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(Bloomberg) -- When the pandemic slammed the travel industry earlier this year, Jeff Cavins didn’t know if his startup was going to make it. Cavins is the chief executive officer of Outdoorsy Inc., a Texas-based RV marketplace. In March and April, as Americans scrapped their travel plans en masse, Outdoorsy’s cancellation rate ran as high as 90%.
Cavins furloughed 40% of his staff, gave across-the-board pay cuts and said he wouldn’t take a salary through the end of the year. Despite having raised more than $80 million from investors, the company took a $1.5 million loan from the federal government’s Paycheck Protection Program to staunch the bleeding.
“If we don’t do it, we’re going to sink this company and there will be nothing left,” Cavins recalls telling his team before the changes. “It’s kind of like a meteor hit our planet and we had to deal with it.”
Now, a few months later, Outdoory’s outlook is dramatically different. As the coronavirus has lingered in the U.S., air travel is seen as more dangerous than driving and even hotels could be potential vectors for disease. That combination has prompted millions of Americans to plan to vacation in RVs this year, according to data compiled by the Recreational Vehicle Industry Association, far more than traveled that way last year.
The result for Outdoorsy -- clinging to life just a few months ago -- is that business is booming.
Last month, Cavins said about 40,000 bookings were made through the startup, which connects RV owners with renters, and roughly 93% of customers were renting for the first time. Outdoorsy has styled itself as a kind of Airbnb Inc. for mobile homes, offering a platform for peer-to-peer rentals, and catering to travelers not yet ready to make the jump into RV ownership. Rates depend on the size of the vehicle but start around $50 a night and can reach more than $400 a night for a full-sized Class A mobile camper.
“It’s an explosive moment for us,” Cavins said. “The company is struggling to keep up with what might be the only alternative way of travel.”
Since retrenching this spring, Outdoorsy has hired back its furloughed staff and added additional employees to keep up with the growing number of antsy travelers. The company is expanding functions like customer service, training and insurance processing teams to 300 people up from 30, but won’t be adding any new mid-level managers or executives. Now, the startup has more than 425 temporary and permanent employees.
Despite the surge, only some of Outdoorsy’s employees had their pre-Covid-19 salaries restored (including its call center workers and other customer-facing roles), and the startup isn’t giving bonuses or pay increases.
Cognizant that customers no longer want to interact face-to-face, Outdoorsy has also shifted to an all-digital insurance claims process, using insurance processor Snapsheet. “Customers just don’t want to see people in-person right now,” said Snapsheet president Jamie Yoder.
Outdoorsy isn’t the only business sating Americans’ newfound yen for road trips. Traditional RV companies including retailer Cruise America Inc., also rent out vehicles. Akron, Ohio-based Shared Peer Holdings Co., which does business as RVshare, is offering rentals as well.
RVs are generally seen as a safe way to vacation in nature and visit national parks, which are expected to see a surge in traffic this summer. The coronavirus has been shown to be less contagious outside, and Cavins said that RVs can make trips to national park seem even safer: providing a controlled environment for cooking, socially distant living arrangements and a built-in private bathroom.
For the time being, Outdoorsy and others expect vacations in nature to be the new normal. The company has even sent 150 frontline health care workers on 3-day road trips as a reprieve from their day-to-day work, as part of its “healthcare heroes” program.
“I think the outdoors will play an important role in the healing of this nation,” Cavins said.
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