Investment in Hotel Properties

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Investment in hotel properties consisted of the following (in thousands):


	December 31, 2021		December 31, 2020
Land and improvements	$	975,688	$	1,089,597
Buildings and improvements	4,001,875		4,084,712
Furniture, fixtures and equipment	691,057		697,404
	5,668,620		5,871,713
Accumulated depreciation	(1,449,504)		(1,385,297)
Investment in hotel properties, net	$	4,219,116	$	4,486,416

For the years ended December 31, 2021, 2020 and 2019, the Company recognized depreciation expense related to its investment in hotel properties of approximately $187.2 million, $193.3 million and $209.6 million, respectively.

Impairments

During the third quarter of 2021, the Company evaluated the recoverability of the carrying amount of the DoubleTree Metropolitan Hotel New York City and recorded an impairment loss of $138.9 million to adjust the hotel's carrying amount to its estimated fair value. The fair value was determined based on the contractual sales price pursuant to an executed purchase

and sale agreement (a Level 2 measurement in the fair value hierarchy). The sale of this hotel property closed in December 2021. Refer to Note 5, Sale of Hotel Properties, for more information regarding the sale of this hotel property.

During the first quarter of 2021, the Company evaluated the recoverability of two hotel properties and recorded an impairment loss of $5.9 million to adjust the hotels’ carrying amounts to their estimated fair values. The fair values were determined based on the contractual sales price pursuant to an executed purchase and sale agreement (a Level 2 measurement in the fair value hierarchy). The sales of these hotel properties closed in May 2021. Refer to Note 5, Sale of Hotel Properties, for more information regarding the sales of these hotel properties.

During year ended December 31, 2019, the Company recorded an impairment loss of $13.5 million related to two hotel properties. The Company evaluated the recoverability of the carrying value of the hotels due to adverse changes in the operating performance of the hotels. Based on an analysis of the estimated undiscounted net cash flows, the Company concluded that the carrying value of the hotels was not recoverable. The Company estimated the fair value of the hotels using a weighted valuation approach considering room revenue multiples and comparable sales adjusted for capital expenditures. The valuation approach included significant unobservable inputs, including revenue growth projections and prevailing market multiples, from third party sources. There were no impairment losses recorded during the year ended December 31, 2020.