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Welcome to our March Spotlight Newsletter

With S pring Break just around the corner, we thought it appropriate to shine the light on BookingPal -  a new player in the vacation rentals space.  An early 2015 investment, BookingPal has already become one of Thayer's fastest growing companies and is quickly becoming a dominant Global Distribution System (GDS) in the market. With few true competitors in the space, all indications are that the coast ahead is very clear!
Timing may not be everything in the startup world but it sure helps. Take BookingPal, for example. This 2015 Thayer Ventures II portfolio company is building what amounts to a Global Distribution System (GDS) for the vacation rental space at a time when the industry is expected to more than double from its current size to more than $195 billion in annual revenue by 2019 (PhoCusWright Study) and account for 20% of the global accommodations market (Expedia Study). 

Achieving that kind of growth requires a transformation of the space from one that is based on an offline, listing-centric booking model to one that is online and standardized with live inventory and multi-channel booking capability. Such a transformation is a serious technology challenge given the heavy fragmentation of supply, vast array of Property Management Systems (PMS) and lack of data standards. Solving that challenge is precisely why Alex Aydin started BookingPal.
Winners Often Win Again

Alex Aydin is not new to the hyper growth startup world. With dual degrees in Electrical Engineering and Biological Sciences from the University of California, Irvine, and an M.S. degree in Biomedical Engineering from California State University, Long Beach, Alex has always taken an analytical approach to his companies. Alex co-founded Procom Technology (NASDAQ: PRCM); an embedded operating systems developer, in 1987, and in 2005, sold the company to Sun Microsystems. In 2006 Alex founded Icanbuy, a SaaS based online comparison-shopping platform for financial products and subsequently sold it to Informa (LON: INFR).

The idea for BookingPal came to Alex during a frustrating travel planning experience he had while attempting to book a ski home for his family's coming vacation. It struck Alex that booking a vacation home should be as easy as booking a hotel and he wondered why it was so far from it. That question, and subsequent market research involving many of the same online channel partners of his Icanbuy days, led Alex to the insight that is now BookingPal. Channel partners were all looking to add vacation rentals as a new product category and revenue stream, but they had no single source to access the inventory.That was the problem - no GDS existed for the vacation rental space. BookingPal was the answer.
The Fragmented Vacation Rental Ecosystem

A number of credible reports estimate total global vacation rental supply to be between 4 and 5 million units. Of these, approximately half are professionally managed while the other half are owner managed. Of the professionally managed units, approximately 1.2 million use a Property Management System (PMS); software that enables managers to organize bookings, services, payments and the like. There are approximately 180 different PMS platforms servicing this segment and each depends on its own data model, rules and digital assets.

Because of the fragmentation of supply and lack of standardized data models across the various PMS platforms, it has been exceedingly difficult for major distributors like OTA's, Airbnb, meta sites and others, to integrate managed supply into their channels and make live booking available to travelers. The desire to do so has increased in intensity, however, as Airbnb exhibits exponential growth and other channel players make aggressive moves into the space. Expedia's acquisition of Homeaway is just one dramatic example.At the same time, property managers are finding it increasingly difficult to drive traffic to their own websites as the major OTA's and Airbnb leverage sophisticated search engine optimization (SEO) and dump billions into search engine marketing (SEM)- driving smaller players onto Google's dreaded "page 2". The result to many property managers, is an experience akin to drowning in an ever expanding sea of complexity and competitive pressure.

To the owners of the assets they are charged with marketing; sales are simply being lost. The missing link, as it were, is the GDS - that integration layer that normalizes the fragmented data into a standard that the channel player can consume. It is the technical tool that enables property managers to participate in all channels, not just their own direct website.
BookingPal - A Value-Added GDS

Alex and BookingPal is solving a difficult problem. First, the company had to develop software tools that would enable the organization to integrate with 180 PMS platforms and normalize data into a standard that various channels could consume. Next, the company had to build tools that would evaluate the quality of the data and generate minimum requirements and recommendations to property managers in order to increase booking velocity of their supply. In other words, BookingPal had to not only become a massive integration and data mapping platform but also a quality control tool that ever increased the efficacy of its client's offerings.

To achieve the vision, BookingPal has 65 employees of which 35 are engineers and developers. The company has established itself as a true technology company that is leading the race to become the de facto platform in a market that will likely have "winner take most" qualities. The company is also proving its efficacy; generating, in one recent case, a burst of bookings for a property manager within days of completing the integration.

On the channel side, BookingPal is serving content to all the major channels including Airbnb, Expedia and and is positioned for explosive growth in the next 18 months. Most importantly, BookingPal is enabling stakeholders to work together and is not disintermediating any incumbents. In other words, no one has to lose for BookingPal to win in a competitive dynamics sense, thereby reducing the strategic risk of competitive response in out years.
Financial Scale

BookingPal is Alex's third startup and he believes it is the one with the greatest potential. In fact, Alex believes BookingPal has all the potential to be a large public company (if not a major strategic acquisition) in the next several years. With only one significant competitor of note
We hope you're enjoying the series and look forward to your continued comments and interest!
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