10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______    to ________    

Commission file number: 001-35972

BRAEMAR HOTELS & RESORTS INC.

(Exact name of registrant as specified in its charter)

Maryland	46-2488594
(State or other jurisdiction of incorporation or organization)	(IRS employer identification number)
14185 Dallas Parkway
Suite 1200
Dallas
Texas	75254
(Address of principal executive offices)	(Zip code)

(972) 490-9600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BHR	New York Stock Exchange
Preferred Stock, Series B	BHR-PB	New York Stock Exchange
Preferred Stock, Series D	BHR-PD	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨    Yes     þ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨    Yes     þ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    þ    Yes    ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)    þ    Yes    ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “small reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 USC. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐    Yes    þ No

As of June 30, 2021, the aggregate market value of 55,902,246 shares of the registrant’s common stock held by non-affiliates was approximately $347,153,000.

As of March 8, 2022, the registrant had 65,348,848 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement pertaining to the 2022 Annual Meeting of Stockholders are incorporated herein by reference into Part III of this Form 10-K.

BRAEMAR HOTELS & RESORTS INC.

YEAR ENDED DECEMBER 31, 2021

INDEX TO FORM 10-K

		Page
PART I
Item 1.	Business	4
Item 1A.	Risk Factors	50
Item 1B.	Unresolved Staff Comments	79
Item 2.	Properties	79
Item 3.	Legal Proceedings	81
Item 4.	Mine Safety Disclosures	82
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	82
Item 6.	Reserved	85
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	85
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	108
Item 8.	Financial Statements and Supplementary Data	109
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	159
Item 9A.	Controls and Procedures	159
Item 9B.	Other Information	161
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	162
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	162
Item 11.	Executive Compensation	162
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	162
Item 13.	Certain Relationships and Related Transactions, and Director Independence	162
Item 14.	Principal Accounting Fees and Services	162
PART IV
Item 15.	Financial Statement Schedules and Exhibits	162
Item 16.	Form 10-K Summary	168
SIGNATURES

As used in this Annual Report on Form 10-K, unless the context otherwise indicates, the references to “we,” “us,” “our,” the “Company” or “Braemar” refer to Braemar Hotels & Resorts Inc., a Maryland corporation, and, as the context may require, its consolidated subsidiaries, including Braemar Hospitality Limited Partnership, a Delaware limited partnership, which we refer to as “our operating partnership” or “Braemar OP.” “Our TRSs” refers to our taxable REIT subsidiaries, including Braemar TRS Corporation, a Delaware corporation, which we refer to as “Braemar TRS,” and its subsidiaries, together with the two taxable REIT subsidiaries that lease our two hotels held in a consolidated joint venture and are wholly-owned by the joint venture and the U.S. Virgin Islands’ (“USVI”) taxable REIT subsidiary that owns The Ritz-Carlton St. Thomas hotel. “Ashford Trust” or “AHT” refers to Ashford Hospitality Trust, Inc., a Maryland corporation, and, as the context may require, its consolidated subsidiaries, including Ashford Hospitality Limited Partnership, a Delaware limited partnership and Ashford Trust’s operating partnership, which we refer to as “Ashford Trust OP.” “Ashford Inc.” refers to Ashford Inc., a Nevada corporation and, as the context may require, its consolidated subsidiaries. “Ashford LLC” or “our advisor” refers to Ashford Hospitality Advisors LLC, a Delaware limited liability company and a subsidiary of Ashford Inc. “Premier” refers to Premier Project Management LLC, a Maryland limited liability company and a subsidiary of Ashford LLC. “Remington Lodging” refers to Remington Lodging & Hospitality, LLC, a Delaware limited liability company and a hotel management company that was owned by Mr. Monty J. Bennett, chairman of our board of directors, and his father, Mr. Archie Bennett, Jr., chairman emeritus of Ashford Trust before its acquisition by Ashford Inc. on November 6, 2019. “Remington Hotels” refers to the same entity after the acquisition was completed, resulting in Remington Lodging & Hospitality, LLC becoming a subsidiary of Ashford Inc.

This Annual Report on Form 10-K contains registered trademarks that are the exclusive property of their respective owners, which are companies other than us, including Marriott International®, Hilton Worldwide®, Sofitel®, Hyatt® and Accor®.

FORWARD-LOOKING STATEMENTS

Throughout this Annual Report on Form 10-K and documents incorporated herein by reference, we make forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Additionally, statements regarding the following subjects are forward-looking by their nature:

•the factors discussed in this Annual Report under the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” and “Properties,” as updated in our subsequent Quarterly Reports on Form 10-Q and other filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

•the impact of the ongoing COVID-19 pandemic, including the resurgence of cases relating to the spread of the Delta, Omicron or other potential variants, on our business, financial condition, liquidity and results of operations;

•the impact of numerous governmental travel restrictions and other orders related to COVID-19 on our business including one or more possible recurrences of COVID-19 case surges causing state and local governments to reinstate travel restrictions;

•our business and investment strategy;

•anticipated or expected purchases or sales of assets;

•our projected operating results;

•completion of any pending transactions;

•our ability to secure additional financing to enable us to operate our business during the pendency of COVID-related business weakness, which has materially impacted our operating cash flows and cash balances;

•our understanding of our competition;

•market trends;

•projected capital expenditures; and

•the impact of technology on our operations and business.

