ASHFORD HOSPITALITY TRUST INC
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
AHT$2.37-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001232582-24-000107
Item 2. RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001232582-24-000148
Item 2. RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 122 previous paragraphs and 127 current paragraphs.
61 unchanged; 57 reworded; 7 added; 3 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Gain (Loss) on Consolidation of VIE and Disposition of Assets and Hotel Properties. Gain on consolidation of VIE and disposition of assets and hotel properties decreased $6.4 million from $6.4 million in the 2023 quarter to $9,000 in the 2024 quarter. The gain in the 2023 quarter primarily related to the sale of WorldQuest Resort in Orlando, Florida.
Current report
Gain (Loss) on Extinguishment of Debt. Gain on extinguishment of debt in the 2024 quarter was $2.7 million. In June 2024, the Company was informed by its lender that the lender intended to exercise remedies for the maturity default on the Ashton Hotel in Fort Worth, Texas, which secured the Company’s $8.9 million mortgage loan. The Company and the lender agreed to a deed-in-lieu of foreclosure, which was completed on July 16, 2024 and resulted in a gain on extinguishment of debt of approximately $2.6 million.
Current report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Current report
In June 2024, the Company was informed by its lender that the lender intended to exercise remedies for the maturity default on the Ashton Hotel in Fort Worth, Texas, which secures the Company’s $8.9 million mortgage loan. The Company and the lender agreed to a deed-in-lieu of foreclosure, which was completed on July 16, 2024. See note 7.
Current report
On November 6, 2024, the Company entered into Amendment No. 4 to the Oaktree Credit Agreement which, among other items, will reduce the exit fee from 15.0% to 12.5% of the original loan balance through December 15, 2024, provided that the outstanding loan balance has been reduced to $50 million or less by November 15, 2024. As of November 12, 2024, the Oaktree term loan balance has been reduced below $50 million triggering the reduced exit fee under the Oaktree Credit Agreement.
Current report
On November 7, 2024, the Company refinanced its mortgage loan secured by the Marriott Crystal Gateway Hotel located in Arlington, Virginia, which had a final maturity date in November 2026. The new, non-recourse mortgage loan totals $121.5 million and has a three-year initial term with two one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is interest only and provides for a floating interest rate of SOFR + 4.86%. The refinancing resulted in approximately $31 million of excess proceeds that was used to pay down the Oaktree term loan.
Current report
On November 8, 2024, the Company entered into a 90-day forbearance agreement for its $409.8 million mortgage loan with a final maturity of November 9, 2024 and secured by 17 hotel properties. The Company is in active discussions with the lender regarding a multi-year extension of the mortgage loan, which the Company expects to finalize during the 90-day forbearance period.
Removed paragraphs (3)
Previous report
Comparison of the Six Months Ended June 30, 2024 and 2023
Previous report
Hotel Dispositions and $1.6 million for the KEYS A and B properties that went into receivership, partially offset by an increase of $2.4 million from our comparable hotel properties and $71,000 from the Stirling hotel properties.
Previous report
On September 9, 2021, the Company and M3A LP (“M3A”) entered into a purchase agreement (the “M3A Purchase Agreement”), which provides that subject to the terms and conditions set forth therein, the Company may sell to M3A up to approximately 6.0 million shares of common stock, from time to time during the term of the M3A Purchase Agreement. The Company filed a Form S-3, which was declared effective by the SEC on April 1, 2022, to replace the previous Form S-11 and to register for resale any future resales by M3A under the M3A Purchase Agreement. As of August 6, 2024, the Company has issued approximately 900,000 shares of common stock for gross proceeds of approximately $12.9 million under the M3A Purchase Agreement.
Reworded paragraphs (57)
Previous wording
The following table summarizes the changes in key line items from our consolidated statements of operations for the three and six months ended June 30, 2024 and 2023 (in thousands):
Current wording
The following table summarizes the changes in key line items from our consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):
Previous wording
All hotel properties held during the three and six months ended June 30, 2024 and 2023 have been included in our results of operations during the respective periods in which they were held. Based on when a hotel property was acquired or disposed, operating results for certain hotel properties are not comparable for the three and six months ended June 30, 2024 and 2023. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties. The following transactions affect the reporting comparability of our consolidated financial statements:
Current wording
All hotel properties held during the three and nine months ended September 30, 2024 and 2023 have been included in our results of operations during the respective periods in which they were held. Based on when a hotel property was acquired or disposed, operating results for certain hotel properties are not comparable for the three and nine months ended September 30, 2024 and 2023. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties. The following transactions affect the reporting comparability of our consolidated financial statements:
Previous wording
The following table illustrates the key performance indicators of the 69 comparable hotel properties and four consolidated Stirling OP properties that were included in our results of operations for the full three and six months ended June 30, 2024 and 2023, respectively:
Current wording
The following table illustrates the key performance indicators of the 68 comparable hotel properties and four consolidated Stirling OP properties that were included in our results of operations for the full three and nine months ended September 30, 2024 and 2023, respectively:
Previous wording
Net Income (Loss) Attributable to the Company. Net income (loss) attributable to the Company changed $74.9 million, from a net loss of $24.6 million for the three months ended June 30, 2023 (the “2023 quarter”) to net income of $50.3 million for the three months ended June 30, 2024 (the “2024 quarter”) as a result of the factors discussed below.
