Operator selection & HMA
Hotel operator selection and HMA negotiation
The management agreement is the most valuable contract most owners will ever sign, and it is usually signed last, under time pressure, by people who will not be there in year fifteen. We take the owner’s side of that table.
The decision
The three questions this engagement answers
Who is actually accountable for performance?
Almost every HMA says the operator uses ‘reasonable efforts’. Very few attach a consequence. We negotiate the gap between effort language and a test the owner can enforce.
What does the owner control after signature?
Budget approval, capex thresholds, key appointments, bank accounts, procurement standards and audit rights are usually negotiable at term sheet and effectively closed afterwards. The term sheet is where the money is.
What does it cost to leave?
Termination, liquidated damages, key-money repayment and the tail on the incentive fee decide whether you have an option to exit or only a licence to hope.
Deliverables
What you get
- An operator long-list from the brands genuinely available in your market and segment, then a short-list scored against your priorities — not the brands’ pitch decks.
- A comparable-set benchmark: what owners of similar assets actually secured on term, fee structure and owner protections.
- A term-sheet before a long-form contract. We negotiate the eight clauses that carry the value before anyone drafts 120 pages.
- Line-by-line review of the full HMA and technical services agreement, annotated with the owner-side position and the fallback we would accept.
- Fee modelling: base and incentive fee as a share of gross and net revenue across the full fee stack, plus the technical services agreement.
- An owner-protection schedule: performance test, cure period, termination rights, key-money mechanics and pre-emptive rights.
| In scope | Not in scope |
|---|---|
| Brand/operator search and RFP | Legal advice — we work alongside your counsel and hand them the annotated contract |
| Term-sheet and full HMA review | Franchise registration and regulatory filings |
| Fee-stack modelling and comparison | Brand standards compliance audits |
| Performance-test and cure drafting instructions | Litigation or dispute representation |
How it runs
Stages, timing and output
| Stage | Duration | Output |
|---|---|---|
| 1. Position paper | Week 1 | What the owner needs from the operator, ranked. This becomes the scoring basis and the negotiating mandate. |
| 2. Market scan and RFP | Weeks 2–4 | Long-list, RFP issue, responses normalised into a like-for-like comparison. |
| 3. Operator presentations | Week 5 | We brief you before each and debrief after. The questions they cannot answer are the finding. |
| 4. Term sheet | Weeks 6–8 | Fees, term, performance test, termination and owner controls negotiated to a defensible position. |
| 5. Full contract close | Weeks 9–14 | Line-by-line review alongside your lawyer, to execution. |
Fees
Fixed fee, agreed in writing before work starts.
Quoted after a scoping call, based on the asset, the number of counterparties and the evidence available. No hourly billing, no success fee, and no commission from any operator or brand. Smaller assignments have a separate fixed-fee product.
- Independent No operator commission, no referral fees, no brand relationship that pays us. The absence of that fee is why the advice can be blunt.
- Twenty years in the region Asset-level experience with hotel groups and investors, including business development and asset management roles in Saudi Arabia and the Gulf.
- Published method We publish our method, our HMA framework and our calculator — including the limits of each, not only the benefits.
Questions owners ask
Questions owners ask before engaging
Can you negotiate an HMA after we have already signed?
Sometimes. Extensions, additions and performance failures are real levers, and a written performance record is what converts them into negotiating position. If the contract genuinely has no lever, we will tell you that too.
Are you independent of the operators?
Yes. We take no commission, referral fee or success fee from any operator or brand, and we do not accept mandates that require us to promote one. The absence of that fee is why our advice can be blunt.
Do you do franchise agreements as well as management agreements?
Yes. Franchise plus third-party management is often the better structure for an owner who wants control and is willing to carry the operating risk. We model both before recommending either.
How long does a full selection take?
Ten to fourteen weeks from mandate to signed contract is realistic in Saudi Arabia. Compressing it is possible; doing so usually means the market scan gets cut, which is the part that produces leverage.
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