I previously covered the Inspirato Pass. It is a great new wrinkle to luxury travel – on a subscription basis. Here, I discuss the Inspirato Club. Normally, I’m allergic to vacation clubs and timeshares – you have to pay a fortune to join, pay regular maintenance fees, etc. and they are difficult to exit. Vacation Clubs are the roach motels of the travel industry. Once you are in the vacation club, scheduling and reserving stays in certain locations can be difficult, especially during peak travel times.
This one is a little bit different. The Inspirato Club appears to be a vacation club for the luxury minded traveler. A member can choose from hundreds of luxury destinations around the world to stay during their travels. Since market forces govern reservations, destination availability is there for those willing to pay. A member can choose to leave the Club.
Please note that I have no affiliation with the Inspirato Club, the Inspirato Pass and the Inspirato business enterprise. I am not an affiliate marketer. Clicking on any link here will just take you directly to the website – no referrer links, etc. Also, the fees, costs, etc. are for illustrative purposes – The Inspirato Club could change their pricing. The benefits and services may also be subject to change by the Inspirato Club. I just wanted to introduce the idea of using opportunity cost in assessing whether vacations are worth their cost.
The Basics
The basics; Inspirato Club has three tiers (This is paid only in the first year.) (I disregarded the Wheels Up membership.);
- Key: $1,150 a month.
- Family: $2,000 a month. Allows sharing of membership with family. Includes a complimentary trip.
- Executive: $3,250 a month. Allows sharing of membership with family and friends. Includes two complimentary trips.
All membership levels include access to Jaunt, Inspirato’s last-minute getaway travel program. Annual dues are $3,800 a year. I disregarded the Wheels Up membership as private jet service is still costly. Maybe it’s a huge selling point for the luxury-minded traveler.
The Club has an initiation fee, which is paid in monthly installments during that first year. I’m not sure why this vacation club has an initiation fee ranging from $13,800 to $24,000 to $39,000. I’m also not sure why the Club charges a hefty $3,800 annual dues. From what I can gather, the Club apparently leases their properties.
Big Ticket Item Calculations
Since this is a big ticket item, some calculations are needed to determine the opportunity cost of joining the Inspirato Club. Always do this cost-benefit analysis for any big ticket item to find its true cost. The opportunity cost is the final cost after an ‘x’ number of years in which you forgo any potential stock market gains by investing these same amounts.
I use Portfolio Visualizer’s Monte Carlo Simulations. I simply used the initiation fees of the Club as a starting point and it is all fully invested in VTSAX for the next 10 years. I also did an simulation with $3,800 yearly dues as ‘contributions’. I selected the 50th Percentile of such returns. Here are the opportunity cost results after 10 years for all three tiers:
- Key: Initiation fee – $13,800 has an opportunity cost of $29,000 at year 10. Adding in $3,800 yearly dues yields an opportunity cost of $91,000.
- Family: Initiation fee – $24,000 has an opportunity cost of $51,000 at year 10. Adding in $3,800 yearly dues yields an opportunity cost of $113,000.
- Executive: Initiation fee – $39,000 has an opportunity cost of $82,000 at year 10. Adding in $3,800 yearly dues yields an opportunity cost of $144,000.
- Annual Dues only: If the initiation fee was waived, and a participant just only had to pay the $3,800 yearly dues, the opportunity cost would be $70,000. This appears to be not an option.
Cost-Benefit Analysis
Before we dive into the numbers, I should note that the Inspirato Club appears to offer luxury properties for your vacation needs. I’ve perused their listings and it is truly impressive. This is mind-blowing luxury. And they are in many locations all around the world, a pretty impressive collection! However, you can put a price tag on these incredible vacation experiences.
Let’s examine the Key membership level. While this is the lowest priced option, it still carries a high opportunity cost of $113,000 after ten years. And, that’s before you select properties and pay for the vacation rentals. I’m not sure that these luxury vacation offerings are worth the cost, especially the fact that one has to pay additional to select, reserve, and utilize vacation properties.
The Family membership level has an opportunity cost of $113,000 after ten years. However, it does include a complimentary Inspirato vacation. That takes the sting out of the hefty $24,000 initiation fee. The main advantage is that family members can schedule luxury vacations. I suspect that this is the best option for families. I still think the cost may not be worth it, as you only get one vacation and still have to schedule, reserve, and pay for the rest.
The Executive membership level has an opportunity cost of $144,000. It includes two complimentary Inspirato vacations. It is not clear from their advertising if these two vacations need to be taken in the first year. The main advantage is that family and friends can schedule luxury vacations. The ‘executive’ name of this membership level suggests that this is primarily targeted at businesses so that they can arrange vacations for their clients, etc. Again, I still think the cost may not be worth it, as you only get two vacations, and still have to schedule, reserve, and pay for the rest.
Gaming the Club
I think there may be a value proposition to be had at the Executive membership level. If one is careful with vacation planning, this person could sign up for the Executive membership level and schedule those two complimentary vacations in the first year, and then cancel their membership. It is not clear from their advertising if one can easily cancel their membership or some hoops have to be jumped through. Their contract will have be read carefully before signing.
The Executive Membership level costs $39,000. Is it worth two complimentary luxury vacations? Even if opportunity costs of $82,000 (after 10 years) are factored in, is it still worth it? That is a lot of money to spend on vacations in a single year. I still think that the benefits of an awesome vacation still are outweighed by its cost. But to a discerning luxury traveler, it may very well be worth it.
Another approach is to have friends band together to purchase an Executive membership level. I don’t know how many ‘friends’ can be accommodated by an Executive membership level. Let’s say that six friends sign up and purchase an Executive membership at Inspirato Club. The opportunity cost now goes down to $24,000 for each person after ten years. This is a far more manageable number. The costs may be outweighed by having awesome, memorable vacations for the whole family. Divvying up the two complimentary vacations may be tougher.
Conclusion
The Inspirato Club appears to offer luxury vacations to destinations all around the world. Reservations apparently are made on their systems and reflect market forces. If a person wanted to reserve a location during a peak time of the year, then this person will pay a premium. And it appears that a person can simply leave the Club if he/she so desired.
One thing I did not cover are their Jaunt offerings. It appears to be last-minute vacation offerings at low prices. I am not a member of the Club, so I cannot assess the quality of Jaunt offerings and whether these prices are truly bargains or not. That perk alone may make Inspirato Club membership worthwhile if they can take spontaneous vacations.
So, is the Inspirato Club worth it? It doesn’t appear to be on my end. I do like the idea of having a luxury vacation once in a while. But, I’m still not enamored with the idea of signing up with a vacation club for the privilege of having premium vacations on an annual basis. I do not want to tie up substantial amounts of money today for this privilege. The opportunity cost is too much.
Image credit – Surfboards by NeedPix