Current wording
Net Income (Loss) Attributable to the Company. Net loss attributable to the Company decreased $5.7 million, from $63.6 million for the three months ended September 30, 2023 (the “2023 quarter”) to $57.9 million for the three months ended September 30, 2024 (the “2024 quarter”) as a result of the factors discussed below.
Previous wording
Revenue. Rooms revenue from our hotel properties decreased $50.3 million, or 17.1%, to $243.6 million in the 2024 quarter compared to the 2023 quarter. This decrease is attributable to a decrease of $31.9 million from our Hotel Dispositions, $21.8 million for the KEYS A and B properties that went into receivership, and $376,000 from the Stirling hotel properties, partially offset by higher rooms revenue of $3.8 million at our comparable hotel properties. Our comparable hotel properties experienced an increase of 1.9% in room rates and a 66 basis point increase in occupancy.
Current wording
Revenue. Rooms revenue from our hotel properties decreased $57.6 million, or 21.3%, to $213.0 million in the 2024 quarter compared to the 2023 quarter. This decrease is attributable to a decrease of $35.7 million from our Hotel Dispositions, $19.9 million from the KEYS A and B properties that went into receivership, $2.6 million from our comparable hotel properties, and $51,000 from the Stirling hotel properties, partially offset by higher rooms revenue of $611,000 from the Le Meridien that opened in August 2024. Our comparable hotel properties experienced an increase of 1.0% in room rates and a 186 basis point decrease in occupancy.
Previous wording
Food and beverage revenue decreased $6.5 million, or 10.5%, to $55.3 million. This decrease is attributable to $5.0 million from our Hotel Dispositions, lower sales of food and beverage of $869,000 at our comparable hotel properties, and $647,000 for the KEYS A and B properties that went into receivership.
Current wording
Food and beverage revenue decreased $5.8 million, or 11.2%, to $46.4 million. This decrease is attributable to a decrease of $6.0 million from our Hotel Dispositions and $582,000 from the KEYS A and B properties that went into receivership, partially offset by higher sales of food and beverage of $669,000 at our comparable hotel properties and $74,000 from the Le Meridien that opened in August 2024.
Previous wording
Other hotel revenue, which consists mainly of Internet access, parking, and spa revenue, decreased $2.4 million, or 12.3%, to $16.9 million. This decrease is primarily attributable to $2.7 million from our Hotel Dispositions, $853,000 for the KEYS A and B properties that went into receivership, and $5,000 from the Stirling hotel properties, partially offset by an increase of $1.2 million at our comparable hotel properties. Other non-hotel revenue decreased $88,000, or 11.4%, to $683,000 in the 2024 quarter as compared to the 2023 quarter.
Current wording
Other hotel revenue, which consists mainly of Internet access, parking, and spa revenue, decreased $2.9 million, or 14.7%, to $16.7 million. This decrease is primarily attributable to a decrease of $3.7 million from our Hotel Dispositions, $814,000 from the KEYS A and B properties that went into receivership, and $17,000 from the Stirling hotel properties, partially offset by an increase of $1.7 million at our comparable hotel properties and $43,000 from the Le Meridien that opened in August 2024. Other non-hotel revenue decreased $83,000, or 12.5%, to $582,000 in the 2024 quarter as compared to the 2023 quarter.
Previous wording
Hotel Operating Expenses. Hotel operating expenses decreased $33.2 million, or 13.8%, to $207.4 million. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and management fees. Direct expenses decreased $16.9 million in the 2024 quarter as compared to the 2023 quarter, which was primarily comprised of a decrease of $10.8 million from our Hotel Dispositions and $6.4 million from the KEYS A and B properties that went into receivership, partially offset by an increase of $384,000 from our comparable hotel properties. Direct expenses were 29.9% of total hotel revenue for the 2024 quarter and 29.7% for the 2023 quarter. Indirect expenses and management fees decreased $16.4 million in the 2024 quarter as compared to the 2023 quarter, which was primarily comprised of a decrease of $13.2 million from our Hotel Dispositions, $9.0 million from the KEYS A and B properties that went into receivership, and $175,000 from the Stirling hotel properties, partially offset by an increase of $6.0 million from our comparable hotel properties.
Current wording
Hotel Operating Expenses. Hotel operating expenses decreased $37.8 million, or 16.2%, to $194.8 million. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and management fees. Direct expenses decreased $20.2 million in the 2024 quarter as compared to the 2023 quarter, which was primarily comprised of a decrease of $14.4 million from our Hotel Dispositions and $6.3 million from the KEYS A and B properties that went into receivership, partially offset by an increase of $311,000 from our comparable hotel properties and $197,000 from the Le Meridien that opened in August 2024. Direct expenses were 31.6% of total hotel revenue for the 2024 quarter and 31.4% for the 2023 quarter. Indirect expenses and management fees decreased $17.6 million in the 2024 quarter as compared to the 2023 quarter, which was primarily comprised of a decrease of $15.9 million from our Hotel Dispositions, $8.8 million from the KEYS A and B properties that went into receivership, partially offset by an increase of $6.8 million from our comparable hotel properties and $278,000 from the Le Meridien that opened in August 2024.
