Hotel management contracts and deficiencies in owner-operator capital expenditure goal congruency

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Title Hotel management contracts and deficiencies in owner-operator capital expenditure goal congruency
Author Turner, Michael J.; Guilding, Christopher John
Journal Name Journal of Hospitality & Tourism Research
Editor Anna Mattila
Year Published 2010
Place of publication United States
Publisher Sage Publications, Inc.
Abstract A review of the findings of prior empirical research concerning hotel management contracts between owners and operators is undertaken. It is noted that management contracts have become increasingly commonplace in the international hotel sector and that gross revenue and gross operating profit are the most extensively used determinants of operator incentive fee remuneration. These findings present a platform for examining how revenue and gross operating profit are deficient in promoting owner-operator goal congruency. In light of this, return on investment (ROI) and residual income (RI) are examined as potential alternative determinants of operator reimbursement. While it is appears that both ROI and RI as determinants of hotel operator fees would represent an advance in promoting owner-operator goal congruency, a rationale outlining how residual income is preferable to ROI is outlined.
Peer Reviewed Yes
Published Yes
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Copyright Statement Copyright 2010 International Council on Hotel, Restaurant, and Institutional Education. This is the author-manuscript version of the paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
Volume 34
Issue Number 4
Page from 478
Page to 511
ISSN 1096-3480
Date Accessioned 2010-11-02
Language en_AU
Research Centre Griffith Institute For Tourism
Faculty Griffith Business School
Subject Commerce, Management, Tourism and Services
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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