Contracts between hotel owners and hotel management companies determin

Question

Contracts between hotel owners and hotel management companies determine the administration of many hotel chains. Typically, owners bear the financial responsibility for profits and losses, while management companies control marketing strategies, staffing, and other day-to-day operations. Simply stated, the owner provides financing, and the management company, in some cases a management chain, furnishes its expertise in the running of the hotels, as well as providing publicity campaigns and established name recognition. It was only when the United States economy entered a troubled stage that the problems inherent in this structure became more readily apparent. Alarmed by their faltering properties, owners began to lobby for fee reductions and shorter contracts with management companies, sometimes linking the fee schedules to a management company's performance.

Some management companies have sought to align themselves even further with the owners and have taken equity stakes in their properties. This reconfiguration of the balance of responsibility and control has been furthered by legal suits brought by owners attempting to redress what they say has been gross mismanagement. The attention focused on these suits should stand as a firm reminder to owners of all types of assets to maintain some control over the handling of those assets.

Some management companies have sought to align themselves even further with the owners and have taken equity stakes in their properties. This reconfiguration of the balance of responsibility and control has been furthered by legal suits brought by owners attempting to redress what they say has been gross mismanagement. The attention focused on these suits should stand as a firm reminder to owners of all types of assets to maintain some control over the handling of those assets.    1 
 1. The primary purpose of the passage is to

A. redress certain wrongs perpetrated by owners of hotels
B. stress the need for fiscal responsibility in the hotel industry 
C. analyze a situation and point out its broader implications
D. present one type of contract used in the hotel industry
E. point out the dangers of mismanaging hotels

2 
 2. According to the passage, how have some owners attempted to rectify problems with management?

A. They have decreased their total level of investment.
B. They have offered management companies changes in their contracts that would benefit both parties.
C. They have focused attention on the poor hiring practices of management companies.
D. They have sought restitution in court.
E. They have recognized the problems inherent in a troubled economy.

3 
 3. According to the passage, some management companies have taken equity stakes in their properties in order to

A. create stronger alliances with hotel property owners
B. prevent owners from tying fees to performance
C. install a system of checks and balances in the industry
D. maintain control over daily operations
E. gain a foothold in a troubled economy

4 
 4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A. They negotiated with management companies for longer contracts in exchange for smaller fees.
B. They attempted to align themselves financially with management.
C. They took over the daily operations of their hotels.
D. They tried to shorten their contracts with management.
E. They withheld fees from management in exchange for more control over their properties.

5 
 5. It can be inferred from the passage that the agreements typically entered into by management and owners

A. worked as long as the owners did not get too greedy
B. were to the benefit of both parties throughout the 1970s
C. had problems that were not immediately evident
D. were ideal for those owners with a hands-on approach to business
E. favored management in most situations

6 
 6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

A. devising an advertising campaign
B. booking a national accounting convention
C. contacting a temporary employment agency
D. hiring celebrities for promotional appearances
E. providing financing for expanding facilities

7 
 7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

A. A lack of trust on the part of owners in the capabilities of management
B. A reconfiguration in the balance of responsibility between the two parties
C. A demand by owners for a bigger role in daily operations
D. A downward trend in the economy in general
E. A new program that tied fees to management performance

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Pankaj0901 · Answer

Answer:
1. A
2. D
3. B
4. D
5. C
6. E
7. D

1. The primary purpose of the passage is to

A. redress certain wrongs perpetrated by owners of hotels
B. stress the need for fiscal responsibility in the hotel industry
C. analyze a situation and point out its broader implications
D. present one type of contract used in the hotel industry
E. point out the dangers of mismanaging hotels

Answer A. It is evident from the last line of the passage: "The attention focused on these suits should stand as a firm reminder to owners of all types of assets to maintain some control over the handling of those assets."

2. According to the passage, how have some owners attempted to rectify problems with management?

A. They have decreased their total level of investment.
B. They have offered management companies changes in their contracts that would benefit both parties.
C. They have focused attention on the poor hiring practices of management companies.
D. They have sought restitution in court.
E. They have recognized the problems inherent in a troubled economy.

Answer D. From the second paragraph: "This reconfiguration of the balance of responsibility and control has been furthered by legal suits brought by owners attempting to redress what they say has been gross mismanagement."

3. According to the passage, some management companies have taken equity stakes in their properties in order to

A. create stronger alliances with hotel property owners
B. prevent owners from tying fees to performance
C. install a system of checks and balances in the industry
D. maintain control over daily operations
E. gain a foothold in a troubled economy

Answer B. All other options are irrelevant, and from the lines: "Alarmed by their faltering properties, owners began to lobby for fee reductions and shorter contracts with management companies, sometimes linking the fee schedules to a management company's performance."

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A. They negotiated with management companies for longer contracts in exchange for smaller fees.
B. They attempted to align themselves financially with management.
C. They took over the daily operations of their hotels.
D. They tried to shorten their contracts with management.
E. They withheld fees from management in exchange for more control over their properties.

Answer D. From the lines: "Alarmed by their faltering properties, owners began to lobby for fee reductions and shorter contracts with management companies, sometimes linking the fee schedules to a management company's performance."

5. It can be inferred from the passage that the agreements typically entered into by management and owners

A. worked as long as the owners did not get too greedy
B. were to the benefit of both parties throughout the 1970s
C. had problems that were not immediately evident
D. were ideal for those owners with a hands-on approach to business
E. favored management in most situations

Answer C. Lines in the first paragraph: "It was only when the United States economy entered a troubled stage that the  problems inherent in this structure became more readily apparent ."

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

A. devising an advertising campaign
B. booking a national accounting convention
C. contacting a temporary employment agency
D. hiring celebrities for promotional appearances
E. providing financing for expanding facilities

Answer E. Financing is on owner's part, as stated in the first paragraph. All other options would come under the purview of the hotel management companies.

7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

A. A lack of trust on the part of owners in the capabilities of management
B. A reconfiguration in the balance of responsibility between the two parties
C. A demand by owners for a bigger role in daily operations
D. A downward trend in the economy in general
E. A new program that tied fees to management performance

Answer D. All other options are irrelevant. From the lines in the first paragraph: "It was only when the United States economy entered a troubled stage that the problems inherent in this structure became more readily apparent."

SomeOneUnique · Answer

According to the best of my ability, kindly find the answer explanations below.

1. The primary purpose of the passage is to

A. redress certain wrongs perpetrated by owners of hotels => wrongs are mentioned only in second para so this choice does not give the primary purpose.  INCORRECT 
B. stress the need for fiscal responsibility in the hotel industry => responsibility is already taken by management companies  INCORRECT 
C. analyze a situation and point out its broader implications => passage is written to analyze how owners and management work together and its implications.  CORRECT 
D. present one type of contract used in the hotel industry => No contract is presented in the passage.  INCORRECT 
E. point out the dangers of mismanaging hotels => In the second para mismanagement is mentioned but dangers are not pointed out. Also it is only in second para but not primary purpose.  INCORRECT

2. According to the passage, how have some owners attempted to rectify problems with management?

EXPLANATION: Para 2 line 2 "This reconfiguration has been furthered by legal suits brought by owners attempting to redress mismanagement."  
A. They have decreased their total level of investment. => With the support of para 1 last line, we can say owners began to lobby for fee reductions and company's performance based shorter contracts but it was due to troubled economy not to rectify the management problems.  INCORRECT 
B. They have offered management companies changes in their contracts that would benefit both parties. => Due to troubled economy, changes in management contracts were made but these were performance based not beneficial fr both parties.  INCORRECT 
C. They have focused attention on the poor hiring practices of management companies. => Passage never talked about hiring management practices.  INCORRECT 
D. They have sought restitution in court. => Perfect, that was a direct question - in line with the explanation  CORRECT 
E. They have recognized the problems inherent in a troubled economy.

