Investment in Unconsolidated Entity

9 Months Ended

Sep. 30, 2021

Equity Method Investments and Joint Ventures [Abstract]

OpenKey is a hospitality-focused mobile key platform that provides a universal smart phone app and related hardware and software for keyless entry into hotel guest rooms. In 2018, the Company made an initial investment in OpenKey, which is controlled and consolidated by Ashford Inc., for an initial 8.2% ownership interest. On July 12, 2021, the Company made an additional investment in OpenKey of approximately $117,000. All investments were recommended by our Related Party Transactions Committee and unanimously approved by the independent members of our board of directors. As of September 30, 2021, the Company has made investments in OpenKey totaling $2.5 million.

Our investment is recorded as “investment in unconsolidated entity” in our condensed consolidated balance sheets and is accounted for under the equity method of accounting as we have significant influence over the entity under the applicable accounting guidance. We review our investment in OpenKey for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of

the investment. Any impairment is recorded in equity in earnings (loss) of unconsolidated entity. No such impairment was recorded for the three and nine months ended September 30, 2021 and 2020.

The following table summarizes our carrying value and ownership interest in OpenKey:


	September 30, 2021			December 31, 2020
Carrying value of the investment in OpenKey (in thousands)	$	1,627		$	1,708
Ownership interest in OpenKey	7.8		%	8.2		%

The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
Line Item	2021		2020		2021		2020
Equity in earnings (loss) of unconsolidated entity	$	(68)	$	(58)	$	(198)	$	(138)