Owner's Contract Briefing · No. 1 · 21 October 2026
Five HMA clauses to settle before you sign — not after.
A hotel management agreement can bind your asset for 15–30 years. These five clauses decide who really gets paid, who can leave, and who pays for the brand's next idea.
1 · Term & renewal
What it decides: your exit windows for a generation. Owner risk: operator-option renewals that outlive your hold period and tax your sale. Ask: whose option is the renewal — and what is the asset worth with 18 years unexpired vs 4?
2 · Incentive fee & owner priority
What it decides: whether the operator shares profit before or after you earn a return. Owner risk: incentive on GOP from the first riyal. Ask: is there an owner-priority hurdle, and how is GOP defined after centralised charges?
3 · Performance test
What it decides: whether chronic underperformance has consequences. Owner risk: no test, or a test the operator can always cure by paying a small sum. Ask: RevPAR index against which named comp set, over how many years, with what cure limits?
4 · FF&E reserve & brand PIPs
What it decides: who funds the hotel's second and third lives. Owner risk: uncapped mid-term Property Improvement Plans priced at signing-day optimism. Ask: reserve %, PIP triggers, caps/consultation rights, and are they in your year 7–10 cash flow?
5 · Termination & sale
What it decides: the price of freedom. Owner risk: termination fees that function as a sale tax, and no step-in on operator failure. Ask: fees on sale/convenience/default, change-of-control, and what happens to bookings, data and staff on day one after exit?
Commercial education, not legal advice. Screen your own draft in two minutes with the free scorecard, then brief your hospitality lawyers with the flags it raises.