Q&A: Steve Case
Steve Case first invested in luxury home club Exclusive Resorts, where members pay $170,000 annually plus dues for access to a portfolio of high-end properties around the world, in 2003. Now the company’s chairman, Case is trying to broaden Exclusive’s appeal—by reuniting with old partners.
Q: EXCLUSIVE RESORTS JUST CELEBRATED ITS 10TH ANNIVERSARY. HOW ARE YOU DOING?
A: In the last decade, we have purchased well over $1 billion in real estate. When I first got involved there were maybe 10 to 15 homes and 50 to 100 members. We have gone from dozens of members to thousands of members, a handful of homes to 300 homes, from a startup to over $1 billion of memberships and sales.
IN DECEMBER YOU MERGED EXCLUSIVE RESORTS’ PORTICO BRAND WITH INSPIRATO, A RIVAL DESTINATION CLUB THAT HAD A SIMILAR BUSINESS PLAN OF A LOWER ENTRY PRICE AND LEASED, RATHER THAN OWNED, PROPERTIES. WHY?
We are trying to be a broader luxury travel company. The club will continue to be the centerpiece of what we are doing, but we think there is the opportunity to supplement that with other products and services, like Inspirato. It complements Exclusive Resorts with destinations it doesn’t have.
INSPIRATO’S FOUNDERS, BRAD AND BRENT HANDLER, ALSO FOUNDED EXCLUSIVE RESORTS, BUT LEFT AT THE END OF 2009. WHY REUNITE?
Several years ago, when the market was in some turmoil, we were focused on stabilizing the core Exclusive Resorts business and decided that was not the right time to launch a new thing. But they wanted to go off and do that, which they did. We launched Portico about a year later. Now, we decided it made sense to have one larger company. It’s been great to put the band back together, if you will.
WHAT WILL THE HANDLERS’ ROLES BE IN THIS NEW ARRANGEMENT?
The combined club, called Inspirato with American Express, operates under Inspirato CEO Brent Handler and chairman Brad Handler. Philippe Bourguignon remains the CEO of Exclusive Resorts.
YOU FIRST INVESTED IN EXCLUSIVE RESORTS JUST MONTHS AFTER LEAVING AOL-TIME WARNER. WHY MOVE FROM TECH TO TRAVEL?
I had the experience of owning a couple of second homes. When you buy them, it always seems like a great thing to do—you’ll have wonderful moments with your family and hopefully the home will appreciate in value. But what typically happens, and what happened in our case, is we ended up using it less than we expected and there was more expense and hassle. That’s when I stumbled upon Exclusive Resorts, which we evaluated initially just to become a member.
SO WHY GO FROM MEMBER TO INVESTOR?
It quickly became apparent that the company was on the early waves of some trends. One was the shift away from ownership to sharing, and the other was people becoming much more interested in experiences.
GIVEN THAT WEALTHY PEOPLE CAN AFFORD TO BUY, WERE YOU WORRIED ABOUT CONVINCING THEM TO SHARE?
Like anything, this is a segment. It doesn’t mean that everybody is going to do this. But for a growing number of people, this is either the better way to think about vacations or a complement to what they are already doing.
UNLIKE SOME OF YOUR COMPETITORS, EXCLUSIVE RESORTS SURVIVED THE RECESSION. HOW DOES THE REAL ESTATE REBOUND AFFECT YOU NOW?
It strengthens us. During the crisis, everyone had to pull back. Now, they are feeling more optimistic. They are far likelier to be interested in committing to something like Exclusive Resorts, which might be a couple hundred thousand dollars up front, most of which is refundable.