A brief idea about Types of Hotel Ownership.Are you thinking about investing in a hotel and wondering about the different types of hotel ownership? You might envision yourself at the helm of a successful B&B operation or walking the halls of your own hotel. There are several types of ownership models and methods to achieve your dream. There are two primary kinds of hotels: independent and chain. That doesn’t mean that if you own a hotel you can’t be part of a popular chain. Within the two designations are several options for ownership.

1. Ownership
Hotel
Types
of

2. Operating arrangements of
accommodation and catering
establishments
1 • Sole ownership/Individual
2 • Lease Arrangements
3 • Chain Operations
4 • Professional Managements

3. Sole ownership/Individual
ownership basis and do not have any affiliation
or contract through any other property
They do not have any tie-up with any other
hotels with regards to policy, procedures and
financial obligations.
Self ownership is the concept of property in
one’s own person, expressed as the moral or
natural right of person to have bodily integrity
and be the exclusive controller of his own body
and life

4. • One head control
• Need not take any kind of affiliation
• Chances of creativity in development
• Profit need not share

5. • Capital in his own hand
• Heavy risk
• Lack of new trends
• Liability issues
• High responsibility

6. Lease Arrangements
A Lease is the contractual agreement calling
for the lessee(user) to pay the lessor(owner)
for use of an asset
Most Restaurants most commonly use the
Ground Lease. Ground means that a tenant
pays for long term use of a specified
property for an period of time, usually 2-5
years.

7. Elements
Names of the parties
Starting date and duration of the agreement
Identifies the specific organisation being leased
Provide conditions for renewal or non-renewal
It has a provision for a security deposits and terms
for its return
May have a set of conditions which are there in
described as default conditions and specific
remedies

8. Pros and Cons
Leasing is less capital incentive
Leasing may provide more flexibility to
a business
If the successful, lessors may demand
higher rental payments

9. There are many single owner hotels, yet more and
more hotels and motels are now getting affiliated to
each other.
This gives them the advantage of a large central
organization providing reservation system,
management services, financial strength, expertise,
manpower specialties, merchandises and
promotional help.

10. This network is referred to as the hotel chain’s
reservation system
Main Advantages are,
Streamline the process of reservation
Reduce overall system cost
Attract business for or refer business to another
chain property

11. Serve as an inter-property communication
network
Serve as an accounting transfer tool
Serve as a destination information system
Serve as a connection with GDS system
including several central reservation offices
connected to each other

12. Major international hotel chains

14. Management
Contract/Professional
Management
Management contracts are hotel management enterprises
which operate properties owned by other entities. In some
cases, the hotel owners may arrange to run their properties
through a management contract with an enterprise that
specializes in managing hotels. The reason for this is that
the owner may not:
1. Have the necessary expertise; or
2. Desire to become involved in the operation of the hotel.

15. • This also a type of chain organization
• The contract is entered on long term
basis between the owner and the
operator and usually as per the contract
• Owner retains the legal and financial
responsibilities
• Operator pays for the operating expenses
and collects from the owner and agreed upon
fees
• Owner is responsible for paying taxes,
insurance and serving debt