LA 687: HOTEL MANAGEMENT AGREEMENT FOR PORTFOLIO OF AFFORDABLE HOTELS FOR FIXED PERCENTAGE OF GROSS REVENUES $59.95
HOTEL MANAGEMENT AGREEMENT
Whereas, Owner and Agent desire to enter into an agreement for the management and operation of ____ Hotels (as hereinafter defined), by Agent, upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained, Owner and Agent agree as follows:
Engagement of Agent to Operate Hotels
Owner hereby hires and engages Agent as the exclusive operator and manager of ___ hotels operating under the flag ___________ (hereinafter the “Hotels”) described on Schedule A attached hereto and incorporated by reference hereto, and Agent agrees to operate and manage the Hotels pursuant to the terms and conditions hereinafter set forth. An individual Hotel may sometimes be referred to as a “Hotel”.
The term of the Agreement (“Term of Contract”) shall be for a period of two years, commencing on __________ and continuing through __________, together with any renewal terms as herein provided. This Agreement may be renewed for additional terms upon the mutual agreement of both the Owner and the Agent provided this Agreement is not otherwise terminated as herein provided.
The primary purpose for which this Agreement is being made is to hire Agent to provide management services in connection with the operation and management of the Hotels and related facilities for the account of Owner and, so far as is economically and legally possible, in accordance with the same procedures, practices, management technique and other rules of operation used by similar hotels and those managed by Agent for the account of others.
Services and Duties of Agent
In connection with the general authority of Agent to operate the Hotels hereinafter set forth, the Agent shall render and perform the following specific services and duties:
(a) Act as the sole and exclusive manager of the Hotels and perform, direct and control the management and operation of the Hotels in accordance with prevailing industry standards for a hotel of comparable location and facilities;
(b) Use its best efforts and due diligence in renting all of the rooms and facilities to desirable guests and tenants. Agent may rent rooms and lease stores and concessions in or about the Hotels at rates approved by Owner;
(c) Execute, and deliver, on behalf of Owner, on terms approved by Owner, concession agreements for stores, office or lobby space, or other rooms or rental space comprising a portion of the Hotels provided that no such lease shall be for a term greater than 30 days without the written consent of Owner;
(d) Apply for, obtain and maintain in the name of and at the expense of Owner or its designees, all licenses and permits required of Owner or Agent in connection with the management and operation of the Hotels. Owner agrees to cooperate fully with Agent in the procurement and maintenance of such licenses and permits and to provide to Agent such information and ancillary documentation as Agent shall request in connection with procuring and maintaining such licenses or permits. In the event such licenses or permits cannot be obtained or maintained, then this Agreement shall terminate at the option of Agent thirty (30) days after written notice to Owner of the exercise of such option to terminate by Agent;
(e) Supervise and attend to all advertising and promotional matters pertaining to the Hotels as determined by Owner. As part of the annual operating budget submitted to Owner by Agent pursuant to the terms of Article IV (m) hereof, Agent shall submit an annual promotional and advertising budget to Owner;
(f) Hire, discharge, suspend, discipline and compensate all employees of Agent, necessary in Agent’s sole discretion for the efficient operation of the Hotels (the “Operating Employees”) and direct and supervise their work. Owner shall have neither right nor obligation to supervise, hire or discharge the Operating Employees. The wages, salaries and all additional remuneration to the Operating Employees, whether direct or indirect, and expenses incurred with the hiring and maintenance of the staff of the Operating Employees shall be an operating expense of the Hotels. Agent will do whatever is required by the laws of the state where the Hotels are located to comply with any federal or state withholding tax, Social Security, unemployment, or workers compensation laws existing or enacted in the future for the benefit of or affecting such employees;
(g) Make, or cause to be made, with Owner’s consent, all ordinary maintenance, repairs and alterations to the Hotels, purchase such building maintenance and janitorial supplies as are necessary and appropriate for the operation of the Hotels, paying all bills therefore on behalf of Owner, and giving Owner the benefit of all discounts, and keep the Hotels and all its furniture, fixtures and equipment in good repair, and arrange for the orderly and appropriate replacements, improvements and changes to such assets as approved by Owner;
(h) Report immediately to Owner any and all accidents or claims for damage resulting to the Hotels including any damage thereto or destruction thereof and provide Owner with written notice of such event or occurrence within seventy-two (72) hours thereafter. Agent shall cooperate and make any and all reports required by any insurance company in connection therewith;
(i) Immediately upon receipt, deposit all funds collected from the operation of the Hotel in a special account or accounts with a bank or banks approved by Owner;
(j) Immediately upon service of legal or other process upon the Agent which process affects or might affect Owner or the Hotels, Agent shall send such process to the attention of the Owner at the address for Owner hereinafter set forth or as Owner otherwise directs in writing;
(k) Deliver to Owner, no later than the 15th day of each month, a detailed statement of income and expenditures made in connection with the operation of the Hotel for the period ending on the last day of the previous month. Agent shall be responsible for maintaining such records as shall conform to the American Hotel and Motel Associations’ Uniform System of Accounts. Agent shall establish and supervise appropriate accounting and cost control systems operated by qualified personnel. Agent shall cause accounting personnel to prepare and file all necessary reports with respect to withholding taxes, social security taxes, unemployment insurance, disability insurance, the Fair Labor Standards Act and all other statements and reports pertaining to the employment of labor on or about the Hotels. Agent shall also prepare profit and loss statements for the Hotels. All books of account shall at all times be open to the inspection and audit by any of Owner’s officers or authorized representatives. All books, records, bills, receipts, bank books, check books, check vouchers, correspondence, lists, files, index cards and books of account relating to lessees, concessionaires, guest and prospective guests, and employees of the Hotels, and other data and records pertaining to or relating to the management and operation of the Hotels shall be safely kept and preserved by Agent for at least 5 years. Upon the termination of this Agreement, such records shall be the property of Owner;
(l) Procure and submit to Owner for payment by Owner in advance of the due date thereof, all tax bills and assessments relating to the Hotels and assist Owner in obtaining fair tax assessments for the Hotel, at Owner’s sole expenses;
(m) Prepare and submit to Owner an annual operating budget as provided herein;
(n) Arrange for, in the Hotels’ names, all water, electrical, gas, fuel oil, telephone, vermin extermination, trash removal and other necessary services for the operation of the Hotels and purchase, upon credit of the Hotel, all food, beverages, operating supplies and other expendables necessary for use in the proper operation of the Hotels;
(o) Provide all such services and functions as might reasonably be expected of a professional hotel management company’s central office, including, but not limited to: supervision, operational analysis, personnel recruitment, contract negotiation, administrative and clerical functions, purchasing and all other reasonable and normal management functions at no cost to Owner;
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