Would You Pay $2,500 for an (Almost) All-You-Can-Travel Subscription?
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If the successes — and failures — of subscription-based businesses such as Rent the Runway, ClassPass, MoviePass and JetSmarter have proven anything, it’s that subscriptions aren’t just for magazines and newspapers anymore.
So, why not have a subscription for travel?
That’s exactly what Denver, Colorado-based luxury travel company Inspirato recently launched.
With Inspirato Pass, you can book a nearly endless number of stays or trips (transportation and incidentals are not included) for a monthly subscription fee starting at $2,500, or $30,000 for a year. There are no nightly rates, taxes or pesky fees to contend with, whether you stay in a luxury villa, high-end hotel or resort, or take a cruise or safari. There are more than 60,000 trips available for Inspirato Pass members to choose from — the catalogue is updated daily — and you can book up to a year in advance. Inspirato also provides pre-trip planning and access to a vacation advisor.
Homes are owned and managed directly by Inspirato so, unlike Airbnb Luxe or most other luxury vacation rental providers, you’re not staying in homes that are managed by third parties or professional vacation rental managers. Hotel and resort partners include brands like Mandarin Oriental; Marriott’s Ritz-Carlton and Edition properties; Four Seasons; and Waldorf Astoria, and other luxury independents. Cruises are from Silversea Cruises, while safaris are crafted by andBeyond.
One catch, however, is that you can’t book your next trip until you check out of your current one. This conundrum can only be resolved if you upgrade your account to a higher subscription rate: $5,000 a month for up to two active reservations at a time or $7,500 for up to three active reservations at a time. At all three rates, there’s also an optional add-on to share your subscription with friends and family, ranging from an additional $500 to $1,500 a month. While you can’t put a hold on a subscription, the Pass is a six-month commitment at one time.
Mikki Cardoza, owner of Northern California-based MikkiMoves Real Estate, said it “wasn’t such an easy decision” to purchase an Inspirato Pass “because it’s a pretty costly option. But what sold her was the “ability to gift it to other people.”
As the owner of her own real estate brokerage firm, Cardoza saw the Inspirato Pass as a way to incentivize her employees, treat friends and family, gift trips to nonprofit organizations, go on weekend getaways with her husband or friends, and even book an entire company retreat. Cardoza opted to buy the pass that has a monthly subscription fee of $5,000, and she also opted for the add-on that allows her to share the membership.
She’s only been an Inspirato Pass holder for six weeks but, she says, “So far, I love it. I find myself talking about it all the time.” She’s used the pass for a weekend getaway to Carmel Valley with her dog and husband, gifted it to a niece, and also used it to stay at a Waldorf Astoria hotel during a work convention this week. “It was a fun upgrade for no stress.”
Cardoza added, “When I’m looking at trips [available on Inspirato Pass], it really appeals to my personality, because I don’t have to worry about the price and I can just take anything off the plate.”
“What you pay versus what you would be having to pay,” is what sold Michael Shaw, the owner of Colorado- and South Texas-based Mike Shaw Automotive dealerships on the Inspirato Pass. Like Cardoza, he opted for the Pass that comes with two reservations to be booked at a time and the option to share, and he’s been pleased with his trips to Jackson Hole, the British Virgin Islands and Park City.
“With the flat fee you don’t have to evaluate whether this place is too much or, if you have more people, will that be too much for them?” Shaw added. “You can just look at what you want to do, where are those days available and what’s the most I can get? Sometimes you get overvalued for the money you’re paying.”
But Is It Too Good to Be True?
That’s exactly what Cardoza initially suspected but, she said, she’s starting to understand how it works — and how it’s been designed so people benefit from the subscription, but also don’t overuse it to extinction so it experiences the same fate of MoviePass.
“I’ve been keeping a spreadsheet,” Cardoza said, of her trips booked using Inspirato Pass. “At first I couldn’t understand how Inspirato is making money,” but, she said, she’s noted “some limitations,” especially that she can only have two reservations booked at any one time.
“I have to wait until one reservation is completed in order to make the next one,” she explained. Juggling the timing of making a booking with availability can be a bit of a challenge.
“In Vegas, I could see lots of places that met my schedule and needs, but by the time I could make the reservation, I had limited access,” Cardoza explained. “Things disappear, because people are using them.”
Inspirato founder and CEO Brent Handler said he and his team spent the past four years trying to come up with a high-end travel subscription model “that’s simple to buy, simple to use and simple to service.” Prior to launching the pass, Inspirato solely offered a more traditional luxury travel membership club, of which Shaw remains a member of as well, and of which there are 15,000 members and counting.
What enables Inspirato to avoid the fate of a subscription service like MoviePass or JetSmarter, he said, is that Inspirato and its hotel and experience partners, more or less, own the inventory, and the subscription model they’ve designed helps them manage excess capacity. The hotel and resort partners also prefer working with a partner like Inspirato Pass to book up their unused inventory because the nightly rates aren’t displayed like they might be on a last-minute hotel booking site such as HotelTonight.
“Can we come up with a subscription where people would want access to our inventory that wasn’t all going to get booked? It’s not all low-season inventory,” Handler explained. “We figured out we could come up with a subscription where they’d pay a monthly fee and they would get access to this inventory, similar to how Rent the Runway or Disney FastPasses or Netflix works. As soon as you’re done with your reservation you can book your next one.”
