HTI Consulting are the leading consultation company focused on operator search and selection based in Africa. Operator selection and contract negotiation are complex processes that differ largely from case to case, the result of which will define the future of the owner/operator relationship. However, hotel operators are generally far more experienced than owners in these matters and as such have a distinct advantage when it comes to the negotiation process.
The selection of the right management company is crucial to the success of the hotel, which can have a significant impact on the bottom line performance. Management agreements can also be difficult to get out of, further emphasizing the importance of the selection and negotiation process and the inclusion of performance and termination clauses, which are not easily negotiated.
The management agreement itself is the most important document entered into by the owner as it sets the rules that defines the long-term relationship (usually between 15 and 20 years) between the owner and the operator.
Through negotiations, HTI Consulting will introduce clauses to the management agreement that will add protection to the owner and transfer a certain amount of risk to the operator. Clauses such as progressive fee structures which place some of the risk on the management company, incentive fees which encourage better performance, GOP thresholds, performance measures and termination clauses amongst others. All of these elements, in past negotiations, have resulted in significant savings for HTI Consulting’s clients. Our value add also results in elements being included (not typically included in base management contracts) which are vital to creating a mutually beneficial and long-standing relationship between the owner and operator.
Operator Selection and Management Contract Assignments
- Management contract advisory for a hotel and apart-hotel at Harbour Arch in Cape Town and a hotel at the Yacht Club Development in Cape Town: Status: Signed as a Marriott Hotel, Residence Inn and an AC by Marriott
- Management contract negotiation for 2 upscale hotels in Mauritius. Status: Signed with Rezidor as Radisson Blu for both properties
- Management contract advisory for an upper upscale 5-star hotel and residences in Johannesburg, signed as a Marriott Hotel and Executive Apartments
- Operator Selection for a 252 room upscale, select service hotel in Cape Town, South Africa; Status: Signed with Rezidor as a Radisson Red
- Management contract negotiation for a 130-key midscale internationally branded hotel in Mbabane; Status: Signed with Hilton as Hilton Garden Inn
- Management contract advisory on a 250-key upper midscale internationally branded hotel in Dubai, UAE; Status: Signed with Accor under Novotel brand
- Management contract negotiation for a 160-key internationally branded midscale hotel in Kampala, Uganda; Status: Signed Term Sheet with International Operator, in final negotiation
- Operator selection for a 120-key upscale hotel and 60 apartments in Nairobi, Kenya; Signed Term Sheet with International Operator, in final negotiation
- Operator Selection for a 160 room economy hotel in Cape Town, South Africa;
- Operator Selection and management contract negotiation for a 200-room 4-star deluxe hotel in Accra Ghana; Status: Signed with Rezidor as a Radisson Blu
- Operator Selection and lease contract negotiation for a 200-room 4-star deluxe hotel in Accra Ghana.
- Lease contract negotiation (fixed/variable lease) for the development of an upmarket hostel in Cape Town
- Lease contract negotiation (fixed/variable lease) with a regional brand for a boutique hotel in South Africa
- Lease contract negotiation (variable lease) with a regional brand for a 5-star hotel in Cape Town, South Africa
- Management contract negotiation for a large 4-star business hotel Freetown; Status: Signed with Rezidor as a Radisson Blu
- Management contract negotiation advisory for a 5-star Hotel Development in Luanda, Angola;
- Management Contract Negotiation and Transaction Advisory for a 5-star internationally branded hotel development in Maputo, Mozambique;
- Management contract negotiation with an international brand for a 5-star hotel in Zimbabwe;
- Management Contract Negotiation Advisory for a 116-room business hotel in Tete; Status: Signed with Rezidor as a Park Inn by Radisson