A Hotel Operation Agreement in Vietnam for 2025 is a legally binding contract outlining the terms and conditions under which a hotel owner (the “Owner”) engages a hotel operator (the “Operator”) to manage and operate the hotel property. This agreement is crucial for defining the roles, responsibilities, and financial arrangements between the two parties. It must comply with various Vietnamese laws effective in 2025, including but not limited to the Commercial Law, the Law on Tourism, the Law on Real Estate Business, and general contract law principles under the Civil Code.

Here’s a typical structure of a Hotel Operation Agreement in Vietnam, keeping in mind the relevant legal framework:

I. Preliminary Provisions:

• Definitions: Clear and precise definitions of key terms used throughout the agreement (e.g., “Hotel,” “Operator,” “Owner,” “Operating Budget,” “Gross Operating Profit,” “Intellectual Property”).
• Purpose of the Agreement: Clearly states the objective of the agreement, which is the engagement of the Operator to manage and operate the Hotel.
• Term of Agreement: Specifies the commencement date and the duration of the agreement, including any options for renewal and the conditions thereof. Commercial leases in Vietnam typically run for around five years, but management agreements can have different terms.
• Scope of Appointment: Defines the extent of the Operator’s authority and responsibilities in managing the Hotel. This may include day-to-day operations, marketing, sales, maintenance, and financial management.
• Representations and Warranties: Statements by both the Owner and the Operator regarding their legal standing, capacity to enter into the agreement, and the accuracy of the information provided.

II. Obligations of the Operator:

• Management and Operation: Detailed clauses outlining the Operator’s responsibilities in managing the Hotel according to agreed-upon standards and budgets. This includes:
  • Ensuring compliance with Vietnamese laws and regulations related to hotel operations, food safety, labor, and tourism. Decree 168 provides technical requirements for hotels, such as a minimum number of bedrooms, reception, shared bathroom, parking, kitchen, and 24-hour staff.
  • Maintaining the quality and standards of the Hotel in line with its classification (e.g., star rating as per Circular 06/2022/TT-BVHTTDL).
  • Employing and supervising hotel staff, ensuring they have the necessary qualifications and training.
  • Implementing and overseeing operational policies and procedures.
  • Managing reservations and revenue.
  • Maintaining the Hotel’s facilities and equipment.
  • Ensuring the safety and security of guests and staff.
• Marketing and Sales: Outlines the Operator’s responsibilities for developing and implementing marketing and sales strategies to promote the Hotel and maximize occupancy and revenue.
• Financial Management and Reporting: Specifies how the Operator will manage the Hotel’s finances, including:
  • Preparing and managing operating budgets, subject to the Owner’s approval.
  • Collecting revenues and making payments. Payment terms for commercial leases are typically quarterly, but can vary.
  • Maintaining proper accounting records in accordance with Vietnamese accounting standards.
  • Providing regular financial reports to the Owner.
• Compliance with Laws: A specific clause emphasizing the Operator’s obligation to comply with all applicable Vietnamese laws and regulations. This includes obtaining necessary food safety certificates from the Ministry of Industry and Trade if providing food services.

III. Obligations of the Owner:

• Ownership and Legal Standing: Confirmation of the Owner’s legal ownership of the Hotel and their right to enter into the agreement.
• Provision of the Hotel: Ensuring the Hotel is available for operation by the Operator in accordance with the agreed-upon terms.
• Financial Contributions: Specifying the Owner’s responsibilities for capital expenditures, reserve funds (e.g., for furniture, fixtures, and equipment – FF&E), and potentially working capital. Equity capital requirements for land-use projects vary based on the land area.
• Cooperation: Obligation to cooperate with the Operator in the performance of their duties and provide necessary information and access.
• Compliance with Laws: Ensuring the Hotel property itself complies with relevant regulations (e.g., construction permits, fire safety).

IV. Fees and Compensation:

• Management Fees: Details the fees payable by the Owner to the Operator for their services. This can be structured in various ways, such as a base fee (often a percentage of gross revenue), an incentive fee (based on performance metrics like Gross Operating Profit), or a combination of both.
• Reimbursement of Expenses: Specifies which expenses incurred by the Operator in managing the Hotel will be reimbursed by the Owner.
• Payment Terms and Procedures: Outlines how and when payments will be made.

V. Intellectual Property:

• Brand Standards: If the Hotel is part of a branded chain, this section will address the use of trademarks, service marks, and brand standards. Trademark registration in Vietnam involves submitting an application to the relevant authorities.
• Proprietary Information: Clauses protecting the confidential information of both parties.

VI. Indemnification and Liability:

• Indemnification by Operator: Outlines the circumstances under which the Operator will indemnify the Owner against losses, damages, and liabilities.
• Indemnification by Owner: Outlines the circumstances under which the Owner will indemnify the Operator.
• Limitations of Liability: May include clauses limiting the liability of either party, to the extent permitted by Vietnamese law.

VII. Insurance:

• Specifies the types and levels of insurance coverage that the Hotel should maintain, and which party is responsible for obtaining and paying for such insurance.

VIII. Termination:

• Events of Default: Lists the events that would constitute a breach of the agreement by either party and allow for termination.
• Termination Procedures: Outlines the process for terminating the agreement, including notice periods.
• Consequences of Termination: Specifies the obligations of both parties upon termination, such as the transfer of management responsibilities, handover of records, and settlement of outstanding payments.

IX. Governing Law and Dispute Resolution:

• Governing Law: Specifies that the agreement will be governed by the laws of Vietnam.
• Dispute Resolution: Outlines the procedures for resolving any disputes that may arise under the agreement. This could include negotiation, mediation, or arbitration in Vietnam. Hybrid arbitration agreements might also be considered for enforceability.

X. Miscellaneous:

• Force Majeure: Addresses unforeseen circumstances that may prevent either party from fulfilling their obligations.
• Assignment: Specifies whether either party can assign their rights or obligations under the agreement to a third party.
• Entire Agreement: States that the written agreement constitutes the entire understanding between the parties.
• Amendments: Requires any modifications to the agreement to be in writing and signed by both parties.
• Notices: Specifies how official communications between the parties should be delivered.

Key Vietnamese Laws Applicable in 2025:

• Civil Code: Provides the general framework for contractual agreements, including principles of formation, performance, and breach of contract.
• Commercial Law: Governs commercial activities, including service provision and agency agreements, which may be relevant to hotel operation.
• Law on Tourism: Regulates tourism activities, including accommodation establishments, and sets out conditions for operating hotels.
• Law on Real Estate Business: Addresses the transfer and management of real estate, which is relevant to the hotel property.
• Law on Investment: If the hotel operation involves foreign investment, this law and its guiding decrees will be applicable, outlining procedures for investment registration and business licensing. Foreign investors typically need to register their investment and obtain a business license to operate a hotel.
• Labor Code: Governs employment relationships, including contracts, wages, working hours, and termination.
• Law on Food Safety: If the hotel provides food services, compliance with food safety regulations and obtaining necessary certifications are mandatory.
• Decree 168/2017/ND-CP (and any amendments): Details regulations on tourism, including standards and classifications for tourist accommodation establishments.
• Circular 06/2022/TT-BVHTTDL: Sets out the national standards for hotel classification (star ratings).

It is crucial for both the Owner and the Operator to seek legal counsel in Vietnam to ensure that the Hotel Operation Agreement is properly drafted, complies with all applicable laws in 2025, and adequately protects their respective interests.