Handler added, “Because hotels have inventory that isn’t going to get used, we can get that inventory and pass tremendous value along to our Pass holders. It might be that a Pass holder wants to go to Paris in a month and if they called the hotel, it might cost $5,000 a night but we, at Inspirato, might be getting that hotel for only $2,300 a night.” In this instance, the customer doesn’t have to worry about the nightly rate, and the hotel drives up its occupancy.
Paul Tumpowsky, CEO of New York-based luxury travel company Skylark, said Inspirato’s subscription model “is interesting and it does seem like, for the right type of flexible customer, they could probably take at least three to four really great vacations a year.” He added, “You’d have to be very flexible to make the most out of this,” but the way Inspirato has designed the subscription really maximizes their ability to fill the inventory it has in terms of homes and hotel rooms.
Handler said Inspirato Pass “works really well for people who don’t have children in school, and have flexibility in their schedules. It also works well with families who do have children at home but can travel multiple times a year. It works really well for Millennials, too, who are just sharing it.”
“In all honestly, maybe it seems like it could be a repackaging of the vacation club concept, but there are lower expectations because you’re paying less and making sure there’s tons of inventory,” Tumpowsky said. “It’s a great way to attract new members without paying an initiation fee, and it’s great to have more people to fill that inventory.”
Handler thinks Inspirato Pass, however, is not at all like a traditional luxury timeshare or membership club because the investment isn’t as high and there are no nightly rates, points or rules involved.
“Luxury travel, as a rule, is highly idiosyncratic,” Handler said. “It can be like airline tickets. Sometimes it’s $4,700 and other times, it might be only $1,800. When we did our research, we found that affluent consumers had high disdain for nightly rates. They didn’t understand them and they felt funny paying them. Why would a 450-square-foot hotel room cost $1,300 one night, and $2,000 another night?”
Handler says that during the beta testing of the Inspirato Pass, which took place in June in Colorado and the Bay Area of Northern California, the company sold 100 passes. Since the official launch in July, the company has sold more than 100 additional passes and, he said, “We’re selling north of 20 a day. Demand has been overwhelming.”
Can It Be Improved?
As Cardoza noted, timing out your trips as an Inspirato Pass holder can be a bit of a challenge. After the initial sign up, you can book as early as one week from signing up and as far in advance as one year.
“I think it would be nicer if I didn’t have to have a three- or seven-day advance,” she noted.
She said she’s mulling whether to buy another Inspirato Pass to make more reservations, and while she does find value in being an Inspirato Pass holder, she added, “It does take effort from me and there is a little bit of a stress factor that I have to pay attention to,” in reference to the booking and timing of trips.
For more complicated trips, both Cardoza and Shaw are sticking with luxury travel agents instead, though they agreed that, increasingly, Inspirato Pass is becoming their first go-to option for booking most travel.
“If I were to plan for a big trip with Inspirato Pass well in advance, I wouldn’t be able to make another reservation for a long time,” Cardoza said. “It would have to be something really amazing, otherwise I would feel like I’m just prepaying it.”
Handler said that while Inspirato Pass is “direct to consumer right now . . . that’s not to say that we wouldn’t partner with travel advisors out there.”
For Shaw, the number of available options on Inspirato Pass can be a bit overwhelming. “There are just so many options available, and filtering down to find what you’re looking for could use some polishing, and I know that’s already in the works.”
Cardoza, on the other hand, said, “It’s also a little bit frustrating that the regular Inspirato program has more available than what’s available on the Pass.”
Another feature of the Inspirato Pass that’s being worked on at the moment is a connection to various hotel loyalty programs.
“We’re optimistic we can build direct relationships with hotel to allow our Pass holders to get their points at check in, but we haven’t had the time yet to work out those details,” Handler said. He added there’s been interest from hotel partners.
“We would very much like to be loyalty positive, so to speak, from an earn standpoint,” he said. “I booked on Inspirato Pass and I’m staying at this Hyatt, can I get my points?”
One small pet peeve of Cardoza’s is that she hasn’t yet been able to use the Pass to stay in a home because the homes she’s looked at don’t allow dogs, or ones as big as hers. “Can we somehow figure out an extra pet deposit?” she wondered.
Advice for Potential Subscribers
Cardoza and Shaw both said that for anyone considering buying an Inspirato Pass, it’s essential that you make the most of your subscription.
“Be diligent about scheduling the next trip — and the next trip,” Cardoza said.
“I would say check it out for sure, but just make sure you put it to good use just like any other subscription you’re paying for,” Shaw said. “It’s an incredible value if you use it. It’s been great so far and I think it’s only going to get better.”
Handler and his team said, “We’re hyper-focused on making the experience better and better, especially by adding more hotels, experiences, residences and continuing to grow the portfolio. The larger and better the portfolio, the more Pass holders, and the more inventory we’re able to acquire. There’s that network effect that’s happening. The better we make it, the more people want to be a part of it.”
And for those who doubt the soundness of this subscription model, Handler said, “There is a lot of inefficiency in luxury travel market thanks to high costs, low variable costs and low occupancy. We’re filling in the void of the excess capacity that exists in luxury hotels and homes and making them useful when they would otherwise be empty. It’s not dissimilar to what Uber did when people had excess capacity in their cars. We’re doing the same thing with unsold hotel rooms and homes.”
Feature photo courtesy of Inspirato.
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