions on the number of tours or users and no monthly fees. The only charge for TrekkSoft comes from any payment made Online either via the TrekkSoft payment gateway or via another payment gateway that has been implemented. The base rate is 6% for using the TrekkSoft payment gateway.

      Looking forward to hearing some feedback, other opinions and critiques.

       
  4. Jason Morehouse

    Agreed – interesting approach. I can see the integrated payment gateway enticing to small operations that don’t already process payments or currently rely on Paypal. That said, monthly settlements could be a real step backwards for many businesses.

    The challenge will be in being a great payment processor, and a knock out tour booking system.

    Best of luck.
    -Jason

     
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  6. Stephen Joyce

    Stephen Joyce

    It’s interesting to see this strategy in light of my recent post about payment challenges in the tour and activity segment. As I mentioned in my post, the model presented by Trekksoft is not new and is a popular one with start-ups for many reasons. Incumbents such as Zerve.com have used the same model for many years and new players like Gidsy, Vayable, and AirBnB all use this model as well.

    “TrekkSoft offers a unique integrated payment gateway, which none of the competition offers. The big advantage to this integrated payment system is that you do not have to set up credit card contracts or PSP (Payment Service Provider) contracts.”

    I cannot speak for the others but we (at Rezgo) made the conscious decision not to be a payment processor. We made that choice over 5 years ago and was not made lightly (and for many very good reasons).

    In case you haven’t read the article, you can find it here:
    https://www.tnooz.com/2012/05/29/news/the-good-the-bad-and-the-ugly-the-truth-about-payments-for-tourism-businesses/

    You can also find a more recent one about credit card security here:
    https://www.tnooz.com/2012/06/05/news/credit-card-safety-and-cyber-attacks-in-travel-everyone-must-take-responsibility/

     
 
 

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