Management agreement guide
What hotel owners should know before signing.
A hotel management agreement defines control, accountability and economics for years. Owners should understand how the document works in practice, not only compare headline fees.
Discuss your propertyDefine the operating scope
Clarify which services are included, which specialists are shared, what requires separate approval and how the operator works with a franchise brand, landlord, residence component or mixed-use development.
Read fees in context
Base and incentive fees matter, but so do central service charges, marketing costs, technology, procurement, training and reimbursable expenses. Compare the total economic structure and what each charge delivers.
Protect the planning process
The annual business plan and budget should define assumptions, staffing, pricing, capital needs and performance priorities. Agree the review calendar, owner approval rights and process for unresolved items.
Make reporting decision-useful
Specify monthly deadlines, financial statements, forecasts, cash requirements, commercial measures, guest indicators and commentary. Owners need a clear connection between results, causes and corrective action.
Understand performance tests
Tests should reflect the market, competitive set and agreed operating assumptions. Review cure rights, exclusions, measurement periods and the consequences of sustained underperformance with specialist advisers.
Plan for change
Key-person provisions, assignment, sale, brand changes, major renovation, casualty and termination should be considered before the relationship begins. The agreement should allow both parties to operate with clarity.
Owner and developer enquiries
Start with the asset, the market and the objective.
A PSH regional director will review your property before the first conversation.
Request a management proposal