Previous wording
Property Taxes, Insurance and Other. Property taxes, insurance and other expense decreased $2.2 million, or 11.3%, to $16.8 million during the 2024 quarter compared to the 2023 quarter, which was primarily due to a decrease of $1.8 million from our Hotel Dispositions and $1.2 million from the KEYS A and B properties that went into receivership, partially offset by an increase of $886,000 from our comparable hotel properties.
Current wording
Property Taxes, Insurance and Other. Property taxes, insurance and other expense increased $717,000, or 4.1%, to $18.1 million during the 2024 quarter compared to the 2023 quarter, which was primarily due to an increase of $4.6 million from our comparable hotel properties, $93,000 from the Le Meridien that opened in August 2024, and $57,000 from our Stirling properties, partially offset by a decrease of $2.6 million from our Hotel Dispositions and $1.4 million from the KEYS A and B properties that went into receivership.
Previous wording
Depreciation and Amortization. Depreciation and amortization decreased $10.0 million, or 21.1%, to $37.2 million during the 2024 quarter compared to the 2023 quarter, which was primarily due to a decrease of $5.3 million from our Hotel Dispositions, $3.3 million from the KEYS A and B properties that went into receivership, and a decrease of $1.6 million from our comparable hotel properties primarily related to fully depreciated assets, partially offset by an increase of $244,000 from our Stirling properties.
Current wording
Depreciation and Amortization. Depreciation and amortization decreased $8.2 million, or 17.9%, to $37.7 million during the 2024 quarter compared to the 2023 quarter, which was primarily due to a decrease of $5.6 million from our Hotel Dispositions, $3.2 million from the KEYS A and B properties that went into receivership, and $142,000 from our comparable hotel properties primarily related to fully depreciated assets, partially offset by an increase of $408,000 from the Le Meridien that opened in August 2024 and $280,000 from our Stirling properties.
Previous wording
Advisory Services Fee. Advisory services fee decreased $795,000, or 6.5%, to $11.5 million in the 2024 quarter compared to the 2023 quarter. The advisory services fee represents fees incurred in connection with the advisory agreement between Ashford Inc. and the Company. In the 2024 quarter, the advisory services fee was comprised of a base advisory fee of $8.2 million, equity-based compensation of $507,000 associated with equity grants of our common stock, PSUs, LTIP units and Performance LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $2.8 million. In the 2023 quarter, the advisory services fee was comprised of a base advisory fee of $8.2 million, equity-based compensation of $955,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $3.1 million.
Current wording
Advisory Services Fee. Advisory services fee decreased $539,000, or 4.3%, to $11.9 million in the 2024 quarter compared to the 2023 quarter. The advisory services fee represents fees incurred in connection with the advisory agreement between Ashford Inc. and the Company and between Ashford Inc. and Stirling OP. In the 2024 quarter, the advisory services fee was comprised of a base advisory fee of $8.2 million, equity-based compensation of $218,000 associated with equity grants of our common stock, PSUs, LTIP units and Performance LTIP units awarded to the officers and employees of Ashford Inc., reimbursable expenses of $3.3 million and a performance participation fee of $111,000 associated with the Stirling OP advisory agreement with Ashford Inc. In the 2023 quarter, the advisory services fee was comprised of a base advisory fee of $8.1 million, equity-based compensation of $1.4 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $2.9 million.
Previous wording
Corporate, General and Administrative. Corporate, general and administrative expense increased $2.3 million from $4.9 million in the 2023 quarter to $7.2 million in the 2024 quarter. The increase was primarily attributable to higher legal and professional costs of $2.1 million, and higher reimbursed operating expenses of Ashford Securities of $585,000, partially offset by lower public company cost of $345,000.
Current wording
Corporate, General and Administrative. Corporate, general and administrative expense increased $1.2 million from $3.9 million in the 2023 quarter to $5.1 million in the 2024 quarter. The increase was primarily attributable to higher legal and professional costs of $450,000, higher reimbursed operating expenses of Ashford Securities of $723,000 and higher public company cost of $198,000, partially offset by lower miscellaneous expenses of $182,000.
Previous wording
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets was $11.7 million in the 2024 quarter. The gain primarily represents the accrued interest expense associated with the default of the KEYS A and KEYS B loans, which resulted in a corresponding increase of the contract asset on our consolidated balance sheet as we expect to be released from this obligation upon final resolution with the lender. See note 7.
Current wording
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets was $11.1 million in the 2024 quarter. The gain primarily represents the accrued interest expense associated with the default of the KEYS A and KEYS B loans, which resulted in a corresponding increase of the contract asset on our consolidated balance sheet as we expect to be released from this obligation upon final resolution with the lender. On July 2, 2024, the Courtyard Plano Legacy Park and the Residence Inn Plano were foreclosed on at a public auction. See note 7 to our consolidated financial statements.
Previous wording
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in loss of unconsolidated entities decreased $19,000 during the 2024 quarter compared to the 2023 quarter. The 2024 quarter included equity in loss of $180,000 from OpenKey and equity in earnings of $18,000 from an investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California. The 2023 quarter included equity in loss of $152,000 from OpenKey and $29,000 from an investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California.
