Hotel companies are increasingly opting for management contracts over ownership because ____.

Hotel companies are increasingly opting for management contracts over ownership primarily because management contracts require less capital investment. When a hotel operates under a management contract, the management company is responsible for running the property, while the owner retains ownership of the real estate. This arrangement allows hotel companies to expand their brand presence and operate multiple properties without the financial burden of owning the actual buildings.

Opting for management contracts minimizes financial risk and frees up capital that can be allocated elsewhere, enabling companies to invest in their brand, marketing, and operations rather than tying up resources in land and property development. Through this strategy, businesses can maintain flexibility and adaptability in the competitive hospitality market, making it an attractive choice for growth and sustainability.