3. According to the passage, some management companies have taken equity stakes in their properties in order to

EXPLANATION: Para 2 line 1 and line 2 - management companies have taken equity stakes for - balance of responsibility and control   
A. create stronger alliances with hotel property owners => That move will not create alliance with owners because owners are not happy when they lose control.  INCORRECT 
B. prevent owners from tying fees to performance => Who knows if steps taken by owners are still valid because they have taken matter to court.  INCORRECT 
C. install a system of checks and balances in the industry => No system is installed  INCORRECT 
D. maintain control over daily operations => Perfect, that was a direct question - in line with the explanation  CORRECT 
E. gain a foothold in a troubled economy => to deal with troubled economy, owners took steps mentioned in para 1 last line but companies did not take steps because of troubled economy.  INCORRECT

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

EXPLANATION: Para 1 last line - Owners began to lobby for fee reductions and shorter contracts with management companies, sometimes linking the fee schedules to a management company's performance.  
A. They negotiated with management companies for longer contracts in exchange for smaller fees.
B. They attempted to align themselves financially with management.
C. They took over the daily operations of their hotels.
D. They tried to shorten their contracts with management. => Perfect, that was a direct question - in line with the explanation  CORRECT 
E. They withheld fees from management in exchange for more control over their properties.

5. It can be inferred from the passage that the agreements typically entered into by management and owners

A. worked as long as the owners did not get too greedy => Owners were never greedy. Every time owners made changes as a response to something.  INCORRECT 
B. were to the benefit of both parties throughout the 1970s => Year is not given in the passage.  INCORRECT 
C. had problems that were not immediately evident => Para 1 last line mentions the problems which were encountered during troubled US economy. Hence we can say these problems were not evident until a certain situation happened.  CORRECT 
D. were ideal for those owners with a hands-on approach to business => We can infer anything about types of owners  INCORRECT 
E. favored management in most situations => The agreements had fairly divided duties.  INCORRECT

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

EXPLANATION: Prior to changes duties were divided. Para 1 line 3. "the owner provides financing, and the management company furnishes its expertise in the running of the hotels, providing publicity campaigns and established name recognition."  
A. devising an advertising campaign
B. booking a national accounting convention
C. contacting a temporary employment agency
D. hiring celebrities for promotional appearances
E. providing financing for expanding facilities => financing does not come under management duty thus this is an exception.  CORRECT

7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

EXPLANATION: Para 1 line 3 and 4 say it was only when the United States economy entered a troubled stage, problems became more readily apparent. Alarmed by their faltering properties, owners made changes.  
A. A lack of trust on the part of owners in the capabilities of management
B. A reconfiguration in the balance of responsibility between the two parties
C. A demand by owners for a bigger role in daily operations
D. A downward trend in the economy in general => Perfect, that was a direct question - in line with the explanation  CORRECT 
E. A new program that tied fees to management performance

c93liu · Answer

Q1 - my answer is C)

A) - "perpetrated by owners of hotel" seems wrong. If anything the stress and changes between owners and operators are mainly stemming from the inherent issues (the classic agency problem).
B) - Again, the main issue is the agency problem (principal-agent problem), not fiscal responsibility.
C) - Yes. The situation analyzed here is the restructuring of owner-manager contracts / relationships in the hotel industry, and the broader implication is the last sentence of the passage.
D) - This point is not discussed or at any rate too narrow of a focus.
E) - Again, not discussed at all or too narrow of a focus.

Q2 - my answer is D)

A) - Not discussed at all in the passage.
B) - "benefit both parties"? More like to the detriment of the management companies.
C) - Not discussed at all in the passage.
D) - Yes. In paragraph 2: "This reconfiguration of the balance of responsibility and control has been furthered by legal suits brought by owners...".
E) - Not discussed at all in the passage.

Q3 - my answer is A)

1st sentence in paragraph 2 directly answers this question: "Some management companies have sought to align themselves even further with the owners and have taken equity stakes in their properties."

A) - Yes. See above.
B) - It's for more interest alignment, and not fee-for-performance.
C) - Nope, not for checks and balances.
D) - They are already in control of daily operations.
E) - Not discussed in the passage.

Q4 - my answer is D)

Last sentence in paragraph 1 directly answers this questions: "Alarmed by their faltering properties, owners began to lobby for fee reductions and shorter contracts with management companies, sometimes linking the fee schedules to a management company's performance." So they did 3 things: 1) fee reduction, 2) shorter contracts, 3) in some cases, fee-for-performance.

A) - This goes against 2) above.
B) - This could be related to obtaining equity stake as discussed in the 1st sentence of paragraph 2, but this is not something that owners did, but what the management companies did.
C) - Nope, not discussed in the passage.
D) - Yes. See 2) above.
E) - "withheld" is not discussed.

Q5 - my answer is C)

A) - We only know that the contracts became a focal point during the economic downturn, which exposed inherent issues in these contracts. We do not know whether they worked before that and as long as the owners were not greedy.
B) - Don't know where 1970s come from.
C) - Yes. And these inherent problems became evident during the economic downturn.
D) - Not discussed in the passage.
E) - We do not know this from the passage.

Q6 - my answer is E)

From paragraph 1: "Simply stated, the owner provides financing, and the management company ... furnishes its expertise in the running of the hotels, as well as providing publicity campaigns and established name recognition".

A) - Ad campaign sounds like publicity campaigns mentioned above. So A) is out.
B) - While an accounting convention could be really far off the hotel core territory, it could be for the benefit of establishing name brand recognition (think about all the sponsors to an industry event). B) is out.
C) - This sounds like day-to-day management on staffing, so C) is out.
D) - Again, for publicity and to establish name brand recognition, so D) is out.
E) - Yes. The only thing that the management does not do is to provide financing.

Q7 - my answer is D)

We know that the change is caused by the economic downturn - "It was only when the United States economy entered a troubled stage that the problems inherent in this structure became more readily apparent" in paragraph 1 - and only D) speaks to that.

ash124 · Answer

Understand the passage: 
 The arrangement between owners and management companies 
And how it changed because of economic conditions.
The attention focused on these suits should stand as a firm reminder to owners of all types of assets to maintain some control over the handling of those assets.

1. The primary purpose of the passage is to

A. redress certain wrongs perpetrated by owners of hotels
 not given 
B. stress the need for fiscal responsibility in the hotel industry 
 not given 
C. analyze a situation and point out its broader implications
 Supported by both paragraphs.  
D. present one type of contract used in the hotel industry
 not given 
E. point out the dangers of mismanaging hotels
 not given

Answer: C

2. According to the passage, how have some owners attempted to rectify problems with management?

A. They have decreased their total level of investment.
 not supported in the passage 
B. They have offered management companies changes in their contracts that would benefit both parties.
 They changed to benefit them 
C. They have focused attention on the poor hiring practices of management companies.
 not supported in the passage 
D. They have sought restitution in court.
 Yes(2nd para.) 
E. They have recognized the problems inherent in a troubled economy.
 not supported in the passage

Answer D

3. According to the passage, some management companies have taken equity stakes in their properties in order to

A. create stronger alliances with hotel property owners
Yes given in 2nd para.
B. prevent owners from tying fees to performance
 not supported in the passage 
C. install a system of checks and balances in the industry
 not supported in the passage 
D. maintain control over daily operations
 not supported in the passage 
E. gain a foothold in a troubled economy
 not supported in the passage

Answer A

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A. They negotiated with management companies for longer contracts in exchange for smaller fees.
 not supported in the passage 
B. They attempted to align themselves financially with management.
 Not given 
C. They took over the daily operations of their hotels.
 not supported in the passage 
D. They tried to shorten their contracts with management.
 Given in 1st paragraph 
E. They withheld fees from management in exchange for more control over their properties.
 Not given

