IHG, Hospitality Properties Trust rework management contract

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InterContinental Hotels Group (IHG) and Hospitality Properties Trust (HPT), a hospitality-focused real-estate investment trust, have reworked their existing management contract. According to a report in hotelnewsnow.com, the two parties have consolidated, revised and extended four existing management agreements for 130 hotels into one new 25-year management contract. HPT owns 289 hotel properties, with approximately 43,000 rooms, in the US.

As part of the deal, up to 42 hotels (6,751 rooms) will be rebranded or sold by HPT, leaving 88 hotels (13,131 rooms) under IHG’s brands in the revised single management contract. The 42 hotels will be removed from IHG’s system in 2011, in addition to one hotel which has already been sold by HPT.

The IHG guarantee on the previous contracts was eliminated and will not be renewed. Instead, IHG will fund a new security deposit of USD 37 million to cover any future shortfalls to HPT’s owner priority returns. This was paid to HPT on July 25, 2011. The balance of the security deposit will be repaid to IHG at the end of the contract.


http://www.travelbizmonitor.com/ihg-hospitality-properties-trust-rework-management-contract-14077
 
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