This Vacation Rental Company Thrived During the Pandemic. Here’s How.
Back in the spring of 2020, Evolve’s cancellation rate on its vacation rental bookings soared to 97 percent. The company’s net booking value — the amount it earns for completed trips — was negative for five weeks straight.
“We had never even contemplated that it could be negative, let alone to the tune of tens of millions of dollars over a compressed time frame,” Brian Egan, the CEO and co-founder of the vacation rental management company, said.
But the worst part, Egan explained, was the uncertainty surrounding COVID-19. He and the rest of the world knew very little about the virus. How fast could it spread? How deadly was it? How long would this last? How would it affect the individuals who worked at Evolve? It seemed like the only thing everyone agreed upon at the time was that social distancing via sheltering-in-place was the best solution.
Needless to say, that was detrimental to Evolve’s model, which offers homeowners a better way to generate rental income and provides travelers with a streamlined booking experience.
“I felt like I was reading a satirical headline, ‘Travel ban bad for travel business,’” Egan said.
But by June 2020, the company had turned a corner. To date, Evolve has seen a 70 percent year-over-year increase in net booking value, and the record growth has led to a major hiring push.
So, how did Egan and the company make it through those existential months? It starts with a leadership philosophy and a company core value acronym — COHAD, which stands for “communicate often, honestly and directly.”
Built In Colorado caught up with Egan to learn more about what this philosophy looked like in action, and how Evolve’s company culture got them through the pandemic.
I’m convinced that the culture we’ve built together was truly what allowed us to survive.”
As the CEO, describe your role and responsibilities at Evolve.
My job is to put every Evolve in the best possible position to succeed. That can encompass a number of different things on any given day, but it usually comes down to four main pillars: setting the edges of our culture; ensuring alignment on our strategic direction; building an exceptional team; and enabling communication. If I do those four things well, it translates to a great experience for Evolvers, where everyone is clear on the what, why and the how of our work, and is surrounded by strong leaders and talented teammates.
Then I get to focus on the fifth pillar: getting out of the way.
At the start of the pandemic, how concerned were you about the company’s outlook?
I cannot overstate the level of concern. We viewed the pandemic as an existential threat to Evolve’s existence, full stop. Looking back, it was amazing how fast it all happened. In a matter of days, we went from viewing COVID-19 as something that was happening elsewhere in the world, to emergency meetings with our board and leadership team, to the sobering recognition that we now had only two priorities: safeguard the health and safety of our team, and don’t let coronavirus kill the company.
How did the company immediately respond?
On March 11, 2020, I got to work thinking it would be a relatively normal day. By 11 a.m. I became convinced that we needed to close our office to protect our team and our community. By 1 p.m. our leadership team had met, confirmed that decision, and devised an implementation plan. At 2:30 p.m. we briefed our people leaders and at 4:30 p.m. I sent an all-company email to notify our team. Albeit abrupt and surreal, that day was a very clear representation of my priorities as a leader; the health and safety of our team came first and we lived up to COHAD within hours of a decision being made.
I closed that email by saying, “I have every confidence that we have the right team, culture and tools to overcome this challenge.” Looking back now, I can honestly say that while we were uncertain about so many things, the resilience and perseverance of our team was never one of them.
How did the COHAD philosophy help you lead through the pandemic?
The true severity of the pandemic set in after we went remote. As humans, a crisis causes us to go back to basics. I made it known to the team that they could come to me with their hardest questions and get the real answers. I confirmed to them that I was not going to suspend my commitment to COHAD during the pandemic, rather, I was going to double down on it. I think we all knew that those real answers would be scary and ambiguous...but we also knew that they were a thousand times better than any other answers because they were the truth.
I made it known to the team that they could come to me with their hardest questions and get the real answers.’’
For Evolve, the most alarming answer was our “low case” scenario. In this scenario, the travel market would be shut down or severely limited for up to two years, and therefore we would need to go into the business equivalent of a nuclear bunker in order to survive. We had more conviction than ever about the vacation rental category and our business model, and we knew that if we could just survive for those two years, we could reemerge and rebuild to new highs. But for our team, this meant that a layoff had to be on the table — something that I shared with everyone from the very beginning.
This extreme transparency has remained a constant throughout the pandemic and I’m grateful every day that we had laid the groundwork for this beforehand. And our unwavering commitment to COHAD would not be possible without a culture that allowed for it. I was the principal architect of that culture, but I didn’t build it myself — that’s something we did as a team. It’s my job to set the edges of our culture, but our team is empowered and encouraged to paint between those lines in whatever ways are most authentic to them.
At what point did you realize that the company would be OK?
Once we started planning against that worst-case scenario, I knew we’d be OK. Our answer to the unknown was to plan for something far worse than any projection at the time, knowing that the rest was upside. The second indicator came shortly thereafter when I told our investors what our capital needs would be to survive the low case. I wasn’t sure what to expect, but they could not have been more supportive. We ended up raising $25 million at a time when everything was still uncertain — travel was nonexistent and no one knew when it would return.
Once we started planning against that worst-case scenario, I knew we’d be OK.’’
The ultimate certainty came several months later. At our low point in March, no one could have convinced me that by June we’d be setting booking records, but that’s exactly what happened. Pent-up demand for travel was growing, the world was starting to have a better understanding of the virus, and people began to see vacation rentals as a safer option for travel. We’ve seen record-shattering bookings since then, which have continued to this day.
What has this past year taught you about leadership?
I learned a lot about trust. In order to live up to COHAD, I have to trust that our team can handle communication that is confidential, challenging, or even scary. I have to be an active listener when it comes to constructive feedback and trust that it is intended to make me and our company stronger. Perhaps most importantly, I have to trust that I can be vulnerable and admit when I’m wrong without losing their confidence, because “honestly and directly, I’m often” wrong.
I thought I was committed to leadership principles like communication and vulnerability prior to the pandemic, but I now realize I was only at the beginning of that journey, and I still have a long way to go. I’m immensely grateful to have learned that lesson. It’s something that will be with me for the rest of my life.