Hotel management contract trends in the Middle East

Abstract

When the international hotel chains first established a significant presence in the Middle East in the 1970s and 1980s, it was a developing region, their skills were at a premium, and they could effectively name their own management contract terms. As markets matured in the 1990s, owners took more control over their properties in a bid to increase operating profits, and competition increased among a larger pool of operators. Facing an increasing emphasis on incentive fees, shorter contract periods, fewer renewal options and demanding performance clauses, the chains are now working harder to make less money, and are left only two options: take on more contracts, or invest equity in a bid for better fees (JOURNAL OF LEISURE PROPERTY v 2/1 Jan, 2002 p 66).