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Receivables and Allowance for Credit Losses | 12 Months Ended
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Dec. 31, 2023
Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract] |
Receivables and Allowance for Credit Losses | Receivables and Allowance for Credit Losses Notes Receivable The Company has provided financing in the form of notes receivable loans to franchisees to support the development of hotel properties in strategic markets. The Company's credit quality indicator is the level of security in the note receivable. The following table summarizes the composition of the notes receivable balances by credit quality indicator and the allowance for credit losses:
| December 31,
(in thousands) | 2023 |  | 2022
Senior | $ | 85,919 |  |  | $ | 95,466 |
Subordinated | 17,004 |  |  | 17,075 |
Unsecured | 5,359 |  |  | 5,674 |
Total notes receivable | 108,282 |  |  | 118,215 |
Less: allowance for credit losses | 8,616 |  |  | 10,172 |
Total notes receivable, net of allowance for credit losses | $ | 99,666 |  |  | $ | 108,043 |
Current portion, net of allowance for credit losses | $ | 20,766 |  |  | $ | 52,466 |
Long-term portion, net of allowance for credit losses | $ | 78,900 |  |  | $ | 55,577 |
The following table summarizes the amortized cost basis of the notes receivable by the year of origination and credit quality indicator:
(in thousands) | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Total
Senior | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 28,840 |  |  | $ | 57,079 |  |  | $ | 85,919 |
Subordinated | 3,496 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 13,508 |  |  | 17,004 |
Unsecured | — |  |  | 234 |  |  | 1,291 |  |  | 886 |  |  | 208 |  |  | 2,740 |  |  | 5,359 |
Total notes receivable | $ | 3,496 |  |  | $ | 234 |  |  | $ | 1,291 |  |  | $ | 886 |  |  | $ | 29,048 |  |  | $ | 73,327 |  |  | $ | 108,282 |
The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses:
| December 31,
(in thousands) | 2023 |  | 2022
Beginning balance | $ | 10,172 |  |  | $ | 16,779 |
Provision for credit losses | 763 |  |  | (938) |
Recoveries | (2,319) |  |  | (5,669) |
Ending balance | $ | 8,616 |  |  | $ | 10,172 |
As of December 31, 2023 and December 31, 2022, one note receivable loan with a senior credit quality indicator met the definition of collateral-dependent and is collateralized by membership interests in the borrowing entities and the associated land parcel. The Company used a market approach using quoted market prices to value the underlying collateral. The Company reviewed the borrower's financial statements, economic trends, industry projections for the market, and comparable sales capitalization rates, which represent significant inputs to the cash flow projections. These nonrecurring fair value measurements are classified as Level 3 in the fair value measurement hierarchy because they are unobservable inputs which are significant to the overall fair value. Based on the Company's analysis, the fair value of the collateral secures substantially all of the carrying value of the note receivable loan. The allowances for credit losses attributable to the collateral-dependent note receivable loan increased by $1.3 million from $0.9 million as of December 31, 2022 to $2.2 million as of December 31, 2023. During the year ended December 31, 2023, the recoveries were primarily associated with cash collections pursuant to a settlement agreement with a borrower. During the year ended December 31, 2022, the recoveries were primarily associated with a note receivable loan that was previously classified as collateral-dependent and was settled in exchange for an operating hotel on April 14, 2022. Refer to Note 24 regarding the 2022 asset acquisition accounting. The following table summarizes the past due balances by credit quality indicator of the notes receivable:
(in thousands) | 1-30 days Past Due |  | 31-89 days Past Due |  | > 90 days Past Due |  | Total Past Due |  | Current |  | Total Notes Receivable
As of December 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Senior | $ | — |  |  | $ | — |  |  | $ | 15,200 |  |  | $ | 15,200 |  |  | $ | 70,719 |  |  | $ | 85,919 |
Subordinated | — |  |  | 2,936 |  |  | — |  |  | 2,936 |  |  | 14,068 |  |  | 17,004 |
Unsecured | — |  |  | — |  |  | 400 |  |  | 400 |  |  | 4,959 |  |  | 5,359 |
| $ | — |  |  | $ | 2,936 |  |  | $ | 15,600 |  |  | $ | 18,536 |  |  | $ | 89,746 |  |  | $ | 108,282 |
As of December 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Senior | $ | — |  |  | $ | 15,200 |  |  | $ | — |  |  | $ | 15,200 |  |  | $ | 80,266 |  |  | $ | 95,466 |
Subordinated | — |  |  | — |  |  | 2,209 |  |  | 2,209 |  |  | 14,866 |  |  | 17,075 |
Unsecured | 20 |  |  | 40 |  |  | 40 |  |  | 99 |  |  | 5,574 |  |  | 5,674 |
| $ | 20 |  |  | $ | 15,240 |  |  | $ | 2,249 |  |  | $ | 17,508 |  |  | $ | 100,706 |  |  | $ | 118,215 |
The amortized cost basis of the notes receivable in a non-accrual status was $15.9 million and $18.7 million as of December 31, 2023 and 2022, respectively. Variable Interest through Notes Receivable The Company has issued notes receivable loans to certain entities that have created variable interests in the associated borrowers totaling $95.1 million and $103.2 million as of December 31, 2023 and 2022, respectively. The Company has determined that it is not the primary beneficiary of these VIEs. For collateral-dependent loans, the Company has no exposure to the borrowing VIE beyond the respective note receivable and the limited commitments which are addressed in Note 23. Accounts Receivable Accounts receivable consists primarily of franchise and related fees due from the hotel franchisees and are recorded at the invoiced amount. During the year ended December 31, 2023, the Company recognized provisions for credit losses on accounts receivable of $7.5 million in selling, general and administrative expenses, and $9.0 million in other expenses from franchised and managed properties, in the consolidated statements of income. During the year ended December 31, 2022, the Company recognized reversals of provisions for credit losses on accounts receivable of $0.4 million in selling, general and administrative expenses, and provisions for credit losses on accounts receivable of $1.4 million in other expenses from franchised and managed properties, in the consolidated statements of income. For the years ended December 31, 2023 and 2022, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $0.6 million and $12.4 million, respectively.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//310-10/tableOfContent + Details
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