Author: Dennis Schaal
You assuredly have heard of Occupy Wall Street, but the “luxury for less” movement, which sets its sights on vacation rentals in multimillion dollar homes and villas around the world, may have escaped your attention.
And, while you are at it, welcome to a family feud of sorts in the luxury lodging and vacation club arena.
Portico Club by Exclusive Resorts, with $16.5 million in funding from Exclusive Resorts chairman and AOL founder Steve Case’s Revolution fund, was spun off after a fashion from uber-premium vacation club Exclusive Resorts in May, and competes with Inspirato for the hearts and wallets of the mega-wealthy near you.
Inspirato, which launched in January 2011 and likewise has roots in Exclusive Resorts, boasts some $65 million in equity and debt from the likes of KPCB, Institutional Venture Partners, First Round Capital, Access Venture Partners, DAG Ventures, Millennium Technology Value Partners and CrunchFund.
Brent Handler and Brad Handler, co-founders and CEO and chairman, respectively, of Inspirato, likewise co-founded Exclusive Resorts in 2002. Brent Handler parted ways with Exclusive Resorts in 2009, and Brad Handler followed in 2011.
Inspirato joins Portico in seeking members who don’t mind spending $10,000 on accommodations for a week’s stay in Nantucket or $15,000 for seven nights in Turks & Caicos.
The concept is simple: If you live in a multimillion dollar home and don’t want to cramp your style when vacationing, there is no reason to buy multiple homes around the world.
Merely join a luxury vacation club and rent a villa — one that’s comparable to your digs back home.
To borrow and hijack a phrase from Hillary Clinton: It only takes a villa.
Portico Club and Inspirato members pay $10,000 and $15,000 initiation fees, respectively, and then $2,500 annually for the lure of below-market, members-only rental rates at roughly 150-175 upscale properties each in the U.S., Mexico, the Caribbean and Europe.
There isn’t much couch-surfing going on with these companies, and there are no tepees for rent, Airbnb-style.
Denver seems to be the locus of the “luxury for less” movement, which is a phrase that Inspirato promulgates. And, it’s not because Denver is renowned for its chateaus and castles, but due to the fact that both Inspirato and Portico are based in Denver, as is Exclusive Resorts.
Justin Halloran, Portico’s CEO, says Portico Club by Exclusive Resorts is a standalone company, having been spun off from Exclusive Resorts in May.
He acknowledges, though, that Portico operates out of the same offices as Exclusive Resorts and shares services.
Adding to the cross-pollination, Exclusive Resorts CEO Philippe Bourguignon, who previously headed Euro Disney and served as executive vice president, North America, for hotel operator Accor, is Portico’s chairman. And Portico benefactor Steve Case is chairman of Exclusive Resorts.
But, the Inspirato and Portico models are different from that of Exclusive Resorts, which charges a $170,000 membership fee and requires 20 days of travel per year, and owns the properties it offers.
Unlike Exclusive Resorts, Portico Club and Inspirato are said to lease the properties they market to their respective members and enable them to travel as often or as infrequently as they wish.
“We control the inventory and the experience, and control 100% of the calendar,” says Halloran of Portico.
Halloran acknowledges that Portico doesn’t lease all of the properties it makes available to members.
And Ira Bahr, chief marketing officer at Inspirato, argues that the greater extent of leasing activities by Inspirato is a differentiator between the two companies.
That leads to a claim from Bahr that Inspirato offers its members better rates at luxury properties than Portico does because Inspirato leases its accommodations and has more flexibility in changing rates than would a company that has to negotiate rates with a third party.
Halloran isn’t buying that line of thinking.
“I do not agree that Inspirato’s properties are more high-end or that they are more discounted,” Halloran says. “Inspirato may have a higher percentage of 4- and 5- bedroom properties than Portico, but Portico is competing with Inspirato for many of the same properties and resort partners and we can confidently state that for like properties, Portico is at least as inexpensive as Inspirato.”
Both companies believe they can take advantage of heightened interest in vacation rentals as an alternative to hotel stays.
And, for Halloran, it all hits close to home.
He is a former vice president of global initiatives at HomeAway, and contends Portico has solved several of HomeAways “drawbacks,” including availability calendars that don’t get updated and homeowners who don’t respond in a timely fashion to reservations’ inquiries.
Portico has reservationists on call and, in another all-iin-the-family touch, uses booking engine services from Escapia, which HomeAway acquired in 2010.
Halloran says unlike many vacation rental companies, Portico curates and vets every home it offers to ensure there are “sharp knives and wi-fi that works.”
And, Bahr of Inspirato concurs about the shortcomings of the vacation rental sector and points to the difficulties of getting what you were promised when booking through vacation rental companies.
“There are a meaningful number of cases where things are not exactly what guests thought,” says Bahr, referring to the quality of a neighborhood, mustiness in a residence and even the “coat of paint” when renting a vacation home on sites such as HomeAway.
Both Inspirato and Portico are trying to apply a new coat of paint to the clubby world of vacation clubs.
And, plenty of VCs who would find themselves right at home in Inspirato- and Portico-type lodgings, are betting they will succeed.