Current wording
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in loss of unconsolidated entities decreased $5,000 during the 2024 quarter compared to the 2023 quarter. The 2024 quarter included equity in loss of $173,000 from OpenKey and equity in earnings of $40,000 from an investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California. The 2023 quarter included equity in loss of $125,000 from OpenKey and $13,000 from an investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California.
Previous wording
Interest Income. Interest income was $1.7 million and $2.3 million for the 2024 quarter and the 2023 quarter, respectively. The decrease in interest income in the 2024 quarter was primarily attributable to lower excess cash balances in the 2024 quarter compared to the 2023 quarter.
Current wording
Interest Income. Interest income was $1.8 million and $1.9 million for the 2024 quarter and the 2023 quarter, respectively. The decrease in interest income in the 2024 quarter was primarily attributable to lower excess cash balances in the 2024 quarter compared to the 2023 quarter.
Previous wording
Other Income (Expense). Other income consisted of miscellaneous income of $37,000 in the 2024 quarter and $109,000 in the 2023 quarter.
Current wording
Other Income (Expense). Other income consisted of miscellaneous income of $36,000 in the 2024 quarter and $34,000 in the 2023 quarter.
Previous wording
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $12.7 million, or 15.6%, to $68.4 million during the 2024 quarter compared to the 2023 quarter. The decrease is primarily due to a $8.2 million decrease on the Oaktree loan attributable to a lower principal balance and the Oaktree deferred loan costs becoming fully amortized and a decrease of $7.3 million from our Hotel Dispositions. These decreases were partially offset by higher interest expense of $2.2 million at our comparable hotel properties primarily due to higher interest rates on our variable rate debt, and lower credits to interest expense of $390,000 related to the amortization credit of default interest and late charges recorded on mortgage loans previously in default and $301,000 at our Stirling properties related to a higher interest rate on the new loan. The average SOFR rates for the 2024 quarter and the 2023 quarter were 5.33% and 4.74%, respectively. The average LIBOR rate for the 2023 quarter was 5.10%.
Current wording
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $20.8 million, or 23.7%, to $66.8 million during the 2024 quarter compared to the 2023 quarter. The decrease is primarily due to a $10.8 million decrease on the Oaktree loan attributable to a lower principal balance and the Oaktree deferred loan costs becoming fully amortized, a decrease of $8.3 million from our Hotel Dispositions, and lower default interest and late charges recorded on mortgage loans previously in default of $4.3 million. These decreases were partially offset by higher interest expense of $2.0 million at our comparable hotel properties primarily due to higher interest rates on our variable rate debt, $337,000 from the Le Meridien and $308,000 at our Stirling properties related to a higher interest rate on the new loan. The average SOFR rates for the 2024 quarter and the 2023 quarter were 5.17% and 5.08%, respectively.
Previous wording
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership increased $8.4 million, from $15.6 million in the 2023 period to $24.0 million in the 2024 period. The increase is due to higher interest rates, default charges and late fees on the KEYS Pool A and KEYS Pool B mortgage loans.
Current wording
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership decreased $629,000, from $11.7 million in 2023 quarter to $11.1 million in 2024 quarter. The decrease is due to lower interest rates, default charges and late fees on the KEYS Pool A and KEYS Pool B mortgage loans. On July 2, 2024, the Courtyard Plano Legacy Park and the Residence Inn Plano were foreclosed on at a public auction. See note 7 to our consolidated financial statements.
Previous wording
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees increased $2.8 million to $3.8 million in the 2024 quarter compared to the 2023 quarter. In the 2024 quarter, we incurred fees of $3.0 million related to loan refinances and modifications, and $796,000 write-off of unamortized loan cost. In the 2023 quarter, we incurred fees of $950,000 related to loan refinances and modifications.
Current wording
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees decreased $1.2 million to $17,000 in the 2024 quarter compared to the 2023 quarter. In the 2024 quarter, we incurred fees of $17,000 related to loan refinances and modifications. In the 2023 quarter, we incurred fees of $1.3 million related to loan refinances and modifications.
Previous wording
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized gain on derivatives decreased $11.2 million from $12.6 million in the 2023 quarter to $1.4 million in the 2024 quarter. In the 2024 quarter, we recognized a realized gain of $7.4 million related to payments from counterparties on interest rate caps, partially offset by an unrealized loss of $5.9 million associated with interest rate caps and an unrealized loss of $128,000 from the revaluation of the embedded debt derivative in the Oaktree Agreement. In the 2023 quarter, we recognized a realized gain of $12.0 million related to payments from counterparties on interest rate caps and an unrealized gain of $2.0 million from the revaluation of the embedded debt derivative in the Oaktree Agreement, partially offset by an unrealized loss of $1.3 million associated with interest rate caps.
Current wording
Realized and Unrealized Gain (Loss) on Derivatives. Realized and unrealized loss on derivatives increased $3.5 million from $2.7 million in the 2023 quarter to $6.2 million in the 2024 quarter. In the 2024 quarter, we recognized an unrealized loss of $12.3 million associated with interest rate caps and an unrealized loss of $1.2 million from the revaluation of the embedded debt derivative in the Oaktree Agreement, partially offset by a realized gain of $7.3 million related to payments from counterparties on interest rate caps. In the 2023 quarter, we recognized an unrealized loss of $12.6 million associated with interest rate caps and an unrealized loss of $436,000 from the revaluation of the embedded debt derivative in the Oaktree Agreement, partially offset by a realized gain of $10.3 million related to payments from counterparties on interest rate caps.
