Most of what is written about management fees comes from law firms, consultancies and valuation houses. Careful, useful, and never written by the company that collects the fee. So here is the map from our side of the table: every place an operator can earn from your hotel, and where ours sits.
The two fees you are quoted
A management agreement rests on two numbers.
The base fee, a percentage of revenue, pays the operator to run the hotel. It is paid whether the hotel makes money or not, so on its own it rewards turnover, not results.
The incentive fee is meant to fix that by tying part of the pay to profit. The wording decides whether it does. An incentive on revenue is a second base fee under another name. An incentive on gross operating profit only pays when the hotel actually makes money. The best versions put an owner's priority in front of it: you take an agreed return first, the operator shares in what is above it. That one clause decides who carries a bad year.
These two numbers are what owners compare, and what operators are happy to have compared, because the rest is elsewhere.
The earnings that do not announce themselves
A technical services fee covers the operator's work before opening: design, construction, fit-out. Real work. The problem starts when it is folded into the same open-ended engagement as running the hotel, so nobody can see where the project ended and the operation began.
Central services are the systems an operator or brand runs across its portfolio: reservations, marketing, loyalty, procurement. Each hotel is charged for them, often as another percentage of revenue, and what a single hotel gets back is hard to read from the invoice.
Purchasing and supplier rebates are the quiet one. An operator buying for many hotels gets paid by suppliers for the volume. That money never appears in your P&L, but it shapes it: the preferred supplier is the one that pays the operator best, not the one that serves the hotel best. A mandated vendor, resold software with a margin on the way through, or a fee calculated on spend all work the same way, and a fee on spend rewards spending.
None of this is hidden. It is in the documents. It is spread across enough lines that the total is rarely legible in one place, and one place is exactly where an owner comparing two proposals needs it. Lease owners should read this section twice: a hybrid lease with revenue-based rent and brand clauses carries most of the same items, filed under rent.
Adding it up
One question does most of the work: across base fee, incentive, central services and anything earned on the buying side, what does this operator take from my hotel in a year, and can I see it as one number? An operator who answers that plainly has told you how it will treat your money. Two smaller ones: is the incentive on revenue or on profit, and where does the pre-opening project end and the operation begin? Those should be priced apart.
Where ours is different
We charge the two fees an owner expects: a base fee for the operational discipline, and a share of gross operating profit with the owner's priority in front of it, so we earn more when the hotel does. The difference is what is not around them. Every supplier contracts with the owner's own entity, at the supplier's price. We resell nothing, mark up nothing and charge nothing on spend.
On rebates we would rather be precise than pure. We are tied to no vendor, and a recommendation follows the hotel. Occasionally a supplier we bring into a project pays us a referral fee for the introduction. It is rare, it is disclosed to the owner every time, and it sits outside the owner's costs, never inside them. That is the whole list. It is a narrower promise than it sounds, and an easy one to check.
The full commercial model is on the hotel management page; the structural reasons behind it are in the owner-aligned management model. Fee structure and references from properties under management are available on request. Start the conversation.
Related reading: The owner-aligned management model, explained · Who gets the hotel in the divorce?
Weave projects is a hospitality development and management company based in Amsterdam, working across the Netherlands and Europe.