There are summer vacations. Then there are high-end summer vacations. And then there’s Inspirato.
Bringing an innovative subscription and membership model to its affluent clientele, the company has just turned profitable in its 13th year of existence, leveraging a funding round of $25 million from Capital One in October 2023.
With more than 50% of its members making more than $500,000 per year, Inspirato CEO Eric Grosse told PYMNTS CEO Karen Webster that he’s pushing the company toward more community and a digital “country club” type of model, which includes what could be among the world’s most affluent loyalty programs.
It’s tier one is $20,000 in annual spend for members that pay $7,800 a year at the Inspirato Club level and then nightly rates on a pay-as-you-go basis. The Inspirato Pass is $2,250 per month with a $2,250 enrollment fee. That level is inclusive of nightly rates.
Its portfolio includes branded homes, five-star resort partners and what it calls “custom travel experiences.” Among that experience: The company handles all preplanning for the trip. When an Inspirato customer books a trip they’re asked for their favorite essentials and the refrigerator is stocked when they arrive. It has on the ground concierge service for its guests.
It has pivoted from a net income loss of $5.9 million in Q1 2023 to a $2.2 million net income gain in Q1 2024, announced May 7, by tightening its belt, shedding unprofitable leases at properties its travelers no longer — or maybe never — favored.
While he’s proud of the operational efficiencies he brought to the company, for Grosse, Inspirato is all about the customer. That perspective is particularly acute when their customer base has the means, and probably the ability, to create their own adventure in other ways. Currently, Inspirato counts approximately 12,000 members.
“Our members are very affluent, but you still have to be innovative,” Grosse told Webster. “You have to be customer obsessed. You have to understand what it is that members are looking for, because whether that’s economic trends or other factors, it’s fair to say than in all segments of the travel industry, there’s always an evolution of customer taste.”
Platform Experience
Grosse is a former board member who was brought in behind founder Brett Handler in November 2023. He is former president of Suki (voice assistant for physicians) and before that he was co-founder of upscale home furnishings eCommerce company Chairish. He cut his teeth in the travel business as a co-founder of travel platform Hotwire before Expedia bought it in September 2003. He is well versed in the two-sided nature of platform business models and loyalty programs. Although 75% of its members have been members for over two years, the program encourages members to travel more with Inspirato, and Grosse believes it increases the company’s share of wallet in the luxury travel market.
The Inspirato customer base is highly educated, with 90% holding college degrees, and tends to skew towards the mid-40s to mid-60s age range. Grosse said he was surprised that many members enjoy traveling together, fostering a sense of community within the platform, which has informed his decision to accelerate the loyalty program and create more family and group bespoke trips on the platform.
Inspirato’s target audience — which Grosse would like to double — is an affluent group of travelers to say the least, with a large percentage having a net worth exceeding $2 million. There are 8 million such consumers in the U.S., roughly 6% of the population, with that profile. Currently, Inspirato counts only 0.0015 of those households as members.
Part of the strategy was to analyze the data about property usage and room nights and develop a product aimed at booking unused capacity. Inspirato Pass, which is a true subscription model, has enabled the company to monetize unused capacity. It will require those ultra high-end customers who can travel frequently to make it viable.
Looking ahead, Inspirato aims to grow its member base using a variety of strategies, formalizing the word of mouth marketing that has helped to grow the base to date.
Grosse hinted that Capital One might play a part in that growth. While it is not known as an affluent brand, Cap One does have a wealth management group and as Webster pointed out, issues the Saks Fifth Avenue and Neiman Marcus credit cards which, as brands, have started to offer travel experiences to their cardholders as a value add.