Previous wording
Income Tax (Expense) Benefit. Income tax expense increased $1.4 million, from $2.1 million in the 2023 quarter to $3.5 million in the 2024 quarter. This increase was primarily due to an increase in current state taxes in the 2024 quarter compared to the 2023 quarter.
Current wording
Income Tax (Expense) Benefit. Income tax (expense) benefit changed $572,000, from expense of $127,000 in the 2023 quarter to a benefit of $445,000 in the 2024 quarter. This change was primarily due to a decrease in current state taxes in the 2024 quarter compared to the 2023 quarter.
Previous wording
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partners in consolidated entities were allocated a loss of $8,000 in the 2024 quarter and $0 in the 2023 quarter.
Current wording
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partners in consolidated entities were allocated a loss of $477,000 in the 2024 quarter and $0 in the 2023 quarter.
Previous wording
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated net income of $565,000 in the 2024 quarter and a net loss of $349,000 in the 2023 quarter. Redeemable noncontrolling interests represented ownership interests of 1.26% and 1.14% in the operating partnership at June 30, 2024 and 2023, respectively.
Current wording
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated a net loss of $746,000 in the 2024 quarter and $889,000 in the 2023 quarter. Redeemable noncontrolling interests represented ownership interests of 1.17% and 1.28% in the operating partnership at September 30, 2024 and 2023, respectively.
Previous wording
Net Income (Loss) Attributable to the Company. Net income (loss) attributable to the Company changed $207.3 million from a net loss of $85.5 million for the six months ended June 30, 2023 (the “2023 period”) to net income of $121.8 million for the six months ended June 30, 2024 (the “2024 period”) as a result of the factors discussed below.
Current wording
Net Income (Loss) Attributable to the Company. Net income (loss) attributable to the Company changed $213.0 million from a net loss of $149.1 million for the nine months ended September 30, 2023 (the “2023 period”) to net income of $63.9 million for the nine months ended September 30, 2024 (the “2024 period”) as a result of the factors discussed below.
Previous wording
Revenue. Rooms revenue from our hotel properties decreased $74.1 million, or 13.5%, to $472.8 million in the 2024 period compared to the 2023 period. This decrease is attributable to $49.3 million from our Hotel Dispositions, $29.4 million for the KEYS A and B properties that went into receivership and $687,000 from the Stirling hotel properties, partially offset by higher rooms revenue of $5.3 million at our comparable hotel properties. Our comparable hotel properties experienced an increase of 1.5% in room rates and a decrease of 102 basis points in occupancy.
Current wording
Revenue. Rooms revenue from our hotel properties decreased $131.7 million, or 16.1%, to $685.8 million in the 2024 period compared to the 2023 period. This decrease is attributable to $85.0 million from our Hotel Dispositions, $49.3 million from the KEYS A and B properties that went into receivership, and $738,000 from the Stirling hotel properties, partially offset by higher rooms revenue of $2.7 million at our comparable hotel properties and $611,000 from the Le Meridien that opened in August 2024. Our comparable hotel properties experienced an increase of 1.3% in room rates and a decrease of 130 basis points in occupancy.
Previous wording
Food and beverage revenue decreased $8.1 million, or 6.7%, to $112.6 million in the 2024 period compared to the 2023 period. This decrease is attributable to $8.0 million from our Hotel Dispositions and $799,000 for the KEYS A and B properties that went into receivership, partially offset by higher sales of food and beverage of $657,000 at our comparable hotel properties.
Current wording
Food and beverage revenue decreased $13.9 million, or 8.1%, to $159.0 million in the 2024 period compared to the 2023 period. This decrease is attributable to $14.0 million from our Hotel Dispositions and $1.4 million from the KEYS A and B properties that went into receivership, partially offset by higher sales of food and beverage of $1.4 million at our comparable hotel properties and $74,000 from the Le Meridien that opened in August 2024.
Previous wording
Other hotel revenue, which consists mainly of Internet access, parking, and spa revenue, decreased $2.0 million, or 5.5%, to $33.6 million in the 2024 period compared to the 2023 period. This decrease is attributable to $4.1 million from our Hotel Dispositions and $1.2 million for the KEYS A and B properties that went into receivership, partially offset by higher other revenue of $3.3 million from our comparable hotel properties. Other revenue decreased $107,000, or 7.5%, to $1.3 million in the 2024 period compared to the 2023 period.
Current wording
Other hotel revenue, which consists mainly of Internet access, parking, and spa revenue, decreased $4.8 million, or 8.8%, to $50.3 million in the 2024 period compared to the 2023 period. This decrease is attributable to $7.8 million from our Hotel Dispositions, $2.0 million from the KEYS A and B properties that went into receivership, and $17,000 from the Stirling properties, partially offset by higher other revenue of $4.9 million from our comparable hotel properties and $43,000 from the Le Meridien that opened in August 2024. Other revenue decreased $190,000, or 9.1%, to $1.9 million in the 2024 period compared to the 2023 period.
