Inspirato Inc (ISPO) 2023 Q2 法說會逐字稿

Thank you for standing by. Welcome to the Inspirato second quarter 2023 earnings call. (Operator Instructions) Again, please be advised today's conference is being recorded.

I would now like to hand the conference over to your speaker today. Kyle Sourk, Investor Relations.

Thank you, and good morning. On today's call, we have Co-Founder and CEO Brent Handler; and CFO, Robert Kaiden. Yesterday afternoon, we issued our press release announcing our second quarter 2023 results, which is available on the Investor Relations page of our website at investor.inspirato.com.

Before we begin our formal remarks, we remind everyone that some of today's comments are forward-looking statements, including but not limited to, our expectations of future operating results and financial positions, guidance and growth prospects, business strategies, plans and market position and potential market opportunities. These statements are based on assumptions and we assume no obligation to update them. Actual results could differ materially. We refer you to our SEC filings for a more detailed discussion of additional risks.

In addition, during the call management will discuss non-GAAP measures which are useful in evaluating company's operating performance. These measures should not be considered in isolation or as substitute for our financial results prepared in accordance with GAAP. Reconciliations of these measures to the most directly comparable GAAP measures are included in our earnings.

With that, I'll turn the call over to our CEO, Brent Handler.

Thank you, Kyle, and good morning, everyone. The past few months have been a pivotal time for Inspirato. Before covering our second quarter results and some of the recent travel and booking trends we're seeing, I want to spend a few moments talking about our strategic investment and partnership with Capital One.

Yesterday we announced entry into a definitive agreement for a new $25 million convertible note investment from Capital One Ventures. This investment will enable us to continue enhancing our experiences to meet the evolving needs of the luxury traveler. Capital One Ventures looks to harness the potential of innovative companies that can integrate well with its business and infrastructure. Capital One's customers are passionate about travel and we share a similar vision to find new ways to deliver luxury travel experiences with unprecedented service and certainty.

Over the past 12 years, we have worked tirelessly to build a premier luxury hospitality brand. We take pride in delivering exceptional value and service to our members, and this summer, we've doubled down on this approach with several member-centric initiatives. In response to the current dynamics of the luxury vacation rental market and to ensure we are delivering significant value to our members, we have communicated broad base nightly rate reductions across our portfolio of managed and controlled accommodations, including a recently launched early booking discounts that encourages members to book further in advance, giving members peace of mind that advanced booking at preferred destinations will not sacrifice value or flexibility.

In addition to matching our low everyday nightly rates with our members' travel needs, earlier this week, we launched Inspirato Rewards, our first ever member loyalty program. Inspirato Rewards offers our most engaged members unique value added benefits and additional savings on Club bookings through tiered status levels, each with increasing valuable benefits. We are really excited about these new programs and offerings as well as the progress on our initiative aimed at optimizing our portfolio, controlling costs, and ultimately generating sustainable profitability.

Jumping into Q2, we delivered more than 47,000 total nights, a 1% year-over-year increase. While the average ADR of our rented portfolio was approximately $1,750 per night, representing a slight increase year-over-year.

When considering seasonality, each metric is among the highest levels in company history. Yet looking closer, the increase in nights delivered has largely been in hotels, often with lower 90 rates and average margins as opposed to our residents. And while ADRs have increased, they have been at the expense of lower occupancy rates: 72% in the second quarter of 2023 compared to 82% a year ago. Overall, our second quarter travel behavior shared similar characteristics as the broad short-term rental vacation market and OTA market.

We have seen solid nights delivered in ADRs, a continued bias towards hotel and urban travel as opposed to residences and resorts and an uptick to our European destinations, largely at the expense of U.S. travel. While our members were not alone in shifting towards Europe and urban-based travel, these property types constitute a smaller proportion of our portfolio, and urban-based travel typically comes with lower average ADRs and length of stay. As a result, this shift in travel behavior had an impact on our second quarter results and is expected to further impact travel revenue for the remainder of 2023.

It's also important to remember that our second quarter results are more representative of travel behavior and strength of the consumer over the past 6 to 12 months as opposed to the next 6 to 12 months. From a booking perspective, second quarter dollars booked decreased 15% to 20% compared to both the first quarter of 2023 and the second quarter of last year. However, the recent formation of our member success team, which is designed in part to further engage members, has led to a slight uptick in bookings.

