Breeze Airways announced Tuesday it would launch a co-branded credit card and a re-branded loyalty program, an ambitious step for the young low-cost carrier.
07.03.2024 - 04:35 / skift.com / Srividya Kalyanaraman
Not much changed for luxury brand Inspirato in the fourth quarter since its last earnings announcement. And its strategy remains the same: to lower nightly rates, and to help find the proper supply and demand balance to improve operating efficiencies. And of course, to break even.
“When you travel with us, you trust you’ll get first class service at a world class property in 2024,” said CEO Eric Grosse during the company’s fourth-quarter earnings call Wednesday. “It is amongst our highest priorities to earn that same level of trust and credibility with our shareholders.”
During the earnings call, Inspirato CFO Robert Kaiden told analysts that the way to achieve operational efficiency is through cutting costs. Savings on software, layoffs and pruning the portfolio will save the company $50 million by the end of first quarter next year, Kaiden said.
Grosse said that Inspirato was successful in reducing cash operating expenses. “For the full year, stripped out more than $20 million of expenses, a year-on-year reduction of approximately 15%.” More is expected to kick in during the following quarters.
How did Inspirato do it? Continuing to optimize its portfolio, lease terminations and realizing the benefit of its layoffs in July last year.
For the fourth quarter last year, the company generated a total revenue of $71 million, Kaiden said that although fourth-quarter revenue decreased 18%, it was in line with Inspirato’s internal expectations. The decrease in revenue is due to a fall in both subscriptions revenue and travel revenue, Grosse said. He added that the loss of $29 million in 2023 was slightly favorable compared to the company’s previous guidance.
For the fourth quarter of 2023, Inspirato posted a net loss of $11 million, and its cash reserves totaled $41 million.
Inspirato said it made improvements to its Pass membership product, which was unprofitable in 2023. Inspirato Pass is a membership subscription product, similar to its core product Inspirato Club, which offers its members access to luxurious homes at special rates.
As of February this year, Pass members can have the flexibility to book last-minute travel to open up high-value inventory. And book a flex travel trip with last-minute discounts.
“Pass was unprofitable for us in 2023 and even before that,” Kaiden said. “40% of our nights with only 20% of our members was going towards Pass.” Kaiden added that members were booking a lot of third-party hotels versus its own properties, and that had a lot of booking costs associated with them.
“A combination of taking out some of those non-core, non-profitable areas of Pass, and getting our members a great opportunity to inventory last minute is a win-win,” Kaiden said.
However,
Breeze Airways announced Tuesday it would launch a co-branded credit card and a re-branded loyalty program, an ambitious step for the young low-cost carrier.
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