Jun 01 2020
A hotel management agreement (HMA) is the core document governing the relationship between hotel owners and operators/managers. In a subsector of the commercial real estate industry particularly hard hit by COVID-19 disruptions, this relationship is being tested in unique ways. With the trough of the pandemic not having been reached, it is too early to predict permanent changes to the owner-manager relationship which may be reflected in future HMAs. Hotel brands may be able to offer owners short-term relief under franchise and management agreements, to test performance returns on an incremental basis without the need for sweeping document modifications. However, there are some long-term effects stemming from the disruption of COVID-19 that are likely to materialize.