I guess I’ve got the taste for luxury. I love reading about luxury stuff and dream of a luxury life. Sadly, I’ll have to settle for an ordinary middle class life. Hey, it’s great. No complaints here.
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 Pass could change their pricing. The benefits and services may also be subject to change by the Inspirato Pass. I just wanted to introduce the idea of using opportunity cost in assessing whether vacations are worth their cost.
Luxury as a Subscription
Something caught my eye recently – Apparently you can snag a luxury travel subscription – The Inspirato Pass. It offers you one reservation at a time and has quite an impressive collection of hotels and residences you can stay at spots all over the world. I’ve perused its collection, and this is…LUXURY. You can even sign up for some exclusive experiences and impressive cruises. Very impressive, and only costs $2,500 a month.
The company behind the pass appears to be a solid company offering luxury travel destinations. They currently have a Club offering with three different offerings – Key, Family, and Executive. I’ll delve into the Inspirato Club offering in a different posting.
The Catch
The biggest catch with this Pass offering is one reservation at a time… I’ve perused its hotel/residence offerings and can see that I could book a stay for 2-4 nights happening in a month. Maybe longer stays (4-7 days) can be reserved from further out. One or two week stays – probably can be reserved even farther out. You can’t make back to back reservations. This makes vacation planning difficult and costly. This Pass is probably best for spontaneous, short vacations.
With judicious use of short stays and quickly reserving them one after another, even with a week between reservations, you have have a great value proposition in luxury travel at $2,500 a month. If I had a sizable trust fund and plenty of free time, I would have seriously considered this. It’s that good.
Big Ticket Item Alert
Often overlooked in calculating the value of a certain service, object, etc. is its opportunity cost. Always do this for big ticket items such as a car, elective surgery, legal action, vacation, etc. This way, you can determine whether if this item or service is worth its cost. By obtaining this big ticket item, you forgo the opportunities to invest these sums into the stock market.
If you sign up for the Pass at $2,500 a month, here’s the numbers I used in Portfolio Visualizer’s Monte Carlo Simulation tool. I used $2,500 as a starting balance and $2,500 a month in contributions. I invested the entire balance into VTSAX and set its duration for 20 years. I examined the 50th Percentile of such results. (I think it’s unlikely a person will continue using the Pass after 2-3 years.)
After five years of using the Pass, I forgo an opportunity cost of $202,000! After ten years of using the Pass, I forgo an opportunity cost of $511,000! It gets worse after that… (Your numbers may vary a little if you try the Monte Carlo Simulation.) At the end, this is the money you potentially could have for other uses, and you guessed it, even for luxury travel.
Conclusion
Is a luxury travel pass subscription worth $500K for ten years? The value proposition is a lot less persuasive in this instance. Sure, you’ll have incredible travel experiences and Inspirato apparently can deliver with their gorgeous and jaw-dropping travel destinations and services. But, is it worth $500K? I’m not so sure.
That doesn’t mean I can’t indulge in some luxury travel. I just have to plan for it like anyone else. Budget those travel plans. Check with friends and family, etc. Luxury travel in one-time bursts can invigorate a months-long vacation or end a memorable vacation with a bang! Once, during a lengthy vacation, I stayed at regular hotels and motels. At the very end, I stayed at a beachfront hotel to end my vacation. That was my ‘splurge’.
Postscript
I wouldn’t be surprised to see major hospitality chains offer some kind of subscription offerings a la the Pass. Thanks to Inspirato’s innovative Pass offering, it can only attract healthy competition for the luxury minded consumer. Me? I’ll totally dig a Holiday Inn Pass! 🙂
* Picture: Interior Room of a Home. (NeedPix)
