The luxury travel club has become somewhat crowded and there have been stray cases like Ultimate Escapes that folded up because it defaulted on a loan of $90 million. But the market still has potential to attract new entrants and investors. Inspirato, which is relatively new in the field has managed to raise an additional round of financing. They have received $20 million from a consortium led by Institutional Venture Partners. More importantly, the two year old Denver based company has been valued at almost $200 million.
The trends in the market reminds you of the good old days of the dot com boom as young companies are being valued at billions of dollars. Luxury travel trends are no different. Luxury home rental service is a growing market and Inspirato is competing with a growing number of websites that cater to the luxury segment of the vacation club market. However they have managed to develop a business model of their own that allows them to keep the annual fees and the recurring membership fees relatively low. Inspirato’s initiation fee is $15,000, and the annual membership fee is $2,950.
Inspirato has 109 homes spread in 13 countries in its portfolio. Their average nightly rate is $650 which moves up closer to $1,000 during the peak season. Brent Handler, CEO and founder has a long experience as way back in 2002 he had founded his first travel club Exclusive Resorts. In one year of operations Inspirato has signed up 1,200 customers who have given them a business of $15 million. Their target market is the 10 million American households with a net worth of $800,000 to $10 million. Their effort now will be to go on enlarging their customer base. It is not going to be easy in a weak economy.