Revenue

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Contract Liabilities

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

Deferred revenues from initial 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.

The following table summarizes the significant changes in the contract liabilities balances during the period from December 31, 2022 to September 30, 2023:

(in thousands)
Balance as of December 31, 2022	$	209,359
Increases to the contract liability balance due to cash received	105,305
Revenue recognized in the period	(99,475)
Balance as of September 30, 2023	$	215,189

Remaining Performance Obligations

The aggregate amount of the transaction price that is allocated to unsatisfied, or partially unsatisfied, performance obligations was $215.2 million as of September 30, 2023. This amount represents the fixed transaction price that will be recognized as revenue in future periods, which is presented as current and non-current deferred revenue in the consolidated balance sheets.

Based on the 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
	September 30, 2023						September 30, 2022
(in thousands)	Over time		Point in time		Total		Over time		Point in time		Total
Royalty, licensing and management fees	$	145,830	$	2,682	$	148,512	$	143,987	$	33	$	144,020
Initial franchise fees	6,194		—		6,194		7,011		—		7,011
Platform and procurement services fees	14,874		668		15,542		13,628		773		14,401
Owned hotels	19,497		6,742		26,239		14,877		5,115		19,992
Other	11,436		—		11,436		31,432		—		31,432
Other revenues from franchised and managed properties	200,399		17,235		217,634		178,349		19,061		197,410
Total revenues	$	398,230	$	27,327	$	425,557	$	389,284	$	24,982	$	414,266
	Nine Months Ended						Nine Months Ended
	September 30, 2023						September 30, 2022
(in thousands)	Over time		Point in time		Total		Over time		Point in time		Total
Royalty, licensing and management fees	$	389,332	$	7,171	$	396,503	$	356,175	$	33	$	356,208
Initial franchise fees	21,240		—		21,240		21,635		—		21,635
Platform and procurement services fees	56,112		2,074		58,186		45,503		2,384		47,887
Owned hotels	55,544		18,531		74,075		39,720		9,500		49,220
Other	33,211		—		33,211		51,588		—		51,588
Other revenues from franchised and managed properties	546,332		56,222		602,554		438,734		74,695		513,429
Total revenues	$	1,101,771	$	83,998	$	1,185,769	$	953,355	$	86,612	$	1,039,967

The owned hotels revenues that are recognized at a point in time represent the goods and services that are purchased independently of the hotel stay, such as food and beverage, incidentals, and parking fees. The remaining revenues that are recognized at a point in time represent the loyalty points that are redeemed by members for benefits (with both franchisees and third-party partners), net of the cost of redemptions.

During the three and nine months ended September 30, 2022, Other revenues included contract termination fee revenue of $22.7 million from the exit of 110 WoodSpring units in September 2022. The contract termination fee revenue consisted of $67.4 million in consideration, less the $44.7 million in intangible assets that were initially recognized on the date of the WoodSpring acquisition.

As presented in Note 11, the Corporate & Other segment revenue amounts are $33.8 million and $29.7 million for the three months ended September 30, 2023 and 2022, respectively, and $86.5 million and $63.4 million for the nine months ended September 30, 2023 and 2022, respectively, and are primarily included in Other revenue and Owned hotels revenue in the consolidated statements of income. The remaining revenues relate to the Hotel Franchising & Management reportable segment.

Royalty, licensing and management fees and Other revenues from franchised and managed properties are presented net of intersegment revenues of $4.0 million and $1.6 million for the three months ended September 30, 2023 and 2022, respectively, and $7.3 million and $3.7 million for the nine months ended September 30, 2023 and 2022, respectively.