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Significant Accounting Policies
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Significant Accounting Policies Significant Accounting Policies
Basis of Presentation—The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. These consolidated financial statements include the accounts of Ashford Hospitality Trust, Inc., its majority-owned subsidiaries, and its majority-owned joint ventures in which it has a
controlling interest. All inter-company accounts and transactions between consolidated entities have been eliminated in these consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2023 Annual Report to Stockholders on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 14, 2024.
Ashford Trust OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Ashford Trust OP that most significantly impact its economic performance, including but not limited to, operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly owned subsidiary, Ashford OP General Partner LLC, its general partner. As such, we consolidate Ashford Trust OP.
815 Commerce Managing Member, LLC (“815 Commerce MM”) is considered to be a VIE, as defined by authoritative accounting guidance. On May 31, 2023, Ashford Trust obtained the ability to exercise its kick-out rights of the manager of 815 Commerce MM, which is developing the Le Meridien hotel in Fort Worth, Texas. As a result, Ashford Trust became the primary beneficiary and began consolidating 815 Commerce MM. During 2023, the Company funded a default loan to the manager of 815 Commerce MM to satisfy a balancing deposit that was required by the property construction lender. The total amount of balancing deposits required by the property construction lender are up to $9.5 million. At June 30, 2024 the Company has funded $9.5 million.
On December 6, 2023, the Company entered into a Contribution Agreement with Stirling OP, a subsidiary of Stirling Inc. Pursuant to the terms of the Contribution Agreement, the Company contributed its equity interests, and the associated debt and other obligations, in Residence Inn Manchester, Hampton Inn Buford, SpringHill Suites Buford and Residence Inn Jacksonville to Stirling OP in exchange for 1.4 million Class I units of Stirling OP.
The Company determined the transaction resulted in Ashford Trust becoming the primary beneficiary of Stirling OP in contemplation of: 1) the related party group comprised of (i) Ashford Trust and (ii) the stockholders who have control over election or removal of the board of directors of Stirling Inc. that have power to direct the most significant activities of Stirling OP; and 2) the consideration that substantially all the economics are held by the Company through its equity interest, and substantially all of the activities are performed on the Company’s behalf. As a result, Ashford Trust began consolidating Stirling OP as of December 6, 2023 and as such, the properties and debt continue to be reflected on the Company's balance sheet at their historical carrying values. As of June 30, 2024 Ashford Trust remains the primary beneficiary and continues to consolidate Stirling OP.
Historical seasonality patterns at some of our hotel properties cause fluctuations in our overall operating results. Consequently, operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.
The following transactions affect reporting comparability of our consolidated financial statements:
Property
Location
TypeDate
WorldQuest Resort
Orlando, FLDispositionAugust 1, 2023
Sheraton Bucks County
Langhorne, PA
Disposition
November 9, 2023
Embassy Suites Flagstaff
Flagstaff, AZ
DispositionNovember 29, 2023
Embassy Suites Walnut Creek
Walnut Creek, CA
DispositionNovember 29, 2023
Marriott Bridgewater
Bridgewater, NJ
DispositionNovember 29, 2023
Marriott Research Triangle Park
Durham, NC
DispositionNovember 29, 2023
W Atlanta
Atlanta, GA
DispositionNovember 29, 2023
Courtyard Columbus Tipton Lakes
Columbus, IN
Derecognized
March 1, 2024
Courtyard Old Town
Scottsdale, AZ
Derecognized
March 1, 2024
Residence Inn Hughes Center
Las Vegas, NV
Derecognized
March 1, 2024
Residence Inn Phoenix Airport
Phoenix, AZ
Derecognized
March 1, 2024
Residence Inn San Jose Newark
Newark, CA
Derecognized
March 1, 2024
SpringHill Suites Manhattan Beach
Hawthorne, CA
Derecognized
March 1, 2024
SpringHill Suites Plymouth Meeting
Plymouth Meeting, PA
Derecognized
March 1, 2024
Courtyard Basking Ridge
Basking Ridge, NJ
Derecognized
March 1, 2024
Courtyard Newark Silicon Valley
Newark, CA
Derecognized
March 1, 2024
Courtyard Oakland Airport
Oakland, CA
Derecognized
March 1, 2024
Courtyard Plano Legacy Park
Plano, TX
Derecognized
March 1, 2024
Residence Inn Plano
Plano, TX
Derecognized
March 1, 2024
SpringHill Suites BWI Airport
Baltimore, MD
Derecognized
March 1, 2024
TownePlace Suites Manhattan Beach
Hawthorne, CA
Derecognized
March 1, 2024
Residence Inn Salt Lake CitySalt Lake City, UTDispositionMarch 6, 2024
Hilton Boston Back Bay
Boston, MA
DispositionApril 9, 2024
Hampton Inn Lawrenceville
Lawrenceville, GA
DispositionApril 23, 2024
Courtyard Manchester
Manchester, CT
DispositionMay 30, 2024
SpringHill Suites Kennesaw
Kennesaw, GA
DispositionJune 10, 2024
Fairfield Inn Kennesaw
Kennesaw, GA
DispositionJune 10, 2024
One Ocean
Atlantic Beach, FL
Disposition
June 27, 2024
Use of Estimates—The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Recently Issued Accounting Standards—In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. As of June 30, 2024, the Company has not adopted this ASU. The adoption of this ASU is expected to only impact disclosures with respect to the Company’s consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topics 740): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. The amendments in this ASU may be applied prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or the amendments may be applied retrospectively by
providing the revised disclosures for all periods presented. As of June 30, 2024, the Company has not adopted this ASU. The adoption of this ASU is expected to only impact disclosures with respect to the Company’s consolidated financial statements.
Reclassification—Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation.