Model overview
The owner assigns a specialised hospitality management company to operate and manage the hotel or restaurant on the owner’s behalf. Ownership and operational management are separated.
Business model
Management Contract
A model where the owner keeps the asset while a specialist hospitality management company operates the hotel or restaurant on the owner’s behalf.
Management structure
The owner retains legal ownership of the assets and investment, while the management company handles daily operations under a formal agreement.
The contract defines the duration, scope of work, performance expectations, fees and responsibilities. The asset may operate under the management company’s brand or the owner’s brand.
Financial responsibilities
The owner generally provides the capital for development, renovation, equipment and working capital, and bears the primary financial risk including operating losses and capital expenditure unless otherwise agreed.
Operational responsibilities
The management company is responsible for implementing professional operating systems and ensuring effective performance.
- Recruiting, training and supervising employees.
- Managing daily operations and service quality.
- Developing marketing and sales strategies.
- Managing purchasing, inventory and supplier relationships.
- Establishing financial budgets and operational procedures.
- Maintaining customer satisfaction and brand standards.
- Preparing performance reports for the property owner.
