The combination of the investment with Capital One and meaningful savings anticipated in 2024 through the actions we’ve taken to improve our free cash flow profile, give us confidence in our liquidity position moving forward. In closing, the past few months have brought about change at a time of uncertainty for employee, homeowners, members and shareholders. It is my firm belief that through our cost savings initiatives and overall execution, we’ve put ourselves on a solid path towards certainty, stability and profitability. Along those lines, we are reaffirming our 2023 full year guidance of $320 million to $340 million of total revenue and an adjusted EBITDA loss between $30 million and $45 million. We are hard at work, finalizing our 2024 budget and look forward to communicating it with you at the appropriate time.
With that, I’d like to turn the call over to the operator for Q&A.
Operator: Thank you. At this time, we will conduct a question-and-answer session. [Operator instructions] The first call comes from Shweta Khajuria of Evercore ISI.
Shweta Khajuria : Okay. Thanks for taking my questions. Let me try two please. First one is, Eric, could you perhaps at a high-level talk about your early observations of being at the company as now the CEO and some of the areas that you will be focused on most in the next call it 6 to12 months and areas that you’re excited about the most. And then the second question I have is on your cash burn rate versus the cash balance that you have, including the convert. So, it looks like you may have approximately $50 million-plus in cash. And given the cash burn that you have, how should we think about potential capital raise needs versus a path to becoming positive free cash flow? Thank you.
Eric Grosse : Well, thanks, Shweta. We appreciate the question. With respect to initial observations, one thing that I’ve really been impressed with as I stepped into my CEO role here is just how our team in the near term has just worked and executed very, very quickly to deliver some material near term operating efficiencies, which is important because my initial and most important near-term priority is just rarely put Inspirato on a path towards profitability. We’ve taken a lot of steps on our lease optimization, our personnel reductions, software, savings, other expense savings. If you add it all up on an annualized basis, it’s over $50 million. And that we’ve done in a very, very short period of time. So that I’ve been really impressed with.
You asked about a longer-term view over the next 6 to 12 months. And as I spend more time with the team and spend more time understanding that the unique role that Inspirato has in the luxury travel category, I will really get more excited about the growth opportunities in front of Inspirato. Partnerships is one area and one opportunity that we need to mind where we can really efficiently tap into demand sources that where we really deliver on our unique residence portfolio. And Capital One is a great example of that and I think there are others and there will be others as we look more into it. The opportunity to revisit — and we’ve rationalized and revitalized our current product offering around Club and Pass, it is definitely an opportunity, as well as new business lines like IFG and IFB that are still very much in the early stages of their development and have encouraging growth prospects to come in front of us.
But I guess when I look at it more broadly and I look at the opportunity more broadly and when I spend more time with members and with our team, I think that we have a pretty unique opportunity to re-instill the magic of what delivers a great, great experience at Inspirato. We deliver great travel experiences at the core of what we do and we’re a travel hub and a great one that delivers pretty exceptional experiences and value to members. And I believe the more time I spend here, that the market opportunity for what we do is just a lot bigger than where it’s broad-based right now.
Robert Kaiden : Yes Shweta, this is Robert. Let me take the question you had about the cash burn. For sure, you’re correct. We have been burning cash at a rate of about $15 million a quarter consistently for a bunch of quarters now. And that’s one of the reasons that we took the actions that Eric mentioned on our path to profitability of reducing our costs. We’ve taken action that will eliminate at least $25 million of lease costs as we’ve gone through our portfolio optimization. And as I’ve mentioned in the past call, while we’ve taken those actions already, the end of the leases haven’t happened yet because those — the end of the leases are 6 to 12 months after we’ve taken the termination actions. A lot of those will start to see by Q1 of next year.
But for now, we’ll have another quarter, we’ll have some cash burn around that. We also took actions around staffing, headcounts as well with a reduction in force in Q3 and that didn’t show up from a cash perspective yet either because of, it was done during the quarter and then there was obviously certain severance costs around that. So, we’ll start seeing some benefit around that. Finally, as part of our 2024 planning process, we’ve really dug deep to identify other areas where there may be cash savings opportunities. For instance, we went and we scrub through all of our software programs and technology that we had and have identified a significant amount of savings there. So when you add all those pieces up, we’re planning on a $50 million-plus of savings that we’ll see annualize in 2024, a very similar number to the kind of cash burn that we’re seeing in 2023.
So while we certainly have our work and our opportunity around what revenue will look like in 2024 as we firm up our 2024 plan, we feel that we’ve taken out sufficient cost that will really be able to temper that cash burn starting with Q1 of 2024. And because of that, we don’t foresee a need where we absolutely need to raise capital, which you asked about. But certainly we’re always apt. We’re always, as many companies are, open to the possibility of raising capital for the right rates and the right structure, but I think we have the best in our own hands in terms of cash moving forward.
Operator: Thank you. One moment for our next question. Our next question comes from Mike Grundle of Northland. Mike, your lines are open.
Mike Grundle : Hey, thanks, guys. First question is just on Pass subscribers. What do you think that weakness is? Is it macro related? Is it something you need to do to tweak the offering? Just looking for a little insight there?
