Although hotel REITS cannot operate the hotels that they own, they can own as subsidiaries the companies that do operate the hotels.

Question

Quizplus · Accepted Answer

Hotel REITs (Real Estate Investment Trusts) are legally restricted from directly operating hotels due to the requirement to primarily earn income through property leasing. However, they can own subsidiaries that manage the hotel operations, allowing them to indirectly participate in hotel management while complying with REIT regulations.

Although Hotel REITS Cannot Operate the Hotels That They Own