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HMAs and “hybrid” contracts for leasing and management elements are increasingly being used. However, the German market remains dominated by leases. In the past, owners could be bound by long-term management contracts with costly early departures. This is one of the areas that has changed significantly in recent years. The big four hotel brands (Marriott, Hilton, IHG and Accor) have switched to management and franchise agreements over the past 20 years, but leases remain an attractive operating format for many brands in Europe, especially in the budget and full-service segments. Hotels, holiday establishments and hotel properties are distinguished by their heterogeneity; a diversity that is explained not only by differences in category, number of rooms, location or equipment, but also by a large number of different ways for hotel owners and hotel operators to manage their employment relationship. The hotel operator contract is of particular importance for investments in hotel real estate, as it determines the distribution of risks between property owners and hotel operators. The operating contract used for a hotel determines the form of investment in that property. In the national and international hotel landscape, two main types of operating contracts are still in operation: leases and management contracts.

The hotel industry has not only evolved to drive brand growth and thus the removal of ownership from Hilton and Marriott International, but also changes in development, fueled by rising costs and changing consumer demands. Mixed-use developments have gained popularity as they allow developers to raise funds in advance and offset costs, but also increase the complexity of contract negotiations. A well-negotiated management agreement should reconcile the interests of both parties. The negotiation of the terms of a hotel management contract characterizes the identity of the property and gives different results for owners and operators. As owner, the main objectives should be to select the management company that will maximise profitability and thus the value of the asset, and to ensure the best possible contractual terms with that operator, while ensuring that the operator receives appropriate incentives to maximise profitability. “There are other issues to consider in institutional investor relations; In particular, for private equity developers with an exit strategy of three to four years, greater care should be taken to ensure that transfer rules, ownership and disruption exemptions meet the deadlines expected by the client. . . .