|1. What is the usual standard imposed on an
operator in respect of the operation of the hotel?
||The standard is diligent professional performance, and
performance tests are set in the HMA (together with
a termination right for failure to meet such tests).
|2. What performance measures are commonly
used in your jurisdiction?
||Performance tests are standard, 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/
or Revpar against a competitive set of local or similar
|3. Is an operator or owner guarantee common in
||Guarantees on both sides tend to be unusual.
|4. What is the usual position in respect of
employees? With whom does the liability for
the employees sit?
||The owner employs the labour force of the hotel, but
the operator has the right to hire and fire personnel
and personally picks the top management, which is
sometimes in the employment of the operator itself.
|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-compete clauses are common and usually
negotiated. With branded operators radius clauses
|6. Who is responsible for insurance?
||The owner is responsible for the cost of property
insurance (even if sourced by the operator) and the
operator may put operational insurances in place
(albeit this would be an operating expense).
|7. Does the HMA give rights in real estate in your
||Not the HMA itself. If the HMA included a purchase
option on the hotel, this could be recorded in the Land
|8. Does the HMA need to be recorded against the
property, if this is possible in your jurisdiction?
||No, this is not possible in Spain.
|9. Where financing is taken is it standard to obtain
a Non-Disturbance Agreement (“NDA”) as part
of a management or lease agreement?
||It is not standard but it is not unheard of, and the idea
is becoming slightly more common.
|10. What other agreements usually sit alongside an
HMA in your jurisdiction?
There could be a number of different agreements
depending on the operator, these include:
- (Brand) Licence Agreement
- Central Services Agreement
- Technical Services Agreement – on a new
build or redevelopment
- Central Reservation Services Agreement.