Luxury Travel Subscription Company Inspirato Going Public With Growing Market And Pent-Up Demand

Luxury travel subscription company Inspirato announced a SPAC deal Wednesday.

The SPAC Deal: Inspirato is going public with Thayer Ventures Acquisition Corp TVAC valuing the company at an enterprise value of $1.1 billion.

The company will trade as ticker "ISPO" on the Nasdaq after the merger is completed.

Public TVAC shareholders will own 13% of the company after the merger.

About Inspirato: Operating in the luxury travel market, Inspirato offers subscription-based plans for its customers. The company launched this model in 2011.

Inspirato’s portfolio includes 385 exclusively managed branded luxury vacation homes and over 500 five-star hotel partners throughout 240 worldwide destinations.

The company offers its subscribers' vacation plans inclusive of nightly rates, taxes and fees. Inspirato also allows hospitality and real estate partners a chance to monetize excess inventory.

The company’s Pass plan allows subscribers the chance to book trips under a monthly subscription plan. The plan costs $2,500 to enroll and $2,500 monthly.

The Club subscription plan from Inspirato is a “pay as you go” model that offers subscriber-only nightly rates for its members. Club members pay $600 to enroll and $600 a month to get the Inspirato rates and member perks.

The company lists a residence value of $1.4 billion for its owned properties in its presentation.

Related Link: Luxury Travel Startup Inspirato Aims SPAC Merger With Thayer Ventures In $1B Deal: Bloomberg

Growth Ahead: Inspirato lists a $135 billion luxury travel market in its presentation. The luxury travel market is expected to reach $230 billion by 2025 in the U.S., according to the company.

Travel recovery with pent-up demand and the ability to work remotely are two trends from the Covid-19 pandemic that could provide additional growth for Inspirato.

The company has seen an uptick with 50,180 nights booked in the first quarter of fiscal 2021, compared to 32,351 in the prior year’s first quarter and 45,532 in the fourth quarter of 2020, which is normally the strongest fiscal quarter according to the company.

The company said it will use proceeds from the SPAC merger to acquire new subscribers, expand its property portfolio and invest in possible product extensions.

Financials: Inspirato had revenue of $165 million in 2020, down from the $220 million in fiscal 2019. A recovery of travel sees the company posting revenue of $221 million in fiscal 2021.

The company projects fiscal 2022 revenue of $366 million.

Inspirato’s subscription-based revenue plans offer highly visible revenue projections. Annual recurring revenue is expected to exceed $200 million by the fourth quarter of fiscal 2022.

Inspirato has more than 12,500 subscribers and has seen subscribers grow at a compounded annual growth rate of 29% from fiscal 2012 to fiscal 2019. The company is projecting subscribers to grow at 17% annually from fiscal 2021 to fiscal 2025.

With its higher monthly subscription price, it takes fewer subscribers for Inspirato to scale. The company needs only 3,300 subscribers to hit $100 million in additional annual recurring revenue.

Price Action: Shares of TVAC are up 0.65%% to $10.09 on Wednesday morning.