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Receivables and Allowance for Credit Losses | 6 Months Ended
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Jun. 30, 2025
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 in order 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:
(in thousands) | June 30, 2025 |  | December 31, 2024
Senior | $ | 97,942 |  |  | $ | 94,963 |
Subordinated | 14,227 |  |  | 15,433 |
Unsecured | 3,926 |  |  | 5,118 |
Total notes receivable | $ | 116,095 |  |  | $ | 115,514 |
Less: allowance for credit losses | 7,204 |  |  | 7,331 |
Total notes receivable, net of allowance for credit losses | $ | 108,891 |  |  | $ | 108,183 |
Current portion, net of allowance for credit losses | $ | 74,677 |  |  | $ | 75,501 |
Long-term portion, net of allowance for credit losses | $ | 34,214 |  |  | $ | 32,682 |
The following table summarizes the amortized cost basis of the notes receivable by the year of origination and credit quality indicator:
(in thousands) | 2025 |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | Prior |  | Total
Senior | $ | 1,656 |  |  | $ | 40,192 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 56,094 |  |  | $ | 97,942 |
Subordinated | — |  |  | — |  |  | 3,501 |  |  | — |  |  | — |  |  | 10,726 |  |  | 14,227 |
Unsecured | — |  |  | 123 |  |  | — |  |  | — |  |  | 746 |  |  | 3,057 |  |  | 3,926 |
Total notes receivable | $ | 1,656 |  |  | $ | 40,315 |  |  | $ | 3,501 |  |  | $ | — |  |  | $ | 746 |  |  | $ | 69,877 |  |  | $ | 116,095 |
The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses:
(in thousands) | June 30, 2025 |  | December 31, 2024
Beginning balance | $ | 7,331 |  |  | $ | 8,616 |
Provision (reversal) for credit losses | (127) |  |  | (609) |
Recoveries | — |  |  | (676) |
Ending balance | $ | 7,204 |  |  | $ | 7,331 |
During the year ended December 31, 2024, the recoveries were primarily associated with cash collections pursuant to a settlement agreement with a borrower. As of June 30, 2025 and December 31, 2024, three and one note receivable loans, respectively, with senior credit quality indicators met the definition of collateral-dependent and are collateralized by the membership interests in the borrowing entities, the associated land parcel, or the operating hotel. The Company used both a market approach that uses quoted market prices and an income approach that uses discounted cash flows 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 respective note receivable loan. The allowance for credit losses attributable to the collateral-dependent note receivable loans was $3.2 million and $2.2 million as of June 30, 2025 and December 31, 2024, respectively. 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 June 30, 2025 |  |  |  |  |  |  |  |  |  |  |
Senior | $ | — |  |  | $ | — |  |  | $ | 42,900 |  |  | $ | 42,900 |  |  | $ | 55,042 |  |  | $ | 97,942 |
Subordinated | — |  |  | — |  |  | 2,264 |  |  | 2,264 |  |  | 11,963 |  |  | 14,227 |
Unsecured | — |  |  | — |  |  | 384 |  |  | 384 |  |  | 3,542 |  |  | 3,926 |
| $ | — |  |  | $ | — |  |  | $ | 45,548 |  |  | $ | 45,548 |  |  | $ | 70,547 |  |  | $ | 116,095 |
As of December 31, 2024 |  |  |  |  |  |  |  |  |  |  |
Senior | $ | — |  |  | $ | — |  |  | $ | 15,200 |  |  | $ | 15,200 |  |  | $ | 79,763 |  |  | $ | 94,963 |
Subordinated | — |  |  | — |  |  | 2,264 |  |  | 2,264 |  |  | 13,169 |  |  | 15,433 |
Unsecured | — |  |  | — |  |  | 784 |  |  | 784 |  |  | 4,334 |  |  | 5,118 |
| $ | — |  |  | $ | — |  |  | $ | 18,248 |  |  | $ | 18,248 |  |  | $ | 97,266 |  |  | $ | 115,514 |
The amortized cost basis of the notes receivable in a non-accrual status was $45.2 million and $17.5 million as of June 30, 2025 and December 31, 2024, 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 $105.0 million and $103.1 million as of June 30, 2025 and December 31, 2024, respectively. The Company has determined that it is not the primary beneficiary of these variable interest entities ("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 12. Transactions with Unconsolidated Affiliates The Company has extended loans to various unconsolidated affiliates or members of our unconsolidated affiliates. The Company had a total principal balance on these loans of $65.8 million and $66.2 million as of June 30, 2025 and December 31, 2024, respectively. These loans mature at various dates and bear interest at fixed or variable rates. 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 six months ended June 30, 2025, the Company recognized provisions for credit losses on accounts receivable of $9.2 million in selling, general and administrative expenses, and $6.9 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income. During the year ended December 31, 2024, the Company recognized provisions for credit losses on accounts receivable of $11.0 million in selling, general and administrative expenses, and $9.7 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income. During the six months ended June 30, 2025, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $12.5 million. During the year ended December 31, 2024, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $14.4 million.

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- Definition The entire disclosure for claims held for amounts due to 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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 + Details
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