Answer D

5. It can be inferred from the passage that the agreements typically entered into by management and owners

A. worked as long as the owners did not get too greedy
 Not given 
B. were to the benefit of both parties throughout the 1970s
 Not given 
C. had problems that were not immediately evident
 Supported in 1st para. 
D. were ideal for those owners with a hands-on approach to business
 Not given 
E. favored management in most situations
 Not given

Answer C

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

A. devising an advertising campaign
 supported  
B. booking a national accounting convention
 supported  
C. contacting a temporary employment agency
 supported  
D. hiring celebrities for promotional appearances
 supported  
E. providing financing for expanding facilities
 financing is not done by management 
 Answer E

7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

A. A lack of trust on the part of owners in the capabilities of management
 Not given 
B. A reconfiguration in the balance of responsibility between the two parties
 Not given 
C. A demand by owners for a bigger role in daily operations
 Not given 
D. A downward trend in the economy in general
 supported  
E. A new program that tied fees to management performance   
 Not given

Answer D

Gaudapada · Answer

+---+---+---+---+---+---+
| 1 | 2 | 3 | 4 | 5 | 6 | 7 |
+---+---+---+---+---+---+
| C | D | A | D | C | E | B |
+---+---+---+---+---+---+

1. The primary purpose of the passage is to

A. redress certain wrongs perpetrated by owners of hotels  
Author takes a fairly neutral stance in the passage. This option seems too biased.

B. stress the need for fiscal responsibility in the hotel industry  
The passage analyses a situation(contracts between owners and companies) in a neutral manner. Author never stressed the need for fiscal responsibility in the hotel industry in particular.

C. analyze a situation and point out its broader implications  
 CORRECT :  Passage describes a situation( nature of certain contracts) and proceeds to analyze the implications of said contracts.

D. present one type of contract used in the hotel industry  
Passage is not presenting  ONE  type of contract. It is depicting the  typical  scenario in hotel industry contracts. A single type of contract is not pinpointed.

E. point out the dangers of mismanaging hotels  
Author maintains a neutral stance. Some hotel owners allege mismanagement but the author never gives their personal opinion. From  paragraph 2 ,  "s. This reconfiguration of the balance of responsibility and control has been furthered by legal suits brought by owners attempting to redress what  THEY SAY  has been gross mismanagement." 
Author is careful to not take a stance on whether mismanagement actually happened.

2. According to the passage, how have some owners attempted to rectify problems with management?

A. They have decreased their total level of investment.  
No such decrease in investment is ever mentioned in the passage. Investment is different from fee. Some owners lobbied for fee reductions but no mention is made of any change in investment level.

B. They have offered management companies changes in their contracts that would benefit both parties.  
 BENEFIT BOTH PARTIES  is the issue with this option. Owners lobbied for changes in contracts to their benefit only (such as shorter contracts and reduced fees), not for the benefit of both parties.

C. They have focused attention on the poor hiring practices of management companies.  
Passage mentions that owners allege mismanagement, but exact details of the mismanagement are not given. Hence this option is incorrect,

D. They have sought restitution in court.  
 CORRECT :  Paragraph 2  mentions these legal suits. 
 "This reconfiguration of the balance of responsibility and control has been furthered by legal suits brought by owners attempting to redress what they say has been gross mismanagement."

E. They have recognized the problems inherent in a troubled economy.  
This option implies a passive recognition of problems inherent in the economy on the part of owners. It is directly contradicted by the fact that owners renegotiated their contracts and even sought legal restitution.

3. According to the passage, some management companies have taken equity stakes in their properties in order to

A. create stronger alliances with hotel property owners  
 CORRECT :   from  paragraph 2 ,
 "Some management companies have sought to  align  themselves even further with the owners and have taken equity stakes in their properties" 
By  aligning  themselves further with owners, management companies are creating stronger alliances in a way.

B. prevent owners from tying fees to performance  
The tying of fees to performance is mentioned in  paragraph 1  as a way in which owners are renegotiating contracts to their benefit. It has nothing to do with the equity stakes mentioned in  paragraph 2

C. install a system of checks and balances in the industry  
Option does not make logical sense. Management companies taking equity stakes in properties does not in any way act as a system of checks and balances in the industry.

D. maintain control over daily operations  
Owners only renegotiated the financial aspects. Passage never mentions that management companies were at risk of losing control over daily operations.

E. gain a foothold in a troubled economy  
from  paragraph 2 , companies sought to align themselves with owners. This option is not supported.

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A. They negotiated with management companies for longer contracts in exchange for smaller fees.  
The issue with this option is the mention of  longer contracts . Passage mentions that owners negotiated for  shorter  contracts and lower fees.

B. They attempted to align themselves financially with management.  
This was the reaction of management, not the reaction of  owners .

C. They took over the daily operations of their hotels.  
As mentioned in  paragraph 1 , management already had control over daily operations. There is no question of taking over.

D. They tried to shorten their contracts with management.  
 CORRECT :   This is explicitly stated in  paragraph 1 .
 "Alarmed by their faltering properties, owners began to lobby for fee reductions and  shorter contracts  with management companies"

E. They withheld fees from management in exchange for more control over their properties.  
Passage mentions renegotiation of fees and fee arrangements, but makes no mention of owners withholding fees.

5. It can be inferred from the passage that the agreements typically entered into by management and owners

A. worked as long as the owners did not get too greedy  
The agreements failed because the problems inherent in them manifested with the economic downturn, not because of the greed of the owners.

B. were to the benefit of both parties throughout the 1970s  
This is not supported by the passage. Problems were inherent in the structure. They only became apparent after the economic downturn. Hence we cannot say the agreements were originally to the benefit of both parties.

C. had problems that were not immediately evident  
 CORRECT :  This is supported by the following line from  paragraph 1 .
 "It was only when the United States economy entered a troubled stage that the problems inherent in this structure became more readily apparent" 
The word  apparent  suggests that problems did exist, but were not immediately evident.

D. were ideal for those owners with a hands-on approach to business  
No distinction is made in the passage between hands-on and hands-off owners in the previous agreement. Passage does not support this inference.

E. favored management in most situations  
This is what the owners allege but it is only an allegation. Passage provides no evidence for or against this claim. Author maintains a neutral stance.

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT
 
  A. devising an advertising campaign  
from  paragraph 1  ,
 "  while management companies control marketing strategies, staffing, and other day-to-day operations. Simply stated, the owner provides financing, and the management company, in some cases a management chain, furnishes its expertise in the running of the hotels, as well as providing publicity campaigns and established name recognition. ". 
An advertising campaign would fall under this category

B. booking a national accounting convention  
This could reasonably fall under the category of publicity campaigns. Organizing conventions would come under the purview of management.

C. contacting a temporary employment agency  
As with  A , employment/staffing falls under the general responsibility of the management company.

D. hiring celebrities for promotional appearances  
As with  A , promotional appearances fall under the category of publicity campaigns/name recognition.

E. providing financing for expanding facilities  
 CORRECT :   from  paragraph 1 , financing is the responsibility of  owners , not management.

7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

A. A lack of trust on the part of owners in the capabilities of management  
A lack of trust would prevent owners and management from working together. We are looking for something that caused management and owners to work together.

B. A reconfiguration in the balance of responsibility between the two parties  
 CORRECT :  As stated in paragraph 2, management  "sought to align themselves even further with the owners and have taken equity stakes in their properties." . This reconfiguration in the balance of responsibilities caused a change in the way managers and owners work together.

C. A demand by owners for a bigger role in daily operations  
Owners demanded a renegotiation of the  financial  aspects of the contract. Owners were not looking for a bigger role in daily operations.

