It is a curiosity of hotel management agreement negotiations that aspects of the owner's financing arrangements can be fundamentally impacted at a time when the owner may not even know who its lender will be - let alone the terms and conditions upon which such financing will be provided.
It is a longstanding tradition that operators wish to place controls and requirements with respect to the owner's arrangements with its lender. These controls and requirements need to be considered carefully as failure to do so may result in the owner being required to pay more for its financing than otherwise would be the case or even blocked from borrowing from a lender who is offering the best deal.
An owner and its lawyers and other advisers always need to pay close attention to the operator's requirements in relation to the owner's borrowings. This has never been more apt than now when the sources of available finance are ever diversifying bringing about an ever expanding range of differing attitudes to operator demands.