More importantly, we believe the actions taken this summer of lowering ADRs instituting our advanced booking discount and launching Inspirato Rewards will be important value enhancers for our members and improve the overall efficacy in our management control portfolio. As a result of these bookings and travel dynamics, we are reducing our 2023 revenue guidance by $30 million at the midpoint to $320 million to $340 million. Similarly, we are lowering our anticipated adjusted EBITDA loss to between $30 million and $45 million, primarily due to our reduced revenue expectations slightly offset by lower plan operating expenses. Of note, revised revenue and adjust EBITDA's guidance do not contemplate any benefits from Inspirato Rewards or the Capital One Ventures partnership.

Recent booking trends have further strengthened our conviction in monetizing our available capacity through strategic partnerships and our portfolio optimization efforts, while also highlighting the importance of the continued success of our Inspirato for Good and Inspirato for Business platforms.

In terms of Inspirato for Good, we sold $3.7 million of trip and membership packages in the second quarter compared to $2.3 million in the first quarter and $1.2 million in the fourth quarter of 2022. Inspirato for Business also has solid results in Q2 with approximately $3.9 million of sales. It's important to note that as of June 30, Inspirato for Good and Inspirato for Business have generated cumulative sales of approximately $13.5 million, though only a small portion has been recognized as revenue. We believe these platforms cannot only serve as a material growth driver for Inspirato in the future, but will provide a stable, predictable revenue stream moving forward.

Finally, I want to thank our employees for their tireless work and dedication to ensuring the success of our new initiative and member satisfaction.

With that, I'll turn the call over to Robert to provide a bit more detail on our quarterly results.

Thanks, Brent. Before reviewing our second quarter results, I'd like to take a minute discussing our path to profitability. In past quarters, we've alluded to these initiatives in more qualitative sense, but today I'd like to provide more specific around the actions we're taking to drive cost savings and how we'll achieve our profitability goals in 2024. We have been decisive in executing our plans to drive significant savings by focusing on the 3 main categories: lease expenses, payroll, and non-payroll.

First, after a detailed portfolio review, we have identified and taken action aimed at generating more than $25 million to annualized lease expense savings. This has largely occurred through giving notice of early termination and our non-renewal of poor performing properties.

Next payroll. While the decisions were never easy, we were taking actions to more appropriately align our cost structure to our current and future revenue projections. On top of the January 12% headcount reduction, in July we reduced our headcount by an additional 6% and made a decision to temper hiring outside of roll that provide member support and service. We expect these actions to result in annualized savings of approximately $20 million.

Finally, non-payroll cost savings. We expect these to be both above and below the line and cover vendor renegotiations, reduced booking fees through portfolio management initiatives and a decrease in professional services. Cumulatively, we've not only identified but have taken action on delivering more than $50 million of annualized cost savings. That will be critical in achieving positive adjusted EBITDA in 2024.

Pivoting back to the second quarter, total revenue of $84 million was flat year-over-year and comprised of $36 million of subscription revenue and $48 million of travel revenue. Brent has already covered some of the travel dynamics in the quarter. So shifting to subscription dynamics, we saw an increase of 1% in subscription revenue compared to Q2 2022. As the decrease in Pass subscription revenue was offset by increases in Club subscription revenue and the portion of Inspirato for Good and Inspirato for Business sales recognized the subscription revenue.

In terms of subscriber activity, we ended the quarter with 15,200 active subscriptions compared to 15,700 at the end of the second quarter of 2022. Year-over-year net decrease of approximately 500 subscriptions is entirely attributable to reduced Pass subscriptions partially offset by year-over-year increase in Club subscriptions. The decrease in Pass subscriptions was primarily due to fewer new sales as opposed to an increase in resignations. While we do expect our Pass subscription counts to decrease through year end, we believe our recent initiatives, which are primarily aimed at increasing paid occupancy, will help us deliver nights in a more proportionate manner between our Club and Pass members, ultimately replacing loss subscription revenue with increased travel revenue.

Further as an offset to the decrease in active subscriptions, we sold approximately 1,200 Inspirato for Good packages in the quarter, which include a bundled Inspirato trip and a 6-month or 1 year trial membership. This compares to approximately 850 packages in the first quarter of 2023 and totals approximately 2,500 Inspirato for Good packages since inception in the fall of 2022. These members are not included in our subscription count, so we have started delivering travel and exposing these highly qualified profits to the benefits of Inspirato, and have begun to be a small but growing number of conversions to our Club and Pass offerings. Look for more on this in the future.

