Steve Case on the Future of Luxury Travel and the Exclusive Collective

0:01Sarah Dandashy: Hey, I'm Sarah Dandashy here live at the Skiff Global Forum, and we have been interviewing some of our speakers today. Very excited for this conversation. We've got Steve Case here from Revolution. And Steve, thank you so much for joining us. Great to be with you. I know, right? It's a very busy day here. It's a busy day. It's great to see all the energy. Exactly. No, definitely. So I want to kind of like start a little bit from tying in a bit of your background and then to bring us into like where we are today. So obviously you helped bring millions of people online with AOL. What drew you from that world basically into investing in the world of travel and hospitality?

0:37Well, it was a little bit of an evolution. I co-founded AOL 40 years ago. I did the internet for about 20 years. I still have it. I still have EOL. It's amazing how far we've gone because when we started in 1985, only 3 % of people were online. 85? Really? 85. That's amazing. And those 3 % only used the internet about an hour a week. So it went from, if not many people knowing or caring or using it, to suddenly, you know, kind of dominating our lives. In every household. So that was the first chapter. And then sort of the second chapter was, you know, I started Revolution as an investment firm about 20 years ago.

1:06We've invested now in a couple hundred companies across lots of different sectors. But in the last few years, the real focus and passion has been in travel and hospitality. I think it's just an exciting industry, as you well know, kind of ripe for disruption. Some things are going to change. Some things are going to stay the same. and figuring out how to get that balance right is where we're focusing a lot of our time at Revolution.

1:25Sarah Dandashy: So it's obviously an industry that's always evolving and it's not going anywhere, which is great. So let's talk about exclusive resorts. So why bring exclusive resorts, Inspirata, and One Fine Stay together now? What are you kind of seeing as the business opportunity? Well, the focus, we created this holding company called the Exclusive Collective, which is those three brands you mentioned, exclusive resorts, which is more of a club that started over 20 years ago, So Inspirata, which is a subscription service, started about a decade ago. And One Fine Stay, which for a while was a division of Accor, but we acquired it from Accor, kind of focused on the super high-end luxury Villa Rentals kind of space.

2:03And our belief is that these high-end luxury customers want flexibility, want choices. And some will prefer a club like Exus Resorts. Some would prefer a subscription service like Inspirata. Some would prefer something like One Fine Stay. Many people actually will use a mix of them. Yeah. And so having more options for people in this kind of luxury collective, I think, makes a lot of sense. And we do about a$500 million business now,$70 million at EBITDA. So it's got some scale to it. But we think it can grow significantly from here because particularly high-end customers, their precious thing is time.

2:37And so they're sure they want good value, but they want to make sure somebody is looking out for them. And AI can help in some of the discovery. But you ultimately want to be able to trust somebody who knows you, knows your family, knows your preferences, knows your taste. So if you're doing a trip to Aspen or going to Hawaii or Europe or what have you, there's some degree of personalized curation and also a real deep sense of connectivity and community. And so those are some of the things that we've really focused on. I think it's a great time for that kind of business because it is kind of fragmented.

3:08People sometimes on some of the booking sites, you know, it's a little bit luck of a draw. There's even with AI, some issues with fake reviews on some of the platforms. So it's sort of like, who do I trust? It's almost a decision fatigue. There's so many decisions I have to make, so much searching I have to do. I just want somebody to make it easy for me. That's what we're trying to do with the exclusive collective.

3:29Sarah Dandashy: I think that's great. And you bring up a really good point as far as decision fatigue, because obviously we have so many options at our fingertips. And I mean, I actually work with a lot of ultra high net worth clients that stay in these type of properties. And I know every trip is going to be different. So depending on their needs, whether it's business, whether it's family travel, whatever. So it is actually, it makes a lot of sense. And more options is not necessarily a good thing. You know, fewer options that are perfectly curated. No, you want choice, but it's like if you go to a restaurant, the menu has like 500 items on it.

3:59It's kind of intimidating. You want more than one, but you don't want an infinite number. And so, and that's true with travel. And people do spend, you know, a lot of time, Some want to spend time on planning and so forth, which is fine. But they also just want to make sure if they're going to go with their family or friends for a week and they're busy people and don't have a lot of time, it's going to be a perfect week. The home's going to be perfect. The services are going to be perfect. And that's really the goal for Exclusive Collective.