D. A downward trend in the economy in general  
The downward trend caused owners to renegotiated the contracts. It did not cause managers and owners to work  together .
 E. A new program that tied fees to management performance

Catman · Answer

1. The primary purpose of the passage is to
Author primary purpose is to analyze the problems arising between the contract of the hotel management companies and hotel owners evident in the troubled us economy and in last line highlights that it may be problems to more such business models
A.  redress certain wrongs perpetrated by owners of hotels  It is mainly highlighting the problem of the business model and not of hotel owner
B.  stress the need for fiscal responsibility in the hotel industry  Author only highlight the problem and not suggest any measure for resolution.
C.  analyze a situation and point out its broader implications  Correct author mentions the issues and in the last lines also highlight that this problem may be prevailing in other similar business models also.
D.  present one type of contract used in the hotel industry  No single contract is explained
E.  point out the dangers of mismanaging hotels  No danger are mentioned.

2. According to the passage, how have some owners attempted to rectify problems with management?

A.  They have decreased their total level of investment.  Not mentioned about decrease in investment
B.  They have offered management companies changes in their contracts that would benefit both parties.  The passage mentions that they want to reduce the contract length, but it is unclear that it will benefit both parties.
C.  They have focused attention on the poor hiring practices of management companies.  They have problem with the overall management and not particular to the hiring process.
D.  They have sought restitution in court.  Clearly mentions in the passage. The hotel owner's take the matter to the courts for resolution.
E.  They have recognized the problems inherent in a troubled economy.  The problem in the business model arises in the troubled economy but hotel owner's view about this is not mentioned.

3. According to the passage, some management companies have taken equity stakes in their properties in order to

A.  create stronger alliances with hotel property owners   "Companies wants to align themselves further by taking the equity share" mentions clearly in the passage.
B.  prevent owners from tying fees to performance  
C.  install a system of checks and balances in the industry 
D.  maintain control over daily operations 
E.  gain a foothold in a troubled economy  Focussed out of the scope of the passage.

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A.  They negotiated with management companies for longer contracts in exchange for smaller fees.  They want shorter contracts not longer.
B.  They attempted to align themselves financially with management.  Not mentioned.
C.  They took over the daily operations of their hotels.  They don't want to take the charge of operations.
D.  They tried to shorten their contracts with management.  Clearly mentioned about shortening of the contract.
E.  They withheld fees from management in exchange for more control over their properties. 
No mention about the withheld of the fees.

5. It can be inferred from the passage that the agreements typically entered into by management and owners

A . worked as long as the owners did not get too greedy  Not mentioned that owners become greedy
B.  were to the benefit of both parties throughout the 1970s  Such timeline is not mentioned.
C.  had problems that were not immediately evident  The problems are evident only when the economic troubles started to began.
D.  were ideal for those owners with a hands-on approach to business  Not mentioned that owners should have a hands-on approach.
E.  favored management in most situations  Can't clearly say as problem arises only after the economic slowdown.

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

A.  devising an advertising campaign  management is for Companies.
B.  booking a national accounting convention  management is for Companies.
C.  contacting a temporary employment agency  management is for Companies.
D.  hiring celebrities for promotional appearances  management is for Companies.
E.  providing financing for expanding facilities  Financing is the hotel owner's role and management is for Companies.

7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

A.  A lack of trust on the part of owners in the capabilities of management  Trust was there, owner just want contract terms to be changed.
B.  A reconfiguration in the balance of responsibility between the two parties  This reconfiguration ... clearly mentions
C.  A demand by owners for a bigger role in daily operations  Owner don't want role in operation. 
D.  A downward trend in the economy in general  Economic problem only highlight the existing issues.
E.  A new program that tied fees to management performance  Program introduction not mentioned.

800gal · Answer

ANSWERS 1. C 2. D 3. A 4. D 5. C 6. E 7. D

REASONING -

Contracts b/w owners & management determine admin of hotel chains.

Owners —> $$$ responsibility
Management —> Marketing, Staffing, day to day ops, provides expertise in running chains, publicity campaigns, name recognition.

(Implies things were ok till this point in history) US economy got troubled —> inherent problems got more apparent in this structure

Owners got alarmed by their faltering properties —> led to owners lobbying for short contracts + fee reductions —> linking fee schedules w/ m.company’s performance (payments started to depend on performance)

Main Point Paragraph 1 —> Introduces a type of contract, defines the contract + it’s properties, explains when it started to breakdown and consequences

m.company aligning with owners by taking equity (ownership) in owner’s properties. (reconfiguration of responsibility- control balance)

The reconfiguration became furthered (more reconfiguration has occurred) when owners filed legal suits (attempt to redress (change) a gross mismanagement (acc to them))\

The attention on lawsuits—> should stand as firm reminder to owners of assets (all kinds) to maintain SOME control on their assets. (AUTHOR’s viewpoint/ statement)

Main Point Paragraph 2 —> Further consequences of the contract falling apart and what each party did in response.

Main Point Passage —> Explains a type of contract with flaws that became apparent during the US economy trouble and it’s consequences.

Author’s Tone —> Analytical w/ a personal viewpoint at the end.

1. The primary purpose of the passage is to

Primary Purpose questions can be helped with a passage map. The passage clearly introduces a contract in the hotel industry, how it went wrong and it's consequences.

A. redress certain wrongs perpetrated by owners of hotels  
The passage doesn't address any wrongs by OWNERS of the hotels. In fact it only addresses how the contract between owners and management broke down after the U.S economy trouble. This is incorrect.
  B. stress the need for fiscal responsibility in the hotel industry   
Fiscal responsibility isn't stressed by the author or anywhere in the paragraph. The paragraph is simply an analysis of a situation in the industry, not necessarily a piece on how to deal with any problems.
 C. analyze a situation and point out its broader implications
CORRECT.  This choice correctly states the primary purpose of the paragraph, which is analysis of the contract, it's breakdown and it's implications.
  D. present one type of contract used in the hotel industry  
This is the purpose of the first few sentences of the FIRST paragraph, not the purpose of the WHOLE passage.
  E. point out the dangers of mismanaging hotels  
This choice implies that the passage warns of something. The entire tone of the passage is analytical. The only warning is the statement at the end of the passage, however this does not make it the primary purpose.

2. According to the passage, how have some owners attempted to rectify problems with management?

This is an evidence question. All we need to do is find evidence on how the owners attempted to rectify problems with management. In the passage it is stated how the owners started to lobby for fee reductions, shorter contracts and filed legal suits as a reaction to their faltering properties.

A. They have decreased their total level of investment.  
Owners reducing their own total money investment is not mentioned in the passage. Asking for fee reductions is not a reduction in investment per say.
  B. They have offered management companies changes in their contracts that would benefit both parties.  
Owners asked for shorter contracts + fee reductions, however we do not know whether this would benefit BOTH parties. There is not enough evidence in the passage for this statement.
  C. They have focused attention on the poor hiring practices of management companies.  
It is not stated in the passage that the hiring practices of management companies was either POOR or the PRIMARY PROBLEM the owners had. Not enough evidence for this choice.
  D. They have sought restitution in court.
CORRECT.   Owners did in fact file legal suits in COURT. Clear evidence in the passage.
  E. They have recognized the problems inherent in a troubled economy.  
All we know about the troubled economy is that the problems INHERENT WITHOUT THE TROUBLED ECONOMY between owners and management became more apparent AFTER the economy fell into trouble. This choice uses the words troubled, economy and inherent temptingly, however the meaning is distorted from what the passage states. TRAP CHOICE.

3. According to the passage, some management companies have taken equity stakes in their properties in order to

Another Evidence Question. The passage states that the management companies took equity stakes in properties TO align themselves with the owners.

