Diane Mastrull: Vacation-rental service can seal the deal in seconds

Steve Barsh of PackLate.com works out with staffers at the Uppercut Gym in Narberth. The session was designed for team-building among the seven employees of the two-year-old start-up, which is hoping to make a bang in the vacation-rental industry.
Steve Barsh of PackLate.com works out with staffers at the Uppercut Gym in Narberth. The session was designed for team-building among the seven employees of the two-year-old start-up, which is hoping to make a bang in the vacation-rental industry. (LAURENCE KESTERSON / Staff Photographer)
Posted: March 05, 2012

One night last week, Steve Barsh, a famously upbeat, can-do serial entrepreneur, was delivering a merciless pounding.

His victim was a 200-pound heavy bag hanging in a Narberth gym, where Barsh and five of his employees spent an hour punching, kicking, and otherwise aggressively acting out.

None of it, Barsh insisted, was to be taken as a sign that his latest start-up is in trouble. Just the opposite, he said, explaining the Wednesday night sweat session at Uppercut Gym as productive team building for a young company of seven employees on a mission to make a big impact in the vacation industry.

He formed PackLate.com two years ago to boost bookings for vacation homes in a way that had not been possible: in real time.

"We think it's a pretty big niche," said Barsh, whose past accomplishments include Dreamit Ventures, a start-up incubator in which he was a partner. "In five or six years, we could do $600 million or $700 million in bookings."

PackLate's aim is to enable those bookings to be as immediate as reserving a seat on an airplane - and as precise. The house you want is the house you get. As opposed to one that might have the number of bathrooms and bedrooms you need but isn't the specific rental you spotted on a vacation website - because that one got booked while you were waiting for the property manager or third-party booking agent to reply to your e-mail asking to reserve the property.

With PackLate.com, there's no lag time. And no sending a check to a property manager you've never met.

It's all about the proprietary software developed by a team of designers at PackLate's office in West Conshohocken, incubator space provided by First Round Capital L.L.C.

That software tracks up-to-date vacation-rental inventory from participating property managers and enables customers - or those booking on their behalf - to access it and rent homes with a credit card as part of a transaction that takes about three seconds to actually confirm, Barsh said. PackLate.com collects a commission on each booking from the property manager.

Early signs are promising, with 80 percent of the bookings through PackLate.com coming from outside the United States.

Barsh said bookings had been up 50 percent month over month since October, when PackLate.com went live with Travel Holdings Inc., a large global travel wholesaler based in Orlando. It's through such wholesalers that, for instance, a travel agency in Saudi Arabia would book rooms for a client at a Hilton Hotel near Disney World.

But securing bookings for homes is a lot tougher - largely because their condition is not as predictable as hotel rooms, making them a chancier proposition for vacationers. That concern is heightened even more when you're living in Europe and planning to vacation at a house in the United States you won't have a chance to check out until you arrive. That's the anxiety PackLate.com wants to eliminate.

So far, its inventory includes 15,000 rental homes in the United States. Starting this week, that inventory goes international with listings from London, followed in the next few weeks by properties in Buenos Aires, Argentina. Barsh expects the PackLate.com inventory, which already includes listings from Canada, to reach 30,000 by the end of this year.

It's a business-to-business model that did not start out that way. As the name suggests, Barsh initially envisioned PackLate.com serving consumers interested in last-minute vacation rentals. Then he realized that those who tend to book vacation homes usually do so six months to a year in advance.

Key to being an entrepreneur is the ability to pivot, which Barsh did when it became apparent that the more-efficient way to attract rental-home bookings would be through business-to-business distributors, such as property managers and travel wholesalers.

"They already have channels into massive numbers of consumers, so there's an opportunity there for us to sort of piggyback on their distribution channels," said Gil Beyda, founder and managing partner at Genacast Ventures, a seed fund that has invested nearly $750,000 in PackLate.com.

Travel-industry professionals from California to Florida interviewed last week reported booking increases of 5 percent to 10 percent since they signed on with PackLate.com.

"They've done a really amazing thing," said Lauren Volcheff, vice president of marketing at Travel Holdings. "They've taken what was a really segmented part of the travel industry and brought them under one umbrella and made them extremely easy to book."

The timing is ideal, said Brandon Ezra, chief executive officer of Mammoth Property Reservations in Mammoth Lakes, Calif., who also is involved with three other property-rental companies.

"The vacation-rental industry is growing leaps and bounds," Ezra said, with a worldwide market capitalization of $80 billion to $90 billion, about $30 billion in the United States.

The lousy economy has helped feed that growth, with more and more families sharing rental vacation homes rather than booking pricier hotel rooms. Vacation homes also have become more appealing as property managers have added amenities once associated only with resort hotels, such as daily cleaning service, hot tubs, pools, and access to fitness centers, Ezra said.

"The guys at PackLate have positioned themselves very well," he said.

Barsh has ambitious expansion plans, which necessitate more funding, though he would not say how much he is seeking from investors. It needs to be enough, he said, to capitalize on PackLate's recent momentum.

"Let's get some fuel and run through it real quickly and grab the market," he said.


Diane Mastrull:

Start-up PackLate holds a weekly "fight night" to help employees reduce stress. Watch a video at

www.philly.com/business


Contact Diane Mastrull at 215-854-2466 or dmastrull@phillynews.com, or follow on Twitter @mastrud.

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