36: Mind Capture
In this solo episode, Susan Barry explains the three stakeholders in the hotel business, how they are incentivized, and why their financial incentives might be inhibiting creativity and innovation. Although she explains a bunch of financial concepts her, be advised -- Susan is neither an attorney nor an accountant. If you have an idea for fixing, changing, or reinventing hospitality, consider this your sign -- get in touch!
Find more about what we talked about in this episode here.
The short history of soft brands
Past discussions of top line vs. profit:
https://www.topfloorpodcast.com/episode/02
https://www.topfloorpodcast.com/episode/09
https://www.topfloorpodcast.com/episode/32
https://www.topfloorpodcast.com/episode/33
Types of hotel owners:
Individuals/families - You already know what this means.
REITs - Stands for real estate investment trust. REITs are essentially real estate stocks, traded publicly. REITs allow individual investors to buy shares in hotel portfolios with income distributed as dividends.
Private Equity - Often called PE. PE investments consist of capital from both institutions and individuals that is directly invested into companies that acquire or develop hotels.
Sponsorship/Syndication - In this type of hotel investment, the sponsor is the managing partner, and s/he gathers up enough limited partners to pool their resources and invest. The income of the hotel is distributed on a regular basis.
Crowdfunding - We’re trying to avoid explaining all of the SEC rules and regulations here (not a law firm!), but relatively recently the SEC passed Reg CF, which allows managing partners/sponsors to use crowdfunding to raise equity capital for hotel investing. The big differences here are 1) the minimum investment is much lower, and 2) the sponsor can use crowdfunding platforms to reach significantly more people than in a traditional syndication.
Shareholder - A company may grant shares or ownership interest in a hotel project as part of compensation.