Cost of revenue is $65 million for the quarter, an increase of approximately $7.3 million or 13% compared to the second quarter of last year. The increase in cost of revenue between periods was primarily due to a 28% increase in lease expenses related to leases that have commenced over the past year and a 15% increase in booking fees primarily related to our experience and bespoke travel program.

Of note, on our last call we identified increase hotel booking fees as a cost we hope to reduce moving forward. In the second quarter, our focus on this area resulted in a decrease in hotel booking fees of 4% year-over-year and 20% sequentially as a portion of net rate hotel nights shift to our lease hotels and residences.

Gross margin for the quarter was negative $11 million due to a $30 million non-cash impairment related primarily to one group of underperforming properties in a single geographic location. Excluding the impairment, our growth margin would've been approximately $19 million or 23% of revenue compared to $26 million or 31% of revenue in the second quarter of 2022. The decrease in margin, both as an absolute 10% of revenue, is due to the increase in cost of revenue.

Importantly, we offset this increase with a decrease in our operating expenses, which was $35 million in second quarter, a 15% improvement compared to $41 million a year ago. Operating expenses as a percent of revenue declined from 49% to 42% between periods. This improvement is primarily due to the reduction in force that took place in January of this year, and heightened focus on reducing corporate expenses. All this equated to an adjusted EBITDA loss of approximately $12 million in each of the second quarters of 2023 and 2022.

As we've articulated today, we've seen a slowdown in new subscription sales, reduced paid residents, nights delivered, and a shift from residents of hotels. These trends have contributed to ending the quarter with a cash balance of $46 million compared to the $62 million on hand at the end of Q1. Similar to our efforts around controlled costs, we have responded with several changes. We have incentivized multi-year subscriptions to improve retention and stabilize our subscription revenue.

Stood up a 100-person member success team to proactively engage with our members, lowered ADRs across our portfolio, implemented early booking discounts to encourage longer booking windows and more certainty around future revenue, and launched our first ever Loyalty Reward program. With our current cash position and cost savings, we anticipate to realize the remainder of the year and in 2024 and the financing we anticipate closing in the next several months. We are confident in our liquidity position moving forward, but unable to provide guidance on our anticipated yearend cash balance at this time.

In summary, I'm extremely confident in our ability to execute what is in our control and adapt to external forces. We made incredible strides in the past few months and are extremely well-positioned to improve our operating efficiencies heading into the back half of the year in 2024.

With that, I'll turn the call over to the moderator for Q&A.

(Operator Instructions) Our first question comes from Shweta Khajuria from Evercore ISI.

So you mentioned that the European travel -- you saw strength in European travel and the supply you have there is understood that is not as high as is compared to the U.S. So could you talk about supply growth in Europe, how you're positioned there and how you can leverage demand of international travel? And then the second question I have is how does the Loyalty Rewards work? So could you talk about not only how they work, but also the potential impact that you expect to see on a sustainable basis? What are you targeting with that program?

Shweta, this is Brent. In terms of European travel, I think we're actually well-positioned. I believe last year was somewhat of an anomaly in terms of how many people were actually traveling to Europe relative to the U.S. We kind of view that as the final push, I guess, post-COVID. We monitor bookings on a forward-booking basis and we feel like our European portfolio, which also grew over the last couple of years is actually right sized and we don't anticipate having the type of unprecedented demand next year that we had this year.

We also have really been listening to our members and thoughtful about our pricing of our domestic vacation rental properties. I think in the luxury segment in particular, there was just so much inflated price and in '21 for bookings in '22, there was really inflated demand. When that started to kind of get back to a more realistic level, we probably were a little bit late in changing our pricing and we've been able to now address that actually with 2 changes in our pricing structure.

So to answer your next question about Inspirato Rewards, first I want to talk about something called our advanced booking discount, which we also just launched yesterday. So Rewards and the advanced booking discount were launched yesterday. Very positive response from members. A lot of bookings yesterday. A lot of people purchasing travel credit yesterday to be booking into the future. And what we're essentially doing there is we're trying to offer better rates for our members if they book further in advance.

Tier 4, we priced our inventory at the highest possible price farther in advance because members would have the most flexibility with planning, with airlines, and then also obviously with availability. We've now flipped that a little bit and provided an incentive for our members to book further in advance. And even after one day, we're getting very positive response and we're seeing some change in behavior.