Such forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Additionally, the following factors could cause actual results to vary from our forward-looking statements:

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•the factors discussed in this Annual Report under the sections entitled “Risk Factors,” “Legal Proceedings,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” and “Properties,” as updated in our subsequent Quarterly Reports on Form 10-Q and other filings under the Exchange Act;

•adverse effects of the COVID-19 pandemic, including a significant reduction in business and personal travel and travel restrictions in regions where our hotels are located, and one or more possible recurrences of COVID-19 case surges causing a further reduction in business and personal travel and potential reinstatement of travel restrictions by state or local governments;

•extreme weather conditions may cause property damage or interrupt business;

•our ability to raise sufficient capital and/or take other actions to improve our liquidity position or otherwise meet our liquidity requirements;

•actions by our lenders to accelerate loan balances and foreclose on the hotel properties that are security for our loans if we are unable to make debt service payments or satisfy our other obligations under the forbearance agreements;

•general volatility of the capital markets and the market price of our common and preferred stock;

•general business and economic conditions affecting the lodging and travel industry;

•changes in our business or investment strategy;

•availability, terms and deployment of capital;

•unanticipated increases in financing and other costs, including a rise in interest rates;

•changes in our industry and the markets in which we operate, interest rates, or local economic conditions;

•the degree and nature of our competition;

•actual and potential conflicts of interest with Ashford Trust, Ashford Inc. and its subsidiaries (including Ashford LLC, Remington Hotels and Premier) and our executive officers and our non-independent director;

•changes in personnel of Ashford LLC or the lack of availability of qualified personnel;

•changes in governmental regulations, accounting rules, tax rates and similar matters;

•legislative and regulatory changes, including changes to the Internal Revenue Code of 1986, as amended (the “Code”) and related rules, regulations and interpretations governing the taxation of REITs;

•limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes; and

•future sales and issuances of our common stock or other securities might result in dilution and could cause the price of our common stock to decline.

When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this Annual Report on Form 10-K. The matters summarized under “Item 1A. Risk Factors,” and elsewhere, could cause our actual results and performance to differ significantly from those contained in our forward-looking statements. Accordingly, we cannot guarantee future results or performance. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Annual Report on Form 10-K. Furthermore, we do not intend to update any of our forward-looking statements after the date of this Annual Report on Form 10-K to conform these statements to actual results and performance, except as may be required by applicable law.

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PART I

Item 1. Business

Changes from Prior Periodic Report

In this report we have complied with the disclosures required by the Securities and Exchange Commission (“SEC”) release No. 33-10825 “Modernization of Regulation S-K Items 101, 103, and 105”, and we have adopted the changes in disclosure standards included in SEC release No. 33-10890 “Management's Discussion and Analysis, Selected Financial Data, Supplementary Financial Information.”

Modernization of Regulation S-K Items 101, 103 and 105

Effective as of November 9, 2020, the SEC issued Release No. 33-10825, “Modernization of Regulation S-K Items 101, 103, and 105.” This release was adopted to modernize the description of business, legal proceedings, and risk factor disclosures that registrants are required to make pursuant to Regulation S-K. Specifically, this release requires registrants to provide disclosures relating to their human capital resources and to restructure their risk factor disclosures. Additionally, the release increases the threshold for disclosure of environmental proceedings to which the government is a party.

These changes are required for any annual period subsequent to the effective date of November 9, 2020. As such, we have adopted these changes in this report.

Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information

In November 2020, the SEC issued Release No. 33-10890, “Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information,” which become fully effective on August 9, 2021. This release was adopted to modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K. Specifically, the SEC eliminated the requirement for selected financial data, only requiring quarterly disclosure when there are retrospective changes affecting comprehensive income, and amending the matters required to be presented under Management’s Discussion and Analysis (“MD&A”) to, among other things, eliminate the requirement of the contractual obligations table.

We have eliminated from this document the items discussed above that are no longer required. Information on our contractual obligations is still disclosed in a narrative within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report.

Our Company

We are an externally-advised Maryland corporation formed in 2013 that invests primarily in high revenue per available room (“RevPAR”) luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by Smith Travel Research. Two times the U.S. national average RevPAR was approximately $144 for the year ended December 31, 2021. We have elected to be taxed as a REIT under the Code beginning in the year ended December 31, 2013. We conduct our business and own substantially all of our assets through our operating partnership, Braemar OP.

We operate in the direct hotel investment segment of the hotel lodging industry. As of March 8, 2022, we owned interests in 14 hotel properties in six states, the District of Columbia and St. Thomas, U.S. Virgin Islands with 3,875 total rooms, or 3,640 net rooms, excluding those attributable to our joint venture partner. The hotel properties in our current portfolio are predominantly located in U.S. urban and resort locations with favorable growth characteristics resulting from multiple demand generators. We own 12 of our hotel properties directly, and the remaining two hotel properties through an investment in a majority-owned consolidated joint venture entity.

