Planning a trip to Copenhagen, visa stamped and itinerary ready? Kids excited to see Kastellet & The Little Mermaid, wife with a shopping list for Strøget Shopping Mile and yourself eagerly anticipating a visit to Tivoli Gardens? You also hope to find a flight that takes you to Copenhagen via Dubai so you can attend the upcoming International Autumn Trade Fair. There is a catch: which airline, with minimum stopovers, to board? On top of it, you do not have the foggiest idea about where to stay without paying an arm and a leg. It requires hours of browsing to work through comparing prices and layovers. You have two options, ring up your travel agent and let him do all the work possibly at a premium charge, or go to a website offering all these services and spend the additional cost only in terms of time?
Yousaf Rizvi believes that people would invariably prefer the latter option. Running the family conglomerate’s (RizviCo Pakistan) travel business as well as his first initiative, Premier International Travel and Tours, prepared him to design and run an online company offering a whole range of services for everyone wishing to book a flight and a hotel – regardless of destination. Thus born Checkin.pk as Pakistan’s first online travel company – with a patent for that. There are a few other similar initiatives in Pakistan including Sastaticket.pk providing the whole array of services as Checkin.pk – flights, hotels, packages, and deals.
However, with his initiative, Rizvi hopes to disrupt the travel market in Pakistan taking away most of the business from the traditional brick and mortar model of travel agents, as well as a chunk of customers making purchases from the airlines’ own websites. In his words, “If you want to put it in exact words we are digitizing travel we are completely revolutionizing and modernizing travel for the modern consumer.”
Having remodeled his venture after taking three partners on-board, Yousaf is not worried about competition either. “The germination took place in 2012, but back then it was just an idea. The official launch of the website was in 2014 and people started coming online and the whole process began. But later, I relaunched the website model when partners came along.” Now Naseeb Network CEO Monis Rehman, Pir Saad Ahsanuddin from RHT Partners, and Cinepax CEO Arif Baigmohamed are co-founders and partners in Checkin.pk. According to Rizvi, his three partners have invested a total of Rs 15 million in this initiative when Rizvi took his startup to a televised incubation center, Idea Croron Ka. Rizvi said that Monis had already taken notice of his business and was already in the process of investing. However, the partnership became official after Monis got Checkin.pk evaluated on ICK.
Apart from this Checkin.pk has not entered any incubator or accelerator, and has neither received substantial funding from a venture capitalist. The only investment comes from co-founders, which seems inadequate when one sees the task at hand.
Rizvi’s travel business is not yet breaking even either, but he is not worried. To him, the only way forward is bringing people on his platform and then think about making money. “We are making money, our revenue is in millions as of now, but it is nothing as compared to where we want to go. But we need a big enough base of users for that first. Currently, we are just bringing people online. Our basic model is that of a service provider. We are like Expedia – an intermediary between party A and party B. The situation from one airline to another is different. The higher the number of tickets people buy from us for a particular airline, the more leverage we will have in negotiating better rates with those airlines. The bigger the website gets the more negotiating power we will have. That’s why we want people to buy from us; we are a completely Pakistani company and the more they buy from us the more we will grow. It is a completely B2C product.”
He continued, “Now we have substantial operations and even though we crossed a milestone last year we expect to do it again this year.” He did not share exact figures for his business, but when probed, he said, “In the last one year, from the third quarter in the previous year to the third quarter, in percentage terms number of transactions have grown by 58%, and value by 17%.” And that it was achieved without spending next to nothing on marketing makes him prouder still. “Neither do we spend on television or digital advertising nor on marketing. Earlier we did some marketing, but no longer. It’s just the word of mouth from our patrons that does it for us. We also enhanced our site with Search Engine Optimisation.”
Not resorting to marketing, to Rizvi, is a matter of pride. However, his financials and the market dynamics point to a different direction. Profit’s inquiries from a group of travelers and travel agents showed that many of them were not even aware of any service like Checkin.pk. Furthermore, there haven’t been any newspaper advertisements, billboards, or TV ads for the business either. Not doing marketing could very well be a major reason for the company still not breaking even. Perhaps it is because of budget constraints.
Travel business works on smaller margins and higher volumes. Without marketing and in the absence of financial incentives for the consumers, it seems a long shot for Checkin.pk to start making profits anytime soon. While disrupting the travel agents market is already a bear, without extensive marketing and substantial expenditures into incentives to changing the attitude of the customers, Checkin.pk or any other online travel business cannot harbor much of a hope to disrupt the market, irrespective of what Rizvi anticipates.
“As people become more and more digitized and are using credit cards, receptivity for online solutions to their travel needs is on the rise. Getting people online is the key here,” said Rizvi. To Rizvi increased penetration of credit cards is a good sign for his business. But looking at the Pakistan’s market, credit cards usage alone might not be the answer. For instance, even a Gold Credit card has the credit limit of Rs 100,000, while a return ticket to New York costs at least Rs 130,000. Even Platinum card holders, with say half a million credit limit, cannot buy tickets for more than three people at a time, not to mention that the segment of the society with the capability to own such a credit card is extremely small. Bringing together the costs of hotels and tickets together makes online payments more of a hassle than an ease, with the only remaining option multiple payments from different credit cards, further narrowing the potential customers. The conventional way of making cash payments to travel agents thus appears easier, despite the additional effort of visiting the travel agents’ offices.
