The Hotel Management Contract is a crucial document used when a property owner wishes to engage a professional hotel management company to operate their hotel property in the Philippines. This agreement is essential for defining the relationship between the owner and operator, establishing clear operational parameters, and ensuring compliance with Philippine regulatory requirements. It covers comprehensive aspects including management authority, operational standards, financial arrangements, staffing, brand requirements, and risk allocation. The document must comply with various Philippine laws including the Tourism Act of 2009, Civil Code, Labor Code, and local government regulations. It's particularly relevant for new hotel developments, rebranding exercises, or when transitioning between management companies in the Philippine market.
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1. Parties: Identification of the Hotel Owner and the Hotel Management Company
2. Background: Context of the agreement, description of the property, and parties' intentions
3. Definitions: Detailed definitions of terms used throughout the agreement
4. Appointment and Term: Scope of manager's appointment, term length, and renewal provisions
5. Manager's Rights and Responsibilities: Detailed outline of the management company's authority and obligations
6. Owner's Rights and Obligations: Owner's roles, responsibilities, and retained rights
7. Personnel and Employment: Staffing arrangements, employment policies, and key personnel requirements
8. Operating Standards: Brand standards, quality requirements, and performance metrics
9. Budgets and Financial Management: Budget preparation, approval process, and financial reporting requirements
10. Fees and Payments: Management fees, structure, calculation methods, and payment terms
11. FF&E and Capital Expenditure: Provisions for furniture, fixtures, equipment, and capital improvements
12. Insurance and Indemnification: Required insurance coverage and mutual indemnification provisions
13. Termination: Termination rights, process, and consequences
14. Post-Termination: Obligations and transitions after contract termination
15. Representations and Warranties: Standard representations and warranties from both parties
16. Governing Law and Dispute Resolution: Choice of Philippine law and dispute resolution mechanisms
17. General Provisions: Standard boilerplate clauses including notices, assignment, and amendments
1. Pre-Opening Services: Used when the hotel is not yet operational, detailing pre-opening obligations and fees
2. Technical Services: Include when the manager provides design and construction consultation services
3. Intellectual Property: Detailed IP provisions when the management company's brand is significant
4. Force Majeure: Extended force majeure provisions for regions prone to natural disasters
5. Non-Compete: Restrictions on manager operating competing properties in the area
6. Environmental Compliance: Additional environmental obligations for properties in protected areas
7. Casino/Gaming Operations: Include for properties with gaming facilities
8. Mixed-Use Property Provisions: Used when hotel is part of a larger mixed-use development
9. Residential Component: Include when hotel includes residential units or serviced apartments
1. Property Description: Detailed description of the hotel property and facilities
2. Key Performance Indicators: Specific performance metrics and targets
3. Base Fee and Incentive Fee Calculations: Detailed fee structures and calculation methods
4. Brand Standards: Specific requirements for maintaining brand standards
5. Required Insurance: Detailed insurance requirements and coverage limits
6. FF&E Requirements: Specifications for furniture, fixtures, and equipment
7. Key Personnel: Positions designated as key personnel and their qualifications
8. Operating Accounts: Structure and management of various operating accounts
9. Initial Budget: First year's operating budget
10. Competitive Set: List of competing hotels for performance comparison
11. Owner's Reserved Rights: Specific decisions requiring owner approval
12. Form of Owner's Certificate: Standard form for periodic owner certifications
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