Operators generally prefer long start periods and several long extension periods that can be exercised by the operator. The owner may prefer a shorter term without specific renewal fees – if the hotel is a success, renewal is in the interest of both parties. Owners may fall into the trap of making assumptions about the extent of the operator`s liability. The operator will endeavour to minimize its responsibilities and impose additional costs for ancillary services that the owner has wrongly accepted as part of the operator`s proposed package as part of the entire package. The management agreement may allow the operator to charge the owner for additional fees for these “chain services,” but these should be limited to services that can be provided more efficiently for the entire group of hotels maintained by the management company and not on the basis of one hotel per hotel. The owner should ensure that all hotels that benefit from these services pay fairly for them. Continuity of operations in the event of termination is important and the management agreement should provide for a smooth transition at the end or expiry. Bandages. A hotel with an IPR of more than 1 means that the owner should have the right to terminate the contract if the operator is late under the agreement, without any liability being incurred.
It may reserve the right to terminate the contract without cause, but must expect the operator to demand payment of a termination fee corresponding to its expected performance over the duration of the contract that has not expired. It should be noted that the relationship between the owner and the operator is increasingly governed not only by the traditional administrative agreement, but also by parallel agreements such as licensing, licensing or service agreements. In order to fully assess the value of payments due to the operator, the royalty requirements of these parallel contracts should be assessed. Given the overall utility and business landscape of the Guam Hotel, the administrators (including independent non-executive directors) believe that (a) the manager`s operation and management of the Guam Hotel and its possible change of reputation in “Crowne Plaza Guam” place the Guam Hotel in a high-end position capable of generating higher revenue and reaching a wider and premium clientele. , b) the terms of the hotel management contract are fair and reasonable and generally are consistent with industry practice for comparable real estate, hotel brands and management service providers, (c) agreements under the hotel management contract under normal business conditions and are in the interest of the company and shareholders as a whole. Directors (including independent non-managers) who have audited and approved the hotel administration agreement and, on the basis of their professional experience, believe that the terms and conditions (including fees and contributions) of the hotel management contract are fair and reasonable, under normal business conditions and, in general, in accordance with industry practices for comparable real estate , hotel brands and management service providers. The owner would prefer that the hotel staff be employed by the operator, but this is rarely feasible. The operators defend the opposite position, with another as vis-à-vis the manager.