GENERAM MANAGER MANUAL ( LEGAL & INSURANCE )

LEGAL & INSURANCE

LAWYER / SOLICITOR

GENERAL PRINCIPLES

·         Selection should go through XXXXXXXXXXX Head Office.

·         When choosing a hotel lawyer or solicitor, the General Manager should pay particular attention to the following points:

CHOICE OF A LAWYER

·         The situations most frequently encountered should be, in that order:

·         Personnel issues

·         Building and maintenance issues

·         Shop leases

·         Providers of goods

·         City ledger.

·         The track record of a prospective lawyer should therefore be examined

in this context.

REPUTATION

·         Do not necessarily go for the most famous lawyer in town. The vast majority of hotel legal issues should be quite routine. Top lawyers would most probably be expensive, and anyway should delegate most of their work to a junior lawyer.

·         Choose a lawyer who should be going to give you his personal attention, at any time, on call.

·         Make sure that this lawyer values cooperating with XXXXXXXXXXX.

·         If an objective opinion should be sought, inquire with local embassy services. You may also contact the XXXXXXXXXXX Head Office for a cross-check through professional channels.

CONFLICT OF INTEREST

·         As a rule, avoid legal council that may imply a conflict of interest i.e. using the Owning Company's lawyer, reputable lawyer also used by a competitor Hotel or Hotel Chain.

FEES

·         Lawyers are usually expensive, some more than others. Make it clear that the hotel wants to work on the basis of a fixed and pre-negotiated retainer. When negotiating a retainer agreement, make sure that the lawyer does not make multiple exceptions to what should be included in his annual retainer.

·         It should be fairly standard practice for lawyers to claim litigation fees and expenses in addition to a retainer, when a case goes to court. Make sure that the lawyer states his hourly billing rate, and carefully check each invoice.

CONTRACTS

SUPPLIERS

·         Three competitive bids should be obtained prior to contract execution.

·         Regular quotes obtained in order to check competitiveness of nominated suppliers (at least annually).

·         When contracts should be in force for more than 2 years, the hotels requests new competitive bids to ensure prices paid remain competitive.

·         Contracts should be reviewed prior to their renewal by tacit agreement.

SALES CONTRACTS

·         A standard sales contract form must be in place for:

·         Groups

·         Banquets

·         Local Companies

·         These sales contracts should be systematically used and signed by both parties.

·         These sales contracts should be reviewed every 2 years by an accredited legal advisor.

LEASE CONTRACTS

·         A contract exists for each lease of this nature.

·         The contracts should be reviewed by a professional legal person.

·         Increases stated in the lease contracts should be applied in due course.

·         XXXXXXXXXXX policy and procedures concerning all lease approvals should be complied with.

CONCESSIONS - SHOPS AND RETAIL

·         Authorization required by XXXXXXXXXXX CEO, plus Owner.

SHOP LEASE

·         All lease and sub-lease agreements must be approved by the XXXXXXXXXXX CEO and the Owner.

·         Our clients require certain types of commercial services in our hotels. On the other hand.

·         Obviously, this has to be checked with local lawyers according to the particular circumstances of each country.

SETTING UP CONCESSIONS

·         Setting up shops in arcades in hotels prior to opening should be the responsibility of the opening General Manager with the approval of the XXXXXXXXXXX CEO.

·         Contracts should be prepared and finalized between the concessionaire and the hotel. The basis of the agreement should be a yearly set royalty, which should be reviewed on a yearly basis. Specific clauses regarding non-competition should be included and respected

PAYMENT OF SHOP ROYALTIES

·         The methods of payment of Hotel concession royalties should be stipulated in the license contract. These fees should be payable monthly and directly to the Hotel.

·         It should be the responsibility of the Hotel Financial Controller to ensure that royalty payments should be made regularly. Should a concession experience financial difficulties, the General Manager, with the agreement of the XXXXXXXXXXX CEO, must take the necessary steps to collect royalties owed to the Hotel.

·         Should it become necessary to break a contract, this decision should be to be taken by the Hotel GM with approval from XXXXXXXXXXX.

CONCESSIONS ADVERTSING

·         Concessions should be a source of income for the hotel as royalties should be included in Gross Operational profit (GOP). It should be therefore to the benefit of the Hotel to ensure the success of its concessions and to ensure guests should be well informed of the services provided. The Hotel Should assist concessions with advertising wherever possible, e.g. Hotel directory, in house television information channel etc provided it conforms to the corporate image and it does not interfere with the hotel décor. Illuminated  signboards to be limited in size and quantity and located in purpose build display units in assigned areas

·         A check should be made to unsure that members of the Hotel Staff, especially those in guest contact, should be recommending Hotel shops to guests rather than those outside the hotel.

INSURANCE

XXXXXXXXXXX International requires appropriate insurance coverage for all hotels and that Xxxxxxxxxxx International is named as ‘co-insured’ on all insurance policies.

Owner’s Insurance

The following discussion of Owner’s Insurance is intended to familiarise the Financial

Controller with the available forms of insurance relating to the protection of the owner. Amounts of coverage and types of coverage need to be tailored to the needs of each project.

All Risk – Any risk that is not covered by this endorsement must be stated in writing.

Extended Coverage – Includes windstorm, hail, explosion (excluding steam boilers),

and riot, riot attending a strike, civil commotion, aircraft, vehicles and smoke.

Extended coverage does not cover collapse.

Earthquake and Flood – May be necessary in some geographic areas. This coverage may be costly and an alternative would be to include these risks by endorsement of

the All Risk policy.

Steam Boiler and Machinery Insurance - This is a separate policy for steam vessels, boilers and turbines not covered under extended coverage.

There are two ways to write owner’s property insurance:

Ø  Reporting Form – The owner reports periodically to the insurance company, the value of construction in place and premium increases gradually.

Ø  Completed Value Form – Insurance is based on the best estimate of the completed value of the project.