Run every operator’s fee structure against one owner-approved operating case before comparing their forecasts. Then evaluate forecast credibility separately.
Use this hotel operator RFP structure
Send the same information pack to a manageable shortlist and request:
- Relevant hotels by size, location, positioning and operating complexity.
- Proposed general manager and above-property support team.
- Departmental staffing and a monthly operating budget.
- Commercial plan by demand segment and distribution channel.
- Every base, incentive, minimum, central-service, technology, procurement, reimbursable and transition charge.
- Capital and working-capital assumptions.
- Reporting samples and account-access arrangements.
- Owner approval rights and proposed performance/termination terms.
- References from comparable owners, including a difficult assignment or departure where available.
- A transition plan with named responsibilities.
Require bidders to identify unavailable evidence rather than replacing it with portfolio-level marketing statistics.
What management fee should you assume?
Use actual proposals. As an observable reference, Pebblebrook’s 2025 annual filing reports base fees generally between 1% and 4% of hotel revenues, alongside incentive and termination provisions that vary by agreement. This does not establish a universal boutique hotel fee or imply that any particular percentage is a good deal. (sec.gov)
Why can the lower headline fee cost more?
Illustration only—not actual operator offers. Assume $5 million revenue and $1.4 million operating profit before all the charges below. Both examples pay a 10% incentive on positive profit remaining after base fees, central charges and a $1 million owner-priority threshold.
| Annual calculation | Operator A | Operator B |
|---|---|---|
| Base fee | 3% = $150,000 | 2% = $100,000 |
| Central charges | $50,000 | $140,000 |
| Incentive fee | $20,000 | $16,000 |
| Total modeled charges | $220,000 | $256,000 |
| Profit after these charges | $1,180,000 | $1,144,000 |
Operator B’s lower base rate costs $36,000 more in this constructed case. The calculation says nothing about service quality or achievable revenue; those require separate evidence.
Which contract provisions need an owner-side issue list?
Ask counsel to document approval rights, budgets and deadlock, bank accounts, key hires, related-party purchasing, records ownership, insurance, indemnities, sale/refinancing rights, termination payments, notice requirements and transition assistance.
For performance tests, record the first test year, exact metrics, comparison-set governance, consecutive-failure requirement, exclusions and cure rights. Goodwin’s July 2026 analysis explains how dual tests, cure payments and exceptions can affect whether underperformance creates an exercisable termination right. Read the actual agreement rather than assuming a missed budget permits dismissal. (goodwinlaw.com)
Gate 7: no operator wins merely because it submitted the highest revenue forecast. Select on evidenced property fit, total owner economics, operating capability and usable contract rights.