Indemnification Provisions in Hotel Management Agreements
Partner Todd Soloway, head of Pryor Cashman’s Real Estate Litigation practice, co-authored the New York Law Journal article entitled “Indemnification Provisions in Hotel Management Agreements.”
When a hotel owner hires a hotel management company to operate its hotel and executes a hotel management agreement, the hotel owner turns over to the manager virtually complete control over the hotel and its assets, subject only to the owner's consent in certain instances. The manager, with varying and limited approval or consent rights from the owner, dictates the hotel's finances and services provided to hotel guests. In the eyes of the manager, an integral part of any hotel management agreement is the indemnification provision, through which the owner is basically forced to indemnify the manager for any claims, damages or liabilities asserted against the manager save in limited, egregious circumstances.
This article examines the structure of common indemnification provisions in hotel management agreements and what a hotel owner must be cognizant of before agreeing to this potentially burdensome financial obligation.
To read the article in its entirety, please click here.
