$10M. Three properties. 40-100 rooms each. We're betting a multi-decade hotel operator + AI-native operations = 15-point margin improvement. If we're right, Fund II goes after bigger properties. If we're wrong, we'll know exactly why.
"Hospitality starts with the genuine enjoyment of doing something well for the purpose of bringing pleasure to other people."
Take a 60-room hotel running 25% EBITDA. Deploy AI for revenue optimization, labor scheduling, and predictive maintenance. Get it to 40% EBITDA. That's $495K more profit annually on a $3.3M revenue property.
Do that across three properties. Prove it works in different markets. Then raise Fund II ($25M-$50M) and apply the same playbook to 200-room hotels where the absolute dollar impact is 3x larger.
We're not building software to sell. We're building operational infrastructure that makes our hotels more profitable than any competitor running on 1990s systems.
What "AI-native" actually means
Dynamic pricing that adjusts rates based on 47 local variables, not last year's spreadsheet.
Housekeeping routes optimized by floor, check-out time, and staff location—saving 2 hours per day per property.
Predictive maintenance that schedules HVAC service before guests complain, not after.
Our operator has more years in hotels than most people have years alive. We're giving them tools that didn't exist when they started.
$10M can't buy a 200-room hotel. Those cost $30M-$50M. But $10M can buy three 60-room properties with leverage. And that's the right size anyway.
A 60-room hotel is complex enough that AI matters—dynamic pricing, labor scheduling, predictive maintenance all drive real margin improvement. But it's simple enough that you can actually implement changes in weeks, not years.
We prove it works at this scale. Then Fund II goes after the 200-room properties where the systems we've built can generate $1M+ in annual margin improvement instead of $500K.
Our operator ran a 200-room property before most LPs in this fund were born.
This isn't a tech founder LARPing as a hotel operator. This is someone who's forgotten more about hotel operations than most people will ever know, finally getting tools that match their expertise.
Year 1: Acquire first property. Deploy AI ops. Hit 40% EBITDA or figure out exactly why we didn't.
Year 2: Acquire properties 2 and 3. Replicate the playbook. Prove it wasn't luck.
Year 3: Fund II. Same operator. Same systems. Bigger properties. $25M-$50M raise.
60-room hotel. $150 ADR. 70% occupancy. Brings in $3.3M annually. Currently running 25% EBITDA because the GM is scheduling housekeeping in Excel and setting rates based on "what we did last year."
We buy that hotel for $5M. Deploy AI for pricing, labor, and maintenance. Get EBITDA to 40%. That's $495K more profit per year.
Not by firing people. By making the people they have 30% more efficient.
40-100 rooms. Full-service preferred. F&B operations a plus because that's where the most manual inefficiency lives.
$3M-$8M purchase price. Markets with 10%+ annual tourism growth. Properties where occupancy is fine but margins are terrible.
We're not looking for distressed assets. We're looking for decent hotels being run by people who are doing their best with tools from 1997.
Portfolio target: 3 properties by end of Year 2.
Different markets. Different sizes within the 40-100 range. Same playbook. If it doesn't work in three different contexts, it doesn't work.
Fund Structure
Total LP commitment target for Fund I
Custom software built for internal use only
First 1-2 property acquisitions
First hospitality deployments
5% annual floor, paid quarterly. If operations come in below that, we use credit facilities to meet it. Target is 15-20% annually.
The floor exists because hotel cash flow is lumpy. You might have a great Q3 and a terrible Q1. The quarterly distribution smooths that out for LPs who want predictable cash.
The 15-20% target assumes we hit our EBITDA improvements and maintain 70%+ occupancy. If we do better, distributions go up. If we do worse, we'll tell you exactly why.
Three scenarios
We meet the floor but don't hit operational targets. You get your money back slowly plus a small return.
We execute the playbook as planned. EBITDA improves 10-12 points. Properties perform.
We exceed on margins or find better acquisition prices. Fund II raises faster.
If this sounds like the kind of bet you want to make, let's talk.