Previous wording
Hotel Operating Expenses. Hotel operating expenses decreased $47.5 million, or 10.2%, to $418.3 million in the 2024 period compared to the 2023 period. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and management fees. Direct expenses decreased $23.6 million in the 2024 period compared to the 2023 period, comprised of a decrease of $17.7 million from our Hotel Dispositions and $8.4 million for the KEYS A and B properties that went into receivership, partially offset by an increase of $2.6 million from our comparable hotel properties. Direct expenses were 30.6% of total hotel revenue for the 2024 period and 30.3% for the 2023 period. Indirect expenses and management fees decreased $23.9 million in the 2024 period compared to the 2023 period, comprised of a decrease of $21.6 million from our Hotel Dispositions, $12.2 million for the KEYS A and B properties that went into receivership, and $199,000 from the Stirling hotel properties, partially offset by an increase of $10.0 million from our comparable hotel properties.
Current wording
Hotel Operating Expenses. Hotel operating expenses decreased $85.3 million, or 12.2%, to $613.2 million in the 2024 period compared to the 2023 period. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and management fees. Direct expenses decreased $43.8 million in the 2024 period compared to the 2023 period, comprised of a decrease of $32.1 million from our Hotel Dispositions, $14.7 million from the KEYS A and B properties that went into receivership, and $60,000 from the Stirling properties, partially offset by an increase of $2.9 million from our comparable hotel properties and $197,000 from the Le Meridien that opened in August 2024. Direct expenses were 30.9% of total hotel revenue for the 2024 period and 30.7% for the 2023 period. Indirect expenses and management fees decreased $41.5 million in the 2024 period compared to the 2023 period, comprised of a decrease of $37.4 million from our Hotel Dispositions, $21.0 million from the KEYS A and B properties that went into receivership, and $108,000 from the Stirling hotel properties, partially offset by an increase of $16.8 million from our comparable hotel properties and $278,000 from the Le Meridien that opened in August 2024.
Previous wording
Property Taxes, Insurance and Other. Property taxes, insurance and other expense decreased $1.3 million or 3.6%, to $34.3 million in the 2024 period compared to the 2023 period, which was primarily due to a decrease of $2.2 million from our
Current wording
Property Taxes, Insurance and Other. Property taxes, insurance and other expense decreased $545,000 or 1.0%, to $52.3 million in the 2024 period compared to the 2023 period, which was primarily due to a decrease of $5.3 million from our Hotel Dispositions and $3.0 million from the KEYS A and B properties that went into receivership, partially offset by an increase of $7.5 million from our comparable hotel properties, $127,000 from the Stirling hotel properties and $93,000 from the Le Meridien that opened in August 2024.
Previous wording
Depreciation and Amortization. Depreciation and amortization decreased $17.3 million or 18.2%, to $77.7 million in the 2024 period compared to the 2023 period, which consisted of lower depreciation of $2.9 million from our comparable hotel properties primarily related to fully depreciated assets, $10.0 million from our Hotel Dispositions and $4.7 million for the KEYS A and B properties that went into receivership, partially offset by an increase of $292,000 from our Stirling hotel properties.
Current wording
Depreciation and Amortization. Depreciation and amortization decreased $25.5 million or 18.1%, to $115.5 million in the 2024 period compared to the 2023 period, which consisted of lower depreciation of $15.6 million from our Hotel Dispositions, $7.9 million from the KEYS A and B properties that went into receivership, and $3.0 million from our comparable hotel properties, primarily related to fully depreciated assets, partially offset by an increase of $572,000 from our Stirling hotel properties and $408,000 from the Le Meridien that opened in August 2024.
Previous wording
Advisory Services Fee. Advisory services fee increased $1.4 million, or 5.6%, to $26.7 million in the 2024 period compared to the 2023 period. The advisory services fee represents fees incurred in connection with the advisory agreements between Ashford Inc. and the Company and between Ashford Inc. and Stirling OP. In the 2024 period, the advisory services fee was comprised of a base advisory fee of $16.4 million, equity-based compensation of $1.0 million associated with equity grants of our common stock, PSUs, LTIP units and Performance LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $9.2 million. In the 2023 period, the advisory services fee comprised of a base advisory fee of $16.7 million, equity-based compensation of $2.2 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $6.3 million.
Current wording
Advisory Services Fee. Advisory services fee increased $881,000, or 2.3%, to $38.5 million in the 2024 period compared to the 2023 period. The advisory services fee represents fees incurred in connection with the advisory agreements between Ashford Inc. and the Company and between Ashford Inc. and Stirling OP. In the 2024 period, the advisory services fee was comprised of a base advisory fee of $24.4 million, equity-based compensation of $1.3 million associated with equity grants of our common stock, PSUs, LTIP units and Performance LTIP units awarded to the officers and employees of Ashford Inc., reimbursable expenses of $12.6 million and a performance participation fee of $333,000 associated with the Stirling OP advisory agreement with Ashford Inc. In the 2023 period, the advisory services fee comprised of a base advisory fee of $24.8 million, equity-based compensation of $3.6 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $9.2 million.
