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Generally, separate corporations were formed to execute
and/or hold each management contract. Some of the more
significant purposes for forming separate entities were to limit
liability and take advantage of possible local tax benefits. The
separate hotel management companies were usually made wholly
owned subsidiaries of either HIC or HHK, and most were
incorporated either in the country where the hotel was located or
in Hong Kong. Generally, no consideration was paid when
management contracts were assigned from a signing entity to a
hotel operating entity. On one occasion, however, Hyatt of
Singapore (HS) paid HIC $500,000 for the assignment of the
management agreement for the operation of the Hyatt Regency
Singapore. In numerous instances, HIC guaranteed the performance
of the signing subsidiary. HIC was involved in the development
of contract opportunities primarily in Central America, Europe,
Africa, and the Middle East, whereas HHK was active in the Asia-
Pacific area. Ultimately, HHK evolved into a master hotel
management subsidiary responsible for the entire Asia-Pacific
region.
Hyatt International Canada Ltd. was established in August
1969, as HIC’s Canadian subsidiary, and three ground-up hotels
were opened, two of which closed by 1979, and the remaining hotel
was transferred in exchange for consideration to Hyatt Domestic
in 1984.
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