Hotels can also be managed under management contracts, which generally occur with already existing hotels entering into agreements with other hotel operators to provide professional management services, thereby agreeing to pay fees for these services and these are long-term agreements. Such contracts have basic advantages and disadvantages to both the owners and the operators. One such advantage or disadvantage is "low downside risk".How is this low downside risk considered?

Question

Quizplus · Accepted Answer

The low downside risk is considered an advantage for the operator as it reduces their financial risk in the operation of the hotel. The owner may have to bear the risk of any financial losses.

Hotels Can Also Be Managed Under Management Contracts, Which Generally