A. create stronger alliances with hotel property owners
CORRECT.   To align is to create alliances. This choice perfectly parallels what is stated in the passage.
  B. prevent owners from tying fees to performance  
Not enough evidence for this choice in the passage. This isn't mentioned or even implied in the passage. All we know is that the management taking equity stakes was done to align themselves with the owners.
  C. install a system of checks and balances in the industry  
Same reasoning as B. Not enough evidence for this choice in the passage. This isn't mentioned or even implied in the passage. All we know is that the management taking equity stakes was done to align themselves with the owners.
  D. maintain control over daily operations  
We already know that management companies already have control over daily operations as it is. It seems illogical for them to take equity stakes to keep doing what they can already do.
  E. gain a foothold in a troubled economy  
Not enough evidence for this choice. It isn't mentioned that the management took equity for some sort of financial benefit in the troubled economy.

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

Evidence question--> The passage states in paragraph 1 that the owners became alarmed at their faltering properties and as a result did the following things--> lobbied for fee reductions, shorter contracts, interconnected fee schedules with the performance of management and filed lawsuits.

A. They negotiated with management companies for longer contracts in exchange for smaller fees.  
The owners lobbied for FEE REDUCTIONS and SHORTER CONTRACTS. This choice is wrong for 2 reasons --> longer contracts is incorrect, and longer contracts weren't negotiated IN EXCHANGE for smaller fees.
  B. They attempted to align themselves financially with management.  
Not enough evidence for this choice. Owners never tried to align themselves financially with the management ( The only alignment mentioned is by the management taking equity in property to align themselves with owners.)
  C. They took over the daily operations of their hotels.  
This is beyond the scope of the passage. It isn't mentioned whether control of operations was given to/taken by owners.
  D. They tried to shorten their contracts with management.
CORRECT.   The owners did lobby for shorter contracts as per paragraph 1.
  E. They withheld fees from management in exchange for more control over their properties.  
The only change in fees mentioned is lobbying for fee reductions and connecting fee schedules to management performance. Withholding of fees in exchange for control is not mentioned and hence beyond the scope of the passage.

5. It can be inferred from the passage that the agreements typically entered into by management and owners

CR + RC --> Inference --> Given what is written in the passage, the answer choice MUST BE TRUE. Therefore, answers to look out for are MAY BE TRUE choices and FALSE choices.

A. worked as long as the owners did not get too greedy  
Greed on the part of the owners is not mentioned as a factor of the agreement. FALSE.
  B. were to the benefit of both parties throughout the 1970s  
Don't be fooled by this choice, all we know is that the US economy became troubled at SOME TIME (Not necessarily AFTER the 1970s). MAY BE TRUE.
  C. had problems that were not immediately evident
CORRECT.   It clearly states in the passage that this contract had inherent problems that became MORE APPARENT after the US economy trouble. TRUE
  D. were ideal for those owners with a hands-on approach to business  
Beyond the scope of the passage. How the contract was ideal was owners with a hands on approach is not explored or even hinted at in the passage. FALSE
  E. favored management in most situations  
All we know is that the contract has problems the resulted in owners reacting a certain way to management. It is even mentioned in the last paragraph that ".....legal suits brought by owners attempting to redress  what they say  has been gross mismanagement." The owners did feel that they lost more in this arrangement, however it is stated as a relative viewpoint of the owners, not as an absolute fact.

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

Inference  EXCEPT  questions are dangerous. Look for 4 MUST BE TRUE CHOICES. The correct choice MAY BE TRUE or COMPLETELY FALSE.
We know from the passage that management companies performed the following functions --> Marketing, Staffing, other day to day operations, provide expertise in running chains, publicity campaigns, providing established name recognition.
Owners only provided financial backing and managed finances in general.

s]A. devising an advertising campaign  
This can fall under day to day operations + publicity campaigns. TRUE
  B. booking a national accounting convention  
This can fall under day to day operations. TRUE
  C. contacting a temporary employment agency  
This can fall under the task of STAFFING. TRUE
  D. hiring celebrities for promotional appearances  
This can fall under publicity campaigns. TRUE
  E. providing financing for expanding facilities
CORRECT    Finances are handled by the owners not management. This is FALSE.

7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

We need to find evidence for what/what event started the change in the way the two parties worked together. From the passage map we know that the troubles became more apparent after the US ECONOMY BECAME TROUBLED.

A. A lack of trust on the part of owners in the capabilities of management  
This cannot be backed by the passage as it does not mention lack of trust as a reason for why the working together changed or that lack of trust CAUSED the change.
  B. A reconfiguration in the balance of responsibility between the two parties  
The reconfiguration is clearly mentioned as an EFFECT of the change in the way the two parties worked together and not the CAUSE.
  C. A demand by owners for a bigger role in daily operations  
The owners are never mentioned as demanding a bigger role in daily operations. This is outright wrong.
  D. A downward trend in the economy in general
CORRECT.    This choice may seem a bit generalised, however it is clearly stated that the changes started with the US economy troubles.
  E. A new program that tied fees to management performance  
Same reasoning as B. The tying of fees to management performance is an EFFECT of the change in the way the two parties worked and NOT THE CAUSE.

Rohitq · Answer

Passage Brief

Para 1 - A situation , i.e. contract b/w the hotel and Management firms is introduced---> Roles of owner and management firm in the contract----> US economy downtrend and its impact on this contract---> how it changed the structure and responsibilities

Para 2 - How management firm tried to mitigate the effects----> balance of responsibility and control reconfigured --->legal suit by owners on mismanagement was one of the cause of reconfiguration ---> reminder to other asset owners

lets look at the questions

1. The primary purpose of the passage is to
 
A.  redress certain wrongs perpetrated by owners of hotels  ( Clearly a wrong statement, since we never discussed on the wrong done by owners  )
B.  stress the need for fiscal responsibility in the hotel industry  ( This is partly true, but we cannot properly say this is the answer. Since last 4 lines of para 2 is where the author states that not only in hotel business but all the assets should have a clear control and responsibility identified by its owner )
C. analyze a situation and point out its broader implications ( This is covering all that is discussed in the passage, Author is first analysing a situation in hotel business and then concluding   "The attention focused on these suits should stand as a firm reminder to owners of all types of assets to maintain some control over the handling of those assets" ,  hence this is the primary purpose of the passage) 
D.  present one type of contract used in the hotel industry  ( Clearly we can eliminate this option since we never discussed on the types of contract in passage) 
E.  point out the dangers of mismanaging hotels   (No, there was a impact financially on the owners of hotel but the passage never discussed in detail on the mismanagement in hotels, rather it used the situation to alert other asset owners  )

2. According to the passage, how have some owners attempted to rectify problems with management?

A.  They have decreased their total level of investment  ( This cannot be inferred from the passage, para 2 states they have shared their responsibilities and controls over the asset. But no the the investment levels )
B. They have offered management companies changes in their contracts that would benefit both parties. ( We can infer this from the para 1  "  Alarmed by their faltering properties, owners began to lobby for fee reductions and shorter contracts with management companies, sometimes linking the fee schedules to a  management company's performance." 
C.  They have focused attention on the poor hiring practices of management companies.  ( Clearly OFS, we cannot find this in the passage )
D.  They have sought restitution in court.  ( In para 2 , we see that legal suites were filed by owners to achieve a proper control and responsibilities of the assets, but in question we are asked on "attempted to rectify problems with management", hence I am ignoring this option) 
E.  They have recognized the problems inherent in a troubled economy. ( question is how did they rectify with management, this answer can be eliminated )

3. According to the passage, some management companies have taken equity stakes in their properties in order to

A. create stronger alliances with hotel property owners ( yes true, can be inferred from para 2   "Some management companies have sought to align themselves even further with the owners and have taken equity stakes in their properties" 
B.  prevent owners from tying fees to performance  ( No this is not mentioned in the passage )
C.  install a system of checks and balances in the industry  ( We cannot be sure of this, since it is not mentioned in the passage) 
D.  maintain control over daily operations  ( Again we cannot state this as the reason since we don't know this from the passage, they might do in some scenario but we are concerned on what is given in the passage )
E.  gain a foothold in a troubled economy   (No this is again not a reason why they took stakes. They simply wanted to build a strong relationship or alliance with the owners and share responsibility if the loss)

