Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies

Schedule of basic and incentive management fees

Total basic management fees, net of key money incentives received from third-party hotel managers, along with incentive management fees incurred by the Company during the three and six months ended June 30, 2018 and 2017 were included in other property-level expenses on the Company’s consolidated statements of operations as follows (unaudited and in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Basic management fees	$	8,812	$	8,942	$	16,346	$	16,837
Incentive management fees		2,128		1,800		4,848		4,353
Total basic and incentive management fees	$	10,940	$	10,742	$	21,194	$	21,190

Schedule of License and Franchise Costs

Total license and franchise fees incurred by the Company during the three and six months ended June 30, 2018 and 2017 were included in franchise costs on the Company’s consolidated statements of operations as follows (unaudited and in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Franchise assessments (1)	$	7,224	$	7,175	$	13,132	$	13,102
Franchise royalties		2,737		2,706		4,682		4,834
Total franchise costs	$	9,961	$	9,881	$	17,814	$	17,936

(1) Includes advertising, reservation and frequent guest program assessments.

Schedule of capital lease assets

The capital lease assets were included in investment in hotel properties, net on the Company’s consolidated balance sheets as follows (in thousands):

	June 30,		December 31,
	2018		2017
	(unaudited)
Gross capital lease asset - buildings and improvements	$	58,799	$	58,799
Gross capital lease asset - land		6,605		6,605
Gross capital lease assets		65,404		65,404
Accumulated depreciation		(8,942)		(8,208)
Net capital lease assets	$	56,462	$	57,196

Schedule of ground, building and air operating lease rent expense

Total rent expense incurred pursuant to ground, building and air lease agreements for the three and six months ended June 30, 2018 and 2017 was included in property tax, ground lease and insurance on the Company’s consolidated statements of operations as follows (unaudited and in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Minimum rent, including straight-line adjustments	$	2,131	$	2,340	$	4,261	$	4,680
Percentage rent (1)		1,896		1,755		3,640		3,340
Total	$	4,027	$	4,095	$	7,901	$	8,020

(1) Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds.

Schedule of hotel geographic concentration of risk

As of June 30, 2018,  17 of the Company’s 24 hotels were geographically concentrated as follows:

				Trailing 12-Month
		Percentage of		Total
	Number of Hotels	Total Rooms		Consolidated Revenue
California	6	28	%	32	%
Hawaii	1	5	%	9	%
Illinois	3	10	%	7	%
Massachusetts	2	12	%	13	%
Greater Washington DC area	3	15	%	14	%
Florida	2	8	%	9	%