In the accommodation industry, “management rights” refers to the business arrangement of on-site care of hotels, motels, and resort complexes. Interested buyers purchase said rights for the opportunity to have a source of income, and at the same time enjoy the lifestyle that the industry offers.
Generally, many hotel operators own both the property as well as the rights to manage it. Resort Brokers Australia, however, says there has been a growing trend in the industry toward leaving property management to separate entities. Companies do this by offering the management rights for sale.
What makes this set-up attractive? It has been known that management rights offer investors a profitable business and a relaxed and rewarding lifestyle. Read on to learn more about its benefits.
Pure Play Exposure
This offers the benefit of allowing hotel and resort properties to be held within tax-advantaged investment trusts, which allow buyers to get pureplay exposure. Purchase of hotel management rights also requires fairly little capital investment, which makes it more attractive as the returns would be higher.
Apart from purchasing the management rights, the buyer also gets to purchase an accommodation within the complex to live in. Ideally, it should be the one closest or attached to the administration office. If the office is not included in the management rights title, the buyer should be granted exclusive use.
Purchasing management rights of a hotel or other types of accommodation is indeed an appealing prospect. This is a type of arrangement that attracts investors due to the lifestyle it offers. Lounging around the pool all day, however, won’t help you grow the business. There are different factors to make management rights work for you. The most important thing is your personal involvement. The more time and energy you put into it, the greater your chances of success.