4:27Sarah Dandashy: Yeah, absolutely. So now that you're kind of talking about this, have you been seeing that, have you found that the travelers that you already sort of have in the ecosystem are using more than one of the, or staying in more than one of these brands? Yes. Yeah. So it's relatively new, the acquisition of Isparato and OneFinds, say, were over the past 12 months. So it's gone from a single brand to three brands over less than a year. So it's evolving, but absolutely, there's some that are using two of them. Some have even used all three of them. And we think giving people that flexibility is important.

4:58And there's clearly some cross-marketing synergies. There's also, we are looking to bring in real estate into the platform, whether we own it, which is typically the model with exclusive resorts, the club, or we lease it. Having a broader ecosystem, having about 25 ,000 high net worth families in our ecosystem gives us more buying power. You see more opportunities. You can partner with more companies. We partner with some great companies like Rosewood and others, and we'll expand those partnerships in the years to come.

5:28Sarah Dandashy: Yeah. And you're, I mean, obviously you're, you're tapping into, you already have, you already have the clientele, you know, we've already got the clientele and they know from previous experiences, the discernments, the discernment factor that's like, okay, well, I know that I've had great experiences, let's say with one fine stay properties. And so it almost, it will make it easier for them to at least pique their interest to explore some of the other options. But as long as we continue to execute on the strategy, you're never going to be disappointed. Yes. Whether it be on the exclusive resort side or the Inspirato side or the one fine stay side, 100%, you know, confidence that you're going to have a great home.

6:06That's exactly what you expected when you walked in. You're not going to be surprised. You're not going to be disappointed. No, of course. And a whole set of services in terms of the initial planning and before you get there or when you're on site that are delivered, hopefully, flawlessly. And you're also getting a good value. So you don't have to spend a lot of time shopping around to make sure you're not being taken advantage of. Even luxury customers, they can afford things, but they also don't want to be nickel and dime. They don't want to be taken advantage of. They just want to make sure they've got a fair value.

6:32Sarah Dandashy: Correct. I always say that there's always a budget, you know, and some there might be a little bit more flexibility. But even if there's a larger budget, everybody is also mindful of the value that they're getting for it. And they want us as the exclusive collective to use our buying power to give them more value as opposed to having them feel like to spend their time shopping around, comparing what's the price here, what's the price there, which is this decision fatigue dynamic, which is true in a lot of people's aspects of people's lives. There's almost too many choices. And how do you make things a little simpler?

7:01But assure them every decision they make is going to be a great one.

7:04Sarah Dandashy: I love that. I love that. As a former hotel concierge, you're speaking my language. Totally. Absolutely. Not getting out of the park. So you have recently moved away from managing more than 200 homes in London and Paris. What inspired this business decision? Well, this specifically for One Fine Stay, which was started more than a decade ago. Core owned it for a number of years. We just acquired it last year. Our focus with the Exclusive Collective is on this high end, is on this curation. So what One Fine Stay was when we acquired it, they had more homes in London. I think it was about 400 homes.

7:39Sarah Dandashy: Plenty, yes. But some were$300 a night and some were$3 ,000 a night, or I should say pounds in this case. And we said, no, we just want the very best home. So we basically worked out a deal to essentially move a lot of the homes. I think it was a couple hundred to another platform that was focused more on that market. So again, if people go to one fine stay and they want to book a home in London or any other place, they know we've really kept the very best of the very best. And that curation, I think, is really is a carefully curated collection of great homes is part of the value proposition for One Fine State, but also the value proposition more broadly for the exclusive collective.

8:20We don't want to be all things all people. We don't want to. There's hotels.com. There's Airbnb. Lots of places where you can go to get the$50 hotel room or the$5 ,000 hotel room. We want to be the place every time you're going to be assured of a great experience and with great services and a great value.

8:37Sarah Dandashy: And again, you also know your clients, you know, like, you know, the type of the clients that you're attracting. And as you might, I mean, you said, just as you were saying curated, I was I was saying the same thing. It's they want to have a curated. And they want to fundamentally it's a trust business. They want to trust you that you're doing the heavy lifting for them so they can focus on having the special time with their family and friends as opposed to be worrying about this or worrying about that. Absolutely. So you projected more than$500 million in revenue and around$70 million for 2026.

9:11Sarah Dandashy: Are you on track for that? Yeah, we're on track. Yeah, which is great. Yeah. That's exciting. So, well, I feel like we can't have a conversation and not talk about AI. Of course. Of course. Okay, so kind of on a broader scale, I mean, you can share, obviously, how it might be playing into what you all are building out. But how should AI handle luxury? What should the role of AI be in luxury travel? And what should always stay human? Well, I think hospitality is always going to be a human trust, people-to-people business. But AI, for sure, is already doing some of this. We'll do more over time.

