How to Create a Contract for a Hotel?

The term “hotel contract” means general management agreement, including maintenance, purchase orders, leases, and other agreements relating to the maintenance, operation, supply, or equipment of the hotel, and amendments thereto. The contract governs arrangements and rules that address income, expenses, fees, food, and beverage sales, etc. A hotel management document is drafted when the owner does not intend to manage the business and plans to delegate responsibilities to a certain party by handing over the day-to-day duties. The owner may lack the relevant skills. In such a case, it is recommended to hire an employee from a qualified company or a company to manage the hotel activities effectively.

A hotel management contract is a legally binding agreement between the owner and the managing company. It outlines the expectations, responsibilities, and duties of the parties. The list of terms and conditions should include the necessary clauses regarding the service, thus, the agreement should be clearly documented. A hotel contract template can be used to draft the document.

One of the reasons behind the popularity of hotel management contracts in the hospitality industry is the general trend where owners delegate most of their responsibilities to managing companies. Hotels are operated by franchisees or independent specialists rather than actual owners. The owner pays more attention to investing in the development of the business and steps back from dealing with day-to-day issues.

Features of a Hotel Management Contract

The document establishes the relationship between the owner and the management company and confirms the legal validity of the terms and agreements made. Managers are responsible for planning day-to-day operations. Their duties include:

  • hiring and dismissing staff;
  • customer service;
  • managing each division of the hotel.

The managing company is responsible for maintenance, marketing, promotion, and advertising.

A detailed description of the hired manager’s responsibilities is clearly stated in the hotel management contract. Negotiations are held between the facility owner and the managing company until the parties come to an agreement and are satisfied with the terms of cooperation. When the owner and manager come to a mutual understanding, the contract will stipulate the legal obligations and the ultimate agreement.

If either party wants to change the outlined terms at a later date, they can do so subject to the approval of the other party. An appropriate way to add changes to the contract is to prepare a written amendment featuring the signatures of both parties and the date thereof. The new document should be attached to the original one.

Hotel Agreement Sample: Parts of the Document

There is no one-size-fits-all template. Different hotel management contracts have different terms and conditions. They depend on the provisions that the parties – the owner and the managing company – have in mind. Nevertheless, there are basic stipulations that need to be included in the contract:

  1. The names/titles of the parties that have agreed to cooperate. The hotel management contract should clearly indicate the owner and the managing company. The document describes the location of the facility and its legal status – whether the hotel is a stand-alone property or is part of a franchise. The contract may include other important information about the parties.
  2. The term of the contract. The document specifies the duration of the business relationship between the owner and the managing company. The parties stipulate the possibility of extending the document by mutual agreement.
  3. Responsibilities of the parties. This part of the contract can be considered vital. The document details the responsibilities, performance obligations, and duties of the managing company, and the obligations of the business owner. Although the funds for the hotel operations are provided by its owner, most of the work is left to the management company. Responsibilities include managing staff, preparing the budget, overseeing day-to-day operations, bookkeeping, ordering and installing hotel inventory, and ensuring adequate customer service. The contract contains information about the mandatory conditions that the hotel owner must fulfill. These include financial and legal arrangements to comply with relevant laws, keeping the hotel operation consistent, and providing proper insurance coverage.

Lawyers assist in drafting a hotel management contract.

Hotel Accommodation Contract Template: When It Is Used

This document is filed and signed by the person who wishes to stay at the hotel. It contains details of the guest, including the full name, nationality, check-in and check-out dates, costs of accommodation, additional services, and requirements. The contract also stipulates the payment procedure, cases when the hotel is entitled to refuse the accommodation, rights and obligations of the guest and the hotel manager.

Software for Generating Sample Contracts

Pandadoc предлагает ПО для внесения изменений в формы, в том числе онлайн. Для редактирования договора достаточно следовать простой инструкции:

  1. Register and log in to the system. It is necessary to create a free account, set a strong password, and complete email verification to proceed to managing forms.
  2. Upload a document. A button is provided for this purpose. Options for uploading a file include adding an agreement from a portable device, the cloud, or via a secure URL.
  3. Make adjustments to the template. The agreement can be edited using the tools on the dashboard. It is possible to add and customize text, images, and fill in lines, highlight important details, and comment on updates made.
  4. Finalize the documents. The form can be emailed to others. A link can be generated for quick document sharing. The template can be exported to the cloud, or saved on the device in the current version or with the option to modify it.

The software for editing hotel management or guest accommodation contracts is used by the business owner and representatives of the managing company. The software can be used to create several contract templates – for guests, employees, and suppliers of equipment, appliances, food, etc.

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