Hotel vs. Multifamily: The Secrets Behind Hospitality Success with Danny Gould

Hotels vs. Multifamily: The Secrets Behind Hospitality Success (with Danny Gould)

In this episode of Accredited Investors Only, I sat down with Danny Gould, founder of Go Capital, to unpack why hotels are a different—and often misunderstood—real estate play. Danny’s path from pre‑med at Stanford to running a boutique private equity firm focused on hospitality is a study in following instincts, developing business skills, and learning to see value where others don’t. Below, I’ll summarize our conversation, share the frameworks we use to underwrite hotel deals, and offer practical takeaways if you’re an accredited investor exploring hospitality.

Danny Gould’s unlikely journey into hotels

Danny didn’t grow up in real estate. He studied pre‑med at Stanford, spent time shadowing physicians, and realized the life of a doctor wasn’t for him. After graduation, he taught summer school, then walked his dog past a for‑sale sign and calculated what a realtor might earn on a $2.5M house. He got his license, built a residential brokerage (eventually managing a team of ~35 agents), and kept an unusual vision alive from a trip to Las Vegas: “I’m going to own one of these hotels someday.”

That persistence and business background led him to become a principal at a hotel group (GMS Ventures, with roughly $300M in assets) and eventually to launch his own private equity firm focused on hospitality and select alternative investments.

“Hotels are the perfect marriage between real estate and business.” — Danny Gould

Why hotels are different: real estate + operating business

What makes hotels unique is how much the operator’s skill directly affects asset value. With most real estate asset classes (like multifamily), location and physical real estate strategy dominate value creation. Hotels combine those fundamentals with complex operational systems: revenue management, sales & marketing, F&B (if present), staffing, reservation systems, brand loyalty, and more. For an investor who enjoys business strategy, hotels are compelling because operational improvements materially move the needle on valuation.

Core skills that translate to hospitality investing

  • Sales & fundraising: Raising capital is a sales skill that translates directly from other businesses.
  • Operations experience: Running a brokerage with staff and agents teaches the operational muscle needed to evaluate hotel P&Ls and identify upside.
  • Discernment from reps: Years of deal flow build a “gut” to separate winners from losers—backed by logical underwriting.

How we evaluate a hotel: the three value levers

Most hotel investments we underwrite are value‑adds. There are three main ways to create value in a hotel asset:

1. Property Improvement Plans (PIPs)

Brands (Marriott, Hilton, etc.) typically require PIPs every 7–10 years and often trigger them when ownership changes. PIPs modernize rooms and public spaces so you can command higher rates. Lenders commonly require owners to set aside a replacement reserve (often ~4% of topline) to fund PIPs, but many owners tapped those reserves during COVID to survive. As brands resume enforcement, a wave of owners who lack funds to complete PIPs are becoming motivated sellers.

Key points:

  • PIPs are usually brand‑mandated and expensive; the cost often falls to the new owner.
  • COVID delayed many PIPs and left some owners undercapitalized—creating acquisition opportunities today.

2. Operational improvements

Operations are the primary lever to increase value. The big metrics are:

  • ADR (Average Daily Rate) — average nightly rate charged for occupied rooms.
  • Occupancy — percent of rooms sold over a period.
  • RevPAR (Revenue per Available Room) — occupancy × ADR; the core revenue metric.

To benchmark performance, we use STAR (Smith Travel Research) reports, which show your property against a comp set (5–7 local hotels). If a branded hotel is underperforming its peer set, there may be operational upside—either on the revenue side (ADR/occupancy) or on cost control (room expenses, labor, utilities). Small percentage improvements in expense line items or ADR can translate to large increases in property value.

3. Rebranding

Reflagging can add value, but it’s complicated and costly. Up‑tiering (e.g., moving from an economy flag to a full‑service or upper‑mid flag) often requires significant renovation and a PIP. More commonly, we see hotels reflagged down a tier when the owner can’t support brand PIP requirements. The ideal “grand slam” is when you can execute a rebrand, complete a PIP, and improve operations all at once—but that’s also the highest risk/effort play.

Brands, fees, and what they actually deliver

Franchise + marketing fees typically run in the ~8–14% range of revenue (often around 13% is quoted). What do you get for that fee?

  • Reservation systems & loyalty programs: Brands deliver distribution (Marriott Bonvoy, Hilton Honors) and a reservation engine that feeds direct bookings and loyalty traffic—massive benefits driven by economies of scale.
  • Marketing & OTA relationships: Brands negotiate with OTAs (Expedia, etc.), deliver centralized marketing, and manage global sales channels.