Travel agents operating in the market take online travel operations with a pinch of salt as well. Muhammad Ali from Sakuf Travels said, the only factor that might pull the customers to online travel service is lower prices, but even when the websites of individual airlines do offer lower prices, and at occasions, travel agents do the same, people would still prefer the latter.
“Then the price is not the only factor while making travel arrangements. Many customers need to change their travel timings, require refunds, or plan beyond just the ticket. For them it is much easier to have someone else to do their work, that is a bigger convenience for them than having an online option at home.”
He is also of the opinion that since all payments through credit cards are accounted for, many affluent people also prefer dealing with cash instead of documenting every purchase they make.
According to him, the Pakistani customers will not be comfortable abandoning travel agents. “Booking.com sells hotels on the best prices, and if that were a model that could disrupt the market, then travel agents would have stopped selling hotels by now. But the target market is entirely different, that is not going to be impacted much.”
Another travel agent, Mansoor Mir from Global Travels concurred. “To the bunch of travellers, it doesn’t matter what the online channels say. They require trust and personal communication with the travel agents.”
He said that the only challenge to conventional travel agents comes from the websites of different airlines. “When they entered the market, 20 to 30 percent market share was taken by the websites. The upper segment of the society prefers direct purchases from the airlines, so unless there is some additional price incentive, it is unlikely that even they would move to an intermediary channel between them and the airline.”
There is another interesting aspect to all of this from the customers. Many potential travellers prefer the existence of such an online channel as Checkin.pk, but only to be able to compare rates of different airlines and to bargain with their travel agents.
Talking to Profit, one such patron said, “There are things beyond the low-priced tickets. My travel agent extends me credit at the time of booking and I pay him by cash or cheque later. I use platforms like Checkin.pk and Sastaticket.pk to compare prices, screenshot the comparisons and send that to my travel agent, only to bargain on the price.”
Owing to the relationship he has built with the travel agent over the years, sometimes he also gets discounted prices on tickets. “Perhaps to counter the competition or to keep his customers, these travel agents sometimes also cut their own margins to the bone and offer lower prices as compared to the airline’s prices.”
Another customer who makes ticket purchases in bulk, for corporate tours of his employees, noted, “You can’t rely on websites to do the booking for 20,30 people. My travel agent from Global Express does it for several companies in Pakistan, and also extends credit for a month or six weeks. He does it to counter the effect that online booking has had on walk-in ticket sales from travel agents. He charges a premium for that but it still is more convenient and reliable than going to a website and doing it one by one.”
To Rizvi, ticket buying is not a purchase, rather it is an experience. “Checkin.pk is also a better digital experience,” he claims. “Monis has a lot of technical experience that I don’t have. Consumers views were my guiding light. The digital experience was added by Monis. I knew what the customer was looking for and I made the first version of the product and if that was S1, now we have S8.” In addition to information about different airlines prices and a range of hotels around the world. “If you have to book flights for any of your family members, you just need to enter information once in our system. After that every time you wish to make a booking, our system will allow you to choose the name from the drop-down menu and all details will be entered automatically.” He is also in the process of launching a mobile app for Checkin.pk. “It was a made in Pakistan site, and once my partners came on board, we decided that the only way forward would be to make everything inside the country.”
While this may be an added comfort for solo travellers, for customers needing to make ticket purchases for a bunch of people, for instance, a corporate or educational trip, this is only an added hassle. On an online platform, you cannot just click and buy a ticket. A lot of information needs to be entered first, not just for the record of the company but also to ensure that the payments and travelling are legitimate. As explained earlier, conventional travel agents serve better in this case. A corporation executive for instance only needs to submit photocopies of his travelling team’s passports to book tickets through a travel agent instead of entering individual information of every employee. Also, if someone has purchased a ticket from a travel agent once, the record of information serves the same purpose there. A repeat traveller doesn’t have to provide all his or her information to the travel agent for every trip. The agent does it on his own.
To accommodate the attitude of Pakistani customers of relying on others to do their booking, Checkin.pk also serves as a telephone travel agent. “To make sure people don’t miss the guidance about travel they can get at a regular ticket booking office, Checkin.pk’s call center also provides consultancy service. Sometimes people do not want to do it for themselves, so we do it for them. We also guide them on what sort of documentation and the processes they might have to go through. So far this service is available only in Lahore but we are expanding to other cities too.” He added that other than customers now travel agents also use the website to provide flight and other details to their patrons. “If someone tries to compare prices manually, it would take him at least three hours to do that, while we do it in a couple of seconds. For now, my main aim is to convince people that they can do their own booking themselves. And on our website, it’s neither complicated nor risky.” Perhaps instead of disrupting the business of conventional travel agents, Checkin.pk is helping them in remaining relevant and fast.
