Property and Equipment

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Net investment in property and equipment as of December 31, 2019 and 2018, consists of the following (in thousands):


	December 31, 2019		December 31, 2018
Hotel properties:
Land and site improvements ⁽¹⁾	$	1,228,231	$	1,215,710
Building and improvements	2,792,579		2,729,661
Furniture, fixtures and equipment	745,145		674,545
Total hotel properties	4,765,955		4,619,916
Development in process ⁽²⁾	70,864		27,174
Corporate furniture, fixtures, equipment, software and other	30,680		24,647
Total cost	4,867,499		4,671,737
Less accumulated depreciation:
Hotel properties	(1,353,772)		(1,201,260)
Corporate furniture, fixtures, equipment, software and other	(20,178)		(16,845)
Total accumulated depreciation	(1,373,950)		(1,218,105)
Property and equipment—net	$	3,493,549	$	3,453,632

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(1)Includes finance lease asset of $3.2 million as of December 31, 2019 and 2018.

(2)Includes finance lease asset of $0.8 million and $0.6 million as of December 31, 2019 and 2018, respectively.

As of December 31, 2019 and 2018, development in process consisted of 15 and 11 land parcels, respectively, that were in various phases of construction and/or development.

During 2019, the Company completed construction of a 124-room hotel in Florida and a 136-room hotel in Arizona. The hotels opened in December 2019. In September 2018, the Company acquired a hotel under construction from Legacy Greenville, LLC for $12.3 million. The hotel opened during the fourth quarter of 2018.

During the years ended December 31, 2019 and 2018, newly-built hotels contributed total room and other hotel revenues, total operating expenses and income (loss) before income tax expense as follows (in thousands):


	Year Ended December 31,
	2019		2018
Total room and other hotel revenues	$	2,199	$	152
Total operating expenses	1,856		201
Income (loss) before income tax expense	343		(49)

The Company recognized an impairment charge of $2.7 million for one hotel located in New York during the year ended December 31, 2019, as a result of a decline in the hotel's estimated future operating cash flows. During the year ended December 31, 2018, the Company recognized impairment charges totaling $43.6 million for 21 hotels generally located in the Midwestern U.S., the majority of which were incurred with evaluating the potential sale of certain non-core assets. During the year ended December 31, 2017, the Company recognized impairment charges totaling $25.2 million for nine hotels, $12.4 million of which related to Extended Stay Canada-branded hotels.

The Company used Level 3 unobservable inputs and in certain instances Level 2 observable inputs to determine the impairment on its property and equipment. Quantitative information with respect to observable inputs consists of non-binding bids or, in certain instances, binding agreements to sell a hotel or portfolio of hotels to one or more third parties. Quantitative information with respect to unobservable inputs consists of internally developed cash flow models that include the following assumptions, among others: projections of revenues, expenses and hotel-related cash flows based on assumed long-term growth rates, demand trends, expected future capital expenditures, estimated discount rates that range from 6% to 10% and terminal capitalization rates that range from 7% to 11%. These assumptions are based on historical data and experience, budgets, industry projections and overall micro- and macro-economic projections.