Would you like a luxury travel subscription from Inspirato with those Amina Muaddi Rosie 95MM Metallic Leather Slingback Pumps from Saks Fifth Avenue?
That could conceivably be a sales pitches as Inspirato entered into a strategic marketing partnership with Saks, which would have its Saks Stylists, online and in-store, try to sell Inspirato luxury travel subscriptions to clients. Consumers can choose to get matched with a stylist at Saks for fashion recommendations.
The two luxury companies plans to engage in a variety of cross-promotional efforts once the partnership kicks in sometime between April and June. Saks Stylists would receive training on Inspirato’s variety of travel subscription offerings, such as the combined Inspirato Pass and Club membership, which the company’s website says costs $2,550 per month.
Among elements of the partnership, Inspirato members will receive a pitch to apply for a SaksFirst Card, and they may qualify for status tier upgrades in the Saks loyalty program based on how much they spend with Inspirato. In turn, Saks customers would get access to incentives to buy Inspirato travel subscriptions.
The Inspirato announcement said Saks is its “exclusive luxury retail partner.”
The companies did not detail the financial details of their marketing partnership.
Inspirato, a Denver-based travel startup, said that it generated $36 million in subscription travel revenue in the second quarter — up by half year-over-year. The company’s full quarterly revenue was $84 million.
The company’s Netflix-like subscription service, Inspirato Pass, had 3,600 subscribers in the quarter. For about $2,500 a month, Inspirato’s Pass lets travelers stay at about luxury vacation homes and hotels it partners with for specified lengths of stay.
In a concerning sign, growth in the company’s longstanding club-based program — Inspirato Club, where people pay a fee for access to discounted travel — grew only 4 percent to 12,100, year-over-year.
In another eyebrow-raising statistic, losses increased instead of shrunk. The net loss for the second quarter of 2022 was $7.2 million compared to a net loss of $0.6 million in the second quarter of 2021. Management attributed the rising losses to “increased corporate operating expenses.”
The company said it forecast that its loss for the full year will be between $15 million and $25 million on an adjusted earnings before interest, taxes, depreciation, and amortization basis. The company anticipates generating positive adjusted earnings for the full year 2023.
Inspirato, a subscription business primarily for stays at luxury vacation homes and hotels, debuted on Thursday a third subscription product.
The new Inspirato Select product lets subscribers pick 3 trips from a list of more than 500,000 for an annual fee of $24,000, plus a $2,000 enrollment fee. The cost includes nightly rates, taxes, and fees but not transportation, meals, or other aspects of a trip.
Tapping into the corporate incentives market, Inspirato’s new Select product can be used as a perk for employees or business partners.
Inspirato, the luxury travel subscription service that went public last year through a SPAC, reported a very strong Q1 2022 earnings topline, a 67% increase from its previous year quarter to $82 million; total active subscribes increased to 15,300 as of March 31, 2022, an increase of 18% year-over-year. More on its results here.
Beyond its core business, the more interesting part is its expansion into adjacent markets, as it detailed in its slides from the quarterly earnings, below.
“We’ve also alluded to early success of adjacent subscription offerings, such as a corporate incentive travel platform. We believe that continuing to successfully innovate around our past platform, specifically as it relates to the shareability of travel with employees could lead to significant upside to our near and long-term revenue growth …
“I’m really glad you asked about the corporate incentive market and the shareability of the Pass platform. It’s something that we’re really focused on, we’re investing heavily in and we think that we’ve really got the tiger by the tail, in terms of the technology and infrastructure that we’ve built with our patented technology that really drives the Pass. And essentially what it allows for us to do is to create these lists of 100s of 1000s of trips or millions of trips, and have a shopping and merchandising experience for the consumer that’s really unmatched. Today the one product that we have is Pass platform, but in the future we think that lends itself very well for things like the individual incentive travel market. There is so much demand for companies to want to really differentiate themselves, to really provide a mechanism where they can win in hiring war or win against the great resignation and providing a trip where historically, these trips would either be like big events, held at a high end somewhere that you just go and it’s sort of like all your work people, or maybe it’s you can bring your spouse. So these are opportunities to bring your whole family or have family and friends be able to experience your hard work and have these incredible vacations.
“So we think that that platform that we’ve already invested in Pass really manifests itself well for this incentive market. And then while I’m kind of talking about this other thing that Pass does really well, is it — it creates a kind of natural exchange platform. So if you think about the ability for Pass, and what we’ve built, to be able to be used by any kind of loyalty program or any other type of incentive program, we really are excited about the differentiation that we bring to that market. And be on the lookout this year for a lot of innovation in that area.”