Hotel management agreement negotiations in 2026 are unfolding against a backdrop few owners expected three years ago: the world’s largest third-party operator spent part of last year handing majority control to its own lenders, US hotel construction has declined for fifteen consecutive months, and the four biggest global brand companies are each turning system growth into fee margin faster than revenue is growing. None of that is the generic “asset-light is the future” commentary that has circulated on conference stages since the pandemic recovery. It is a structural change in who owners can realistically choose from, and it shows up first in two line items — the management fee and the termination clause — that determine what a contract actually costs to sign, and to leave. For a GM weighing a rebrand or a revenue manager modelling next year’s fee expense, the direction of that shift matters more than any single quarter’s RevPAR print.
The debate among asset managers and owner-operators right now is not whether the hotel industry looks healthier than it did in 2023 — most of the data says it does. The debate is narrower and more contractual: has the shrinking pool of financially sound, at-scale operators actually moved fee and termination terms in operators’ favor, or is what looks like operator leverage really a supply-side story — fewer new hotels, more conversions, bigger brands compounding scale — that hasn’t yet, or may never, show up in the language owners sign? The evidence below supports the first half of that question more clearly than the second.
Table of Contents
The Category Leader Nearly Broke, Then Consolidation Talk Followed
Aimbridge Hospitality, the world’s largest third-party hotel management company, entered 2025 handing control to its own lenders. In January 2025, Aimbridge signed a restructuring support agreement converting more than $1.1 billion of debt to equity and adding $100 million in new capital, cutting total debt from roughly $1.3 billion to a maximum of $210 million at close. First-lien lenders, not Advent International, became the majority owner. CoStar/Hotel Investment Today, “Lenders take majority stake in Aimbridge,” January 16, 2025 reported the deal had support from 80% of first-lien lenders and the full backing of second-lien lenders and Aimbridge’s existing sponsor.
A year later, Aimbridge CEO Craig Smith described the company as having moved from a “very unhealthy” balance sheet to one of the strongest in the industry, and told CoStar he expects the third-party management sector to keep consolidating “through companies buying each other or merging with one another.” He also put the scale gap in context: Aimbridge manages roughly 1,000 hotels against Marriott’s nearly 10,000 and Hilton’s roughly 9,000 — meaning even the largest independent operator holds under 1% of the branded industry. CoStar News, “Aimbridge courts hotel owners with focus on bottom line, better access to executives,” February 23, 2026.
For an owner, this changes the practical menu. A management company that just rebuilt its balance sheet is a different counterparty than one still carrying distressed debt, and the difference matters most at the exact moment an owner would want leverage — when negotiating renewal terms or shopping a portfolio to a new operator. If the roster of operators an owner can credibly hire without doing extensive financial diligence keeps getting shorter at the top of the market, that scarcity is itself a form of pricing power, independent of anything written into a specific contract clause. It touches the switching-cost line on an owner’s P&L: the cost of walking away from an underperforming manager rises when there are fewer scaled, creditworthy replacements to walk toward.
What’s worth watching is that this consolidation is happening at the top of the market only. Smith himself pointed out that barriers to entry for a small regional operator remain minimal — “you’ve got a cell phone, you have a car” — which is why the sector stays fragmented below the handful of national and global platforms. Owners of trophy or complex assets are facing a narrower field of proven counterparties; owners of smaller, limited-service properties are not.
Construction Has Stalled for Over a Year, and Conversions Are Filling the Gap
US hotel rooms under construction have declined year over year for fifteen consecutive months through March 2026, according to CoStar, “U.S. hotel construction down for 15 consecutive months,” April 29, 2026. STR’s February 2026 forecast update, produced with Tourism Economics, found the development pipeline held nearly 767,000 rooms but only 19% were actually under construction — the lowest share in twelve years — while conversion activity in 2025 reached its highest level since 2016, with nearly 1,900 hotels changing brands or operators in the year. CoStar, “U.S. Hotel Forecast Assumptions – February 2026”. Lodging Econometrics’ Q2 2026 data shows the broader US pipeline down almost 5% year over year even as luxury and upper-upscale segments post double-digit gains, reported by Hotel Dive, “US hotel construction pipeline down in Q2, but higher-tier segments saw growth”.
This is not a US-only pattern in its effects. When ground-up development slows, brand selection for an existing asset becomes the main lever available to an owner who wants better commercial terms — and it is exactly the moment when a brand with an established loyalty program, distribution reach and conversion incentive package becomes harder to substitute. Marriott reported that conversions, including multi-unit deals, represented more than 35% of signings and over 40% of openings in the first quarter of 2026 alone. IHG’s first-half 2026 results showed conversions accounting for 43% of room openings and roughly half of new signings. That means a rising share of the industry’s growth is now coming from owners re-flagging or re-managing hotels that already exist, not from new construction where an owner controls the brand choice from day one.
