Articles Posted in Hotel Management Agreements

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5 September 2008

Hotel brand proliferation offers more choices — and challenges — for hotel owners. What are the 5 questions every owner should ask before selecting a hotel brand?

With the battle scars earned as the hotel lawyer and advisor on several hundred hotel management agreements, my partner, Bob Braun, is one of the senior members of JMBM’s Global Hospitality Group®. While we have a very “deep bench” of hospitality lawyers experienced in dealing with hotel operators, Bob is one of the real veterans who has seen it all.

Bob and I work together frequently, and we often present practical guidance on many aspects of hotel management agreements at industry conferences and here on the Blog. In fact, an entire section of the Blog is devoted to Hotel Management Agreements. (Just go to www.HotelLawBlog.com and click on the “TOPICS” tab at the top, and then select “Hotel Management Agreements.” Alternatively, you can point your browser to https://hotellaw.jmbm.com/management_and_franchise_agree/).

Many of our rich library of resources focus on getting the right hotel operator, and how to get a fair management agreement, but today Bob gives us 5 Questions that every hotel owner needs to ask BEFORE even getting to the hotel management agreement.

Here is Bob Braun’s article. . .

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29 July 2008
Keywords:

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.

Terminology

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.

Hospitality Lawyer: How to survive some of the custom and “lore” of Hotel Management Agreement Indemnification Provisions.

While we have a very deep bench of hospitality lawyers — particularly in hotel management agreements — my partner, Bob Braun, is one of the most experienced on our team, with several hundred management contracts to his credit, and a dozen or more on his current work schedule at any point in time.

So it was no surprise when he suggested recently that we work together on a few articles going “beyond the basics” of hotel management agreements and post them for our industry friends on www.HotelLawBlog.com. We decided to call this upcoming series, “Hotel Management Agreements 201.” Bob took the lead in putting this first one together on the critical area of INDEMNIFICATION, and here it is.

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Author of www.HotelLawBlog.com
21 June 2008
Hospitality Attorney’s top insights to hotel industry. As we approach the half-way mark in 2008, the hospitality lawyers in JMBM’s Global Hospitality Group® thought it would be interesting to determine our readers’ “top picks” of all the articles we have posted this year. We could almost say that the top three picks are hotel financing, hotel financing and hotel financing. But here are the top three picks by “Topics” at www.HotelLawBlog.com:

(1) Hotel financing and hotel values in buy-sell transactions
(2) Hotel management agreements
(3) LEED and GREEN hotel development

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The Hotel RFP Process: 5 Factors that determine what your RFP looks like.
16 Steps to a successful RFP Process
| Author of www.HotelLawBlog.com
1 May 2008
Keywords:

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.

Terminology

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.

In the last few articles here at www.HotelLawBlog.com, I have been sharing some of the important lessons our hotel attorneys in the JMBM Global Hospitality Group® have learned about hotel management agreements over more than $125 billion of hotel transactions, involving more than 4,700 properties. While it may be an exaggeration to say that “JMBM wrote the book on hotel management agreements,” we certainly know the area and have at least written a few chapters in that book.

In parts 1 and 2 of this series, we covered:

* 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)

* What’s a Hotel RFP and what shapes it.

In case you missed our earlier discussion, please see “How to get the right hotel operator – part 1” and “How to get the right hotel operator – part 2.” You will find it with some other great Hotel Management Agreement resources under the topic by that name here at www.HotelLawBlog.com.

Let’s return now to the Hotel RFP process …

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The Hotel RFP Process: How to create value
| Author of www.HotelLawBlog.com
29 April 2008
Keywords:

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.

Terminology

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 $87 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!

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Author of www.HotelLawBlog.com
29 April 2008
Hotel Attorney on hotel management agreements and operator breach of duty. U.S. District Court confirms that Owner of the Ritz-Carlton Bali can terminate long-term, no-cut management agreement without penalty.

As of April 29, 2008, the Federal District Court in Maryland issued an order ruling on various post-trial motions of our client, the owner of the Ritz-Carlton Bali. The details of this owner-operator dispute have been previously covered here at www.HotelLawBlog.com, but today was the latest development in this struggle.

Here’s what the court said.

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Author of www.HotelLawBlog.com
21 April 2008
Keywords:

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.

Terminology

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 Lawyer on hotel management agreements. Long-term, no-cut hotel management agreements: How to get the right brand and operator for your hotel project . . . and a deal you can live with.
The successful matching of a hotel brand and operator with an asset and its owner is an important determinant of the financial and operational success of a hotel project. Aside from the right “marriage” partners, the terms of the management contract tying them together is critical, because it will likely govern the relationship for decades and is hard to change once cast.

Question: What’s more important for your hotel project than getting the “right” brand and operator?

Answer: Not much! Finding the right operator or brand for your project — and achieving reasonable terms — can make a significant and positive impact in key areas: value, financing, and operational success.

So how do you do that?

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Author of www.HotelLawBlog.com
1 February 2008
Keywords:

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.

Terminology

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 Lawyer on hotel management agreements and operator breach of duty. It may be an exaggeration to say that “JMBM wrote the book on hotel management agreements,” but we certainly know the area and have at least written a few chapters in that book. We have been helping owners, developers and lenders with many hundreds of hotel management agreements over the past 20 years. We have negotiated, re-negotiated, terminated and litigated almost every aspect of them, so the only thing surprising about the latest jury verdict handed down on January 25, 2008 against Marriott International and Ritz-Carlton is that it shows a continuing disconnect of operators who choose to ignore their contractual and fiduciary duties. (Search “Management Agreements” at www.HotelLawBlog.com)

In this case, one of our clients owned the Ritz-Carlton Bali which was managed under a typical long-term, no-cut management contract. A few days ago, after a 3 week trial, a jury sitting less than 10 miles from Ritz-Carlton’s home office ruled that the management contract was breached by Marriott International and Ritz-Carlton, giving the owner the right to terminate the contract, awarding $382,304 in compensatory damages, $10 million in punitive damages, plus attorneys fees and costs to the owner. The Wall Street Journal published an article today by Tamara Audi on the case. How does this happen?

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by Jim Butler and Robert Braun
19 March 2007
Keywords:

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.

Terminology

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.

In order to consummate any substantial business transaction, there are inevitably some “challenges” to overcome. Hotel management agreements are no exception: in part because of their complexity, and in part because hotel management agreements typically transfer effective control over valuable assets for several decades, and their terms can easily enhance — or diminish — the value of hotel by a staggering amount.

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Author of www.HotelLawBlog.com
3 January 2007
Hotel Lawyer — Top Picks of 2006. Yes, 2006 has been a record year for many in the hospitality industry, and for the hotel lawyers at Jeffer, Mangels, Butler & Marmaro LLP. As we have already given our Outlook for 2007, we thought it might be interesting to look back on our Top Pick articles from 2006 from www.HotelLawBlog.com.

The Top Picks articles are organized by the major TOPICS on the Blog. We generally tried to select just the top two or three articles for each TOPIC. It was a major struggle to decide where to make the cutoff. If you want more information on a particular TOPIC, you can go to www.HotelLawBlog.com, and search for all articles on that TOPIC. To do that, just scroll down the right hand side, and below the (free) subscription and RSS Feed buttons is the Browse search engine that enables you to sort by TOPIC (or date, or key words, etc.).

Here they are . . .

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Contact Information
Jim Butler, Chairman
Global Hospitality Group®
Jeffer Mangels Butler & Mitchell LLP
(310) 201-3526 • jbutler@jmbm.com
www.HotelLawyer.com

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