|1. What is the usual standard imposed on an
operator in respect of the operation of the hotel?
||Contractual performance standards vary between
operators, type of hotel etc. Generally speaking
HMAs do not usually contain KPIs, SLAs or specific
standards because fee structures often mean owner
and operator interests are aligned.
|2. What performance measures are commonly
used in your jurisdiction?
||A performance test is fairly standard (together
with a termination right for failure to meet such
test), but the type and nature can vary depending
on the operator, nature of the hotel, location,
etc. A standard performance test would consider
achievement against budget and RevPAR against a
competitive set of local or similar hotels.
|3. Is an operator or owner guarantee common in
||For branded operators, an operator guarantee would
be unusual. Regarding owner guarantors, it will depend
on the owner vehicle, if it owns the hotel (e.g. are
there are Propco/Opco structures in place).
|4. What is the usual position in respect of
employees? With whom does the liability for
the employees sit?
||The norm is that all employees are employed with an
owner’s vehicle, but for some operators there is an
exception for key personnel (general manager and
|5. 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 common and usually negotiated.
|6. Who is responsible for insurance?
||The owner is responsible for the cost of property
and operational insurances (albeit the latter may be
negotiated as an operating expense).
|7. Does the HMA give rights in real estate in your
|8. Does the HMA need to be recorded against the
property, if this is possible in your jurisdiction?
||HMAs do not generally require registration. License
agreements need to be registered with Rospatent.
|9. Where financing is taken is it standard to obtain
a Non-Disturbance Agreement (“NDA”) as part
of a management or lease agreement?
||Yes, it is seen more often, but still there is a chance
that a specific bank could refuse to enter into it.
Therefore, an obligation to obtain is frequently
replaced with “use best efforts” or alike.
|10. What other agreements usually sit alongside an
HMA in your jurisdiction?
||Generally, other agreements include License
Agreements, Technical Services Agreements and
Centralized Services Agreements.