Question

5) Which is a true statement about Management Companies?

a. Management companies have contracts where they receive payment for their services and/or some portion of profits
b. Management companies may manage only one chain
c. Management companies will always own the hotels they manage
d. Management companies serve the exact same role as asset management companies

Answer 1

The correct statement about Management Companies is that they have contracts where they are paid for their services and may receive a portion of profits. They do not necessarily own the properties and can manage multiple chains, contrasting from asset management companies.

Step-by-step explanation:

The statement that is true about Management Companies is: Management companies have contracts where they receive payment for their services and/or some portion of profits. This means that these companies are typically contracted by property owners to manage operations, providing expert oversight in exchange for a fee and sometimes a share of the property income. Management companies do not necessarily own the properties they manage and may handle the affairs of multiple brands or chains, so statements suggesting they only manage one chain or always own the hotels they manage are incorrect. Additionally, the role of management companies can be different from asset management companies, as the latter usually focuses more on maximizing the property's value and investment returns rather than daily operational management.