Hotel Incentive Agreement

The program was designed to help existing hotels with six or more rooms renovate their properties, investing no less than $5,000 per room and collecting an annual share of the new Incremental End Occupancy Tax (TOT). While the removal of the basic levy on administrative agreements is probably not possible, there are those who argue for a bearer-focused administrative structure. This could include different layers of compensation, but, as Dickinson said, the broader direction could be achieved through fees based on the realization of a GOP barrier and a priority barrier for homeowners. “This type of structure is really the only way for homeowners to get an alignment in the end,” she says. Another reason to reassess the force majeure clause is to determine how to use it for the future of a property. If, at the expiry of the leniency disclosure, certain conditions and obligations have not yet been met, the owner or operator is free to adopt a case of force majeure to terminate the contract. For example, if the owner feels that the hotel`s business model is too risky and wants to transform the hotel, he can use force majeure as a reason for terminating the contract. This should be implemented with caution. If the termination is perceived for a reason other than the effects of COVID-19, this could result in legal action and ongoing litigation. Administrative costs also need to be reviewed, as more hotels are converted to hospitals or offer their beds to medical staff. This is a temporary adjustment for the duration of the pandemic. The above clauses were influenced by COVID-19 or the pandemic revealed its weaknesses, and each should be adapted and renegotiated after each hotel and contract.

Please contact us at the info@globalassetsolutions.com, we would be happy to offer you our services, evaluate your management agreement and develop an action plan to help you move forward. If you have any questions regarding the calculation of incentive fees in your hotel management contract, please contact Cayuga Hospitality Consultants. In the meantime, brand executives have successfully launched a petition to reinstate the HMA on their behalf. Think of Marriott International when, in 2005, Maryland`s legislature passed a law that was part of the Trade Act of the Maryland Code. The law provides that in the event of a conflict between the agent and the client, “the explicit terms of the enterprise contract apply.” Any result that makes the hotel manager and owner more consistent is a positive trend that can find its basis at the beginning of the relationship, thanks to the terms of the management agreement.