Hotel Management Agreement

Summary

This template is a hotel management agreement and may be used when a hotel owner wishes to have a third party manage and operate the property. This template includes practical guidance and drafting notes. Hotel management agreements contractually allocate the rights and responsibilities between an owner of a hotel property and a manager of that property. Negotiation of the hotel management agreement begins with a template that is almost always provided by the manager. Hotel managers generally fall into two broad categories - independent managers or branded managers who are affiliated with a branded hotel operating company through a franchise agreement. Hotel management agreements involving branded operating companies always entail greater complexity than agreements with independent hotel managers because they address issues such as maintaining brand standards and the provision of centralized brand service by the manager. To more fully understand a hotel's ownership and management structure, the following chart may be used in transactions where a buyer, often a joint venture between two or more parties, is acquiring a hotel which will be managed by a third party property manager. This structure chart illustrates a typical structure and may be modified on a deal-by-deal basis to reflect the parties to the transaction and their relationships to one another. Visualization of Sample Hotel Ownership and Management Structure Chart. Author: Marie C. Bertrand, Day Pitney LLP This template is drafted from the perspective of a manager but includes drafting notes from both owner's and manager's perspectives. This template contains references to number of days, monetary amounts, and percentages. These numbers are merely recommendations and may be negotiated by the parties. For further guidance on hotel franchise agreements see Hotel Franchise Agreements.