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There are two main ways of hotel management:

   1. Property owner and hotel operator are the same subject

   2. Property owner and hotel operator are two different subjects

On the base of such distinction, the presence of a hotel manager that takes care of the structure has to be regulated by a management agreement, generally a hotel lease agreement or a hotel management agreement.

Each of such contracts has particular features and requires an appropriate level of legal and commercial experience to be drafted the best possible way.

Lease: there can be two different types of lease:

   1. Property lease

   2. Business lease

Each of such lease contracts has particular features as for the lease object, duration, rent, maintenance, possible conditions for the contract termination and other circumstances. In both lease agreements, the rent paid by the manager to the owner has guarantees, in order to protect the due payment. Forms of bank guarantee are often required to guarantee a real contract execution between the parties.

Management: the hotel management agreement comes from the United States and since some years it has been present in Italy as well, especially for the large accommodation structures and those which require the presence of an international operator.

Such agreement bestows the management responsibility to a management company, which has to run the hotel on behalf of the owner and receives remuneration for such management activity. The remuneration almost always consists of a base fee, and a variable component, named management fee. The base fee is a percentage on total incomes, while the management fee is often a percentage of the gross operating margin deriving from the management.

The margin generated after the payment of the management fee is the owner’s profit, who receives such margin according to the financial results effectively obtained.

The process of negotiating a management agreement is a complex professional activity that requires relevant legal and commercial experience, which has to be acquired within the hotel and accommodation industry. The lease contract is regulated by the circumstances included in the Civil Code and, therefore, it often refers to contract norms of the Italian commercial law. On the contrary, the management agreement is an atypical case, since it does not refer to any contract regulated by the law. In this last case, it is necessary to rely on qualified professionals who know how to draft and negotiate these contracts respecting these specific international approaches.

Feasibility studies support the whole process of real estate development, identifying realistic objectives in terms of performance of the new accommodation structure in the market.

Hotel feasibility studies are the result of a professional activity aimed at establishing if a hotel project has enough probability to be economically sustainable, according to current and perspective market conditions.

The process of hotel valuation is linked to the unique features of hotel, hospitality and tourist assets, identifying a monetary value to be attributed to a property in given market conditions.

The hotel valuation is generally carried out by qualified professionals and consists of drafting and issuing a written and signed Report, which also contains the definitions of value determined.

The Investment Memorandums or Information Memorandums represent a key tool to communicate the investment opportunity to the public.

This tool, deriving from the English world, allows a professional, transparent and punctual promotion of the sale and purchase opportunity, qualifying in a unique way the hospitality property offered to the market.

The professional search and selection service of a hotel operator aims at identifying, evaluating and choosing the hotel operator that best suits the hotel owner’s needs, considering his objectives and the hotel features.

The commonly adopted professional approach involves the presence of a professional appointed by the Client that can identify hotel operators interested in signing mainly long-term hotel contracts.

The process of negotiating a hotel contract is a complex professional activity requiring relevant legal and commercial experience, which has to be acquired within the hotel and accommodation industry.

The lease contract and the management agreement are the most common forms in hotel contracts.

It is useful to rely on qualified professionals who know how to draft and negotiate these contracts.

Through franchising, independent hotels can receive commercial and marketing services, associating their own name with a recognizable brand in order to increase customer retention and loyalty.

The franchise agreement negotiation is based on the identification of all elements that are offered by the hotel franchisor, evaluating the perspective benefits that independent hotel entrepreneurs can enjoy through the contract.

Recently, hotel architecture and design have experienced important changes aimed at improving the guests’ experience, in order to best respond to a need of identity and recognition towards the places and the surrounding environment.

Furthermore, for all kinds of accommodation structures there has been a functional innovation path, due to technology advancements and building automation.

Such elements reflect on the distribution of the different areas included in the architectural project.

Hotel due diligence investigations are undertaken by buyers and investors in the process of evaluating a hotel investment, tailored to the acquisition of the asset.

The whole process is often assigned to specialized professionals, whereof principle objective is to render as faithfully as possible the buyer’s vision on asset to current status, legally and physically, technically and fiscally.

Hotel, hospitality and tourist investment sales are experiencing remarkable development thanks to the presence of many international operators and investors who see Italy as a key tourist destination.

The sales process can be directly adopted by the owner or supported by companies and real estate advisors that manage the whole investment sale process towards the market.

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