Hotels and hospitality businesses operate through layered contracts: hotel management agreements between owners and operators, brand franchise agreements, lease arrangements, food and beverage concessions, and event and banqueting contracts.
Owner-operator disputes are the most significant. They typically concern performance against budgets, management fees and incentive fees, capital expenditure demands, brand standards, and termination rights. These agreements run for many years, and the relationship usually needs to survive the dispute.
Arbitration fits well because it is private — neither owner nor brand wants a public dispute affecting bookings or reputation — and because arbitrators can be chosen for their understanding of hotel operations, performance metrics and management fee structures.
Termination disputes are high-stakes. An operator facing termination may seek orders to stay in place, while an owner may need orders to take back control of the property and systems. Clauses should preserve interim relief and address transition arrangements expressly.
For smaller hospitality businesses — banquet halls, resorts, restaurants — event contract disputes over cancellations, advances and refunds are common. Clear cancellation terms and a simple arbitration clause with an online hearing option can resolve these disputes quickly and cheaply.