Brent Handler: Okay. I’ll go ahead and answer the first one, and then Web can answer the question on cash. What we found last year was that while it’s easier to get people to join Inspirato for, say, joining monthly or even joining for one year, essentially the efficacy and the productivity of that subscriber for being so short-term requires us to sell them again and also, of course, they have optionality to leave. And so, a big decision that we made this year was to really increase heavily our longer-term commitments at the point of sale. So, most of the people who are joining now are actually joining for two years. And in joining for two years, the current rate for that is $7,800, so $3,900 per year, but there’s no additional incentive that they’re given.
Previously, people would join for around the same price, but they would get some form of joining incentives such as a free trip or maybe some travel credit. So, while the in-year was higher last year, maybe it was even, call it, around $1,300 or $1,400 higher, what was happening is, a lot of those people weren’t paying either for the entire year, if they were monthly, or we had some issues with yearly churn, because they would have paid for a year and then maybe they weren’t re-upping. Now, what we have is a cascading opportunity for members to join for between really two and five years. And by locking them in over that period of time, it obviously locked in their retention, but it also locks in — we can actuarialize how much they’re going to be traveling.
So, we expect that in 2024, this is going to have a material impact on our retention to the positive. And obviously, as we continue to drive our incentive plans for our salespeople to provide value to members who join for longer and longer terms, this is really only beneficial for Inspirato. It kind of has a little bit of a one-year hit this year, but over time it’s a much better strategy for a club like ours. And then, I’ll turn over the cash question to Web.
Web Neighbor: Hi, Brett. On cash, the way we think about it is our — the midpoint of our EBITDA projection is a $15 million negative EBITDA number in our projection for 2023. We run — that’s a — not a — it’s a decent proxy for cash because of the capital-light nature of our business. I mean, our biggest single line item of expense in the field and operations is our lease expense number. Those are very flexible and capitalized leases. So, that’s an important lever that we have. As we’ve mentioned, we are actively in the process and already have renegotiated, restructured and even terminated some leases. We generally have very favorable rights in that respect. To your related point on the prepaids, historically, we’ve been able to accrue a lot of cash upfront by selling subscriptions far in advance.
We have a much longer booking window traditionally than other hospitality platforms might typically have. In addition, the subscription element, (ph) prepaid subscriptions, emphasizing those multiyear prepaids, we would anticipate that would have all else being equal, a very positive impact on cash relative to — been — historically had — sometimes having a higher mix of monthly or shorter period subscriptions. So, there’s some really positive cash dynamic elements when you pull all that together.
Brett Knoblauch: Got it. But I guess maybe just a follow-up. Do you guys expect to end 2023 with more Pass subscriptions versus the end of 2022?
Brent Handler: Did you say more Pass subscriptions in 2023 than 2022?
Brett Knoblauch: Yes, like the year-end subscriber count?