The Ten Hot Management Agreement Issues in Asia

Aug 07, 07 | 1:58 am

By Graeme Dickson, Global Practice Leader Baker & McKenzie

In our view the ten hot issues are:

1. Sign Them Up: There is frenetic activity by many operators in many jurisdictions to sign up management agreements.

2. No Leases Thanks: Operators like management agreements and dislike leases.

3. In For The Long Haul: It's getting harder to prematurely terminate an operator without cause.

4. No Termination: It's also getting harder to terminate an under performing operator.

5. Not For Sale: Owner sale provisions are getting tighter and are subject to increasing operator discretion.

6. Let's Bind Financiers: Operators are increasingly keen to bind financiers.

7. The Retail Market: Developers are moving heavily into the retail market (eg Condo Hotels) with enhanced risk.

8. Brand Leverage: Savvy operators are leveraging brand value (eg branded residences and brand partners).

9. Brand Standards: The Brand Standard is increasingly becoming the benchmark for CAPEX spending.

10. Agency Out: Operators are moving away from "agency" relationship with owners to minimise complications (eg obligation to disclose "secret" profits).

Contact: Graeme Dickson
Global Practice Leader
Baker & McKenzie
+61 2 8922 5228
Email: graeme.dickson@bakernet.com

Source: Baker & McKenzie