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A.  They negotiated with management companies for longer contracts in exchange for smaller fees . ( We can find negotiation on the less fees, but we cannot find that less fee is to be charged for long contract. Refer this statement from para 1   " Alarmed by their faltering properties, owners began to lobby for fee reductions and shorter contracts with management companies, sometimes linking the fee schedules to a management company's performance. " 
B.  They attempted to align themselves financially with management.   (Nope, we cannot find this in the passage. We know from start of para 1 that management wanted to align with the owners and not the other way round) 
C.  They took over the daily operations of their hotels.  ( No we cannot find this in the passage and hence eliminated) 
D. They tried to shorten their contracts with management. ( yes we can infer this properly from this statement in para 1  "Alarmed by their faltering properties, owners began to lobby for fee reductions and shorter contracts with management companies, sometimes linking the fee schedules to a management company's performance." ,  hence this is correct )
E.  They withheld fees from management in exchange for more control over their properties .  (They reduced the fees but no where it is mentioned that they withheld the amount to gain control)

5. It can be inferred from the passage that the agreements typically entered into by management and owners

A.  worked as long as the owners did not get too greedy   (No we cannot infer this, since the agreement was working fine before the financial crisis and after crisis owner wanted a shared responsibility rather than sharing the financial burden alone) 
B.  were to the benefit of both parties throughout the 1970s   (This is easy elimination on the basis of the year given. In passage we dont have any such year mentioned) 
C. had problems that were not immediately evident  (Yes true, they were working fine before the US crisis. After crisis the problem was discovered) ,  hence we can safely say that the issue was not evident immediately) 
D.  were ideal for those owners with a hands-on approach to business   (OFS, no where we can find evidence for this and hence cannot be inferred) 
E.  favored management in most situations   ("Most" is a strong word, we don't know from the passage that it always favored management, hence this cannot be the inference)

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

A.  devising an advertising campaign  ( from para  1 "  Simply stated, the owner provides financing, and the management company, in some cases a management chain, furnishes its expertise in the running of the hotels, as well as providing publicity campaigns and established name recognition." ,  advertising is a part of management company duties, hence eliminate) 
B.  booking a national accounting convention  (it is a part of above stated duties of the management firm, hence eliminate) 
C.  contacting a temporary employment agency   (Staffing requirements, hence a part of the duty. Eliminate) 
D.  hiring celebrities for promotional appearances  ( Advertisement, yes a part of duty, eliminate  )
E. providing financing for expanding facilities  (No they do not involve in financial operations. It is a duty of hotel owners. This is the correct choice)

7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

A.  A lack of trust on the part of owners in the capabilities of management  ( in para one we can find the cause   "It was only when the United States economy entered a troubled stage that the problems inherent in this structure became more readily apparent." ,  eliminate this choice since it is not there in passage )
B.  A reconfiguration in the balance of responsibility between the two parties   (No that is not the cause of it but an effect) 
C.  A demand by owners for a bigger role in daily operations   (No, we can safely assume that before the crisis they were working fine and after that owners wanted a shared responsibility of the assets) 
D. A downward trend in the economy in general  (Yes this is what para 1 states and is a cause for change in the dynamics of the owners and management firms) 
E.  A new program that tied fees to management performance   (Again we cannot find this in the passage and hence is OFS)

irisjojojo · Answer

Question 1: C

--> not the focus of the passage
 
  Question 2: C

--> discover the problem is not the way to "correct" the problem, so no

Question 3: A

--> nope, again

The answer is obvious and can be located to:   "Some management companies have sought to align themselves even further with the owners and have taken equity stakes in their properties."

Question 4: D

--> not mentioned

Question 5: C

This can be seen in...  "It was only when the United States economy entered a troubled stage that the problems inherent in this structure became more readily apparent."  Pretty obvious...

Question 6: E

Question 7: D

--> It is also the "consequence"

We can conclude this from...  "It was only when the  United States economy entered a  troubled stage   that the problems inherent in this structure became more readily apparent. Alarmed by  their faltering properties , owners began to lobby for fee reductions and shorter contracts with management companies, sometimes linking the fee schedules to a management company's performance."

RohitSaluja · Answer

Analysis: The passage starts with the explaining typical model of running a hotel and how the problem with the typical model became apparent only during low economy, the second passage talks about how management also made few changes and how owners were provided some sort of protection/more control in the contract

1. The primary purpose of the passage is to

A. redress certain wrongs perpetrated by owners of hotels  
Nowhere in the passage, any wrong doings about owners are mentioned, hence eliminate

B. stress the need for fiscal responsibility in the hotel industry  
No the intent of the passage is broader than talking about fiscal responsibility, hence eliminate

C. analyze a situation and point out its broader implications  
There are no implications that are presented by the author

D. present one type of contract used in the hotel industry 
After eliminating, this is by far the best answer choice and aligns with our analysis, correct answer choice

E. point out the dangers of mismanaging hotels  
There are no dangers of mismanaging hotels that are mentioned in the passage, hence eliminate

2. According to the passage, how have some owners attempted to rectify problems with management?

A. They have decreased their total level of investment.  
Nowhere in passage, it is mentioned that owners decreased their total level of investment, eliminate

B. They have offered management companies changes in their contracts that would benefit both parties.  
The passage does mention that there were changes in the contract but we do not know whether they would benefit both parties or not, eliminate

C. They have focused attention on the poor hiring practices of management companies.  
Totally off the topic here, eliminate

D. They have sought restitution in court.  
I mistakenly selected option choice E for this, but while posting the explanation, I realized this should be the correct answer, as it is mentioned in the passage that "control has been furthered by legal suits brought by owners"

E. They have recognized the problems inherent in a troubled economy.  
Yes they did recognized, but this option does not talk about what the owners did to rectify the problem

3. According to the passage, some management companies have taken equity stakes in their properties in order to

A. create stronger alliances with hotel property owners 
The second paragraph mentions that "management companies have sought to align themselves even further with the owners", hence this is the correct answer

B. prevent owners from tying fees to performance  
No this can't be inferred from the passage

C. install a system of checks and balances in the industry  
Nowhere it is mentioned in the passage

D. maintain control over daily operations  
Nowhere it is mentioned in the passage

E. gain a foothold in a troubled economy  
Nowhere it is mentioned in the passage

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A. They negotiated with management companies for longer contracts in exchange for smaller fees.  
This is the opposite of what management did, eliminate this

B. They attempted to align themselves financially with management.  
Yes, they aligned themselves with management, but this is too general and option D is directly stated in the passage, hence eliminate

C. They took over the daily operations of their hotels.  
Nope, that's not what happened

D. They tried to shorten their contracts with management. 
Directly mentioned in the passage

E. They withheld fees from management in exchange for more control over their properties.  
Not mentioned anywhere in the passage

5. It can be inferred from the passage that the agreements typically entered into by management and owners

A. worked as long as the owners did not get too greedy  
No, the passage doesn't mention greediness on anyone's count

B. were to the benefit of both parties throughout the 1970s  
Not mentioned anywhere and cant be inferred

C. had problems that were not immediately evident 
Bingo, the passage directly says that "It was only when the United States economy entered a troubled stage that the problems inherent in this structure became more readily apparent", hence this is the correct answer

D. were ideal for those owners with a hands-on approach to business  
Nope, not mentioned

E. favored management in most situations    
Nope, not mentioned

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

A. devising an advertising campaign  
Yes the management do the advertising campaign

B. booking a national accounting convention  
Yes this falls under management role

C. contacting a temporary employment agency  
Yes this falls under management role

D. hiring celebrities for promotional appearances  
Yes this falls under management role

E. providing financing for expanding facilities 
The passage clearly states in the first paragraph that it was the onus of the owner to provide financial support, so this is the correct answer choice

7. According to the passage, what caused a change in the way management and owners work together to run a hotel? 
As stated in the above explanations and analysis as well that the apparent issues with the typical model only became apparent during low economy, hence option D is the correct answer choice

A. A lack of trust on the part of owners in the capabilities of management

B. A reconfiguration in the balance of responsibility between the two parties

C. A demand by owners for a bigger role in daily operations

D. A downward trend in the economy in general

E. A new program that tied fees to management performance

sunitapandey · Answer

First Paragraph: 
Administration of hotel management is managed by contract between Hotel owners and hotel management chain.