9:49taking some of the friction out of it. We invested in a company called Clear 10 years ago that was focusing on making it easier to get through an airport. Now they've expanded that to sports arenas and hospitals and so forth. And that's an example of eliminating kind of bad friction. It's the things that are annoying. And how do you not have people be annoyed? How do they get from their home to the gate faster? But there's also some good friction and we don't want to eliminate that. There's something, the serendipity about travel, going to some restaurant, running into some people, hearing some music on the street, that kind of thing that AI is not going to replicate.

10:22That's what makes travel so special. And so trying to strike the right balance using AI to be more efficient, to be smarter, to track people's preferences so you can provide even more personalized, customized service. But I think, at least for the exclusive collective, given the audience we're targeting, which are the higher end luxury customers, it's always going to be people first.

10:43Sarah Dandashy: Yeah. Oh, absolutely. And I agree with that. So kind of like in looking ahead, just seeing like the broader trends. I mean, obviously, the premium market is expanding everywhere, you know, from hotels, airlines, all of that. What do you think is kind of what do you see is exciting about that as far as moving ahead, whether for the brand and the company? Well, we have obviously a lot of different businesses, a lot of different sectors. But the thing that is striking to me about this luxury segment, and you mentioned the Collective, we have 25 ,000 people in our ecosystem, which is great. But there's 450 ,000 people who have$30 million more or more of net worth.

11:18So there's still a big market to go after with whether it be the exclusive resorts brand or the Inspirato brand or the one client stay brand or some mix of those brands. So there's a lot of expansions. We also believe if we're doing our job right, we can serve the needs of our customers, our clients much more effectively and have them book more things through us as opposed to just an occasional vacation. We think the growth opportunities there are significant. and using technology as part of it, but also using the broader scale we now have, the broader network we now have to have access to places and experiences that we wouldn't have had as a smaller company.

11:54And obviously, momentum begets momentum. As we have more of that access, we have more of that network, we can bring in more homes, we can bring in more experiences, it becomes more valuable to existing members. So they use it more and they tell their friends, and that becomes a growth driver for the business. So it's really having that flywheel working on behalf of our clients.

12:13Sarah Dandashy: Which is great. And again, I mean, it's just only continuing to grow as we... And I am definitely biased just because of my background. But to me, it's a very exciting intersection to be in just because you can do more. There's more ways to just really level up the whole experience. Absolutely. But also people are expecting the best. and you have to be able to consistently deliver that using technology, AI, other things to help facilitate that. But ultimately, it's a people-to-people business. Yeah, definitely. So final question before we wrap up here. Are there any little nuggets that you can share with us as far as what might be in the pipeline to expect?

12:55Sarah Dandashy: Maybe just hinting at what the future might hold. Well, we talked a lot about existing collective. We also have some other businesses. We're developing a peninsula in Costa Rica, Punta Casica. We opened a 600-acre peninsula right next to Peninsula Papagaya. I'm very familiar with that. Four Seasons, Ritz Reserve. And that's done really well. So that's fantastic. That's done extremely well. They started 20 years ago. We started a year ago. And we opened the first hotel, a Waldorf Astoria, just about a year ago. We have a couple other hotels lined up and we're now working on the amenities, experiences, and really building it as a great community.

13:23Not just that peninsula itself, but how we connect the people and the adjacent community, the little town of Coco, another beach town called Hermosa, five, 10 minutes away. And so that's been fun to basically, you know, how do you master plan not just a resort, but a 600-acre peninsula and create a, you know, hopefully one of the best resort experiences, one of the best resort communities in the world. We're also doing a bunch of things in Hawaii. Amazing. The Maui Land and Pineapple Company, which owns the Kapalua Resort, where there's a Ritz-Carlton and a montage, doing some things on Kauai.

13:55So we're pretty active now in the travel hospitality space, and it's an exciting business to be part of. And I think the momentum in the next 5, 10, 10, 15 years are going to be really, really tremendous.

14:05Sarah Dandashy: Exciting. Well, I have to say, I'm adding all those to the lifts. I'm familiar with them enough that it's like, well done. You definitely have exciting things in the pipeline. Well, thank you again so much. I know you're getting ready to speak. I am. Looking forward to it. I appreciate you taking the time. Thank you. And thank you again. Thanks to you.