Danny’s point: the question isn’t just “what are they taking?” but “can I recreate this infrastructure at the same cost?” For most operators, the answer is no, so partnering with a top brand is often the right short‑term choice while learning the systems they use.

“They take advantage of economies of scale. They’ve got thousands of hotels and the infrastructure they’ve built is incredibly scalable.” — Danny Gould

STAR reports and comp benchmarking

When underwriting a branded hotel, you’ll receive STAR reports that compare ADR, occupancy, and RevPAR against a comp set. Performance relative to comp set (% index) is how operators diagnose opportunity:

  • Index >100% = outperforming comp set
  • Index <100% = underperforming comp set

Different flags have different expectations—upper midscale and upscale flags typically carry a higher index expectation than economy flags—so you need to judge performance relative to the brand and the market.

Market dynamics are creating opportunities right now

Two tailwinds are creating one of the most attractive windows in recent memory for hotel acquisitions:

  • Loan maturities and rising rates: Many commercial loans are short‑term (5–10 years) or variable. When loans reset at much higher interest rates than when they were underwritten, owners may face refinancing shortfalls or be forced to sell.
  • PIP pressure post‑COVID: Brands are resuming enforcement of PIPs that were delayed during COVID. Owners who drained reserves to survive may now be unable to fund brand‑mandated renovations.

That combination is creating motivated sellers across markets, particularly among owners who can’t or won’t inject new capital. But remember: the opportunity is market‑specific. Some markets (e.g., Nashville) are outperforming, while business‑travel‑dependent markets (e.g., some parts of San Francisco, Denver) are still struggling to regain pre‑COVID levels.

Buy box: what Danny and Go Capital look for

Our typical target properties are limited‑service and extended‑stay hotels (Courtyard, Holiday Inn Express, extended‑stay brands). Why?

  • No heavy F&B component (restaurants and bars add complexity and capex risk).
  • Operational levers are clearer (rooms revenue and cost control drive NOI).
  • Extended‑stay products and limited‑service hotels often offer predictable cash flow and easier operational improvements.

Ground‑up development in hotels is harder today—construction costs and financing make ground‑up hotel plays less attractive versus multifamily. Ground‑up multifamily will often offer better ground‑up returns because cap rates and demand dynamics differ.

Demand trends: leisure vs business and local nuance

Broadly, leisure travel has softened relative to pandemic‑era rebounds because consumer wallets are stretched. Business travel has recovered in many markets, sometimes exceeding pre‑COVID levels in specific properties. The key is to analyze local demand drivers:

  • Is the market leisure, business, group/convention, or a mix?
  • Have local economic drivers changed since COVID (new corporate relocations, tourism patterns, or supply shifts)?
  • Does the product match the market (don’t place an economy trucker motel in a corporate suburb, and vice versa)?

Practical advice for investors and LPs

  • Work with operators who bring tactical, boots‑on‑the‑ground solutions—large platform scale is valuable, but smaller, nimble operators can outmaneuver in distressed or transitional situations.
  • Be conservative about interest‑rate expectations—plan for higher rates to persist rather than assuming rates will quickly drop.
  • Focus on the micro: neighborhood demand, comp sets, and property‑level P&Ls matter more than a single macro headline.
  • Sales and networking are core skills. If you can raise capital and source deals through relationships, you’ll have an edge.

Quick examples and real‑world nuances

  • Some highly profitable hotels get PIP waivers from brands because the brands prefer cash flow over renovation compliance.
  • Replacement reserves (often ~4% of topline) can mask true PIP exposure if owners withdrew funds during COVID—dig into timing and withdrawals.
  • Operational line items matter: a 10% higher room expense relative to peer expectations can signal either opportunistic upside or an immovable problem (e.g., union labor).

How to reach Danny Gould

If you want to speak with Danny about hospitality investments, he shared a few ways to connect:

Key takeaways

  1. Hotels combine real estate and business operations—operator skill materially affects value.
  2. Three main value levers: PIPs (renovations/brand mandates), operational improvements (ADR, occupancy, RevPAR), and rebranding.
  3. Brand fees (8–14%) buy distribution, reservation systems, loyalty, and marketing that are hard to replicate at scale.
  4. Current financing and PIP pressure are creating unusually attractive acquisition windows for prepared investors.
  5. Micro market analysis and operator execution matter more than macro headlines—look at comp sets, STAR reports, and property-level P&Ls.

If you enjoyed this deep dive, I encourage you to return to our podcast for more conversations like this. Danny brought perspective that’s relevant whether you’re actively underwriting hotels or just learning how operational business strategies can unlock real estate value. For investors considering hospitality exposure, the next 12–24 months are likely to offer compelling opportunities—but only if you pair market insight with operator expertise.