It is interesting to note here that many travellers only use Checkin.pk to compare flights but stop short of buying a ticket from the platform, rather they share the ticket price information with the conventional travel agents to bargain the rates. After all, it may appear that the personal communication with the travel agents allows customers a higher level of trust and confidence, leaving price comparisons being the only major advantage from Checkin.pk.
Despite all this, Rizvi feels that his reach has extended in the market. “Initially the people who bought tickets from us thought that it was more expensive but now people have gotten used to the site after comparing our prices to the prices offered by airlines on their own platforms.” He added, “We also have customers buying tickets to travel within Pakistan.” The online ticket booking process has already become the norm in many parts of the world, he said. To match with international websites, Rizvi has also enabled online payments on his platform. “We also have digital payments on our platform while no other platform in Pakistan provides that. We also have FINJA and EasyPaisa on board and people can use their wallets to buy tickets even when they are waiting on the counter to check in the flight. We are also expanding into lots of digital payment solutions.” Checkin.pk also has payment gateways through Habib Bank Limited. There is also a helpline to guide people into booking a flight for them – in real time. “Now people know that they can pay online and also use our website in the evening when the conventional ticket booking offices are closed.”
The last part is obviously an improvement on the traditional travel agencies constrained by working hours, but then again, there are only so many instances where customers are on a clock themselves. Unless it’s a business tour, Pakistani customers are known to start planning their trips well in advance, which makes it less of a worry for travel agents to start operating 24 hours.
Furthermore, the point about online payments is as relevant as the argument about credit cards. It might make sense for the affluent, for whom the choice is between airline websites and Checkin.pk. But for the majority of the population, it might not be disruptive enough. As far as mobile wallets are concerned, there are about 20,000 users on FINJA, and perhaps lower on other similar wallets, and most likely a majority of this segment is not among the frequent users of airlines. Even in toto, this makes up for a meagre proportion compared to the whole market, not to mention that most of these users do not have hundreds of thousands in these wallets that might be necessary for buying airline tickets.
Rizvi said, “It is a continuous process; we needed to start small and then grow. Now it is a respectable brand in online travel and you can trust that it’s a credible and reliable entity.” Talking about his plans to run operations, he said, “We are focusing on increasing our base and increasing volumes online. We want people to start buying online and move online. Our process is to convince customers to buy from us first. After bringing people on board the next step would be to offer them other products, such as we have started Umrah packages. You can book a hotel with us and our packages that we are offering and we intend to offer will be destination based.”
“There are multiple ways for us to earn. One way is based on volume. As higher volumes come, you can negotiate better prices for your customers and for yourself. Currently, we are charging no service fees and whatever price you get on the Emirates site, it is the same on our website. Right now, in fact, we are adding incentives.” However, it is worthwhile to mention that these incentives mostly include packages with ease of everything already aggregated from tickets to hotels, rather than any lower price offers on tickets. While the platform’s primary service remains tickets, perhaps a discount on the ticket prices would have been better to generate new trials and bring in more customers instead of packages like Umrah service targeting a very small segment of the customers.
Keeping in sight his ambitions to move ahead, Rizvi’s biggest expense remains the innovation and constant updating of the product. “We always strive to produce a product which is best in the market and so we are continuously innovating and improving. For us, the biggest cost is incurred on the development. We are expanding into other markets now. The brand will remain Checkin with the country’s initials after the dot.”
To him, his platform is not catering to any particular socio-economic segment, as Rizvi has plans to include his clientele’s buying power when it comes to offering other products. “Currently, we are looking at people who would like to know the different rates. So, yes, there is a target group that includes those who travel, or those interested in travel, or travel agents, but we also offer local airlines so everyone can use our platform. People in smaller towns do not have to do ticket booking courses to enter business. I know many who use our platform to book tickets for their customers and transfer money to other account. Every year a new generation of young adults becomes financially well-off and enters our customer base, while the previous ones stay. That ensures steady growth for us year on year.”
In a nutshell, while Checkin.pk has brought in an innovation when it comes to comparing ticket prices, it has probably not done enough to change the buying attitude of customers. While traditional travel agents sometimes cut down their own margins to keep customers, Checkin.pk has also failed to utilize this basic inclination of customers by offering prices lower than listed on airlines’ websites. If it is a restriction from the airlines themselves, even then Checkin.pk needs to come up with lower prices in some services to generate first trials. Online payments and increasing credit card usage have little to do with the majority of travellers from Pakistan, who prefer convenience and trust of a human face on the possibility of lower costs on an online channel.
On its own, one can safely say, Checkin.pk has failed to create enough ripples in the market, primarily by holding back on marketing itself or perhaps being unable to advertise as much as it should because of financial constraints. Whatever the reason may be, unless Checkin.pk is prepared to go all out on changing customer perceptions about online ticket buying, and offering substantial price discounts on ticket prices, little change should be expected from the market.
And as long as that doesn’t happen, travel agents can continue to shut their shop at 6 p.m., go home and sleep in peace knowing that their customers will still be there when they get back the next morning.
