XML 36 R23.htm IDEA: XBRL DOCUMENT v3.22.0.1

Commitment and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation

The Company is subject to various claims, lawsuits and legal proceedings, including routine litigation arising in the ordinary course of business, regarding the operation of its hotels, its managers and other Company matters. While it is not possible to ascertain the ultimate outcome of such matters, the Company believes that the aggregate identifiable amount of such liabilities, if any, will not have a material adverse impact on its financial condition or results of operations.

Chatham RIMV LLC (a wholly owned subsidiary of the Company) is a defendant in a lawsuit brought by the City of San Diego and other related entities, San Diego Housing Commission et al. v. Neil et al. (Superior Court of California, County of San Diego, Case No. 37-2021-00033006-CU-BC-CTL) filed in connection with the sale of the Residence Inn Mission Valley to the City of San Diego. The City of San Diego is seeking a return of monies spent on the acquisition as well as a declaration that the purchase agreement executed in connection with the acquisition is void. At the time of this filing, the City of San Diego and the other Plaintiffs have made no allegations of wrongdoing by Chatham RIMV LLC or any other Company entity. We believe this lawsuit is without merit and we are defending our case vigorously. As of December 31, 2021, we have accrued $40 thousand related to legal costs incurred to date. At this time we believe potential future costs related to this lawsuit are not probable and estimable.

Management Agreements

The management agreements with IHM have an initial term of five years and automatically renew for two five-year periods unless IHM provides written notice to us no later than 90 days prior to the then current term's expiration date of their intent not to renew. The IHM management agreements provide for early termination at the Company’s option upon sale of any IHM-managed hotel for no termination fee, with six months advance notice. The IHM management agreements may be terminated for cause, including the failure of the managed hotel to meet specified performance levels. Base management fees are calculated as a percentage of the hotel's gross room revenue. If certain financial thresholds are met or exceeded, an incentive management fee is calculated as 10% of the hotel's net operating income less fixed costs, base management fees and a specified return threshold. The incentive management fee is capped at 1% of gross hotel revenues for the applicable calculation.

As of December 31, 2021, terms of the Company's management agreements are (dollars are not in thousands):

Property			Management Company			Base Management Fee			Monthly Accounting Fee			Monthly Revenue Management Fee			Incentive Management Fee Cap
Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington			IHM			3.0		%	$1,200			$1,000			1.0		%
Homewood Suites by Hilton Minneapolis-Mall of America			IHM			3.0		%	$1,200			$1,000			1.0		%
Homewood Suites by Hilton Nashville-Brentwood			IHM			3.0		%	$1,200			$1,000			1.0		%
Homewood Suites by Hilton Dallas-Market Center			IHM			3.0		%	$1,200			$1,000			1.0		%
Homewood Suites by Hilton Hartford-Farmington			IHM			3.0		%	$1,200			$1,000			1.0		%
Homewood Suites by Hilton Orlando-Maitland			IHM			3.0		%	$1,200			$1,000			1.0		%
Hampton Inn & Suites Houston-Medical Center			IHM			3.0		%	$1,000			$1,000			1.0		%
Residence Inn Long Island Holtsville			IHM			3.0		%	$1,000			$1,000			1.0		%
Residence Inn White Plains			IHM			3.0		%	$1,000			$750			1.0		%
Residence Inn New Rochelle			IHM			3.0		%	$1,000			$750			1.0		%
Residence Inn Garden Grove			IHM			3.0		%	$1,200			$1,000			1.0		%
Homewood Suites by Hilton San Antonio River Walk			IHM			3.0		%	$1,200			$1,000			1.0		%
Residence Inn Washington DC			IHM			3.0		%	$1,200			$1,000			1.0		%
Residence Inn Tysons Corner			IHM			3.0		%	$1,200			$1,000			1.0		%
Hampton Inn Portland Downtown			IHM			3.0		%	$1,000			$550			1.0		%
Courtyard Houston			IHM			3.0		%	$1,000			$550			1.0		%
Hyatt Place Pittsburgh North Shore			IHM			3.0		%	$1,500			$1,000			1.0		%
Hampton Inn Exeter			IHM			3.0		%	$1,200			$1,000			1.0		%
Hilton Garden Inn Denver Tech			IHM			3.0		%	$1,500			$1,000			1.0		%
Residence Inn Bellevue			IHM			3.0		%	$1,200			$1,000			1.0		%
Springhill Suites Savannah			IHM			3.0		%	$1,200			$1,000			1.0		%
Residence Inn Silicon Valley I			IHM			3.0		%	$1,200			$1,000			1.0		%
Residence Inn Silicon Valley II			IHM			3.0		%	$1,200			$1,000			1.0		%
Residence Inn San Mateo			IHM			3.0		%	$1,200			$1,000			1.0		%
Residence Inn Mountain View			IHM			3.0		%	$1,200			$1,000			1.0		%
Hyatt Place Cherry Creek			IHM			3.0		%	$1,500			$1,000			1.0		%
Courtyard Addison			IHM			3.0		%	$1,500			$1,000			1.0		%
Courtyard West University Houston			IHM			3.0		%	$1,500			$1,000			1.0		%
Residence Inn West University Houston			IHM			3.0		%	$1,200			$1,000			1.0		%
Hilton Garden Inn Burlington			IHM			3.0		%	$1,500			$1,000			1.0		%
Residence Inn San Diego Gaslamp			IHM			3.0		%	$1,500			$1,000			1.0		%
Hilton Garden Inn Marina del Rey			IHM			3.0		%	$1,500			$1,000			1.0		%
Residence Inn Dedham			IHM			3.0		%	$1,200			$1,000			1.0		%
Residence Inn Il Lugano			IHM			3.0		%	$1,500			$1,000			1.0		%
Hilton Garden Inn Portsmouth			IHM			3.0		%	$1,500			$1,000			1.0		%
Courtyard Summerville			IHM			3.0		%	$1,500			$1,000			1.0		%
Embassy Suites Springfield			IHM			3.0		%	$1,500			$1,000			1.0		%
Residence Inn Summerville			IHM			3.0		%	$1,500			$1,000			1.0		%
Courtyard Dallas			IHM			3.0		%	$1,500			$1,000			1.0		%
Residence Inn Austin Northwest/The Domain Area			IHM			3.0		%	$1,500			$1,000			1.0		%
TownePlace Suites Austin Northwest/The Domain Area			IHM			3.0		%	$1,500			$1,000			1.0		%

