Hotel managers and operators are different from property and/or hotel owners. Therefore, their presence often needs a professional support aimed at searching hotel companies for hospitality properties managed by third parties.
The commonly adopted professional approach involves the presence of a professional third party appointed by the Client that can identify hotel operators interested in signing mainly long-term management agreements.
The professional search and selection service of a hotel operator presents many phases, aimed at identifying, evaluating and choosing the hotel operator that best suits the hotel owner’s needs, considering his/her objectives and the accommodation unit features.
The operator search and selection process is carried out professionally and it typically involves the following activities:
- Preparation of an Investment Brochure (the so-called Information Memorandum), that includes the accommodation property features, management objectives, owner’s expectations with respect to the hotel operator conduct and main terms of the management agreement
- Preparation of a list of operators (the so-called Target List) identifying all the hotel companies that are potentially suitable to run the structure, considered the type of hotel product to manage
- Identification of the Term Sheet, through which the hotel owner selects the main contract terms in the management agreement to be negotiated. Such terms concern basically the type of contract, duration, payment due to the owner, possible interruption clauses and maintenance management agreements, both of the property and the furniture of the accommodation structure
- Commercialization of the management opportunity through commercial actions addressed to the market of national and international hotel operators. Such actions are aimed at communicating management opportunities, selection modalities and property expectations regarding the management agreement
- Selection of operators and creation of a Short List, namely a restricted list of operators with which to maintain more advanced and urgent negotiations
- Selection of the preferred operator: through this activity, the most suitable subject to negotiate the Term sheet is identified, entering a final phase of negotiation
- Signature of the Term Sheet and inclusion of the legal parties in the negotiation: in this last phase their respective lawyers are included in order to draft the management agreement and finalize the contractual relationship between the parties.
The process duration may vary from few months to even more than one year, according to the complexity of the selection and the operators involved. Generally, the operator search and selection service is paid with fixed remuneration and a variable component depending on the achievable result.