When negotiating management contracts, both hoteliers and management companies have a single, simple goal in mind: Finalizing a deal that is fair and satisfying to both parties.
But what if a hotelier is new to the management company game? What is negotiable and what isn’t? Who makes the first move? And, most importantly, how can hoteliers be sure they’re getting a contract that meets their needs and expectations?
For any hotelier looking to ink a new management contract, there is a clear first step—hire a lawyer familiar with not just management contracts, but also the hospitality industry as a whole. Albert J. Pucciarelli, partner at McElroy, Deutsch, Mulvaney & Carpenter, explains, “It’s crucial that a lawyer who works on hotel contracts understand the hotel business. They need to be able to help clients with more than just the legalese in contracts, especially clients who are building their first hotel.” Pucciarelli has nearly 30 years of experience as a hospitality lawyer, and he says that when looking for a lawyer, hoteliers should be prepared to interview prospects to ensure they know their stuff. “You need a lawyer who knows what RevPAR is and how central service charges work,” he says.
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