XML 24 R11.htm IDEA: XBRL DOCUMENT
v3.22.4

Revenue | 12 Months Ended
--- | ---
Dec. 31, 2022
Revenue from Contract with Customer [Abstract] |
Revenue | Revenue Contract Liabilities Contract liabilities relate to (i) advance consideration received, such as initial franchise fees paid when a franchise agreement is executed and system implementation fees paid at time of installation, for services considered to be part of the brand intellectual property performance obligation and (ii) amounts received when loyalty points are issued but for which revenue is not yet recognized since the related loyalties have not been redeemed. Deferred revenues from initial fees and system implementation fees are typically recognized over a five- to ten-year period, unless the franchise agreement is terminated and the hotel exits the franchise system whereby remaining deferred amounts are recognized to revenue in the period of termination. Loyalty points are typically redeemed within three years of issuance. Significant changes in the contract liabilities balances during the year ended December 31, 2022, inclusive of balances assumed in the acquisition of Radisson Hotels Americas (refer to Note 24), are as follows:
(in thousands) |
Balance as of December 31, 2021 | $ | 175,425 |
Assumption of contract liabilities from Radisson Hotels Americas acquisition | 27,682 |
Increases to the contract liability balance due to cash received | 124,103 |
Revenue recognized in the period | (117,851) |
Balance as of December 31, 2022 | $ | 209,359 |
Remaining Performance Obligations The aggregate amount of transaction price allocated to unsatisfied or partially unsatisfied performance obligations is $209.4 million as of December 31, 2022. This amount represents fixed transaction price that will be recognized as revenue in future periods, which is primarily captured in the consolidated balance sheet as current and non-current deferred revenue. Based on practical expedient elections permitted by ASU 2014-09, Revenue From Contracts with Customers (Topic 606) and subsequent amendments ("Topic 606"), the Company does not disclose the value of unsatisfied performance obligations for (i) variable consideration subject to the sales or usage-based royalty constraint or comprising a component of a series (including franchise, partnership, qualified vendor, and software as a service ("SaaS") agreements), (ii) variable consideration for which we recognize revenue at the amount to which we have the right to invoice for services performed, or (iii) contracts with an expected original duration of one year or less. Capitalized Franchise Agreement Costs Sales commissions earned by Company personnel upon execution of a franchise agreement (“franchise sales commissions”) meet the requirement to be capitalized as an incremental cost of obtaining a contract with a customer. Capitalized franchise sales commission are amortized on a straight-line basis over the estimated benefit period of the arrangement, unless the franchise agreement is terminated and the hotel exits the system whereby remaining capitalized amounts will be expensed in the period of termination. The estimated benefit period is the Company's estimate of the duration a hotel will remain in the Choice system. Capitalized franchise sales commissions of $57.6 million and $55.5 million are recorded within Other assets as of December 31, 2022 and 2021, respectively. Amortization expense and impairment charges for the years ended December 31, 2022, 2021 and 2020 were $13.0 million, $11.9 million and $9.7 million, respectively, and are recorded within SG&A expenses. The Company makes certain payments to customers as an incentive to enter into new franchise agreements (“franchise agreement acquisition cost”). These payments are recognized as an adjustment to transaction price and capitalized as an intangible asset. Franchise agreement acquisition cost intangibles are amortized on a straight-line basis over the estimated benefit period of the arrangement as an offset to royalty, licensing and management fees and other revenues from franchised and managed properties. Impairments from adverse franchise agreement activity, including terminations and significant delinquencies in construction or invoice payments, for the years ended December 31, 2022, 2021 and 2020 were $2.5 million, $11.1 million and $2.0 million, respectively, and are recorded within SG&A expenses and other expenses from franchised and managed properties. Disaggregation of Revenue The following table presents our revenues by over time and point in time recognition:
