Management Agreement Or Lease

It`s simple. It is a question of control! A retail management agreement typically gives a hotel owner much greater control over the day-to-day operation of a retail establishment than a retail lease agreement. The first question a hotel owner should ask themselves is, “Do I really want to control the day-to-day operation of the retail establishment?” The answer may vary from one institution to another. For example, the hotel owner might not want to immerse himself in the day-to-day operation of the various stores, but in the food and beverage business, which can be a completely different matter, since the food and beverage experience is closely linked to the entire guest experience. As we can see, there is a big difference between hotel management contracts and hotel rental contracts, and there are advantages for both paths. The collaboration of a property owner with a management company with proven management skills, a CV and a target group may be suitable for a property owner who has knowledge and experience in the hotel sector and who would like to create a professional hotel and increase his chances of success. On the other hand, a real estate owner who would be interested in minimizing his exposure to risk and who would be interested in peace at work, such as a management company that has all the risks and all the chances of success on his side, will prefer to conclude a hotel rental contract. A hotel management company is a company that specializes in hotel management. This company manages the hotel for the owner of the property in exchange for a management fee agreed in advance, while all income and expenses are taxed on the owner of the property. Indeed, the management company is nothing but the long and professional arm of the real estate owner, who acts transparently and with a minimum of economic and financial risks. VAT is usually not paid on rental contracts unless the lessor has opted for taxation, which is usually unlikely for residential property. 5.

The management company presents a low risk of collaboration with the owner, while the management company, even if the hotel is not profitable, earns a fixed and known amount (in the form of a percentage of revenue). . . .