Kiwi backpacker tour operator Stray Travel hopes to double its business within a year, after expanding its operations to the South-East Asian nation of Laos.

Stray believes it is the first Western company to become a licensed tour operator in the socialist republic, giving it a jump ahead of competition in the fast developing tourist destination.

The venture also makes it the first hop-on, hop-off travel network in the region.

It is the first venture of its type outside of New Zealand for Stray director Neil Geddes, who co-founded the successful backpacker bus tour provider Kiwi Experience.

Between Stray and his other tour business - the company is also the licensed operator for Australian tour company Adventure Tours in New Zealand - Geddes' team transports 16,000 people around this country annually.

"We expect to carry those sorts of numbers in Asia within a year," he said.

Known as the "land of a million elephants", Laos is a rapidly growing tourist market.

The communist government only opened the country up to tourism in the early 1990s and it is seen as offering an "original" Asian experience now lost in other places.

Stray zeroed in on Laos not only for its development potential but its location, Geddes said.

The new Stray route incorporates northern Thailand, and South-East Asia was a stepping stone for travellers to this part of the world, he said.

With its existing hop-on, hop-off services and associated Spaceships campervan rental operations in New Zealand and Australia, it was good business to point people in this direction.

"Our concept works well in Laos and our existing expertise and systems could be applied to a product there.

"It's a developing market and it's in a hub on the way to Australasia.

"So it was complementary to what we're doing here."

While there were existing package tours in Laos, there was nothing for the more adventurous traveller, Geddes said.

The infrastructure in Laos is limited, so although you can catch the extremely cheap local buses they are not set up for visitors and getting to the tourist attractions is difficult.

Stray's product is set up to take travellers directly to the hotspots such as the Plain of Jars, an archaeological site scattered with thousands of megalithic jars, and the village of Vang Vieng where the popular backpacker past-time is pub crawling in inner tubes down the river.

Stray had to jump through many hoops to get its tour licence and the process took a year.

"You have to submit a plan to the Government which I was warned we would be forced to stick to so it had to be really comprehensive," he said.

"We got knocked back on various things over a three-month period and had to resubmit."

But Stray persevered because of the potential in the market. While other Western operators may have used a local company to provide services, Stray wanted to control its own product quality. Stray does have a local partner, which owns the buses, and its guides, drivers and other staff are Laotian.

Two months in and the new Stray South-East Asian operation is running two departures a week with eight to 14 people on each. Geddes predicted it would soon be running every day.

The hop-on, hop-off concept works like a cross between a Eurorail pass and bus tour.

Customers can buy passes covering the whole route - the Thailand/Laos circuit takes 17 days and costs about $1125 - or they can buy passes for smaller sections.

They can hop off wherever they like and get online to book themselves on the next bus coming through when they're ready to leave.

"People aren't aware of what's there before they start so they don't know where they're likely to spend extra time, so that total freedom to get off is a huge sales point."

With 20 years' experience in the business, Geddes said Stray's reservation systems were one of its competitive advantages.

Geddes owns the business with an investor. It also has a Spaceships operation in the United Kingdom.

While business slowed last winter it had picked up again this summer.

Geddes believed, too, that because it was a premium budget operator, travellers who might have taken more expensive options in better economic times were looking in Stray's direction.