HMA review, drafting and negotiation for hotel owners, developers and operators. Senior legal advice from a former hotel group Executive Director and General Counsel, based in Brisbane and acting across Australia.
A hotel management agreement typically runs for many years and decides who controls budgets, staffing, capital spend and the right to sell. Operators negotiate these agreements every year from well developed standard forms. Many owners negotiate one or two in their lifetime.
Having negotiated HMAs as Executive Director and General Counsel of a major hotel group, Angie knows which operator positions are genuinely fixed, which are opening positions, and where owners can realistically achieve better protection without stalling the deal.
A clear, commercial read of an operator's proposed HMA or term sheet, with the issues ranked by what actually matters to you.
Full documentation and negotiation of the HMA suite, through to signing.
Support before you sign and for the life of the agreement.
How long you are locked in, and who controls extensions.
Base fees, incentive fees, centralised service charges and how they are calculated.
Whether the test is meaningful, and what happens if the operator fails it.
Owner approval rights over operating and capital budgets.
Contributions, brand standards and who decides on major spend.
Your ability to sell, refinance or exit, and the cost of doing so.
Operator contributions and the strings attached to them.
Non-disturbance and step-in arrangements that keep your funding in place.
| Management agreement | Lease | Franchise | |
|---|---|---|---|
| Who runs the hotel | Brand operator | Operator as tenant | Owner or third party manager |
| Who takes trading risk | Owner | Operator | Owner |
| Owner's return | Hotel profit after fees | Rent | Hotel profit after fees |
| Owner control | Moderate, through approval rights | Low | High |
| Typical fit | Owners wanting a brand and its systems | Owners wanting a passive, rent based return | Owners with operating capability |
Negotiated the HMA, Technical Services Agreement and Licence and Royalty Agreement, with landowner, financier and lessor deeds, for a new build within a master planned development. Drafted and negotiated branded residence agreements.
Led legal work and negotiations for the opening of a 414 room hotel under tight timeframes.
Negotiated the HMA suite and associated financier deeds for a 107 room hotel.
A hotel management agreement (HMA) is a contract under which a hotel owner appoints an operator to run the hotel, usually under the operator's brand, in return for management fees. The owner generally keeps the trading risk and reward, while the operator manages day to day operations.
Under a lease, the operator pays rent and takes on the trading risk. Under a franchise, the owner or a third party manager runs the hotel and pays fees to use the brand and systems. Under an HMA, the operator manages the hotel for fees while the owner keeps the trading risk.
Key clauses usually include the term and renewal rights, base and incentive fees, performance tests, budget approval rights, FF&E reserves, termination and sale rights, key money and financier non-disturbance arrangements.
Both. Angie has negotiated HMAs on the operator side as Executive Director and General Counsel of a major hotel group, and now advises owners, developers and operators across Australia.
Arrange an initial conversation about your hotel project. Fixed fee HMA reviews are available.
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