Owners Take care of financial responsibility for profits and losses it mainly finances whereas management companies control marketing strategies, staffing, and other day-to-day operations it mainly looks after publicity campaigns, running, and provides a brand name.

Only after United states economy downslide, the hotel owners and management groups realized the problems in their approach.

Second Paragraph:
Both Hotel Owners and Management groups took steps to rectify their approach.
Management groups aligned themselves with the owner and took stake in their property.
Hotel Owners filed legal suits to maintain control over the assets.

1. The primary purpose of the passage is to

A. redress certain wrongs perpetrated by owners of hotels
Not Discussed
B. stress the need for fiscal responsibility in the hotel industry
Correct
C. analyze a situation and point out its broader implications
Not Discussed
D. present one type of contract used in the hotel industry
Not Discussed
E. point out the dangers of mismanaging hotels
Not Discussed

2. According to the passage, how have some owners attempted to rectify problems with management?

A. They have decreased their total level of investment.
Not Discussed
B. They have offered management companies changes in their contracts that would benefit both parties.
Not Discussed
C. They have focused attention on the poor hiring practices of management companies.
Not Discussed
D. They have sought restitution in court.
Correct"furthered by legal suits brought by owners"
E. They have recognized the problems inherent in a troubled economy.
Not Discussed

3. According to the passage, some management companies have taken equity stakes in their properties in order to

A. create stronger alliances with hotel property owners
Correct "management companies have sought to align themselves even further with the owners"
B. prevent owners from tying fees to performance
Not Discussed
C. install a system of checks and balances in the industry
Not Discussed
D. maintain control over daily operations
Not Discussed
E. gain a foothold in a troubled economy
Not Discussed

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A. They negotiated with management companies for longer contracts in exchange for smaller fees.
Not Discussed

B. They attempted to align themselves financially with management.
Not Discussed

C. They took over the daily operations of their hotels.
Not Discussed

D. They tried to shorten their contracts with management.
Correct
E. They withheld fees from management in exchange for more control over their properties.
Not Discussed

5. It can be inferred from the passage that the agreements typically entered into by management and owners

A. worked as long as the owners did not get too greedy
Not Discussed
B. were to the benefit of both parties throughout the 1970s
Not Discussed
C. had problems that were not immediately evident
Correct
D. were ideal for those owners with a hands-on approach to business
Not Discussed

E. favored management in most situations
Not Discussed

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

A. devising an advertising campaign
Not Discussed

B. booking a national accounting convention
Not Discussed

C. contacting a temporary employment agency
Not Discussed

D. hiring celebrities for promotional appearances
Not Discussed

E. providing financing for expanding facilities
Correct

7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

A. A lack of trust on the part of owners in the capabilities of management
Not Discussed

B. A reconfiguration in the balance of responsibility between the two parties
Correct
C. A demand by owners for a bigger role in daily operations
Not Discussed

D. A downward trend in the economy in general
Not Discussed

E. A new program that tied fees to management performance
Not Discussed

akash2703 · Answer

Quick notes on the passage -

Para1 General structure-
Hotel owners- Provide Financial Aid
Hotel management- Day to day operations, Publicity campaigns and name recognition.
Economy fall in US lead to shorter contract and fee reduction based on performance

Para2 -
Actions taken -
Management companies bought equity stakes in owner's properties.
Owners - legal suits on miss management

Conclusion- There is a need of some control by owners over handling their assets, leading to more fiscal responsibilities in the industry.

Question1 OA - B

1. The primary purpose of the passage is to

A. redress certain  wrongs  perpetrated by owners of hotels  
B. stress the need for fiscal responsibility in the hotel industry    
C. analyze a situation and point out its broader implications  
D. present one type of contract used in the hotel industry  
E. point out the  dangers  of mismanaging hotels

Question2 OA - D
2. According to the passage, how have some owners attempted to rectify problems with management?

A. They have decreased their total level of investment.  
B. They have offered management companies changes in their contracts that would  benefit both parties.   
C. They have focused attention on the poor hiring practices of management companies.  
D. They have sought restitution in court.    
E. They have recognized the problems inherent in a troubled economy.

Question3 OA - D
3. According to the passage, some management companies have taken equity stakes in their properties in order to

A.  create stronger alliances  with hotel property owners  
B.  prevent  owners from tying fees to performance  
C. install a system of checks and balances in the industry  
D. maintain control over daily operations  
Reference: Para2:  This reconfiguration of the balance of responsibility and control . 
Para1:  while management companies control marketing strategies, staffing, and other day-to-day operations 
I chose D over C.
E. gain a foothold in a troubled economy

Question4 OA - D
4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A. They negotiated with management companies for longer contracts in exchange for smaller fees.  
B. They attempted to align themselves financially with management.  
C. They took over the daily operations of their hotels.  
D. They tried to shorten their contracts with management.
Straight from the passage -  Alarmed by their faltering properties, owners began to lobby for fee reductions and shorter contracts with management companies 
E. They withheld fees from management in exchange for more control over their properties.

Question5 OA - D Except D all are extreme options without any reference in the passage.
5. It can be inferred from the passage that the agreements typically entered into by management and owners

A. worked as long as the  owners did not get too greedy 
B. were to the  benefit  of both parties throughout the 1970s
C.  had problems  that were not immediately evident
D. were ideal for those owners with a hands-on approach to business    
E.  favored  management in most situations

Question 6 OA - E
6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

A. devising an advertising campaign  
B. booking a national accounting convention  
C. contacting a temporary employment agency  
D. hiring celebrities for promotional appearances 
E. providing financing for expanding facilities
Straight from the passage -  Typically, owners bear the financial responsibility for profits and losses,

Question 7 OA- D
7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

A. A lack of trust on the part of owners in the capabilities of management  
B. A reconfiguration in the balance of responsibility between the two parties  
C. A demand by owners for a bigger role in daily operations  
D. A downward trend in the economy in general  
Straight from the passage -  It was only when the United States economy entered a troubled stage that the problems inherent in this structure became more readily apparent.

E. A new program that tied fees to management performance

zyt · Answer

1. The primary purpose of the passage is to

A. redress certain wrongs perpetrated by owners of hotels 
No owner wrongdoings are mentioned but they are not the main purpose.

B. stress the need for fiscal responsibility in the hotel industry 
responsibility in hotel industry is not discussed

C. analyze a situation and point out its broader implications 
This is correct as the passage analyses the change in relation between owner and management and mentions its implication on other areas in the end of second paragraph

D. present one type of contract used in the hotel industry 
different types of contracts are mentioned.

E. point out the dangers of mismanaging hotels 
Not the primary goal of the passage

2. According to the passage, how have some owners attempted to rectify problems with management?

A. They have decreased their total level of investment. 
yes they invest less or try their best to decrease their expense on fees paid to management.

B. They have offered management companies changes in their contracts that would benefit both parties. 
not the change is to disadvantage to management companies, not beneficial to both

C. They have focused attention on the poor hiring practices of management companies .
hiring practices of management companies are not mentioned.

