PROCESS OF MANAGEMENT CONTRACTING
1. Property review & evaluation ; Operator will review & evaluate the hotel’s facilities and staff service standard.
2. Technical assistance agreement proposal ; Operator will provide the Technical Assistance to the owner in:
- Preparing the hotel renovation program and design brief
- Establishing targets to meets the consensus standard.
- Guiding the design team
- Integrating the standards and specifications for design, construction and equipment.
- Defining and selecting the specialized equipment.
3. Facilitate the agreement of a letter of intent ; Define all of the necessary conditions to be put in Management contract.
4. Management contracting ; Legal contract signing.
Prima Consultant provides an effective day-to-day operational management under the conditions mentioned in management contract which addressed the typical components of a hotel management agreement. The following major components provide the basis for structuring the entire agreement:
- Contract Term – Length of time the agreement will be affected.
- Management Fee - Amount to be paid for services rendered.
- Reporting Requirements – Type, distribution, frequency of operational and financial reporting.
- Approvals – Aspects of hotel operation to get approval from 3rd party.
- Contract Termination – options which the contract can be terminated.
- Operator’s investment in the property – Types of the investment an operator can make decisions in the property.
- Operating income and Expenses – Types of expenses above GOP
- Owner’s and Operator’s Expenses – Types of expenses below GOP and types of expenses incurred outside of the property that will be reimbursed by the hotel owner.
- Hotel Personnel – Authorization to employ the personnel.
- FF&E Reserve for replacement – The structure and management of a reserve for replacement.
- Hotel Budgetary and Accounting Process – Business plan creation and approval of business plan, Audited accounts, Payment adjustment and disputes.
- Mandatory Insurance – The necessary insurance to cover all the business.
- Duties of the Owner Prior to the expected Management date.