APAC Hotel Management Terms Rise to 17 Years on Average
Skift Take
The Hotel Management Contract Survey 2024 by JLL and Baker McKenzie found that the average term of hotel management agreements in Asia Pacific increased to 17.4 years, with varying durations by market, declining base fees, rising sales and marketing fees, and a growing focus on performance-based incentive fees and termination provisions.
JLL and Baker McKenzie published a study, Hotel Management Contract Survey 2024, with the major findings including that the initial term of hotel management agreements in Asia Pacific increased by four years on average since 2025, reaching 17.4 years in 2024. Regional operators generally have a shorter term and an appetite for more flexibility. The survey comprised 400 hotel management agreements analyzed over the past 20 years and included 145 hotel management contracts signed between 2018 and 2023. The length of the HMAs differ by market, with Maldives and Japan at 26 and 23 years, respectively, where there are a higher number of luxury hotel developments and owners prefer to lock in brands for longer. Australia is more tailored to shorter agreements with an average of 15 years as owners prefer shorter terms and unencumbered asset sales. The make-up of fees is a factor influencing the duration. The survey showed the average base fee in contracts has come down to 1.6% o
