Hotel Agreements

Some might call it a “harsh awakening,” but it may be more “fire-testing” of the management agreement. In this report, we first discuss the importance of a “win-win” HMA and why it matters. Then, the pressure points of an HMA, which are often highly contested, such as the term, fees, centralized services, performance testing and language found in most agreements. Finally, we conclude with the guide for hotel owners on the best methods to get a win-win HMA. Our statistical analysis made two parts of it. We first used correlation analyses to study the overall effects. We then used a series of regression analyses to study the impact of orientation on hotel services, after having put in place controls for alternative explanations that could arise from property, individual and/or situational characteristics. We therefore also propose that management companies make a full commitment that the owners of their hotels know not only the management plans for the property, but also the underlying reasons for these decisions, as this can help to obtain support from the owners. I hope that a healthy debate should lead to better and better coordinated goals, beneficial to both parties and contribute to a better long-term relationship. This article examines the evolution of hotel management, leasing, franchising and other agreements in recent years.

It focuses on the terms and conditions of contractual agreements and should not be construed as a legal document. It should be noted that the relationship between the owner and the operator is increasingly governed not only by the traditional administrative agreement, but also by parallel agreements such as licensing, licensing or service agreements. In order to fully assess the value of payments due to the operator, the royalty requirements of these parallel contracts should be assessed. While both parties have a strong interest in the hotel`s success, their sources of income, risk profiles and different investment strategies mean that they often have different interests, which can lead to misguided and perhaps even contradictory goals. This means that a large part of these hotels do not generate the profits necessary for owners to pay incentives to operators. While there may be mitigating circumstances that may affect a hotel`s performance, the general lack of incentive fees indicates that owners may be looking for other ways to balance the interests of management companies with their own. The operator`s remuneration for the provision of services under the hotel management contract is generally intended as a fee which is in fact a cost of operating the hotel business.