| HBS Case Collection
The Paris Opera Hotel (TN)
This case provides an introduction to hotel investment, development and management from the perspective of a short term oriented investor group. Students learn that hotels are a unique real estate property type, with performance often tied to the broader economy, and returns dependent upon sound marketing and an efficient operating strategy, usually executed by a third-party manager. As such, hotels can reasonably be viewed as operating companies—not simply real estate—and therefore carefully structured operating agreements, which align incentives for owners and third-party managers, while maximizing returns, are vital. Class discussion of the selection of an operating company, and potential ways to structure the agreement, allows students to hone their negotiation instincts in a real estate context.
Keywords: real estate;
Segel, Arthur I. "The Paris Opera Hotel (TN)." Harvard Business School Teaching Note 213-066, December 2012.