Question

Differentiate owner-managed from franchised hotels.

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Answer 1

Owner managed:

1. Hotel Management Agreement (HMA) Hotel brand/operator will be responsible to manage the hotel by providing supervision, direction, and expertise through conventional methods and measures. It will fundamentally take over the operations of the hotel for and on behalf of the hotel owner for a fee.
2. Given this scenario, the hotel brand (such as Marriott, IHG, Hilton, Accor/SBE) is the manager and the hotel owner is the managed owner. They signed a Hotel Management Agreement for a specific hotel brand (such as Ritz Carlton, Sofitel). The hotel owner will bear all the operating risk. They also require paying a base fees, brand trademark, incentive fees, marketing fees, distribution and loyalty fees, IT fees and many more. Hotel management agreements can be long and complex.

Franchise:

1. The franchise agreement is a legal license agreement between the hotel brand and the hotel owner that give hotel owner the rights and obligations to operate the hotel under the franchisor's brand in exchange for fees.
2. Given this scenario, the hotel brand (such as Marriott, IHG, Hilton, Accor/SBE) is the manager and the hotel owner is the managed owner. They signed a Hotel Management Agreement for a specific hotel brand (such as Ritz Carlton, Sofitel). The hotel owner will bear all the operating risk. They also require paying a base fees, brand trademark, incentive fees, marketing fees, distribution and loyalty fees, IT fees and many more. Hotel management agreements can be long and complex.

Answer 2

Answer:

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