As of December 31, 2022, 13 of Company's hotel properties were subject to ground lease agreements that cover the land underlying the respective hotels. The ground leases are classified as operating leases. The total ground lease expense was $15.9 million for the year ended December 31, 2022, which consisted of $11.9 million of fixed lease expense and $4.0 million of variable lease expense. The total ground lease expense was $13.1 million for the year ended December 31, 2021, which consisted of $11.6 million of fixed lease expense and $1.5 million of variable lease expense. The total ground lease expense was $12.4 million for the year ended December 31, 2020, which consisted of $11.6 million of fixed lease expense and $0.8 million of variable lease expense. The total ground lease expense is included in property tax, insurance and other in the accompanying consolidated statements of operations and comprehensive income (loss).


			Ground Lease Expense
			For the year ended December 31,
Hotel Property Name	Initial Term Expiration	Extension Term(s) Expiration	2022		2021		2020

Wyndham Boston Beacon Hill	2028	—	$	803	$	556	$	400
Wyndham San Diego Bayside	2029	—	5,009		4,042		4,100
DoubleTree Suites by Hilton Orlando Lake Buena Vista	2032	2057	1,005		666		300
Residence Inn Palo Alto Los Altos	2033	—	86		86		100
Wyndham Pittsburgh University Center	2038	2083	726		726		700


Marriott Louisville Downtown	2053	2153 (1)	—		—		—
Embassy Suites San Francisco Airport Waterfront	2059	—	1,646		1,239		1,200
Wyndham New Orleans French Quarter	2065	—	487		487		500

Courtyard Charleston Historic District	2096	—	1,044		1,019		950
Courtyard Austin Downtown Convention Center and Residence Inn Downtown Convention Center	2100	—	922		555		449

Courtyard Waikiki Beach	2112	—	3,922		3,742		3,700
Moxy Denver Cherry Creek	2115	—	258		5		—
			$	15,908	$	13,123	$	12,399


	December 31, 2022
2023	$	11,617
2024	11,375
2025	10,443
2026	10,352
2027	10,097
Thereafter	532,440
Total future lease payments	586,324
Imputed interest	(469,314)
Lease liabilities	$	117,010

The Company is obligated to maintain cash reserve funds for future capital expenditures at the hotels (including the periodic replacement or refurbishment of FF&E) as determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents. The management agreements, franchise agreements and/or mortgage loan documents require the Company to reserve cash ranging typically from 3.0% to 5.0% of the individual hotel’s revenues. Any unexpended amounts will remain the property of the Company upon termination of the management agreements, franchise agreements or mortgage loan documents. As of December 31, 2022 and 2021, approximately $55.1 million and $48.5 million, respectively, was available in the restricted cash reserves for future capital expenditures, real estate taxes and insurance, and debt obligations where certain lenders held restricted cash due to a cash trap event.

Neither the Company nor any of its subsidiaries is currently involved in any regulatory or legal proceedings that management believes will have a material and adverse effect on the Company's financial position, results of operations or cash flows.

As of December 31, 2022, 96 of the Company's consolidated hotel properties were operated pursuant to management agreements with initial terms ranging from one to 25 years, with 17 different management companies as noted in the table below. This number includes 35 consolidated hotel properties that receive the benefits of a franchise agreement pursuant to management agreements with Hilton, Hyatt, Marriott, or other management companies.


Management Company						Number of Hotel Properties
Accor Hotels						1
Aimbridge Hospitality						31
Colwen Management, Inc.						1
Concord Hospitality Enterprises Company						1
Crestline Hotels and Resorts						1
Davidson Hotels and Resorts						2
Hilton Management and affiliates						20
HEI Hotels and Resorts						2
Hersha Hospitality Management & Urgo Hotels (1)						7
Highgate Hotels						3
Hyatt Corporation and affiliates						11

InnVentures (2)						3


Marriott International, Inc.						3
Pyramid						1
Sage Hospitality						5

White Lodging Services						4

						96

Each management company receives a base management fee between 1.75% and 3.5% of hotel revenues. Management agreements that include the benefits of a franchise agreement incur a base management fee between 2.0% and 7.0% of hotel revenues. The management companies are also eligible to receive an incentive management fee if hotel operating income, as defined in the management agreements, exceeds certain thresholds. The incentive management fee is generally calculated as a percentage of hotel operating income after the Company has received a priority return on its investment in the hotel.

Management fees are included in management and franchise fee expense in the accompanying consolidated statements of operations and comprehensive income (loss). For the years ended December 31, 2022, 2021 and 2020, the Company incurred management fee expense of approximately $38.8 million, $24.2 million and $13.2 million, respectively.

As of December 31, 2022, 59 of the Company's consolidated hotel properties were operated under franchise agreements with initial terms ranging from one to 30 years. This number excludes 35 consolidated hotel properties that receive the benefits of a franchise agreement pursuant to management agreements with Hilton, Hyatt, Marriott, or other management companies. In addition, two hotels are not operated with a hotel brand so they do not have franchise agreements. Franchise agreements allow the hotel properties to operate under the respective brands. Pursuant to the franchise agreements, the Company pays a royalty fee between 2.0% and 6.0% of room revenue, plus additional fees for marketing, central reservation systems and other franchisor costs between 1.0% and 4.3% of room revenue. Certain hotels are also charged a royalty fee between 1.5% and 3.0% of food and beverage revenues.

Franchise fees are included in management and franchise fee expense in the accompanying consolidated statements of operations and comprehensive income (loss). For the years ended December 31, 2022, 2021 and 2020, the Company incurred franchise fee expense of approximately $60.9 million, $43.2 million and $25.6 million, respectively.

In 2019, the Company entered into an agreement with Wyndham to terminate the net operating income guarantee effective December 31, 2019 and received termination payments totaling $36.0 million from Wyndham. In addition, during the year ended December 31, 2021, the Company extended certain Wyndham management agreements to December 31, 2022. During the year ended December 31, 2022, the Company terminated the remaining Wyndham management agreements. For the years ended December 31, 2022, 2021 and 2020, the Company recognized approximately $4.1 million, $14.1 million, and $17.8 million, respectively, as a reduction to management and franchise fee expense related to the amortization of the termination payments over the remaining terms of the management agreements. The termination payments were fully recognized as of December 31, 2022.