Reportable Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Reportable Segment Information

Reportable Segment Information

The Hotel Franchising reportable segment includes the Company's hotel franchising operations consisting of its 23 brands and brand extensions. The 23 brands and brand extensions are aggregated within this segment considering their similar economic characteristics, types of customers, distribution channels and regulatory business environments. Revenues from the hotel franchising business include royalty fees, initial franchise fees, marketing and reservation system fees, procurement services revenue and other hotel franchising related revenue. The Company is obligated under its hotel franchise agreements to provide marketing and reservation services appropriate for the operation of its systems. The revenues received from franchisees that are used to pay for part of the Company's ongoing operations are included in hotel franchising revenues and are offset by the related expenses paid for marketing and reservation system activities to calculate hotel franchising operating income. Equity in earnings or losses from hotel franchising related investment in affiliates is allocated to the Company's Hotel Franchising segment.

The Company evaluates its Hotel Franchising segment based primarily on the results of the segment without allocating corporate expenses, indirect general and administrative expenses, interest expense, interest income, other gains and losses or income taxes, which are included in the Corporate & Other column. Corporate & Other revenues include owned hotel revenues and revenues related to the Company's SaaS technology solutions division which provide cloud-based property management software to non-franchised hoteliers.

Intersegment revenue adjustment is from the elimination of Hotel Franchising revenue which include royalty fees, marketing and reservation system fees, management fees, payroll costs and other cost reimbursements charged to our owned hotels against hotel operating expenses recognized by our owned hotels in Corporate & Other operating income (loss).

Our President and Chief Executive Officer, who is our chief operating decision maker, does not use assets by operating segment when assessing performance or making operating segment resource allocations decisions and therefore assets by segment are not disclosed below.

The following table presents the financial information for the Company's segments:

	Three Months Ended September 30, 2022								Three Months Ended September 30, 2021
(in thousands)	Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated		Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated
Revenues	$	386,124	$	29,692	$	(1,550)	$	414,266	$	310,703	$	13,532	$	(866)	$	323,369
Operating income (loss)	$	161,084	$	(16,066)	$	—	$	145,018	$	169,516	$	(10,410)	$	—	$	159,106
Income (loss) before income taxes	$	162,162	$	(25,386)	$	—	$	136,776	$	172,338	$	(20,749)	$	—	$	151,589
	Nine Months Ended September 30, 2022								Nine Months Ended September 30, 2021
(in thousands)	Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated		Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated
Revenues	$	980,352	$	63,363	$	(3,748)	$	1,039,967	$	756,013	$	30,504	$	(1,857)	$	784,660
Operating income (loss)	$	433,852	$	(32,088)	$	—	$	401,764	$	360,269	$	(38,141)	$	—	$	322,128
Income (loss) before income taxes	$	435,131	$	(68,494)	$	—	$	366,637	$	358,274	$	(66,121)	$	—	$	292,153