Hotel Property Management Agreement

This may mean choosing a company whose vision and goals are well geared towards your own – or a company with different but attractive goals and visions. Recognitions: This study was supported by hotel owners and members of the Association of Hospital Asset Managers (HAMA) of Asia-Pacific, Europe and the Middle East-Africa, the European Hotel Managers Association (EHMA) and the Master Innholder, who graciously provided the data used in this study. “From the owners` point of view, you want your operator to offer profit incentives,” says Felicity Jones, a partner at the law firm Watson Farley and Williams, which represents both hotel owners and operators in negotiating management agreements. The main incentive tax is on it — the gross operating result. It goes even further; the idea of abolishing the basic tax altogether. “When operators charge services – from accounting assistance to income management – what is the purpose of the basic tax?” she asked. If the hotel is a new building, the owner should have the right to terminate the management contract if, for some reason, the hotel is not completed without compensation to the operator. This is important because the misdirection of the doors has often led to costly legal disputes, including accusations from management companies that do not assume their responsibilities as owners` representatives. It is therefore recommended that owners have detailed interviews with different management companies, not only to identify their analyses and hotel plans, but also to compare them to their own. An owner may also realize, as a result of these interviews, that he is effectively withdrawing from the management company`s plans, which in turn could help to reconcile his objectives. Owners may fall into the trap of making assumptions about the extent of the operator`s liability.

The operator will endeavour to minimize its responsibilities and impose additional costs for ancillary services that the owner has wrongly accepted as part of the operator`s proposed package as part of the entire package. The management agreement may allow the operator to charge the owner for additional fees for these “chain services,” but these should be limited to services that can be provided more efficiently for the entire group of hotels maintained by the management company and not on the basis of one hotel per hotel.