INVEST IN ULTRA LUXURY TRAVEL
UTOPIAN LVH IS A $6,000,000 PRE-IPO INVESTMENT OPPORTUNITY IN THE LUXURY SHORT-TERM RENTAL INDUSTRY.
With over $750,000,000 in assets under management in seven highly sought-after vacation destinations in North and Central America, Utopian LVH is an emerging market leader and an Inc. 5000 company, experiencing 26.7% year-over-year growth since 2015.
Proceeds from this raise will primarily be used to fund the acquisition of a complementary vacation rental company in accordance with our pre-existing LOI. The acquisition will add almost 75% to Utopian's gross income, increase Utopian LVH oeprating revenues from $5.1M to 8.5M and will more than double EBITDA to $1.54M in 2018. Following the acquisition, Utopian LVH’s gross revenues are projected to exceed $24M over the next 12 months.
Following the successful capital raise and the integration of the two companies, Utopian LVH intends to file a Qualified Offering to begin trading as a public company.
|2018 Combined Financials|| |
Normalized Operating Revenue
Normalized Net OperatingIncome
The acquisition target is under a Letter of Intent. Terms include $3.0M in cash at closing plus the assumption of a seller note for $2.0M with a two-year term and 6% coupon. Utopian is seeking $6.0M in convertible note financing with an 8% annualized interest rate and a 20% discount to the next qualified round of financing.
The uses of funds include the following:
To Seller for Acquisition: $3.0M
Interest and equity Reserve: $2.0M
Utopian LVH is a leader in vacation rental-management services for luxury homeowners and their guests. Headquartered in Park City, Utah, Utopian LVH represents luxury and ultra-luxury homes in key vacation destinations, including Park City, Palm Springs, Hawaii, Lake Tahoe, Arizona, and Belize. We manage properties exclusively, outfitting, staging, photographing, and marketing them to luxury clientele throughout the world, maintaining them to luxury standards, and providing the ultimate in concierge, housekeeping, and home services to homeowners and guests.
In a very real sense, each of our destinations is comparable to a luxury hotel that is collectively owned by our homeowners. Utopian LVH is the hotelier.We take care of the properties, market the properties, take reservations, register our guests, and provide guests and owners with the ultimate in guest services during their stays.
Utopian LVH’s mission is to deliver an exceptional selection of luxury vacation residences, unparalleled professional service, and a consistent world class experience to the benefit of all stakeholders.
A Lack of Consistency in Short-Term Luxury Rentals
We formed Utopian LVH in 2011, because we could see that the short-term rental market was failing to meet the needs and expectations of its luxury clientele.
Luxury clientele—people who can afford to rent luxury properties at premier vacation destinations—are accustomed to staying in top luxury hotels, where they know they will receive the highest standards in accommodations and service. But when they rented a luxury home for their vacation, other than as shown by pictures, they did not know what they would get. What was missing most from their luxury vacation rental experience was a consistent luxury standard, like they found at the Ritz Carlton, Four Season, or Fairmont—and the confidence that it would be delivered.
It was not only guests who were adversely affected by lack of a consistently applied luxury standard. Homeowners were often adversely affected as well, because they did not have confidence in the care, custody, and control of their vacation home, and they did not know what to expect when they returned.
A World-Class Hospitality Platform
Utopian has aggregated luxury homes and paired them with a hotel-like organization and infrastructure to provide our homeowners and guests with a consistent, luxury, experience across all properties within each destination.
Maintenance and Housekeeping ensure that our properties are guest and owner ready. When the Sales Team books a guest or owner stay, they also determine how often housekeeping will be required, whether there are pets or other considerations, and whether or not they are planning on any special events. After a stay has been booked, Concierge Services reaches out to help with travel arrangements, reservations, equipment rentals, and shopping lists so that the home can be appropriately provisioned and made ready for their arrival. Before a stay, homes are re-inspected, lights are on, the temperature is set, and a Utopian representative is at the home waiting to introduce the home, provide an electronic home manual, answer questions, and otherwise assist in the arrival.