The commercial consequence lands on system cost and acquisition cost. An owner converting an existing asset typically negotiates from a weaker position than a developer selecting a brand at the ground-up stage, because the property improvement plan, timeline and re-opening costs are sunk into a decision the owner has often already made in principle. As new-build slows and conversion volume rises as a share of total growth, more owners are negotiating from that weaker starting point, even if the headline base-fee percentage on any individual contract hasn’t moved.
What bears watching is the bifurcation by chain scale. Luxury and upper-upscale segments are the only parts of the US pipeline still expanding, which suggests owners of top-tier assets retain more brand-shopping power than owners of mid-market properties competing for a shrinking supply of available conversion candidates and management capacity.
The Big Four Are Converting System Growth Into Fee Margin
| Company | Reporting period | RevPAR growth | Net rooms / system growth | Fee revenue growth |
| Marriott International | Q1 2026 | +4.2% worldwide | +5.0% net rooms (YoY) | Franchise & base management fees +13%, to $1.211bn |
| Hilton Worldwide | Q1 2026 | +3.6% system-wide | +6.3% net unit growth | Management & franchise fee revenue +10.4% |
| Hyatt Hotels Corporation | Q1 2026 | +5.4% system-wide | +5.0% net rooms (trailing 12 months) | Gross fees +8.6%, to $333m |
| IHG Hotels & Resorts | H1 2026 | +4.1% global | +5.0% net system growth (strongest in 7 years) | Fee revenue +7%; fee margin +120bps to 65.9% |
Table: Fee and system growth reported by the four largest listed global hotel companies in their most recent 2026 earnings releases. Figures are each company’s own reported metrics for the periods shown and are not directly comparable across differing quarter/half-year windows. Marriott International Q1 2026 results, May 6, 2026; Hilton Worldwide Q1 2026 results, April 28, 2026; Hyatt Hotels Q1 2026 results, April 30, 2026; IHG H1 2026 results / SEC Form 6-K, August 2026.
In every case, fee revenue or fee margin grew faster than — or closely tracked — RevPAR, and system growth is running ahead of what new construction alone could explain, given the pipeline data above. IHG’s own filing states plainly that its scale is expected to keep taking share specifically because slower new supply strengthens both existing-portfolio RevPAR and conversion opportunities, an area the company describes as a proven strength.
The commercial consequence for an individual owner is about relative bargaining position rather than a single fee number. When a brand company’s overhead grows more slowly than its fee revenue — IHG’s fee-business overhead rose 4% in the first half of 2026 against 7% fee revenue growth — that operating leverage compounds every year it continues, widening the resource and technology gap between the largest brand platforms and any single owner or smaller operator negotiating against them. It does not, on its own, prove that the percentage rate an owner pays on a new or renewed contract has risen; the fee dollars are growing mainly because rooms and RevPAR are growing.
What’s worth watching over the next two to three renewal cycles is whether this operating-leverage gap translates into brand companies pushing harder on ancillary and system fee lines — loyalty program contributions, technology fees, sales and marketing charges — rather than the headline base management fee, since that is where several advisers report the more active negotiation currently sits.
Owners Are Reshuffling Brand and Management Relationships Faster Than Usual
The Hospitality Asset Managers Association’s Fall 2025 Industry Outlook Survey, covering 81 US asset managers representing roughly a third of HAMA’s membership, found that 57% were making or planning changes to brand and/or management strategy. “Management company performance” was cited as a top concern by 25.9% of respondents, alongside demand (77.8%), ADR growth (51.9%) and wage increases (33.3%). HAMA Fall 2025 Industry Outlook Survey, September 16, 2025; concern rankings via Asian Hospitality, “HAMA Survey: Hotel Asset Managers Predict Q4 RevPAR Rise”. HAMA’s Spring 2026 survey of 86 members found sentiment had improved further, with roughly 70% actively pursuing acquisitions and nearly 90% planning renovations. HAMA Spring 2026 Industry Outlook Survey, May 6, 2026.
That level of churn cuts against a simple owners-losing-ground narrative. Asset managers actively reassessing brand and management relationships are, by definition, exercising choice rather than passively renewing on an incumbent operator’s terms. The commercial consequence is that owner behavior in 2025 and 2026 looks more like active portfolio management — shopping operators, testing the market, using renewal windows as leverage points — than resignation to worse terms. Whether that activity is producing materially better contracts, or simply churning owners among a similar set of available operators without changing the underlying fee or termination language, is not something the survey data itself can answer.
What deserves monitoring is the “management company performance” concern specifically. A quarter of asset managers flagging operator performance as a top-three issue, in a year when the largest independent operator was mid-restructuring, suggests owner dissatisfaction with execution may be a bigger driver of contract renegotiation activity right now than any structural shift in operator bargaining power.
