Project Scope

Our office was engaged by the owner of an upscale beach resort, to conduct a thorough review of a proposed hotel management contract with an international hotel operator. The primary objective was to ensure that the contract terms were favorable, balanced, and aligned with the client’s financial and operational goals.

We commenced the project by analyzing the draft management contract in detail, focusing on key provisions such as management fees, incentive fees, performance tests, term and termination clauses, owner approvals, budgeting processes, and dispute resolution mechanisms.

Our team evaluated the proposed fee structures, comparing them to industry standards and benchmarking against similar agreements in the upscale resort segment. We assessed the alignment of incentives to ensure the operator’s interests were in harmony with the owner’s objectives for profitability and asset value enhancement.

We scrutinized performance test clauses to ensure they provided adequate protection for the owner in case of underperformance by the operator. This included examining provisions for termination or remedy if performance thresholds were not met.

The contract’s terms regarding capital expenditure obligations, property maintenance, and brand standards were reviewed to assess potential financial impacts and operational implications for the owner.

We also evaluated clauses related to owner approvals and control over key decisions, such as budgeting, staffing of key personnel, and significant operational changes. Ensuring the owner retained appropriate oversight and input into the resort’s management was a critical focus.

Our legal consultants reviewed the contract for compliance with applicable laws and regulations, identifying any legal risks or areas requiring clarification.

The final deliverable was a comprehensive report outlining our findings, concerns, and recommendations for contract modifications. We provided [Client Name] with negotiation strategies to address unfavorable terms and enhance the contract’s alignment with their interests.

Our review enabled the client to enter negotiations with a clear understanding of the contract’s implications, ultimately securing more favorable terms and establishing a solid foundation for a successful partnership with the hotel operator.

Project Location

Koh Chang, Thailand