Fluctuating Fees: The Impact of the COVID-19 Industry Recession on Management Fees
Hotel management contracts typically include two primary components of compensation for the management company—a base fee and an incentive fee. The base management fee is generally derived as a percentage of total revenue. In addition, owners may pay the management company an incentive fee once they reach a designated profit threshold. The incentive fee is designed to make management more conscious of the bottom line since owners achieve their returns and pay their debts from […]
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