|What is the usual standard imposed on an
operator in respect of the operation of the
||Some HMAs contain KPIs or some other form of
service level requirements, however, in most cases
none of these are used since the fee structure ensures
that the interests of the parties are aligned.
|What performance measures are commonly
used in your jurisdiction?
||RevPAR against a competitive set of local similar hotels
or performance against annual budget.
|Is an operator or owner guarantee common in
||For established brands, an operator guarantee would
be very unusual, owner guarantee is also rare and
usually limited to cases where there is a substantial
financing on the property.
|What is the usual position in respect of
employees? With whom does the liability for
the employees sit?
||Usually the owner is the employer.
|Is it usual to have a non-compete clause, e.g.
that no other property with that brand can
open within a certain radius?
||Non-competes are standard.
|Who is responsible for insurance?
||The owner is responsible for property insurance (real
estate plus FF&E), while the operator is responsible
for third party liability insurance and operational
|Does the HMA give rights in real estate in your
||No. If a right of first refusal or purchase option
is agreed over the property for the operator in a
separate agreement, then those can be registered on
the title of the hotel.
|Does the HMA need to be recorded against the
property, if this is possible in your jurisdiction?
||HMAs cannot be recorded in the land registry, right of
first refusal or purchase option right can be registered
|Where financing is taken is it standard to obtain
a Non-Disturbance Agreement (“NDA”) as part
of a management or lease agreement?
||Yes, an NDA is usually obtained if the property is
|What other agreements usually sit alongside an
HMA in your jurisdiction?
||Usually, staff training and group services arrangements
are made. If the operator is granted a right of first
refusal or purchase option right over the real estate,
then these are established in a separate agreement.