Qualified Management Agreement Rules: What You Need to Know

Qualified Management Agreement (QMA) refers to an agreement between a hotel operator and a property owner where the operator is granted the right to operate the hotel on behalf of the owner.

Hotel operators offer their expertise to increase efficiency, reduce expenses, and improve the profitability of the property. This agreement is crucial as it provides clear guidelines to help create a mutually beneficial partnership between both parties.

However, QMA rules can be complicated, and it is important to understand them fully to ensure that the agreement is successful and profitable.

Here are some factors to keep in mind when entering into a QMA:

1. Structure of the Agreement: The QMA should clearly specify the roles and responsibilities of both parties. It should outline the terms of the agreement, including the extent of control the operator has over the hotel operations, the compensation structure, and any incentives.

2. Performance Criteria: The agreement should outline specific performance criteria to ensure that the operator is achieving the expected results. The criteria should be measurable and clear to all parties.

3. Revenue and Expense Sharing: The QMA should specify how revenue and expenses will be shared between the owner and the operator. This includes the percentage of gross revenue that the owner will receive, and how expenses such as marketing and personnel will be managed.

4. Quality Control: The agreement should outline how quality control will be managed. This includes establishing quality standards, regular inspections, and ensuring that standards are met.

5. Duration of the Agreement: The QMA should specify the duration of the agreement and any renewal terms. This includes the option to renew the agreement, and if so, the conditions of renewal.

6. Termination: The agreement should outline the conditions that lead to termination and the process for resolving disputes. This includes a discussion of any penalties for breach of contract, and the timeframe for resolving disputes.

In conclusion, QMA rules play a crucial role in determining the success of a hotel operation. As a property owner or operator, it is important to take the time to understand the agreement fully and ensure that all parties are in alignment. By following these guidelines, you can create a mutually beneficial partnership that maximizes the profitability of your property.