HVS London is one of the leading consulting service organisations around the world. The company focuses on a variety of different industries including the hotel, mixed-use, shared ownership, gaming and leisure. HVS has been established since 1980 and through the use of a network of 40 offices and a team of more than 350 professionals the business is able to provide a wide variety of services that cannot be matched by other companies in the hospitality industry.
HVS London have carried out a report that implies owners have become more knowledgeable about them over recent years and that global hotel operators have become even more powerful, which makes it more difficult for hotel owners to negotiate trade leases with the global operators. Hotel lease contracts are traditionally quite popular in Europe and are the preferred method of leasing for a lot of institutional investors. These types of management contracts are becoming more and more customary as more investors look at improving the profit their hotel can make by trading. As these trading leases are becoming more common, most larger international hotel brands are becoming less and less willing to offer this kind of leases.
These kinds of management contracts are becoming more complex, and also take fair longer to negotiate than before, and include within them a wide range of terms and restrictions that could then lead to the help of a specialist advisory firm. Because many hotel owners are becoming more knowledgeable, they are more selective about their operator selection. Hotels are also becoming a more mainstream asset which has led to a number of different operating models has arisen; including third party operators to give the owners more flexibility. Other hybrid contracts that combine lease and management services are also becoming more common. In this case the hotel owners look to go in to partnership with a branded hotel company to manage the hotels for a set period of time before becoming a franchise contract.