Hma Hotel Management Agreement

Risk distribution has always been a key element of the relationship between owners and managers, with managers preferring that owners increasingly take responsibility for the risks associated with the performance and operation of a hotel. For example, managers have required homeowners to purchase insurance to cover administrative debts at the owner`s expense, including employer liability insurance. The trend is to first define the fundamentals of business in a letter of intent (LOI) before moving on to the “final document” phase. Here are the key words for which there should be a “meeting of minds” before the parties can conclude that they have agreed on the terms of a HMA: a hotel is a unique property, but often operates within a binary relationship between the owner of the property and its administrator. The hotel administration contract (HMA) is legally binding, which imposes the terms of their partnership and defines the obligations of agent and other provisions. Al Tamimi`s real estate lawyers regularly advise on hotel management agreements in the event of a force majeure event. Hotel management agreements are usually long-term agreements. Under such agreements, the hotel operator has almost exclusive control. The role of the hotel owner is that of a sleeping partner until problems arise. That`s a lot, but not all of the negotiating considerations. Many other areas are addressed in the HMA, such as law, dispute resolution and much more. Since their first appearance in the early 1950s, HMa management has evolved to the point of specializing in vocabulary, business concepts and legal interpretation. They require experienced advice as well as hotel development and operational know-how.

Industry practices today have made these agreements a bit “standard” in appearance, but there is plenty of room to negotiate keywords. Operators operating the hotel under their own brand will likely require the right to spend to preserve the brand appeal related to their goodwill and common operating standards. It is important to ensure that this does not become an “empty cheque” – if the group of operators decides to introduce a swimming pool in all branded hotels, the owner should not be forced to accept the construction of a new pool complex in his hotel.