During a stay, housekeeping provides daily or biweekly as requested by the guest or owner, and normal concierge services are available twelve hours a day. The Services desk, and through it, maintenance, and security personnel, is always available, 24 hours a day.
After a stay, the property is inspected, inventoried, and brought back to owner/guest ready condition, periodically inspected and maintained, tracked within the Company’s property management system, so that homeowners and guests will know that they will be afforded a five-star experience when they return.
The Business Model
Every Guest is a Potential Homeowner
Utopian LVH’s business requires the aggregation of luxury vacation homes in golf, beach, or mountain/ski destinations. We are able to aggregate homes because we provide owners with better return on investment, better service, and greater peace of mind, all of which leads to homeowner referrals and a stable inventory. In mature markets such as Park City, our annual turnover is below five percent.
Utopian LVH frequently becomes a catalyst for vacation home purchases, making and receiving referrals to and from real estate professionals. Vacationers that are having an exceptional experience in a destination often begin looking for properties within the destinations. Utopian LVH’s guests have visibility into how the luxury vacations rental market works and the extent that the rental income could underwrite their investment. Most importantly, they know that Utopian LVH will manage their property to luxury standards, making their ownership experience is financially and personally rewarding.
To oversee the marketing and management of their homes, Utopian charges owners a commission of thirty percent (30%) in emerging markets and thirty-five percent (35%) in mature markets. The average Utopian short term vacation rental guest stays 5.5 days and spends $1,350 per night, generating gross rental income of $7,425 per reservation. Utopian LVH's most expensive residence generates $20,000 per night in gross rental income.
Utopian LVH is a Leader in a Growing Market
The short-term luxury-rental market is a $167.9B* industry and is experiencing 13.5%** year-on-year growth in the US.
Utopian’s segments of the short-term-luxury-rental include properties at select mountain/ski, golf, and beach destinations where there is a large inventory of luxury vacation properties and where the ratio of vacation homes to residences is high. Because Utopian’s business is providing comprehensive luxury services to owners and guests, our business is not directly competitive with well-known distribution channels such as AirBnB, VRBO, and Bookings.com. AirBnB, VRBO, and Bookings.com are third-party booking agents—each Utopian Destination is the equivalent of a luxury hotel.
Like most luxury hotels, Utopian uses its own web-site and its own dedicated sales team to book guest stays, but we also distribute our offerings and book through third-party booking agents (also known as distribution channels) such as AirBnB, VRBO, and Bookings.com.
Utopian currently receives 48% of its bookings through third-party channels. 52% of our bookings are direct. As we expand the Company, we will strengthen our brand, develop relationships with our guests, and improve our percentage of direct bookings. Our goal is to have 80% of our booking direct within five years.
Utopian’s long-term goal is to grow the Company to include 50 vacation destinations with a minimum of fifty homes per destination. Our short-term plan calls for the Company to expand to a minimum of eleven destinations by year five through organic expansion into under-served markets and, when economically justified, through acquisition of successful luxury rental management companies in mature markets.
Utopian’s long-term goal is to grow the Company to include
50 vacation destinations with a minimum of fifty homes per destination. Our
short-term plan calls for the Company to expand to a minimum of eleven
destinations by year five through organic expansion into under-served markets
and, when economically justified, through acquisition of successful luxury
rental management companies in mature markets.
Capitalizing on Success
Since its founding in Park City in 2011 by seasoned entrepreneur Jeff Jenson, Utopian LVH has been growing annually by 20% to 40% with no outside capital.
This organic growth has refined the company's business model within its three market segments: premier beach, mountain/ski, and desert/golf destinations.
Having spent eight years, building a hotel-like organization and infrastructure and developing relationships with homeowners and guests, our growth strategy is able to capitalize on the foundation we've already built as we expand within mature, emerging, and new markets.
The Company’s goal is to achieve 50 worldwide markets with at least 50 residences per market. Our strategy for achieving that goal is to grow by entering underserved markets before entering contested markets. We will augment our organic expansion by making targeted acquisitions of successful luxury vacation rental companies whose ownership seek an exit. We conservatively estimate that each market with 50 residences will generate $5M+ in gross rental income and fees and contribute $650K to Utopian LVH’s EBITDA.
