Key Money in Hotel Management Agreements – Boon or Burden? ...Middle East

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Key Money in Hotel Management Agreements – Boon or Burden?
In the competitive world of hotel development and acquisitions, few incentives capture an owner’s attention more quickly than key money. This upfront payment, offered by a hotel brand or operator, can feel like free capital. However, behind the allure lies a complex set of trade-offs that can significantly impact profitability, flexibility, and asset value for years. Understanding how key money works—and the strings attached—is critical for making a sound business decision.

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