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Owner and Operator Bargaining Power Factors in Hotel Management Contract Negotiations

not surprisingly, its provisions tend to favor the operator’s position. The operator wishes to maximize his control over the property’s operation for an uninterrupted and extended period of time. The owner, on the other hand, wants the freedom to monitor the operator’s performance, to change or to influence the operator’s behavior during the term of the contract, and to terminate the contract if he is justifiably dissatisfied with the operator’s performance. As a result, certain provisions of the form create owner concerns. During negotiations, the owner attempts to reduce or eliminate these concerns, while the operator tends to resist revisions that weaken his position or promise to create operator concerns during the term of the contract. The negotiation phase is an extremely important step in the management contract process; if owner and oper-