Service Properties Trust (SPT) has received a notice of termination regarding the management agreement for 22 Hyatt Place hotels owned by subsidiaries of SPT, the company announced.
Hyatt's obligations under the agreement, which requires minimum annual returns of $22 million, are supported by a $50 million limited guaranty, according to SPT. The company added that while Hyatt is current with its payments to date, it recently exhausted the guaranty, allowing Hyatt to terminate the agreement upon 90 days' notice. The effective date of the termination is April 8.
SPT and Hyatt are in discussions regarding possible changes to the management agreement in which some or all of the hotels could remain Hyatt Place properties, according to SPT. However, if the discussions do not lead to a new management agreement, SPT expects to transfer management of the 22 hotels to Sonesta International Hotels Corp. under the Sonesta Select brand.
This possible change in management of Hyatt Place properties follows InterContinental Hotels Group and Marriott International terminating management of 103 and 122 properties, respectively, owned by Service Properties Trust. Those properties are now managed by Sonesta, which earlier in January agreed to acquire Red Lion Hotels. SPT owns 34% of Sonesta.
Source: Business Travel News