Control of Hotel Real Estate

Learn how investors separate ownership from control of hotel properties, how management contracts are negotiated, and how to prepare term sheets from the perspectives of both owners and operators.

Description

In most hotels, the physical ownership of the property is separated from the control and management of the hotel. This course explores the ways in which hotel investors separate ownership from control of the hotel and examines the two major decisions faced by owners: first, what are the benefits and costs of franchise affiliation? Second, under what conditions should an owner hire a professional operator?

Participants will learn how management contracts are negotiated and about the motivations of each negotiating party. They will learn to prepare term sheets from the perspectives of both owners and operators to provide insight into how to structure the most advantageous deal. This course also examines contemporary hotel leases prevalent around the world.

Who Should Take This Course?

This course is designed for:

• Managers and professionals in the hospitality industry with financial or operational responsibility for real estate, investments, or management contracts
• General managers, asset manager and others with asset management responsibilities
• Business development professionals with branded operators who have professional interaction with owners
• Lenders, investors, real estate professionals, and developers who seek entrance into the hospitality real estate market

Course Format

All eCornell courses are delivered online and are self-paced. An eCornell instructor leads the online discussions, grades any course projects, and is available to answer specific questions about the course content.

This course contains the following modules:

• Operating Agreement Choices and Trends
• Who Controls the Operations?
• Choosing the Operator and Type of Branding
• Leasing
• Negotiating Contemporary Hotel Franchise Agreements
• Evaluating Franchise Affiliation
• Franchises in the Future
• Negotiating Contemporary Management Contracts
• Owner-Manager Relationships
• Negotiating the Contract: The Provisions of the Term Sheet
• Case Study: Crafting an Advantageous Management Agreement

Benefits to the Learner

Participants who complete this course will be able to:

• Explain the factors contributing to deciding who controls the daily operations of hotels and why
• Describe the key attributes of contemporary hotel leases and their applicability in different international settings
• Evaluate a proposed franchise agreement
• Assemble term sheets for new management contracts
• Analyze management contracts from the perspective of owners and operators

Authoring Faculty

Jan A. deRoos, Ph.D., Associate Professor

Sponsoring School

Cornell University's School of Hotel Administration

Total Learning Time

Approximately six hours over a period of two weeks

Certificate Information

This course can be applied toward the following certificate:

• Hotel Real Estate Investments and Asset Management

This course qualifies for 5.75 Professional Development Units (PDUs) from the Project Management Institute (PMI) for Professional Project Managers (PMPs) seeking ongoing education and professional development for continuing certification. eCornell is a Global Registered Education Provider of PMI. PDUs are designated as Category 3.

Project Management Institute Professional Development Units