Previous wording
Corporate, General and Administrative. Corporate, general and administrative expense increased $7.9 million, or 104.9%, to $15.4 million in the 2024 period compared to the 2023 period. The increase was primarily attributable to higher reimbursed operating expenses of Ashford Securities of $5.4 million, higher legal and professional fees of $2.5 million, higher other expense of $340,000, partially offset by lower public company cost of $272,000.
Current wording
Corporate, General and Administrative. Corporate, general and administrative expense increased $9.1 million, or 79.7%, to $20.5 million in the 2024 period compared to the 2023 period. The increase was primarily attributable to higher reimbursed operating expenses of Ashford Securities of $6.1 million, higher legal and professional fees of $2.9 million, and higher miscellaneous expenses of $158,000, partially offset by lower public company cost of $75,000.
Previous wording
Gain (Loss) on Consolidation of VIE and Disposition of Assets and Hotel Properties. Gain on consolidation of VIE and disposition of assets and hotel properties increased $93.3 million, from $1.1 million in the 2023 period to $94.4 million in the 2024 period. The gain in the 2024 period was primarily related to the sale of the Residence Inn in Salt Lake City, Utah, Hilton Boston Back Bay in Boston, Massachusetts, Hampton Inn Lawrenceville in Lawrenceville, Georgia, SpringHill Suites Kennesaw in Kennesaw, Georgia, Fairfield Inn Kennesaw in Kennesaw, Georgia, One Ocean in Atlantic Beach, Florida, and Courtyard Hartford Manchester in Manchester, Connecticut. The gain in the 2023 period primarily related to a $1.1 million gain for the consolidation of the VIE, which is represented by the difference between the fair value of the assets and liabilities recognized, the fair value of the non-controlling interest and the previous carrying value of the Company’s investment in 815 Commerce MM.
Current wording
Gain (Loss) on Consolidation of VIE and Disposition of Assets and Hotel Properties. Gain on consolidation of VIE and disposition of assets and hotel properties increased $87.0 million, from $7.4 million in the 2023 period to $94.4 million in the 2024 period. The gain in the 2024 period was primarily related to the sale of the Residence Inn in Salt Lake City, Utah, Hilton Boston Back Bay in Boston, Massachusetts, Hampton Inn Lawrenceville in Lawrenceville, Georgia, SpringHill Suites Kennesaw in Kennesaw, Georgia, Fairfield Inn Kennesaw in Kennesaw, Georgia, One Ocean in Atlantic Beach, Florida, and Courtyard Hartford Manchester in Manchester, Connecticut. The gain in the 2023 period was primarily related to a $1.1 million gain for the consolidation of the VIE, which is represented by the difference between the fair value of the assets and liabilities recognized, the fair value of the non-controlling interest and the previous carrying value of the Company’s investment in 815 Commerce MM and $6.4 million related to the sale of WorldQuest in Orlando, Florida.
Previous wording
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets was $145.6 million in the 2024 period. The gain includes the initial gain of $133.9 million related to the derecognition of assets related to the hotel properties securing the KEYS Pool A and KEYS Pool B mortgage loans that were placed into receivership in March 2024. Additionally, during the second quarter of 2024 we recognized a gain of $11.7 million, which primarily represents the accrued interest expense associated with the default of the KEYS A and KEYS B loans accrued during the second quarter of 2024, which resulted in a corresponding increase of the contract asset on our consolidated balance sheet as we expect to be released from this obligation upon final resolution with the lender. See note 7.
Current wording
Gain (Loss) on Derecognition of Assets. Gain on derecognition of assets was $156.7 million in the 2024 period. The gain includes the initial gain of $133.9 million related to the derecognition of assets related to the hotel properties securing the KEYS Pool A and KEYS Pool B mortgage loans that were placed into receivership in March 2024. Additionally, subsequent to the initial derecognition, we recorded an additional gain of approximately $22.8 million, which primarily represents the accrued interest expense associated with the default of the KEYS A and KEYS B loans accrued during the second and third quarters of 2024, which resulted in a corresponding increase of the contract asset on our consolidated balance sheet as we expect to be released from this obligation upon final resolution with the lender. On July 2, 2024, the Courtyard Plano Legacy Park and the Residence Inn Plano were foreclosed on at a public auction. See note 7 to our consolidated financial statements.
Previous wording
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in loss of unconsolidated entities was $695,000 in the 2024 period, which consisted of equity in loss of $289,000 from OpenKey and $406,000 from an investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California and $577,000 in the 2023 period which consisted of our share of loss of $302,000 in OpenKey and $275,000 in the Napa resort investment.
Current wording
Equity in Earnings (Loss) of Unconsolidated Entities. Equity in loss of unconsolidated entities was $828,000 in the 2024 period, which consisted of equity in loss of $462,000 from OpenKey and $366,000 from an investment in an entity that owns the Meritage Resort and Spa and the Grand Reserve at the Meritage in Napa, California and $715,000 in the 2023 period which consisted of our share of loss of $427,000 in OpenKey and $288,000 in the Napa resort investment.
Previous wording
Interest Income. Interest income was $3.7 million and $4.9 million in the 2024 period and the 2023 period, respectively. The decrease in interest income in the 2024 period was primarily attributable to lower excess cash balances in the 2024 period compared to the 2023 period.
