Overview
Hospitality establishments need operational licenses from the relevant tourism authority, and these requirements differ based on the establishment's category and type of service offered, from a luxury hotel to serviced apartments.
Hotel management agreements carry a precise balance between the property owner who provides the asset and the hotel brand operator who manages daily operations, and need drafting that defines each party's responsibility and financial return clearly.
Regulatory Basis
Hospitality establishments fall under tourism and hospitality regulations issued by the competent authority, which set licensing and classification requirements for each establishment category.
How We Help With This Sector
We review the type of establishment planned to determine licensing and classification requirements, and help structure the management agreement if operation is through an outside hotel brand.
Who Needs This Service
A property owner planning to convert it into a hospitality establishment who needs to understand the appropriate licensing requirements.
A hotel owner negotiating a management agreement with an international hotel brand who needs the responsibility balance between them structured.
We notice that some hotel management agreements are drafted with overly broad language granting the operator wide authority over daily operational decisions without a clear mechanism holding them accountable to the property owner for actual financial performance, an imbalance worth correcting with specific performance indicators within the contract itself, rather than relying on the general reputation of the operating hotel brand alone.
Additional Considerations
The real estate asset behind this facility connects with our real estate and property law service.
When the hotel brand is operated through a franchise, this connects with our franchise and commercial franchising service.
Common Questions
Do licensing requirements differ based on establishment category?
Yes, they differ between luxury hotels, serviced apartments, and others, and we review this specifically based on your project's nature.
Who bears responsibility for daily operations in a hotel management agreement?
This is determined by the management agreement itself, and we draft it to balance the operator's authority with the property owner's interest.