The Marketing and Sales Strategy
Building a Focus on Services Leads to Repeat Customers
The marketing team at Utopian LVH focuses on new-media and traditional approaches to marketing. In addition to a powerful, optimized website, Utopian LVH makes appropriate use of third-party booking services such as AirBnB, VRBO, and Bookings.com to drive sales.
With proceeds from this offering, the Company will hire two additional marketing personnel and will devote additional resources for marketing campaigns, including campaigns with affinity groups such as alumnae organizations with which our employees, owners, and guests have existing relationships, which will target both luxury vacation homeowners and guests.
A Service Platform that Sets Us Apart
Utopian LVH’s business is to provide luxury vacation rentals to a luxury minded clientele. Each of our destinations is comparable to a luxury hotel that is collectively owned by our homeowners. We are the hotelier who takes care of the properties, markets the properties, takes reservations, registers our guests, and provides them with the ultimate in guest services during their stays.
Because Utopian’s business is providing fulsome vacation-rental-management services to owners and guests, our business is not directly competitive with well-known distribution channels such as AirBnB, VRBO, and Bookings.com. Utopian LVH’s principal competition is from other luxury hotels and from competitive luxury-vacation-rental providers.
Utopian LVH’s distinctive competence and our key differentiator is our ability to provide our homeowners and guests with a consistent, luxury, experience across all properties within each destination. Our culture was built to provide that ability—and that ability is built into our culture.
The Financials (Combined)
Destination Cost of Goods
Corporate COGs & Expenses
In 2018 combined we generated $20.9M in gross income, 5.1M in operating income and after taking into account an allowance for discontinued operations, had an EBITDA of $438,895. The Company acquisition added 8.7M in gross income, $3,0M in operating income and increases EBITDA BY $1,1M for the year ended 2018.
Utopian's goal is to build a solid shareholder base though this Reg D 506(c), and file a Qualified Offering to begin trading as a public company.
Diversification across Multiple Destinations
Utopian LVH's portfolio manages over $750,000,000 in assets and includes properties in:
Park City, UT
Palm Springs and the Coachella Valley, CA
Lake Tahoe, CA & NV
Wine Country, CA
The Big Island, HI
A High Standard of Excellence and Experience
Founder Jeff Jenson has a capital markets background and has taken over 70 private companies public. The team also has a combined 60+ years in marketing and business development experience and over 100 years of combined experience in the hospitality sector, primarily with ultra luxury resorts.
We are dedicated to making rental home Ownership stress-free. We take pride in protecting owner assets and providing all stakeholders with the luxury experience they deserve.
Continuing to Grow as a Leader in the Industry
With the proceeds from this raise that will be devoted to infrastructure, we will continue development of a customized version of the Light Maker Property Management system (“LMPM”), with which we went live in November of last year. The further development of LMPM will extend the capabilities of Utopian’s property management systems down to the guest/owners in the form of iPad Home Manuals and down to housekeepers, maintenance personnel, and guest services personnel by way of mobile devices and associated applications.
We have invested in a talented and experienced team at Utopian LVH, and we want to continue to grow that team. With the funds from this raise, we plan to hire two more full time employees to our marketing team and allocate more funds to marketing efforts. We also plan on hiring a full time HR/administrative professional and a seasoned hospitality expert currently working as an independent contractor as a full time employee in Southern California.
This offering is the Company’s first attempt at raising outside capital, so it provides a unique opportunity for individual investors to get in early without incurring many of usual startup and early-stage risks. Join us today in setting the industry standard for world-class vacation experiences!
Utah 100 winner, ranked as one of the fastest growing companies in Utah #38October, 2018
Inc. 5000 winner, ranked as one of the fastest growing companies in America #4181August, 2018
Utah 100 winner, ranked as one of the fastest growing companies in Utah #75October, 2017
Inc. 5000 winner, ranked as one of the fastest growing companies in America #914August, 2017
Inc. 500 winner, ranked as one of the fastest growing companies in America #350August, 2015