In terms of our Reward program, which is on our website at Inspirato.com, it's in the top nav under Rewards. It's essentially a rewards program versus a point-based loyalty program. There's 3 tiers. The tiers are achieved based upon a member spend. It's how many dollars they spend with us in a year, and they're getting 100% of their credit in a year, and then they get 5% of their total spend in previous years. The tiers are at 20,000 and 35,000 and 50,000.

And yesterday, just to give you one kind of real simplistic example, we had an unengaged member who hasn't traveled with the Club since 2019, but had paid their dues, wanted to get to the top status level, so actually paid $50,000 of travel credit so they could become what's called an Avanti member. The discounts that they're able to achieve through the Reward program range from 10% on the low end to 20% on the high end based upon their status and based upon whether it's a 7-night stay or a shorter stay.

In addition to that, there's all types of other great benefits, early booking discounts. All of the things our members have been asking for really for about 10 years or so, we've put that together into a very exciting Rewards program, and we anticipate that activity kind of cascading upon itself and creating a lot more velocity from our members to book. We've shared this comment before, but at any given time, more than half of our members don't have a single reservation on the books for future travel. So this is a great opportunity for us to get our members to be engaged and traveling again.

And because we have the ability to have lower prices, so long as we can get back up to our target occupancy and we have the right (inaudible) in Clubs, we're very optimistic that this should help us in our overall efficacy as we move into the end of the year and especially into 2024.

Our next question comes from Brett Knoblauch from Cantor Fitzgerald.

The first, the capital raised from Capital One Venture, I guess that partnership, can you elaborate on what type of revenue opportunities that partnership could create?

Sure. First off, I guess I would just say we're remarkably excited about partnering with Capital One. That's a founder-led business, highly innovative, extremely disruptive in the space. They're a cloud-based, mobile-first, really innovative business, and if you've kind of followed them, you've seen that they've done a great job of attacking new businesses, including travel, and really making an impact to their card holders.

They have more than a 100 million customers. They're also really one of the fastest growing small business card issuers, which is going to be we think very positive for our Inspirato for Business platform. And then beyond the card, they've invested very heavily in travel. They've become a big investor in Hopper. Hopper has really grown Capital One travel has really been extremely fast growing. They've also invested in airport lounges.

They recently purchased Velocity Black, which is a mobile first, very high-end concierge platform. They invested in SevenRooms, which is a dining platform. And now with their investment into Inspirato, they're really looking to be able to access our luxury homes, and our service and certainty. And we don't really have today the ability to share the details of the partnership. But what I can say is that we have a definitive signed term sheet and that we are working on getting the final definitive agreement done in the same timeframe as our shareholder vote upon closing. But we are extremely optimistic about them being an outstanding demand generator for Inspirato and what we can bring to the table in terms of our luxury platform.

So if you ask me who I thought the best partner could be for Inspirato, it would not be a stretch for me to say Capital One. I think it's a perfect marriage and we think that this is a game changer for us. And we are extremely excited about getting going.

I know terms of the deal maybe haven't been finalized yet. I guess just from a modeling perspective, should we assume that you guys are raising $25 million with cash in third quarter, and I guess any idea of what maybe the interest rate would be on that, or should we just leave it out for the time being?

I think I can just direct you to the K-one -- or sorry to the 8K, excuse me, to the 8K that was released yesterday and I believe you'll be able to find details on the investment there.

Got it. And then is there any update on your partnership with Saks? How is that progressing?

So the training has been completed with Saks. We view that as an extremely important partnership. The summer season for retail can be a little bit slower, but we have seen some kind of good progress there. And as we move more into the season, we expect to see some further returns from the Saks investment. But with Capital One in terms of their travel and the innovative and the scale that they're bringing us in terms of that partnership plus Saks, which we view as the top tier luxury consumer brand, probably what you're starting to notice is Inspirato is becoming very partner-friendly.

And when you think about ways for Inspirato to grow, in addition to Inspirato for Business and Inspirato for Good, it has to do with us leveraging the platform that we've invested a lot into and the technology that we've built so that we can become very good partners to leaders in different classifications that can be demand generators for us.

