ABSTRACT
The chapter begins by discussing the early development of management contracting, at the time viewed as a risk-free initiative for international expansion.
The hotel management contract offered by a hotel chain advances a package of services which enable the operation and management of a specific branded hotel offering. These services centre upon managerial capabilities and expertise which are transferred through human resources. The first part of this chapter explores the transference of managerial expertise, especially the role of the General Manager. Due to the agency-principal relationship underpinning contracts, there are diverse influences, issues, and parties involved. The dynamics of the relationship between the two parties – operator and owner – in terms of the balance of power and possible misalignments are investigated. It is suggested that there is less appetite for management contracts delivered by hotel chains and a short section looking at this acts as a bridge leading to the final section of the chapter which examines the entry of White Label Management firms. Working to a different business model, the latter are led by former hotel chain employees and act as boundary spanners between franchisors and owners. However, it is argued that they are cost-focused rather than being truly innovative.