Management fees totaled approximately $7.2 million, $5.3 million and $10.8 million, respectively, for the years ended December 31, 2021, 2020 and 2019. Incentive management fees paid to IHM for the years ended years ended December 31, 2021, 2020 and 2019 were $0.0 million, $0.0 million and $0.1 million, respectively.

Franchise Agreements

The fees associated with the franchise agreements are calculated as a specified percentage of the hotel's gross room revenue. Terms of the Company's franchise agreements are as of December 31, 2021:

Property						Franchise/Royalty Fee			Marketing/Program Fee			Expiration
Homewood Suites by Hilton Boston-Billerica/ Bedford/ Burlington						4.0		%	4.0		%	2025
Homewood Suites by Hilton Minneapolis-Mall of America						4.0		%	4.0		%	2025
Homewood Suites by Hilton Nashville-Brentwood						4.0		%	4.0		%	2025
Homewood Suites by Hilton Dallas-Market Center						4.0		%	4.0		%	2025
Homewood Suites by Hilton Hartford-Farmington						4.0		%	4.0		%	2025
Homewood Suites by Hilton Orlando-Maitland						4.0		%	4.0		%	2025
Hampton Inn & Suites Houston-Medical Center						6.0		%	4.0		%	2035
Residence Inn Long Island Holtsville						5.5		%	2.5		%	2025
Residence Inn White Plains						5.5		%	2.5		%	2030
Residence Inn New Rochelle						5.5		%	2.5		%	2030
Residence Inn Garden Grove						5.0		%	2.5		%	2031
Homewood Suites by Hilton San Antonio River Walk						4.0		%	4.0		%	2026
Residence Inn Washington DC						5.5		%	2.5		%	2033
Residence Inn Tysons Corner						5.0		%	2.5		%	2031
Hampton Inn Portland Downtown						6.0		%	4.0		%	2032
Courtyard Houston						5.5		%	2.0		%	2030
Hyatt Place Pittsburgh North Shore						5.0		%	3.5		%	2030
Hampton Inn Exeter						6.0		%	4.0		%	2031
Hilton Garden Inn Denver Tech						5.5		%	4.3		%	2028
Residence Inn Bellevue						5.5		%	2.5		%	2033
Springhill Suites Savannah						5.0		%	2.5		%	2033
Residence Inn Silicon Valley I						5.5		%	2.5		%	2029
Residence Inn Silicon Valley II						5.5		%	2.5		%	2029
Residence Inn San Mateo						5.5		%	2.5		%	2029
Residence Inn Mountain View						5.5		%	2.5		%	2029
Hyatt Place Cherry Creek						5.0		%	3.5		%	2034
Courtyard Addison						5.5		%	2.0		%	2029
Courtyard West University Houston						5.5		%	2.0		%	2029
Residence Inn West University Houston						6.0		%	2.5		%	2024
Hilton Garden Inn Burlington						5.5		%	4.3		%	2029
Residence Inn San Diego Gaslamp						6.0		%	2.5		%	2035
Hilton Garden Inn Marina del Rey						5.5		%	4.3		%	2030
Residence Inn Dedham						6.0		%	2.5		%	2030
Residence Inn Il Lugano						6.0		%	2.5		%	2045
Hilton Garden Inn Portsmouth						5.5		%	4.0		%	2037
Courtyard Summerville						6.0		%	2.5		%	2037
Embassy Suites Springfield						5.5		%	4.0		%	2037
Residence Inn Summerville						6.0		%	2.5		%	2038
Courtyard Dallas						4.0% to 6.0%			2.0		%	2038
Residence Inn Austin Northwest/The Domain Area						5.5% to 6.0%			2.5		%	2036
TownePlace Suites Austin Northwest/The Domain Area						3.0% to 5.5%			2.0		%	2041

Franchise and marketing/program fees totaled approximately $16.6 million, $11.6 million and $25.9 million, respectively, for the years ended December 31, 2021, 2020 and 2019.

X

- References

No definition available.

+ Details

Name:	us-gaap_CommitmentsAndContingenciesDisclosureAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-URI http://asc.fasb.org/topic&trid=2127136

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-URI http://asc.fasb.org/topic&trid=2144648

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 954
-SubTopic 440
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6491277&loc=d3e6429-115629

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123406679&loc=d3e25336-109308

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123406679&loc=d3e25336-109308

+ Details

Name:	us-gaap_CommitmentsAndContingenciesDisclosureTextBlock
Namespace Prefix:	us-gaap_
Data Type:	dtr-types:textBlockItemType
Balance Type:	na
Period Type:	duration