INDUSTRY INSIGHTS

HVS provides thousands of articles on all aspects of hospitality, including hotel valuations, investing, lending, operations, asset management, and much more.
35 results
1 2 3 4 Next

Paid Publication HVS Guide to Hotel Management Contracts

Why is this guide more relevant that ever?

Among all the many peculiarities of the hotel industry, the hotel management contract is likely the most unique. A binding contract between owners and operators which has evolved over almost six decades. In fact, the first hotel management contract was signed for the Hong Kong Hilton, which opened in 1963.

The management contract structure allowed hotel companies to expand rapidly and become what is nowadays known as “asset light”. Of course, hotel owners stand to benefit in that they can bring in sound management expertise to their property and partake in the financial upside, unlike a traditional lease model which preceded it. Leveraging their management expertise, operators pushed for the hotel management contract to rapidly become the norm in the industry as a ‘take it or leave it’ proposition to owners.

Over time, the hotel management contract has become an intricate web of terms and clauses that defines the relation between owner and operator. The balance of power in this relationship needs to be carefully established, which was, and unfortunately still is, not always a given. Owners need to be on their toes and bring in expert advice from consultants and lawyers to navigate the complexities of an agreement which can bind them for decades to come.

As the role of the hotel asset manager stands to become more prevalent around the globe and the COVID-19 pandemic ushers in a new era, this is a space that needs to be closely watched. These testing times will cast a shadow on management contracts and call for change on multiple provisions. As we have observed in numerous instances, a strong property that is appealing to operators can secure significantly more favorable terms than a “standard” hotel. After all, gaining market share to impress investors may be more important to some operators than securing strong contracts.

This year’s HVS Guide to Hotel Management Contracts by Daniel J Voellm and Eunice Wong gives insights into prevalent terms and how contracts have evolved in the last six years. This guide provides a global reference for owners to understand the language of hotel management contracts while demonstrating our extensive hands-on experience. The authors provide insight into the five principal sections of a management contract: term and renewals, operator management fees, performance test, budget and expenditures, and termination of the contract by owner. Key money and indemnification are also addressed.

We hope this guide can serve the industry as a reference to make better decisions, effecting better and more balanced relations between owners and operators.

 

VIEW EXCERPTS | HVS GUIDE TO HOTEL MANAGEMENT CONTRACTS

 

  • The full guide and survey report comprising around 100 pages can be purchased for US$2,000.

All reports are available in PDF (soft copy) only. A personalized copy of the report will be sent.

For more information, please contact Eunice Wong at [email protected].

Hong Kong Site 3 – A Hotel Perspective

In the coming months, a true gem of a site in the heart of Hong Kong will be sold. Located in front of its iconic skyline, Site 3 measures 4.76 hectares between Jardine House (the one with the round windows) and the Star Ferry pier. We take a look at what could be accomplished here.

HVS Market Pulse: Luang Prabang, Laos

Luang Prabang is located in north central Laos on a peninsula bounded by the Mekong River to the north and the Khan River to the east. Listed as a UNESCO World Heritage Site. Since 1995, Luang Prabang attracts tourists from international and regional markets through a combination of preserved cultural experiences and natural beauty within the province. The following article gives a brief overview of Luang Prabang, its tourism industry and recent dynamics of the local lodging market.

In Focus: Singapore, Revitalising and Repurposing Hotels

In Focus: Singapore 2020 provides an overview of Singapore’s tourism landscape and hotel market performance, infrastructure development, revitalising and repurposing hotels, hotel transactions and investment in 2019, outlook and crisis management.

Pandemics and the Lodging Industry

With the Coronavirus scare gaining momentum, this article revisits the 2003 SARS pandemic, seeking insight into the potential impact on individual markets and travel as a whole.

Market Snapshot: Asia Pacific 2019

The Market Snapshot: Asia Pacific 2019 highlights an overview of transaction activity in the region and presents 12 countries’ current hospitality landscape; each covering demand and supply dynamics, hotel performances, and key transactions.

In Focus: Vietnam, Discover the Boundless Allure of the Land of Rising Dragon

In Focus: Vietnam 2019 provides an overview of Vietnam’s ten leading provinces' tourism landscape and hotel market performance, infrastructure development, hotel transactions and investment in 2018 and outlook.

The Annual HVS Asia-Pacific Hotel Operator Guide 2019 – Excerpt

The Sixth Edition of the Asia-Pacific Hotel Operator Guide provides owners and investors with a unique reference about the presence and scale of 50 international operators with 244 brands, across 1,008 markets and 5,742 properties in the Asia-Pacific Region.

Interviews with Leaders - Mr. Neil George, Strategic Advisor, Rosewood Hotel Group

Next in the series of Interviews with Leaders is Mr. Neil George, Strategic Advisor, Rosewood Hotel Group.

Market Snapshot: Asia Pacific 2018

The Market Snapshot: Asia Pacific 2018 highlights an overview of transaction activity in the region and presents 16 markets’ current hospitality landscape; each covering demand and supply dynamics, hotel performances, and key transactions.
1 2 3 4 Next