After the Reset: AI and the Next Phase for Short-Term Rentals

**Jamie Lane** (0:05)
Welcome to the STR Data Lab.
Hello, and welcome to another edition of the STR Data Lab. I'm Jamie Lane, Chief Economist at AirDNA, and I'm joined today by a really special guest. We have Brian Egan, the co-founder and CEO of Evolve, as our guest today. Brian, welcome to the show.

**Brian Egan** (0:28)
Jamie, thanks for having me. Great to be here.

**Jamie Lane** (0:30)
Yeah, so I feel like Evolve is one of the OG companies in our space. I'm out.
I'm starting in 2011, which is not only pre-Covid, it's pre-AirDNA, pre-Guesty, pre-PriceLabs, pre-a lot of the companies we all know and love that have been around for more than a decade.
Evolve has grown to be one of the largest operators in the space. And you guys have done a lot of good things, but maybe just wanted to start with some of that history. And you've seen a lot. You guys have maybe even invented the asset light management model that is now coming back into favor. And you guys were doing it a long time ago. But for those that don't know Evolve, do not know that thesis. And could you just walk us through and what you do, how you do it, and what you were sort of bedding on when you started the company?

**Brian Egan** (1:39)
Sounds great. Again, thanks for having me. I'm glad to hear we're coming back into style. Nobody told me we were out of style. So, but if that's the update, I'm glad we're already on the other side of it.
Jamie, it's so interesting. I love the framing of we're one of the OG companies. I don't know when we, I don't know when that happened, right? It's like these things are, as you know, you've been a part of building AirDNA, which is an incredible business over many years. And it's just a labor of love. There's a lot of blood, sweat and tears. It's day in, day out constant. And one day, you're kind of the upstart that is the little engine that could. And the next day, people think you're the OG and kind of the established incumbent. And somewhere in between, there's a whole lot of work.
I'll actually take that designation and wear that kind of proudly.
So thank you for that. And then yeah, as far as the journey itself, and maybe the origin is kind of what you were poking out there. So as you mentioned, we launched the business in 2011
And we came out this with what we now call, you refer to it as Asset Light, what we now call the either Asset Light or a hybrid management model. We didn't have that name at the time. But what we saw in the market was essentially a three-prong thesis for us. Was one, this market is going to mainstream. Sounds super obvious now. But in 2010, 2011, as we're planning out the business, it was still a very nascent industry. It was still riddled with inefficiencies.
At the time, the big site on the internet was VRBO, and it was a classified ad site, not e-commerce enabled, not even close to it. Pretty unreliable when it came to the content on there. The photos might not be right. The calendars probably aren't updated. The owner may or may not get back to you after you inquire about booking the property. A lot of paper checks. There's plenty of people paying for vacation rentals by leaving a check under the coffee can on the counter when they checked out of the property. It was that kind of a wild west world. We believed very strongly in the value proposition of the space that this was an amazing format for travel, that families and friends and groups were going to gravitate towards and that it would mainstream. That was point one. Point two was, with that mainstreaming though, we're going to be bringing all these new consumers into this category, and they're not going to be willing to put up with that stuff. They're going to be looking at short-term rental and expecting it to behave the way that the other formats for travel and the other things they buy on the Internet are going to do. They want to be able to shop and buy and have the protections and certainty that they would expect from air, hotel, and car.
On the other hand, they're not expecting to walk in and have the kind of variances that were happening at the time.
What that's going to lead to is a more vibrant, a more robust, a much bigger, but also a more complex and competitive market for all of those owners and all those local managers, which were kind of the two things making up the market, to operate it, right? And third, and ultimately like the business, with those two points in place, and with that increase in competition and complexity, there is going to be an opportunity to build a new kind of management model, and to help all of those owners who need that help, who aren't kind of either willing, able, desiring to do this on their own, as a part-time or even some cases a full-time job. They need that help, but they want more flexibility. They want more flexibility on the things that matter to them most. For some owners, that might be selecting the on-site partners that take care of the home. For some owners, that might be having access to specific pricing tools. For other owners, it might be that they want to have an interaction with that guest and greet them at the door, or they want nothing to do with that. More flexibility, and then ultimately being able to pass through a lower fee structure.