Hotels for Lease

Frequently asked questions

What does it mean to lease a hotel?

Under a hotel lease you take on the trading business — you run the hotel, keep the revenue and pay rent to the owner of the property. You carry the operating risk and the upside, without the capital cost of buying the real estate. It is how a large share of the world’s hotels are operated, particularly in markets where developers, funds and family offices own the buildings but do not want to run them.

How is a lease different from a management agreement?

Under a lease, the trading business is yours: you keep the profit and absorb the loss, and you pay the landlord rent. Under a management agreement the owner keeps the business and pays you a base fee plus an incentive linked to performance, so your downside is limited but so is your upside. Hybrid structures — a guaranteed minimum rent plus a share of revenue above a threshold — sit between the two and are increasingly common in the Gulf and Southern Europe.

How much does it cost to lease a hotel?

Rent depends on the market, the location within it, room count, category and how much of the fit-out and equipment is included. As a rule of thumb, rent is compared per room per year, which lets you weigh properties of different sizes against each other. Structure matters as much as the headline figure: a fixed rent, a percentage of turnover and a hybrid with a guaranteed minimum produce very different risk profiles from the same nominal number.

Can a foreign company lease a hotel in these markets?

In most of them, yes. The Gulf states have substantially liberalised foreign ownership of operating companies, and European markets generally place no restriction on foreign operators. What varies is the licensing: nearly every market requires a properly registered operating entity plus a tourism or hotel licence for the property itself. Always take local legal advice on the entity structure and on whether the licence transfers with the lease.

What should I check before signing a hotel lease?

Confirm that the hotel licence and classification are valid and transferable, commission a building and services survey — especially on older stock and in hot or coastal climates — and establish exactly who funds furniture, fixtures and equipment renewal and future refurbishment. Check which corporate accounts, agency contracts and forward bookings transfer, and in markets where employees follow the business, diligence the headcount and employment liabilities before you agree terms.