Ross’s candor was striking: branded concepts are recovering faster than independents, widening the performance gap. Pre-COVID, Hawkins Way bet on upscale boutique hotels competing through pricing and experience. Post-COVID, their IRR playbook is breaking down: ADR growth without brand muscle is muted, leaving operators constrained to expense management. The quantamental sequence explains why.
At the NPV → IRR stage, boutique hotels can look viable, but once we pass through AHA (Adjusted Hospitality Alpha) and BAS (Bay Adjusted Sharpe), the boutique edge evaporates . Without loyalty pipelines and distribution scale, alpha is eroded and risk efficiency collapses. Branded flags, by contrast, convert loyalty demand into both ADR resilience and occupancy stability.
It is no surprise, then, that Marriott’s Bonvoy ecosystem becomes the crux of Ross’s decision: “earn and burn” locations for loyalty members anchor both the AHA uplift and the BAS efficiency. In quantamental terms, Series is less about a logo and more about risk-adjusted throughput of revenue intensity.
Ross underscored a buying opportunity: “underutilized hotels in need of renovations and stronger management.” This is a classic LSD (Liquidity Stress Delta) and BMRI (Bay Macro Risk Index) overlay moment . Boutique assets carry liquidity drag and country/macro volatility exposures; by layering in a soft brand conversion, Hawkins Way neutralizes downside while maintaining optionality.
Bay Street’s framework interprets this as the pursuit of a replicable thesis—a modular conversion play that can scale across markets, satisfying both NOI and capital market visibility. Our Modular Moats logic explicitly flags such replicability as a defensible advantage .
In our recent dialogues with European art families exploring art licensing into hospitality portfolios, a parallel theme emerged. One collector reminded us of a line from Art Collecting Today: “Value is anchored in networks of trust, recognition, and circulation.” That is precisely Marriott’s Bonvoy logic—the network itself creates circulation of value.
Likewise, as Management of Art Galleries notes, “The strength of a gallery is often less in the art hung than in the ecosystem of relationships it convenes.” Boutique hotels, like standalone galleries, may offer beauty, but without distribution they risk irrelevance. Series by Marriott seeks to solve that by marrying Found’s identity to Marriott’s distribution scale.
For Bay Street, Hawkins Way’s move is a validation of our quantamental funnel: boutique assets without brand backing falter at the AHA/BAS stage, and conversions into brand ecosystems restore risk-adjusted returns. The real signal, however, lies not in Marriott’s scale but in the cultural capital layering—the ability to maintain Found’s design DNA while embedding it into a replicable, loyalty-fed engine.
In our conversations with art families, the lesson has been clear: cultural assets thrive when paired with the right operator. The same principle now applies to boutique hospitality—identity must meet infrastructure, otherwise NOI stays stranded.
Hawkins Way may have been first to adopt Marriott’s Series in the U.S., but from Bay Street’s perspective, this is not a one-off. It’s the opening move in a broader cycle where replicable, brand-backed conversions will define the next phase of hospitality alpha.
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Bay Street Hospitality is a diversified hotel fund series for allocators seeking quant-driven exposure across top countries, operators, and hotel tiers. The fund targets a diversified portfolio in both high-growth emerging markets and stable developed markets, optimizing risk-adjusted returns. The leadership provides structured equity and pivotal strategic guidance to hotel-related investments. The fund establishes joint ventures with best-in-class partners, focusing on deal flexibility, currency considerations, tax efficiency, and clear exit strategies.
