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The Hotel RFP Process: How to create value
By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
29 April 2008
Hotel Operating Agreement, HOA, Hotel Management Agreement, HMA, Hotel Management Contract, Management Contract. Hotel Operator, Hotel Manager, Hotel Owner. RFP for Hotel Manager. RFP for Hotel Operator, How to get a great hotel operator.
Contracts between hotel owners and managers (or operators) controlling the management of a hotel go by various names. They are called hotel management agreements, HMAs, hotel management contracts or hotel operating agreements. For convenient reference, this article will generally use the term "Hotel Management Agreement" or "HMA." However all these terms can be used interchangeably and mean the same thing, just as with hotel operator or hotel manager.
Whatever they are called, Hotel Management Agreements allocate risk between the hotel manager and the hotel owner. They are critical in determining the profitability and value of a hotel.
Hotel Attorney on Hotel Management Agreements . How to get the right brand and operator for your hotel project . . . and a deal you can live with -- The Hotel RFP Process.
Recently, I talked about some important lessons our hotel attorneys in the Global Hospitality Group® have learned about hotel management agreements -- lessons learned in the course of working on more than $50 billion of hotel transactions involving more than 1,000 properties all over the world. Specifically, we looked at
* How the terms of your hotel management agreement can easily raise or lower the nominal value of your hotel by 25% or more
* The 5 biggest mistakes owners make in pursuing hotel management agreements (and how to avoid them)
In case you missed our earlier discussion, please see "How to get the right hotel operator - part 1". You will find it with some other great Hotel Management Agreement resources under the topic by that name at www.HotelLawBlog.com.
One of the keys we discussed to maximize the value (and avoid the common pitfalls) is the Hotel RFP Process. What is it? What are the steps that should be included in every RFP? Where do you get the form or checklist? What kind of assistance do you need? Here are the answers that may save you a lot of money!