The Contract-Term Evidence Doesn’t Fully Match the Consolidation Story
The most rigorous published dataset on how HMA terms have actually moved over time comes from JLL and Baker McKenzie’s analysis of roughly 400 hotel management agreements since the early 2000s, focused on the Asia Pacific region. It points in a more mixed direction than the consolidation narrative alone would suggest. Average base management fees have edged down slightly, from 1.7% to 1.6% of revenue, and incentive fees have also declined, to 6.6% of gross operating profit in the firm’s 2024 survey. Performance-based termination provisions — the mechanism that lets an owner exit for sustained underperformance — now appear in 93% of contracts, a marked increase over the past two decades, even as average contract length has lengthened, from 13 years in 2005 to 17 years currently. JLL & Baker McKenzie, “The Evolving Landscape of Hotel Management Agreements in Asia Pacific,” JLL Insights, September 23, 2024.
Read against the operator-consolidation and supply-scarcity evidence above, this creates a genuine tension rather than a tidy conclusion. Base fees have not documented an upward trend in the one dataset that tracks them systematically over time; if anything, the multi-decade direction runs slightly the other way. Termination rights tied to performance have become more common, not less — the opposite of “loosening” in the sense of owners losing exit options, though a separate question, largely unresolved in public data, is whether the transactional and lender-consent conditions attached to invoking those rights have become harder to satisfy in practice. What has clearly moved in operators’ favor is contract duration and the complexity of ancillary fees — sales and marketing charges above 3% of room revenue rose 32 percentage points between JLL’s 2018 and 2024 surveys — which is a different mechanism than the base fee or termination clause specifically.
This is the piece of the picture worth the closest attention over the next negotiating cycle. No comparably rigorous, named dataset exists yet tracking global base-fee percentages or termination-clause language specifically through 2025 and 2026, so whether the operator-side consolidation documented above is starting to show up in the actual terms owners sign — as opposed to in system growth, fee-margin expansion and counterparty scarcity — is a question the current public record does not settle. Owners heading into a renewal or a new-build brand selection this year have reason to negotiate as though leverage has shifted, given the counterparty landscape, without assuming the underlying fee math has already moved against them.
Data Source
- CoStar/Hotel Investment Today, “Lenders take majority stake in Aimbridge,” January 16, 2025. Reports the terms of Aimbridge Hospitality’s debt-to-equity restructuring, based on the company’s own announcement.
- CoStar News, “Aimbridge courts hotel owners with focus on bottom line, better access to executives,” February 23, 2026. Interview with Aimbridge President and CEO Craig Smith on the company’s post-restructuring outlook and consolidation expectations.
- CoStar, “U.S. hotel construction down for 15 consecutive months,” April 29, 2026. STR construction-pipeline data as of March 2026.
- CoStar, “U.S. Hotel Forecast Assumptions – February 2026”. STR/Tourism Economics forecast, including 2025 conversion volume and pipeline construction share.
- Hotel Dive, “US hotel construction pipeline down in Q2, but higher-tier segments saw growth”. Reporting on Lodging Econometrics’ Q2 2026 US Construction Pipeline Trend Report.
- Marriott International, First Quarter 2026 Results, May 6, 2026. Company earnings release; RevPAR, net rooms, fee revenue and conversion-share figures.
- Hilton Worldwide Holdings, First Quarter 2026 Results, April 28, 2026. Company earnings release; RevPAR, net unit growth and fee revenue figures.
- Hyatt Hotels Corporation, First Quarter 2026 Results, April 30, 2026. Company earnings release; RevPAR, net rooms and gross fee figures.
- IHG Hotels & Resorts, H1 2026 Results / SEC Form 6-K, August 2026. Regulatory filing; RevPAR, net system growth, fee revenue/margin and conversion-share figures.
- Hospitality Asset Managers Association, Fall 2025 Industry Outlook Survey, September 16, 2025. Survey of 81 US-based hotel asset managers, approximately one-third of HAMA’s membership.
- Asian Hospitality, “HAMA Survey: Hotel Asset Managers Predict Q4 RevPAR Rise,” September 16, 2025. Additional detail on HAMA Fall 2025 survey concern rankings.
- Hospitality Asset Managers Association, Spring 2026 Industry Outlook Survey, May 6, 2026. Survey of 86 HAMA members.
- JLL & Baker McKenzie, “The Evolving Landscape of Hotel Management Agreements in Asia Pacific,” JLL Insights, September 23, 2024. Analysis of approximately 400 hotel management agreements in the Asia Pacific region since the early 2000s, covering fee structures, termination provisions, contract length and key money.
A note on scope: The construction-pipeline and HAMA survey data above are US-specific; the JLL/Baker McKenzie contract-term analysis is Asia Pacific-specific; the four listed hotel companies’ fee and system-growth figures are global. No single named primary source currently tracks base management fee percentages or termination-clause terms globally and specifically through 2025–2026, so claims about worldwide fee-rate or termination-clause movement over that exact window should be treated as unconfirmed rather than established.
