Hotel Revenue Glossary · Financial

Owner's Priority (Owner's Return)

A minimum operating profit threshold that must be achieved before the management company earns its incentive fee. The owner's priority ensures the property owner receives a baseline return on investment before the operator participates in profit sharing.

Why it matters: Owner's priority creates a performance floor that aligns management company and owner interests. Revenue management is directly responsible for helping exceed this threshold, which determines whether the management company earns its incentive fee.

All glossary terms Management Fee NOI (Net Operating Income) EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)