Hotel Operating Agreement

Owner: [Name/Company] · Operator: [Management Company Name] · Hotel: [Name, Address] · Date: [Date]

1. Appointment

Owner engages Operator to manage and operate the hotel described above, including [staffing, reservations, guest services, maintenance, and day-to-day operations], as Owner's agent.

2. Management Fee

Operator's fee: [Base fee of [%] of gross revenue] plus [Incentive fee of [%] of gross operating profit, tied to performance benchmarks].

3. Owner's Reserved Rights

Owner retains approval rights over: [the annual operating budget and business plan, capital expenditures above [Amount], and major contracts].

4. Operating Standards

Operator will operate the hotel consistent with [brand standards, if flagged under a franchise/brand agreement] and industry standards for a property of this class.

5. Employees

Hotel staff are employees of [Operator/Owner, as structured], with Operator responsible for hiring, training, and day-to-day supervision.

6. Bank Accounts and Funds

Operating funds are held in an account [in Owner's name, with Operator having signing authority for operating expenses] per the approved budget.

7. Reporting

Operator provides Owner with [Monthly] financial statements and operating reports, and an annual budget for Owner's approval.

8. Term and Termination

This Agreement runs for [Term], with either party able to terminate for [material breach, failure to meet specified performance benchmarks over a defined period, or a sale of the hotel, subject to any applicable termination fee].

Owner: ______________________ Date: ____________ Operator: ______________________ Date: ____________

*This document is provided for informational and educational purposes only and does not constitute legal advice. Whether hotel employees are legally employed by the owner or the management company (Section 5) has real tax, liability, and labor law consequences — this is a heavily negotiated structural decision in real hotel management agreements, not a boilerplate detail.*