Inspirato (ISPO), a luxury vacation rental company, is going public through a SPAC deal with Thayer Ventures. The company specializes in the luxury travel area by providing exceptional luxury travel experiences with superior service. Unlike most other vacation rental companies such as Airbnb (ABNB) or Marriot (MAR), the company operates with a subscription model.
The company offers two subscription product which includes the Inspirato Club and Inspirato Pass. Inspirato Club has an enrollment fee of $600 and a monthly subscription fee of $600 with exclusive nightly rates, whereas the Inspirato Pass has an enrollment fee of $2500 and a monthly subscription fee of $2500 with no nightly rates, taxes, or fees. Subscribers will have access to Inspirato’s property portfolio which includes 365+ residences, 500+ hotels and resorts in 80+ different destinations, and different unique experiences and events.
The company currently has 12500+ subscribers with 67% of households earning an income of $250k+. The company has grown at a CAGR (compound annual growth rate) of 29% from 2012–2019 and is forecast to grow at a CAGR of 17% from 2021–2025. The TAM (total addressable market) for luxury travel is huge and is forecast to grow from $135 billion to $230 billion in 2025 with a 9% CAGR. The ease of lockdowns and increasing vaccination rates will also provide a substantial tailwind for the company. The company’s differentiated business model combined with its niche operating market creates a natural moat.
Having a subscription business model provides resilience during a downturn as part of the company’s revenue is recurring. And as the company scale and gain more subscribers, the company is able to grow its revenue while keeping its cost relatively low which can drive up its margin over time. The company is going public with an enterprise value of $1.1 billion which converts to an attractive 2022 EV/Sales ratio of 3 compared to high-growth rental companies such as Airbnb. We believe it is a company worth watching with its interesting prospect compared to other companies in the space.
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