Current wording
Interest Income. Interest income was $5.4 million and $6.8 million in the 2024 period and the 2023 period, respectively. The decrease in interest income in the 2024 period was primarily attributable to lower excess cash balances in the 2024 period compared to the 2023 period.
Previous wording
Other Income (Expense). In the 2024 period and the 2023 period we recorded miscellaneous income of $72,000 and $243,000, respectively.
Current wording
Other Income (Expense). In the 2024 period and the 2023 period we recorded miscellaneous income of $108,000 and $277,000, respectively.
Previous wording
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $13.1 million, or 8.4%, to $142.4 million in the 2024 period compared to the 2023 period. The decrease was primarily due to lower cash interest expense and amortization of loan costs of $10.7 million on the Oaktree loan attributable to a lower principal balance and the Oaktree deferred loan costs becoming fully amortized and $12.0 million from our Hotel Dispositions, partially offset by a $5.7 million increase in interest expense at our comparable hotel properties primarily due to higher interest rates on our variable rate debt and lower credits to interest expense of $3.3 million related to the amortization credit of default interest and late charges recorded on mortgage loans previously in default and $603,000 at our Stirling properties related to the new loan with a higher interest rate. The average SOFR rates in the 2024 period and the 2023 period were 5.33% and 4.62%, respectively. The average LIBOR rate in the 2023 period was 4.85%.
Current wording
Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $33.9 million, or 13.9%, to $209.2 million in the 2024 period compared to the 2023 period. The decrease was primarily due to lower cash interest expense and amortization of loan costs of $21.5 million on the Oaktree loan attributable to a lower principal balance and the Oaktree deferred loan costs becoming fully amortized, $20.4 million from our Hotel Dispositions, and lower default interest and late charges recorded on mortgage loans previously in default of $946,000, partially offset by a $7.7 million increase in interest expense at our comparable hotel properties primarily due to higher interest rates on our variable rate debt, $337,000 from the Le Meridien and $911,000 at our Stirling properties related to the new loan with a higher interest rate. The average SOFR rates in the 2024 period and the 2023 period were 5.27% and 4.78%, respectively.
Previous wording
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership increased $3.5 million, from $8.5 million in the 2023 period to $11.9 million in the 2024 period. The increase is due to higher interest rates, default charges and late fees on the KEYS Pool A and KEYS Pool B mortgage loans.
Current wording
Interest Expense Associated with Hotels in Receivership. Interest expense associated with hotels in receivership increased $7.8 million, from $27.4 million in the 2023 period to $35.2 million in the 2024 period. The increase is due to higher average interest rates, default charges and late fees on the KEYS Pool A and KEYS Pool B mortgage loans. On July 2, 2024, the Courtyard Plano Legacy Park and the Residence Inn Plano were foreclosed on at a public auction. See note 7 to our consolidated financial statements.
Previous wording
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees increased $2.4 million to $3.8 million in the 2024 period compared to the 2023 period. In the 2024 period, we incurred fees of $3.0 million related to loan refinances and modifications, and $817,000 write-off of unamortized loan cost. In the 2023 period, we incurred fees of $1.3 million related to loan refinances and modifications.
Current wording
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees increased $1.2 million to $3.8 million in the 2024 period compared to the 2023 period. In the 2024 period, we incurred fees of approximately $3.0 million related to loan refinances and modifications and wrote-off $817,000 of unamortized loan costs. In the 2023 period, we incurred fees of $2.6 million related to loan refinances and modifications
Showing the first 40 of 57 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We derecognized the hotel properties securing the KEYS Pool A and KEYS Pool B loans from our consolidated balance sheet in March 2024, when the receiver took control of the hotel properties, and accordingly recognized a gain of $133.9 million, which is included in “gain (loss) on derecognition of assets” in our consolidated statements of operations and recorded a contract asset of $378.2 million, which represented the liabilities we expect to be released from upon final resolution with the lenders on the KEYS Pool A and KEYS Pool B mortgage loans in exchange for the transfer of ownership of the respective hotel properties.
Current report — wording carried from elsewhere
During the three months ended June 30, 2024, we recognized an additional gain of $11.7 million, which is included in “gain (loss) on derecognition of assets” in our consolidated statements of operations that increased the contract asset by a corresponding amount. The additional gain primarily represents the additional accrued interest expense recorded during the three months ended June 30, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Gain (Loss) on Consolidation of VIE and Disposition of Assets and Hotel Properties. Gain on consolidation of VIE and disposition of assets and hotel properties increased $86.4 million from $1.1 million in the 2023 quarter to $87.4 million in the 2024 quarter. The gain in the 2024 quarter primarily related to the sale of Hilton Boston Back Bay in Boston, Massachusetts, Hampton Inn Lawrenceville in Lawrenceville, Georgia, SpringHill Suites Kennesaw in Kennesaw, Georgia, Fairfield Inn Kennesaw in Kennesaw, Georgia, One Ocean in Atlantic Beach, Florida and Courtyard Manchester in Manchester, Connecticut. The gain in the 2023 quarter related to consolidation of the VIE, which is represented by the difference of the fair value of the assets and liabilities recognized, the fair value of the non-controlling interest and the previous carrying value of the Company’s investment in 815 Commerce MM.