Financial terms dominate HMA negotiations. The clauses protecting an owner’s own people are just as consequential, and far more often overlooked.
Most hotel management agreement negotiations pour enormous energy into fees, performance tests, and termination rights. Far less attention typically goes to a set of issues that can prove just as damaging over the life of a relationship, and in genuinely difficult negotiations, have been known to come close to breaking the deal entirely: how the operator treats the owner’s own people. A hotel’s staff — its General Manager, its chef, its sales team — are not incidental to the investment. In a service business, they are a large part of what the owner is actually paying to build. An HMA that leaves that talent unprotected is leaving real value exposed.
General Manager Stability — Five Years Is Not an Arbitrary Number
A General Manager needs meaningful time to genuinely shape a hotel’s performance — to build relationships with key accounts and the local market, embed operational standards, develop the team beneath them, and see a business plan through from initial implementation to measurable results. Yet operators often reserve broad, effectively unilateral discretion to reassign or replace a GM at will, with limited or no real consultation with the owner. Owners should push for a defined minimum tenure protection, in the order of five years, restricting the operator’s ability to remove or reassign the GM within that period without genuine owner consultation, except in cases of clear underperformance or misconduct. A revolving door of General Managers is rarely in an owner’s interest, however routine it may be from the operator’s own internal staffing perspective.
Not a Training Ground — At the Owner’s Expense
A related but distinct concern is the practice of placing junior or developing operator staff at a hotel specifically to build their experience, only to move them on to another property once that development has been completed — with the owner having borne the ongoing cost of employing and training that person throughout. Owners should require that staff not be seconded to other properties within the operator’s portfolio without the owner’s specific consent, and should question closely whether a given hotel’s staffing pattern reflects genuine long-term resourcing or a rotating training pipeline funded at the owner’s expense.
The Non-Solicitation of Staff and Post-Departure Poaching Problem
Perhaps the most commercially damaging and least discussed risk is what happens after a valued staff member leaves. An owner invests real time and cost in developing a strong chef, a capable maître d’, or an effective sales manager — and it is not uncommon for that same individual to subsequently be offered a position at another hotel within the operator’s own portfolio, sometimes within a matter of months. The owner has funded the development of that talent; the operator captures the benefit elsewhere, at zero cost to itself, while the owner is left to rebuild. This is a genuine and recurring source of friction in HMA negotiations, and a reasonable, commercially standard protection is a restriction preventing the operator from directly employing a departed staff member for a defined period, commonly around six months, after they leave the property — a period consistent with standard non-solicitation practice used more broadly in commercial agreements outside the hotel sector as well, so this is not an unusual or extreme ask.
In my own experience acting for owners across South East Asia, this specific issue — an operator being prevented from soliciting or poaching staff or simply agreeing not to employ staff who have resigned from an owner’s hotel for say 6 months — has come closer to becoming an outright deal-breaker in HMA negotiations than any other single issue I have encountered, financial terms included. That is itself telling. If operators are prepared to let an entire negotiation stall over preserving their freedom to solicit and poach or re-hire departed staff says a great deal about how much genuine commercial value they place on that freedom, and, by extension, how seriously owners should treat the risk it represents rather than dismissing it as a minor, secondary point.
Further Staffing Issues Worth Negotiating
- A defined Key Employee list with genuine consultation or approval rights. Rather than leaving all staffing decisions to the operator’s sole discretion, owners should seek a specific list of key positions — General Manager, Executive Chef, Director of Sales, Director of Finance among them — where the owner has a defined right to be consulted, or in stronger negotiating positions, a right of approval, before appointment, removal, or transfer.
- Cross-charging and cross-subsidisation. Owners should confirm that staff nominally employed and paid for by the hotel are not, in practice, spending material time supporting other properties in the operator’s portfolio or the operator’s own regional or corporate functions, with the owner’s hotel quietly bearing the cost of work performed elsewhere.
- Advance notice of planned departures or transfers. Genuine advance notice of any planned change to a key staff member’s role gives an owner real time to prepare and provide input, rather than being presented with a staffing change as a fait accompli.
- A succession planning obligation. Operators should be required to maintain a proper succession plan for key positions, rather than leaving critical roles vacant, or filled on an ad hoc interim basis, for extended periods following an unplanned departure.
Why This Deserves the Same Rigour as the Financial Terms
It is easy, in the middle of a lengthy HMA negotiation, to treat staffing provisions as secondary to fees, performance tests, and termination rights. In practice, in a genuinely people-driven business like hospitality, the treatment of an owner’s own staff is not a secondary issue at all — it goes directly to the quality and consistency of what the owner is actually paying the operator to deliver. These provisions have, in real negotiations, come close to derailing a deal entirely, and that is not a coincidence. They deserve to be treated as core commercial terms from the outset, not as an afterthought addressed once the financial architecture of the agreement has already been settled.
Tim Dobson is the Founding and Managing Partner of Dobson & Partners, a boutique international law firm based in Bangkok, and is ranked by Chambers Asia-Pacific for his hospitality and hotels practice. He has acted for hotel owners across Thailand, Vietnam, Cambodia, Bangladesh and the Maldives in the negotiation of hotel management agreements against most of the world’s major international hotel operators.