Awesome. No, that makes sense. And maybe if I just ask one more. On the portfolio optimization strategy, where are we at with that now? Are we completed, should we expect continued portfolio optimization in the back half of the year? And then on the occupancy rate, I know 72% or 73% is still well above industry standards. I guess, what occupancy rate do you need to get the business to be adjusted EBITDA positive that you guys are targeting?

Thanks for the questions, Brett. We've made a lot of strides as it relates to the portfolio optimization. We probably have locked in on 75% of all the deals that we're going to close on. Sometimes there's ones that we don't have a termination right until a certain date in the future. And so for those, that's why they're not all done at this point in time.

But when we say that the difference between us entering into an agreement to terminate and the actual date of the termination, there's usually a 6-month or 12-month period. So we're not seeing the real benefits yet of any of these terminations. We'll start to see this start to bleed in really in Q4 is when the first group really will start to wind through and then there'll be more as we go through 2024.

As it relates to the occupancy rate, 72% is a low rate for us. Historically, if you look across the different years, this would be the lowest rate we've had. We expect that we'll be through the efforts that we take increasing the occupancy rates at 80% plus, which is consistent with where we've been in the past.

Brett, one other note on occupancy mix is extremely important as well. Pass is a great product for the Club. It's a great product for the member, but the Pass to Club ratio is out of balance in terms of how many Pass reservations are available relative to how many Club reservations are available. And as you know, Club reservations are considerably higher in terms of ADR. So in addition to increasing occupancy, we will also get back to a more favorable mix between Club bookings paid and stayed revenue, travel revenue versus Pass subscription revenue.

Our next question comes from Mike Grondahl from Northland.

The press released it (inaudible) multiple, what's the average duration in years that those new subscriptions are going for? Is that 2 to 3 years or how long are those?

Mike, this is Brent. I cut out in the very beginning. I'm going to repeat the question if that's okay. I think the question is help me understand the average duration of your subscriptions. It seems like it's about 2 to 3 years. Did I get the question right?

Yes, I'll just add, the press release says that 80% of sales year-to-date have been multiple years. So I'm just curious you used to sell a 1 year plan of the 80% that have been multiple years on average, how long are they?

Yes. Mike, thanks for the question. So we've definitely seen and we've had a shift towards multi-year arrangements. On average, I think the ballpark you gave 2 to 3 years is about right. We do sell those subscriptions up to 5 years in length, 2 years is very common. So there's definitely -- though you see it every phase of that, but there's a lot more in that 2 to 3 year range than we had in the past.

I think it's important, Mike, to note that last year we also had quite a few month subscriptions as well, so not just a year, but last year a lot of the subscribers that we were selling were in fact month-to-month. And so going from 2 plus years where last year the average was well under one year that the benefits of that in terms of retention, we'll start to see in 2024. And that's really just the norm moving forward.

Got it. And how should we think about IFG and IFB going forward? I mean, they are steadily ramping up. Are you putting more sales people behind those efforts or kind of how much attention are those getting?

It's a great question. Both of those groups have been impacted just like the entire company in terms of corporate overhead and G&A. So they're both, I'd say relatively smaller to where they were. I'd like to talk about IFG first. We've made a lot of great improvements. I mean, it's hard to believe, but those businesses are less than a year old. And so we had to go into a market in the nonprofit space and really learn from the ground up starting about a year ago. So what we've now figured out is what are the right packages, how do we do the right marketing, what's the correct messaging.

Our repeat bookings is very high. We don't have exact numbers, but we think, we believe to the best of our knowledge, it's going to be around 65% to 70% of nonprofits who book an event with us, turn around and book a subsequent event with us. And we are increasing the dollar amount that we're offering to these nonprofits. We started with $2,000 and $4,000 packages. We now have packages well over $15,000 that are available to that market. So we do think that we're getting better. Our brand recognition is getting stronger and we anticipate strong growth within in Inspirato for Good.

Inspirato for Business is a much larger opportunity. It's become very clear that the opportunity on the business side is very, very strong for Inspirato. We now have nearly 50 business customers who are working with the company. Every month we're bringing on new customers, extremely high satisfaction. These are employees who are given the gift of travel rather than say a spot bonus or an Amazon gift card. And they are typically thrilled with what it is that they're getting. Their employers are super happy. I had an employer tell me the other day that they sent out -- this is a pretty big company, they sent out a memo to all leaders that said, no more spot bonuses. You can't give a spot bonus, you can only give Inspirato travel benefit.

