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Travel's most forward-thinking insiders will gather September 18–19 for our annual Skift Global Forum in New York. In just a few years, Skift's Forums — the largest creative business gatherings in the global travel industry — have become what media, speakers, and attendees have called the “TED Talks of travel.”
Skift Global Forum 2019 will take place at Jazz at Lincoln Center’s Frederick P. Rose Hall in New York. This year's Forum speakers include CEOs and top executives from Booking Holdings, Delta Air Lines, Expedia, Air France-KLM, Marriott International, Amtrak, and many more.
When luxury travel company Inspirato launched a new subscription service in July, CEO Brent Handler never anticipated his staff would receive more inbound requests from customers in one day than they normally would over the course of a month.
Handler compares his company’s new offering, Inspirato Pass, to a buffet — in that travelers receive access to a select list of destinations, homes, and hotels on a first-come, first-serve basis for $2,500 a month.
The upshot is customers do not have to pay nightly rates or fees like they would under Inspirato’s flagship tiered member-based club model. But there are some limitations, notably that users can only have one active reservation at a time. Inspirato also requires a six-month commitment before customers can cancel.
According to the company, Inspirato customers are increasingly finding Inspirato Pass to be different enough from its club model that affluent travelers are opting to buy both.
A traditional Inspirato membership starts at $1,150 a month for the first year, in addition to annual fees of $3,700 if customers choose to extend their memberships. In return, Inspirato’s list of 15,000-plus active members gain access to the operator’s entire inventory of branded and independently owned properties managed by the company. There also no limits to the number of trips customers can book at once.
“Customers want the flexibility to book what they want — but also want the buffet,” said Handler. “They love traveling, want to take their family to Deer Valley [Utah] on a ski trip but also check Inspirato Pass for stuff that is available.”
Inspirato CEO Brent Handler will be speaking at Skift Global Forum in New York City on September 18.
Skift Editor’s Note: This interview has been edited for clarity and length.
Skift: We are now almost two months past the launch date of Inspirato Pass. How are your members liking the new offering?
Brent Handler: Inspirato Pass is doing better than expected in all measurable categories, including the number of new Pass holders who purchase, existing members who purchase, and engagement of people who are using it. Even our trip satisfaction has jumped 15 percent on Pass trips.
Skift: What material impact does Inspirato expect the new offering to have on financial performance going forward?
Handler: Like all subscription business, we expect to invest heavily in the opportunity for subscription travel. However, we expect rapid payback on that investment since our existing business is profitable, growing, and provides the necessary infrastructure to scale quickly.
Skift: What’s the upside for property owners of letting Inspirato members stay at luxury destinations at discounted rates?
Handler: Inspirato acquires inventory in two primary ways. For our homes and select experiences such as a chartered week on a luxury cruise, Inspirato takes full inventory risk and manages the experience to provide service and certainty that is not available through brokers or marketplaces. As an example, Inspirato has more than 300 homes that we lease from property owners, typically for over five years. And in these cases, property owners get a fixed fee payment and all maintenance expenses covered. Because we pay owners a fixed rate, they don’t care about our rates or profitability.
The second way that we get inventory is through traditional agreements with brand operators. As it relates to pass, brands love the true opacity that we offer, in that a Pass holder never sees a discounted rate for a hotel stay and we direct all Pass holders to the brand’s website to view photography, content, and nightly rates. As a result, brands are willing to provide us inventory at a value that we would be unable to attain if we were simply discounting through traditional pricing channels.