The Hotel Management Agreement: What, Why And How?

With the global downturn in certain asset class valuations, hotels are experiencing something of a renaissance and have re-emerged as a preferred asset class. With challenges in all but the best in class and transit-oriented office properties, hotels are benefiting from strong demand and recovery in key segments like leisure and business travel. Canadian Revpar (revenue per available room, a key industry metric) averages have recently rebounded to pre-Covid levels, with 2025 projections looking higher still.

As the industry booms and demand increases, hotel operators are looking to establish new locations, and CRE (commercial real estate) owners are providing (or, frequently, repurposing) land and buildings to serve that need. But for both owners and operators alike, the key to unlocking value in this asset class comes in correctly determining and drafting an efficient and effective operating structure—one that incentivizes performance, rewards success and