One of the newest companies to get listed on a stock exchange is Denver-headquartered Inspirato (NASDAQ:ISPO), which went public on Feb. 11 following its merger with Thayer Ventures Acquisition Corp. (NASDAQ:TVAC), a special purpose acquisition company (SPAC).
Founded in 2011 by brothers Brent and Brad Handler, Inspirato operates a proprietary subscription platform that matches travelers with a portfolio of more than 385 exclusively managed branded luxury vacation homes and over 500 five-star hotel and resort partners in more than 240 destinations around the world. In 2019, the company unveiled its Inspirato Pass, which is billed as the first luxury travel subscription inclusive of nightly rates, taxes, and fees.
Inspirato, which has an 800-person workforce, secured more than $100 million in net proceeds from its SPAC merger, and the combined company began trading with an initial valuation of approximately $1.1 billion.
Benzinga spoke with co-founder and CEO Brent Handler on Inspirato’s journey from concept to stock exchange.
Q: What inspired your company’s journey from being privately owned to being publicly traded?
Brent Handler: I had started a company called Exclusive Resorts in 2002 and left at the end of 2009. It was another kind of luxury vacation company and was sold to Steve Case. 2010 was a year when my brother and I came up with the concept for Inspirato. We had a one-year non-compete clause, and then we sold our first membership on Jan. 1 2011.
We introduced the Inspirato Pass in 2019, right before the pandemic, and we had this really big growth engine. We wanted to grow in a way that's just too difficult as a private company.
We went through a formal fundraising process, almost exactly a year ago, and were thinking of either a traditional IPO, working with a SPAC or a larger late-stage private round. UBS (NYSE:UBS) were our bankers, and we ultimately decided to go the SPAC route. We met several SPACs along the way, and Thayer had a lot of domain expertise in travel. It seemed like a really good fit.
Q: What is the state of luxury travel today?
Brent Handler: I've been doing this for 20 years, and luxury travel has never been in the place that it is today. The tailwinds behind luxury travel are incredible – we've done some work that shows that this market is a $100 billion opportunity for American travelers.
And there's never been such supply constraints. It's extremely expensive to build luxury hotels – you don't see many new five-star luxury hotels in resort destinations like you did 10 or 15 years ago.
On the residential side, we're very good – we manage and control these homes through a long-term lease, so we're not like a broker. We're unique in that we can provide that experience to our subscribers. And the demand to be able to stay at a home and have the service and certainty of a Four Seasons is sort of off the charts – there’s a lot of positive market dynamic going on.
Q: Are you concerned about the current economic issues, such as growing inflation and extreme stock market swings, on this sector?
Brent Handler: There's a lot of wealth out there. Despite what's going on in the market today – this sort of little blip that we're having – there's still been more wealth created in the last 10 years than ever before.
The other thing that's happening, and we're also gaining from this trend, is where people want to spend money on experiences more than things. It's not just that they're wealthy, and it's not just that we have residences versus hotels. There is more vacation luxury supply than city luxury supply. Cities like New York City have kept up with luxury five-star hotels, but hotels in places like Hawaii have not kept up. So, if you’re going on vacation, if you really want the best of the best, it's just become more expensive and more difficult to do.
Q: Now that you are a publicly traded company, have you been giving thought to acquiring other companies and growing your operations that way?
Brent Handler: We've been giving it thought, but we don't have any specific thoughts. Obviously, having a public company provides us more opportunity – one of the factors to go public was being able to have more success in the M&A front. But we don't have anything lined up.
Q: What is on the company's agenda for the rest of 2022? And what can you do for an encore after going on the NASDAQ?
Brent Handler: We’re at the end of the going public process, but it feels like it's the beginning of a big story. And the story is bringing subscription travel to more people.
The business model of the Inspirato Pass – $2,500 a month, no nightly rates, taxes or fees – is highly disruptive. People have been talking about how could you do subscription travel for a really, really long time, and many have taken shots at it. Inspirato figured that out, so for us investing in subscription travel from a technology standpoint and a personalization standpoint, making the experience better and easier for these families to enjoy is really important.
The real driver, more so even than technology, is inventory. Getting subscribers and retaining subscribers is super easy, so you'll see that we’ll become more aggressive in building out a bigger team, taking on more and better inventory.
More inventory owners are reaching out to us now because they're understanding how our model works and how we lease the inventory from them. There's definitely a flywheel effect that happens in these marketplace-type subscription businesses.
Q: Where is your inventory?
Brent Handler: We focus on where North Americans want to travel, so our biggest inventories are in the U.S., with the second most in Latin America, the third in the Caribbean and the fourth in Europe. We don't have anything in Asia, Australia, New Zealand – nothing that is super hard to get to, because we take risk.
I don't foresee in the next three quarters having a big focus on international expansion for subscriber acquisition, especially when there is so much opportunity just in the U.S.