So that is a good question in terms of growth, it is an area where we are doing some analysis now. We'll have more information to share in coming quarters, but we believe that there is a really strong payback period by bringing on new salespeople in that business and that it will make sense for us to be investing in Inspirato for Business and growing that platform. It's also just in terms of the core profitability of Inspirato for Business that does really well also just because of the makeup and how efficient it is to get these larger sales across the globe. And so we're very excited about both and I think it's reasonable to expect that you'll see some continued positive momentum in those segments.

And our next question comes from Tom Champion from Piper Sandler.

This is Jim on for Tom. Thanks for taking the question. I guess first one for Brent. With regards to the Capital One partnership assuming everything goes through, what sort of step one that Inspirato can do from an operational standpoint that can sort of drive the business going forward?

Yes, great question, Tom. I think that the way to think about this partnership is that Inspirato has built a platform of service and certainty for luxury travel that's unmatched, especially when you consider the portfolio of homes that we exclusively manage and control. Over the 2 years where we had nearly 50% growth, it's been well-documented now that we grew too fast, we had too much inventory. We're now right sizing that inventory and at the same time we're bringing an incredible demand engine into our business as a partner in Capital One.

So what I would say is that the benefit to Inspirato will be that Capital One will help us bring new subscribers, more travel demand into our platform. We also see opportunities with Velocity Black that Capital One just purchased. We think there's a great opportunity there for incremental demand. We also really look at the partnership from the lens of Inspirato for Business. They are a very, very, very big player in the corporate card space at really all levels of size. And we know that we do really well with our business platform, but getting help on the lead gen side and on the demand side will be extremely helpful there.

So I think it is really about them being a great demand partner for us and us providing Capital One luxury travel and service and certainty that's really unattainable in the marketplace. And detail is forthcoming when the definitive agreement is announced.

And then I guess one more for Robert. So it looked like subscription revenue was down sequentially again in 2Q. Should we expect that cadence to continue through the balance of '23?

Yes. The breakout of the subscription revenue is really, it's a Pass story. Pass is down 500 plus and when you look at the rest of the subscriptions, we're flat to up. So it's really the questions around Pass. And we do expect that for the remainder of the year at least, that we will see some further deterioration around our number of Pass holders.

That being said, we have a tremendously loyal group of Pass members who use Pass very aggressively and very consistently as Brent mentioned before where they're going on far more trips per person than all of our other members. So while we do expect that decline to continue because we've seen it for the last 3 quarters now there is a point where we expect that that will start to level out because the Pass product really works really well for people who want to do a lot of traveling, it becomes a tremendous value proposition for them while other people in the post revenge spend era have kind of dropped back down to being able to travel a few times a year, which would be more consistent with a Club member.

One thing to add there that we're learning pretty quickly and we're very excited about is what we did learn post-COVID -- I guess just pre-COVID a little bit and then post-COVID with Pass, is that we are able to attract an affluent traveler who can put in their brain, I'm going to spend $30,000 a year and I'm going to commit that amount of dollars and I'm going to travel. Now with Inspirato Rewards, we have the similar kind of budget. You could spend $20 or $30 or $50,000, but instead of it being with the Pass algorithm where you are limited, where you can go and you have to be flexible, but it is incredibly valuable, now you're able to make a commitment to travel with Inspirato and you're getting great benefits through Inspirato Rewards, and you spend the same amount of money, but maybe now you're going on that spring break trip exactly when you want and you're feeling great about the value that you're getting versus with Pass, maybe you couldn't travel over spring break, but instead you have to travel the first week of March and you're going to go to Europe instead of to Cabo.

So we really now have 2 platforms that are both value centric that drive the 2 different types of consumer. The person who is super flexible that travels a lot, as well as typically families who just want to make sure they're getting what they want when they want it, and they can feel comfortable and confident in their bookings that they're going to be getting great value with the Club.

(Operator Instructions) At this time, I'm showing no further questions. I would now like to turn the conference back to Brent Handler for closing remarks.

Fantastic, thank you. Well, I just wanted to thank everybody for joining our call today. We're extremely excited on a variety of fronts. We're excited about Capital One. We're excited about the launch of Inspirato Rewards and our advanced booking discount. We're very excited for our loyal employees and for the opportunity we have ahead of us and the roadmap that we set for profitability next year. And we are out there kind of executing and we look forward to talking to everybody at the next call. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.