D. They have sought restitution in court. 
not correct

E. They have recognized the problems inherent in a troubled economy. 
nowhere mentioned about troubles of economy

3. According to the passage, some management companies have taken equity stakes in their properties in order to

A. create stronger alliances with hotel property owners 
mentioned in the beginning of second paragraph

B. prevent owners from tying fees to performance 
no mentioned

C. install a system of checks and balances in the industry 
not stated

D. maintain control over daily operations
E. gain a foothold in a troubled economy 
not mentioned as well, the management want to equalize with owners not concerned with the economy as such.

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A. They negotiated with management companies for longer contracts in exchange for smaller fees. 
they did negotiate but for shorter contracts

B. They attempted to align themselves financially with management. 
aligning was the reaction of management not owners

C. They took over the daily operations of their hotels. 
no they did not, not mentioned

D. They tried to shorten their contracts with management. 
yes this is mentioned in first paragraph

E. They withheld fees from management in exchange for more control over their properties. 
this strategy of management is not stated

5. It can be inferred from the passage that the agreements typically entered into by management and owners

A. worked as long as the owners did not get too greedy 
no it worked till economy was good.

B. were to the benefit of both parties throughout the 1970s 
the year of start of trouble is not stated.

C. had problems that were not immediately evident 
yes the problems were evident only after the American Economy was troubled

D. were ideal for those owners with a hands-on approach to business 
no not stated

E. favored management in most situations 
infact owners exploited the situation to their benefit more at least initially

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT

A. devising an advertising campaign
B. booking a national accounting convention
C. contacting a temporary employment agency
D. hiring celebrities for promotional appearances 
 E. providing financing for expanding facilities 
this was duty of owner to provide finances, rest were duty of management

7. According to the passage, what caused a change in the way management and owners work together to run a hotel?

A. A lack of trust on the part of owners in the capabilities of management
B. A reconfiguration in the balance of responsibility between the two parties
C. A demand by owners for a bigger role in daily operations 
 D. A downward trend in the economy in general 
this is clearly stated in paragraph 1
 E. A new program that tied fees to management performance

Haridas800 · Answer

1.A
2.C
3.D
4.B
5.D
6.E
7.B

snscatter · Answer

HO – Hotel owners, HM – Hotel management companies

1. The primary purpose of the passage is to

A. redress certain wrongs perpetrated by owners of hotels –  No, as per Para 2, the owners brought legal suit upon the management 
B. stress the need for fiscal responsibility in the hotel industry –  No, refer to the line “the attention focused on these suits should stand as a firm reminder to owners of all types of assets to maintain some control over the handling of those assets.” 
C. analyze a situation and point out its broader implications –  No. This is a generic statement and I cant help but question what is the situation being referred to here? is it the contract? or is the downward trend of economy? And if it is the latter then the broader implications are not around every subject but just Hotel contract. So I'd rule this option out 
D. present one type of contract used in the hotel industry –  Yes, the passage as a whole is focused on one type of contract in the hotel industry in which HO does the financing and HM manages the admin and marketing of the hotel and how this contract had to go through changes due to economy's downward spiral 
E. point out the dangers of mismanaging hotels –  No, although the passage does tell about how the contract’s fallacies came to limelight after the economic downturn but to call them “dangers of mismanaging hotels” seems extreme

2. According to the passage, how have some owners attempted to rectify problems with management?

A. They have decreased their total level of investment. –  No. This was the action taken by management companies to take some equity stake in the hotels 
B. They have offered management companies changes in their contracts that would benefit both parties. –  No, not mentioned in the passage 
C. They have focused attention on the poor hiring practices of management companies. –  No, not mentioned in the passage 
D. They have sought restitution in court. –  Yes, this is the action taken by the owners. Refer to line – “This reconfiguration of the balance of responsibility and control has been furthered by legal suits brought by owners attempting to redress what they say has been gross mismanagement.” 
E. They have recognized the problems inherent in a troubled economy. –  No, not mentioned in the passage

3. According to the passage, some management companies have taken equity stakes in their properties in order to

A. create stronger alliances with hotel property owners –  Yes, “Some management companies have sought to align themselves even further with the owners” 
B. prevent owners from tying fees to performance –  No, this cant be inferred from the passage. 
C. install a system of checks and balances in the industry –  No, this cant be inferred from the passage. 
D. maintain control over daily operations–  No, HM already had control over daily operations 
E. gain a foothold in a troubled economy –  No, we cant certainly infer that from the passage

4. According to the passage, what was the reaction of owners to a decline in the value of their hotels?

A. They negotiated with management companies for longer contracts in exchange for smaller fees. –  No, refer to the line “owners began to lobby for fee reductions and shorter contracts with management companies” 
B. They attempted to align themselves financially with management. –  No. "Align" here sounds like they reached some midway but HO outrightly started to lobby for fee reductions and shorter contracts with HM 
C. They took over the daily operations of their hotels. –  No. Although this the recommendation given by the author at the end of the passage, but we can’t say from the passage that this was actually implemented 
D. They tried to shorten their contracts with management. –  Yes, reference to the same line “owners began to lobby for fee reductions and shorter contracts with management companies” 
E. They withheld fees from management in exchange for more control over their properties. –  No. They surely linked the fees to performance of management but that was not to gain more control over properties.

5. It can be inferred from the passage that the agreements typically entered into by management and owners

Refer to line - It was only when the United States economy entered a troubled stage that the problems inherent in this structure became more readily apparent.

A. worked as long as the owners did not get too greedy –  No, it was the deteriorating economic conditions that exposed the fallacies in the contracts.  
B. were to the benefit of both parties throughout the 1970s –  No, not mentioned in the passage 
C. had problems that were not immediately evident –  Yes, we can infer from the passage that everything was smooth sailing until the economy entered a troubled stage 
D. were ideal for those owners with a hands-on approach to business–  No, not mentioned in the passage 
E. favored management in most situations–  No, not mentioned in the passage

6. It can be inferred from the passage that, prior to changes in the management-owner relationship, all of the following might have been duties of management EXCEPT
 
 Refer to line - Typically, owners bear the financial responsibility for profits and losses, while management companies control marketing strategies, staffing, and other day-to-day operations.

A. devising an advertising campaign –  No, comes under marketing strategies 
B. booking a national accounting convention –  No, comes under day-to-day operations 
C. contacting a temporary employment agency –  No, comes under staffing 
D. hiring celebrities for promotional appearances –  No, comes under marketing strategies 
E. providing financing for expanding facilities –  Yes, financing was provided by HO

7. According to the passage, what caused a change in the way management and owners work together to run a hotel?
 
 Refer to line - It was only when the United States economy entered a troubled stage that the problems inherent in this structure became more readily apparent.

A. A lack of trust on the part of owners in the capabilities of management –  No, this happened after the economy went into the downward spiral 
B. A reconfiguration in the balance of responsibility between the two parties –  No, cant be inferred from passage 
C. A demand by owners for a bigger role in daily operations –  No, cant be inferred from the passage 
D. A downward trend in the economy in general –  Yes, the above stated reference from passage tells us this 
E. A new program that tied fees to management performance –  No, this was an implication of the downward economy

Thus, the answers are:
1. D
2. D
3. A
4. D
5. C
6. E
7. D

Sajjad1994 · Answer

Hello everyone!

This is a medium level passage overall.

Question #1
Difficulty Level: 650
Easy to eliminate options are: B, D, and E

The only debate can happen between the OA C and A

Question #2
Difficulty Level: 650
Easy to eliminate options are: C and E

Question #3
Difficulty Level: 650 
Easy to eliminate options are: C, D, and E

Question #4
Difficulty Level: 450

Question #5
Difficulty Level: 550

Question #6
Difficulty Level: 450

Question #7
Difficulty Level: 550

(10/10)

800gal  (The best among all)
 c93liu  (Excellent)

(9-9.5/10)

Gaudapada 
 snscatter 
 Catman 
 Rohitq

Good luck with the next questions

VerbalBot · Answer

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Contracts between hotel owners and hotel management companies determin

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