Business Model

Business 2: Each Property (SPV)

• Each property has its OWN set of investors operating under a Special Purpose Vehicle (SPV)
• SPV funds acquisition + conversion, receives economic benefits, exits at end of hold period
• Some investors may invest in multiple SPVs — app doesn't track cross-SPV overlap
• These are mature real estate hospitality transactions, NOT tech investments
• SPV pays management/brand fees to ManCo and keeps the rest

Intercompany Elimination (ASC 810)

Management fees paid by SPVs cancel against fee revenue received by ManCo on consolidation.

TWO Property Business Models

Model 1: Boutique Hotel (all properties except Medellín duplex)

• Converted from large residential estates on acreage
• Main house → common areas (restaurant, bar, lobby, event space)
• Rooms in additions: A-frame cabins, glamping units, converted outbuildings
• Barn/outbuilding → event venue
• Revenue: ADR × rooms × occupancy + F&B + events + other
• Target revenue split: 50% rooms / 35-50% F&B / 5-15% other
• Targets specific verticals: wellness, sexual wellness, corporate retreats, healing
• Quality tier (not star rating): Luxury, Upper Upscale, Upscale, Upper Midscale, Midscale, Economy

Model 2: Luxury Rental (Medellín duplex type)

• Whole-property rental at per-night rate (~$2,500/day for Medellín duplex)
• Revenue is per-property-per-night, NOT per-room
• Capacity measured in beds/people (4 bedrooms, 8-10 guests), not room count
• Additional revenue from F&B events, receptions, parties, creative experiences
• Guests invite others for events — increases F&B revenue beyond staying guests
• Simpler cost structure, fewer services from ManCo
• Located in premium areas: sky areas, beach, upscale urban neighborhoods
• Needs better name than "VRBO" — consider "luxury residence" or "estate rental"

F&B Revenue Is Central — NOT an Afterthought

ALL property models must include F&B revenue. Even the luxury rental has F&B from events, welcome baskets, catering, experience programming.

• Target: 50% rooms / 50% F&B (Ennismore/Accor model, Obra Pía Cartagena)
• DEFAULT_REV_SHARE_FB = 0.30 (30% of total revenue) targets the 50/50 rooms/F&B split
• To achieve 50/50: F&B must attract non-hotel guests (destination dining, events, local community)
• All-inclusive or MAP packaging captures 3 meals/day from in-house guests
• Event/banquet revenue from estate properties can be 20-30% of total
• The VRBO model with costRateFB=0 and revShareFB=0 is WRONG

Management Fee Structure

Service Fees (Base Management)

Properties pay the management company for centralized services:

Marketing & Brand and Performance Fee are mandatory — non-optional for branded properties.

Incentive Management Fee (Performance-Based)

• Default: 12% of GOP (industry standard for boutique operators: 5-12%)
• Rewards ManCo when property performs well
• Should include owner's priority return hurdle (8-10% of equity) — currently missing
• Should include fee subordination option to debt service — currently missing

What's Missing in Current Model

• Owner's priority return hurdle before incentive fee kicks in
• Fee subordination to debt service (investor protection)
• Performance test provisions (owner termination right if underperformance)
• "Marketing" should be renamed "Marketing & Brand" to reflect franchise component

Property Conversion Pipeline

Properties are NOT acquisitions of existing hotels. The pipeline:

1. Buy large home on large lot (estate, ranch, farm)
2. Convert: main house → common areas, add rooms via A-frames/cabins/outbuildings
3. Convert barn → event venue, expand kitchen to commercial grade
4. Handle zoning, permitting, fire code, ADA, liquor licensing
5. Pre-opening: staffing, training, marketing
6. Start operations

Cost Categories to Model

• Acquisition price + Conversion/renovation + Room additions + Event venue + Commercial kitchen
• Fire safety/ADA + Zoning/permitting + FF&E + Technology + Pre-opening + Operating deficit reserve
• Liquor licensing varies: NY ~$10-25K, Utah $15-40K+, Colombia $2-8K

Key Constraints Research Must Flag

• Septic capacity (binding constraint on rural room count)
• Corridor width (36" residential vs 44" commercial minimum)
• Utah water rights + liquor license quotas (40+ room threshold for hotel license)
• Cartagena heritage zones (24-36+ month timelines)
• Properties under 12-15 rooms struggle to cover fixed costs

Current Portfolio

• Medellín, Colombia — duplex (luxury rental model)
• Cartagena, Colombia — Obra Pía (hotel model, 50/50 rooms/F&B)
• New York State — 2 properties (hotel model, estate conversions)
• Utah — 1 property (hotel model, NOTE: restricted liquor environment)
• Potential: Asheville NC, Austin TX, others fitting the model

Vertical Communities & Scheduling

Target Verticals

• Wellness (yoga, meditation, detox)
• Sexual wellness (tantra, intimacy workshops — NOT swinger/lifestyle coded)
• Corporate retreats (team offsites, strategic planning)
• Health and healing
• Group experiences and events

Scheduling Conflict Rule

A corporate team and a sexual wellness retreat CANNOT be at the same property simultaneously. Properties either dedicate to verticals or implement calendar-based separation. This reduces effective capacity.

Practitioner-Led Marketing

Facilitators (yoga teachers, tantra educators, corporate coaches) bring their audiences. The brand provides venue + operational excellence. The app should consider practitioner partnerships as a demand driver.

Financial Constants — NO Magic Numbers

Only truly universal math constants may be hardcoded: MONTHS_PER_YEAR=12, DAYS_PER_MONTH=30.5

Everything else follows a hierarchy:

1. Country-level (set by law): depreciation years, income tax, inflation benchmarks
2. State/province-level: property tax, state income tax
3. City/municipal-level: hotel/tourism taxes, some cost of capital
4. Research-engine-driven (per property): ADR, occupancy, cost rates, cap rates, revenue shares — NEVER in defaults tables

If research hasn't run for a property, market-driven fields should be EMPTY, not pre-filled with guesses.

Key Files