Revenue

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Contract Liabilities

Contract liabilities relate to (i) advance consideration received, such as initial franchise and relicensing fees paid when a franchise agreement is executed and system implementation fees paid at time of installation, for services considered to be part of the brand intellectual property performance obligation and (ii) amounts received when Choice Privileges points are issued, but for which revenue is not yet recognized since the related points have not been redeemed.

Deferred revenues from initial and relicensing fees and system implementation fees are typically recognized over a five- to ten-year period, unless the franchise agreement is terminated and the hotel exits the franchise system whereby remaining deferred amounts are recognized to revenue in the period of termination. Loyalty points are typically redeemed within three years of issuance.

Significant changes in the contract liabilities balances during the period December 31, 2021 to June 30, 2022 are as follows:

(in thousands)
Balance as of December 31, 2021	$	175,425
Increases to the contract liability balance due to cash received	56,392
Revenue recognized in the period	(57,127)
Balance as of June 30, 2022	$	174,690

Remaining Performance Obligations

The aggregate amount of transaction price allocated to unsatisfied or partially unsatisfied performance obligations is $174.7 million as of June 30, 2022. This amount represents fixed transaction price that will be recognized as revenue in future periods, which is captured in the consolidated balance sheet as current and non-current deferred revenue.

Based on practical expedient elections permitted by ASU 2014-09, Revenue From Contracts with Customers (Topic 606) and subsequent amendments ("Topic 606"), the Company does not disclose the value of unsatisfied performance obligations for (i) variable consideration subject to the sales or usage-based royalty constraint or comprising a component of a series (including franchise, partnership, qualified vendor, and software as a service ("SaaS") agreements), (ii) variable consideration for which we recognize revenue at the amount to which we have the right to invoice for services performed, or (iii) contracts with an expected original duration of one year or less.

Disaggregation of Revenue

	Three Months Ended						Three Months Ended
	June 30, 2022						June 30, 2021
(in thousands)	Over time		Point in time		Total		Over time		Point in time		Total
Royalty fees	$	121,449	$	—	$	121,449	$	106,242	$	—	$	106,242
Initial franchise and relicensing fees	6,222		—		6,222		7,328		—		7,328
Procurement services	20,744		1,059		21,803		11,502		590		12,092
Marketing and reservation system	148,126		41,256		189,382		121,944		14,044		135,988
Owned hotels	14,694		2,388		17,082		7,550		1,336		8,886
Other	11,927		—		11,927		7,701		—		7,701
Total Topic 606 revenues	$	323,162	$	44,703	367,865		$	262,267	$	15,970	278,237
Non-Topic 606 revenues					109						107
Total revenues					$	367,974					$	278,344
	Six Months Ended						Six Months Ended
	June 30, 2022						June 30, 2021
(in thousands)	Over time		Point in time		Total		Over time		Point in time		Total
Royalty fees	$	212,188	$	—	$	212,188	$	172,289	$	—	$	172,289
Initial franchise and relicensing fees	14,624		—		14,624		12,755		—		12,755
Procurement services	31,876		1,610		33,486		22,241		1,042		23,283
Marketing and reservation system	260,382		55,637		316,019		200,995		26,514		227,509
Owned hotels	24,635		4,385		29,020		11,068		2,058		13,126
Other	20,156		—		20,156		12,108		—		12,108
Total Topic 606 revenues	$	563,861	$	61,632	625,493		$	431,456	$	29,614	461,070
Non-Topic 606 revenues					208						221
Total revenues					$	625,701					$	461,291

Marketing and reservation system and Procurement services point in time revenues represent loyalty points redeemed by members for benefits (with both franchisees and third-party partners), net of the cost of redemptions.

As presented in Note 11, the Corporate & Other segment amounts represent $19.4 million and $10.9 million for the three months ended June 30, 2022 and 2021, respectively, and $33.7 million and $17.0 million for the six months ended June 30, 2022 and 2021, respectively, and are included in the Over time column of Other revenues and the Owned hotels and Non-Topic 606 revenues rows. The remaining revenues relate to the Hotel Franchising segment.

Royalty fees and Marketing and reservation system revenues are presented net of intersegment revenues of $1.3 million and $0.7 million for the three months ended June 30, 2022 and 2021, respectively, and $2.2 million and $1.0 million for the six months ended June 30, 2022 and 2021, respectively.