| Year Ended December 31, 2022 |  |
(in thousands) | Over time |  | Point in time |  | Total |  |  |  |  |  |
Royalty, licensing and management fees | $ | 471,601 |  |  | $ | 158 |  |  | $ | 471,759 |  |  |  |  |  |  |
Initial franchise fees | 28,074 |  |  | — |  |  | 28,074 |  |  |  |  |  |  |
Procurement services | 60,768 |  |  | 3,032 |  |  | 63,800 |  |  |  |  |  |  |
Owned hotels | 55,197 |  |  | 15,398 |  |  | 70,595 |  |  |  |  |  |  |
Other | 64,740 |  |  | — |  |  | 64,740 |  |  |  |  |  |  |
Other revenues from franchised and managed properties | 596,668 |  |  | 106,082 |  |  | 702,750 |  |  |  |  |  |  |
Topic 606 revenues | $ | 1,277,048 |  |  | $ | 124,670 |  |  | 1,401,718 |  |  |  |  |  |  |
Non-Topic 606 revenues |  |  |  |  | 231 |  |  |  |  |  |  |
Total revenues |  |  |  |  | $ | 1,401,949 |  |  |  |  |  |  |
|  |  | Year Ended December 31, 2021
(in thousands) |  |  |  |  |  |  | Over time |  | Point in time |  | Total
Royalty, licensing and management fees |  |  |  |  |  |  | $ | 397,218 |  |  | $ | — |  |  | $ | 397,218 |
Initial franchise fees |  |  |  |  |  |  | 26,342 |  |  | — |  |  | 26,342 |
Procurement services |  |  |  |  |  |  | 47,878 |  |  | 2,515 |  |  | 50,393 |
Owned hotels |  |  |  |  |  |  | 31,747 |  |  | 5,642 |  |  | 37,389 |
Other |  |  |  |  |  |  | 28,669 |  |  | — |  |  | 28,669 |
Other revenues from franchised and managed properties |  |  |  |  |  |  | 465,184 |  |  | 63,659 |  |  | 528,843 |
Topic 606 revenues |  |  |  |  |  |  | $ | 997,038 |  |  | $ | 71,816 |  |  | 1,068,854 |
Non-Topic 606 revenues |  |  |  |  |  |  |  |  |  |  | 444 |
Total revenues |  |  |  |  |  |  |  |  |  |  | $ | 1,069,298 |
| Year Ended December 31, 2020 |  |
(in thousands) | Over time |  | Point in time |  | Total |  |  |  |  |  |
Royalty, licensing and management fees | $ | 263,308 |  |  | $ | — |  |  | $ | 263,308 |  |  |  |  |  |  |
Initial franchise fees | 25,906 |  |  | — |  |  | 25,906 |  |  |  |  |  |  |
Procurement services | 42,919 |  |  | 2,323 |  |  | 45,242 |  |  |  |  |  |  |
Owned hotels | 16,824 |  |  | 2,912 |  |  | 19,736 |  |  |  |  |  |  |
Other | 15,838 |  |  | — |  |  | 15,838 |  |  |  |  |  |  |
Other revenues from franchised and managed properties | 325,785 |  |  | 76,783 |  |  | 402,568 |  |  |  |  |  |  |
Topic 606 revenues | $ | 690,580 |  |  | $ | 82,018 |  |  | 772,598 |  |  |  |  |  |  |
Non-Topic 606 revenues |  |  |  |  | 1,474 |  |  |  |  |  |  |
Total revenues |  |  |  |  | $ | 774,072 |  |  |  |  |  |  |
Owned hotels point in time revenues represent goods and services purchased independently of the hotel stay, such as food and beverage, incidentals, and parking fees. The remaining point in time revenue captions represent loyalty points redeemed by members for benefits (with both franchisees and third-party partners), net of the cost of redemptions. For the years ended December 31, 2022, 2021 and 2020, these loyalty net revenues, inclusive of adjustments to estimated redemption rates, were $109.3 million, $66.2 million, and $79.1 million, respectively. For the year ended December 31, 2022, other revenues include contract termination fees of $22.6 million related to the termination of 110 WoodSpring units. The termination fee revenue represents $67.4 million in consideration received, less the $44.7 million carrying basis of the related contract intangibles initially established at the time of the WoodSpring acquisition. As presented in Note 20, the Corporate & Other segment amounts represent $108.9 million, $45.7 million, and $28.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in the Over time column of Other revenues and the Owned hotels and Non-Topic 606 revenues rows. The remaining revenues relate to the Hotel Franchising & Management reportable segment. Royalty, licensing and management fees and Other revenues from franchised and managed properties net of intersegment revenues of $5.5 million, $2.9 million, and $1.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

X
- References No definition available. + Details
Name: | us-gaap_RevenueFromContractWithCustomerAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI https://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 + Details
Name: | us-gaap_RevenueFromContractWithCustomerTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration