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22 Sep, 2012

Free Download: Handbook to Help Negotiate Better Hotel Deals


LOS ANGELES–(BUSINESS WIRE)- September 19, 2012 -The Global Hospitality Group® today announced the publication of the 2nd edition of The HMA Handbook, a practical guide for hotel owners, developers, investors and lenders negotiating, re-negotiating or terminating hotel management agreements (HMAs).

Co-authored by Group Chairman, Jim Butler and Partner and Senior Member of the Group, Robert E. Braun, the 1st edition of The HMA Handbook was released last March 2011 to an enthusiastic readership, evidenced by thousands of requests for the electronic book. Now, taken from content available on the Hotel Law Blog, the new and expanded 2nd edition of the HMA Handbook adds 5 new chapters of the practical advice readers have come to expect from JMBM’s Global Hospitality Group®, including:

  • 10 tips for negotiating a hotel management agreement
  • An update on HMA litigation and fiduciary duties
  • Case studies on the terminations of the Waikiki Edition and Turnberry Isle hotel management agreements

“The hotel management agreement is the linchpin of a successful hotel investment,” said Butler, whose Group has negotiated, litigated and advised on more than 1,000 HMAs. “The HMA holds together a very complex structure, and every critical investment and operational decision is tied to the agreement. In fact, the hotel management agreement can easily add or subtract as much as 25 percent of the value of a hotel.”

“We help hotel owners, developers, investors and lenders negotiate with hotel operators to maintain that value,” said Braun. “The traditional brand operators have full-time, professional business and legal advisors who negotiate these agreements day in and day out. Owners are not in the business of negotiating management agreements, and that puts them at a big disadvantage.”

Written in plain English, The HMA Handbook, 2nd edition, covers three topics critical to every hotel owner, developer, investor or lender:

1. How to get a great hotel operator

  • Maximizing hotel value with management, branding and franchise
  • 2 of the most important things you will ever do for your hotel
  • The 5 biggest mistakes hotel owners make in selecting operators and negotiating hotel management agreements
  • Why hotel owners need an HMA PRO™ to identify and retain the best operator for its hotel
  • How to negotiate a hotel management agreement: 10 tips for a smoother process

2. What you need in your hotel management agreement

  • What to do before you start negotiating your hotel management agreement
  • Hotel management agreement performance standards and why they matter
  • Hotel management agreement performance standards – the operator’s take
  • Hotel management agreement performance standards – the owner’s return test
  • 5 keys for good budget provisions in the hotel management agreement
  • Indemnification provisions
  • How SNDAs (subordination agreements) affect the value, financeability, and collateral value of a hotel
  • Exculpation clauses – protecting the owner’s assets

3. How to terminate a hotel management agreement

  • Why hotel management agreement litigation is on the rise
  • The importance of “fiduciary” duties in disputes between hotel owners and hotel operators
  • Case studies on hotel management agreement terminations
  • Terminating hotel management agreements when things don’t work? Not easy, but not impossible either
  • Terminating a hotel management agreement – where to begin
  • The hotel bankruptcy trump card
  • Hotel management agreement terminations – is there a better way?

“In our experience, even the sharpest business minds have huge knowledge gaps when it comes to HMAs,” said Butler. “The Handbook was developed to help our clients and friends in the hospitality industry get up to speed on issues that have a major impact on the value of their hotel investment.”

To download a copy of the 2nd edition HMA Handbook, go to http://www.hotellawyer.com/files/books/hma-handbook/#/Cover/ (registration required).