I caught up with Steve Barsh after last month’s Supernova Forum in Philadelphia, where he was a panelist. The day we spoke, PackLate was launching its service in Maui and was preparing to expand to Puerto Rico and Costa Rica, its first markets outside of the American Sun Belt.

PackLate’s online booking platform now allows customers to book more than 7,000 properties in 30 cities. Given that the site only went live in February, it has clearly struck a chord with both increasingly desperate property owners and last-minute travellers.

Last-minute economics

The idea for PackLate stemmed from Barsh’s 10-year experience as a vacation-home owner. He was always surprised by the number of last-minute bookers, and frustrated by how many nights would go unused. Rental homes are a “perishable inventory,” Barsh explains. “You could never get that night back.”

The recession made things worse. Scores of home-owners, no longer able to afford their mortgages, flooded the rental space with extra homes. Meanwhile, wary travellers, unsure whether they would still be employed in six months, started to put off their vacations. With demand way down and supply up, “there was pain all over the market,” Barsh says.

PackLate aims to alleviate the pain by creating a meeting space for last-minute travellers and property managers with spare inventory. The site’s golden rule? The closer to check-in time, the cheaper the rate. Most homes end up being rented for roughly one-third off the original price, according to Barsh, though he says discounts can reach the fifty percent mark. In other words, PackLate is a bargain for travellers, and a Hail Mary for home-owners.

Online bookability

PackLate owes its success to the platform’s simplicity. Barsh describes the service as “Expedia for vacation rentals.” Customers search by location and use their credit cards to book. The company liaises with property managers, verifying price and availability in real time. This eliminates the traditional, often frustrating “back and forth” with home-owners, Barsh says.

While this model is familiar to airlines and hotel bookings, it’s a big deal in the rental home industry where haggling and dilly-dallying are the norm. Barsh says that at least one of the big online travel agents has approached him about a partnership, impressed by PackLate’s ability to “do a real live booking” in this notoriously chaotic space.

A free walled garden

The company makes money by taking a cut of any successful booking. Consumers don’t pay for the service, but they have to sign up for a free PackLate account in order to see detailed information about a property.

This “membership wall” keeps identifying information about the homes out of the grasp of search engines like Google and Bing, guarding the most exclusive deals for subscribers.

The idea is to avoid undercutting PackLate’s rental company partners by turning last-minute rates into de facto rates, Barsh explains. But creating a walled garden also limits the site’s exposure. “It makes our marketing really hard because we’re good at SEO,” Barsh says, “but that’s not our model.”

Getting personal

PackLate tries to differentiate itself by providing top-notch customer service, “which is not generally something travel is known for,” Barsh says. The company’s phone number is featured prominently on the site and Barsh often fields calls on his cellphone.

Barsh tells a story about a customer who recently showed up at the Orlando home he booked online, only to be moved to another location by a rude property manager. Barsh says he offered to refund the family’s first night, but the customer demanded to be compensated for a $400 trip to Universal Studios that the family missed out on because of the ordeal.

Unsure what to do, the company drafted a blog post asking readers to help resolve their conundrum. “If you are a young start-up, trying to differentiate with great customer service,” Barsh wrote, “where do you ‘draw the line’ when a customer (who is understandably upset) keeps asking for ‘more?’”

In the end, Barsh leaned on the property manager to grant the family a late check-out time so they could visit the theme park a day later (at a small extra cost). PackLate’s hands-on approach turned a disgruntled customer into an impressed one. And it also generated some compelling – and not unflattering – content.

Next step social?

Savvy travellers will notice that PackLate doesn’t have any social features built into the site. Prospective renters can’t browse comments or reviews from previous customers as they would on sites like TripAdvisor. Barsh says he’s looking into adding a review feature.

With its clean look and excellent usability, PackLate is already an impressive platform. Just imagine if it were also a community. Vacationers could swap stories and travel tips. They could share information about local restaurants or secret swimming spots.

After all, chances are PackLate’s customers aren’t just last-minute travellers, but like-minded ones as well.