We are advised by Ashford LLC, a subsidiary of Ashford Inc., through an advisory agreement. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. Asset management functions include acquisition, renovation, financing and disposition of assets, operational accountability of managers, budget review, capital expenditures and property-level strategies as compared to the day-to-day management of our hotel properties, which is performed by our hotel managers. We do not have any employees. All of the advisory services that might be provided by employees are provided to us by Ashford LLC.

We do not operate any of our hotel properties directly; instead, we employ hotel management companies to operate them for us under management contracts. On November 6, 2019, Ashford Inc. completed its acquisition of Remington Lodging’s hotel management business from Mr. Monty J. Bennett, chairman of our board of directors, and Mr. Archie Bennett, Jr.,

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chairman emeritus of Ashford Trust. Remington Hotels, a subsidiary of Ashford Inc. after November 6, 2019, manages four of our 14 hotel properties. Third-party management companies manage the remaining hotel properties.

Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to, design and construction services, debt placement and related services, audio visual services, real estate advisory services, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services, mobile key technology and broker-dealer services. See note 15 to our consolidated financial statements.

As of December 31, 2021, Mr. Monty J. Bennett and Mr. Archie Bennett, Jr., together owned approximately 610,246 shares of Ashford Inc. common stock, which represented an approximate 20.2% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc. Series D Convertible Preferred Stock, which was exercisable (at an exercise price of $117.50 per share) into an additional approximate 3,991,191 shares of Ashford Inc. common stock, which if exercised as of December 31, 2021 would have increased the Bennetts’ ownership interest in Ashford Inc. to approximately 65.6%, subject to applicable voting limitations. The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts.

As of December 31, 2021, Mr. Monty J. Bennett, chairman of our board of directors and his father, Mr. Archie Bennett, Jr., together owned approximately 4,112,277 common shares of the Company (including common units, long-term incentive plan (“LTIP”) units and performance LTIP units), which represented an approximate 5.7% ownership in the Company.

We continued to see a negative impact on room demand within our portfolio stemming from the COVID-19 pandemic during 2021. A more detailed discussion of the ongoing impact of the COVID-19 pandemic on our business is contained in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Our Investment and Growth Strategies

Our principal business objectives are to generate attractive returns on our invested capital and long-term growth in cash flow to maximize total returns to our stockholders. To achieve our objectives, we pursue the following strategies:

Focused Investment Strategy. Our strategy is to invest in premium-branded and high-quality independent luxury hotels and resorts that are anticipated to generate RevPAR at least twice the average RevPAR for the U.S. lodging industry, as determined by Smith Travel Research and are located predominantly in North America.

We intend to concentrate our investments in markets where we believe there are significant growth opportunities, taking into consideration the risk of additional supply. In determining anticipated RevPAR for a particular asset, we may take into account forecasts and other considerations, including without limitation, conversions or repositioning of assets, capital plans, brand changes and other factors which may reasonably be forecasted to raise RevPAR after stabilization. Stabilization with respect to a hotel, after the completion of an initiative such as a capital plan, conversion or change of brand name or change of the business mix or other operating characteristics, is generally expected to occur within 12 to 24 months after the completion of the related renovation, repositioning or brand change.

In connection with this investment strategy, we frequently evaluate opportunities to acquire additional hotel properties, either through direct ownership, joint ventures, partnership participations or similar arrangements. We may use cash or debt or issue common units or other securities of ours or our operating partnership, Braemar OP, or our other subsidiaries as currency for a transaction. Some or all of these acquisitions, if completed, may be material to our company, individually or in the aggregate. We may, from time to time, be party to letters of intent, term sheets and other non-binding agreements relating to potential acquisitions. We cannot assure you that we will enter into definitive acquisition agreements with respect to any potential acquisitions.

Active Asset Management Strategy. We rely on Ashford LLC to asset-manage the hotel properties in our portfolio, and will rely on Ashford LLC to asset-manage any hotel properties we may acquire in the future, to help maximize the operating performance, cash flow and value of each hotel. Asset management is intended to include actively “managing” the hotel managers and holding them accountable to drive top line and bottom-line operating performances. Ashford LLC aims to achieve this goal by benchmarking each asset’s performance compared to similar hotel properties within our portfolio. Ashford LLC also closely monitors all hotel operating expenses, as well as third-party vendor and service contracts. If expense levels are not commensurate with the property revenues, Ashford LLC works with the property manager to implement cost-cutting initiatives. Ashford LLC is also very active in evaluating and proposing improved strategies for the sales, marketing and revenue management initiatives of the property manager as well as its ability to drive ancillary hotel revenues (e.g., spa, food and beverage, parking, and Internet). In addition to supervising and directing the property manager, Ashford LLC works with the brands and management companies to negotiate favorable franchise agreement and hotel management agreement terms.

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Ashford LLC also actively participates in brand advisory committee meetings to provide feedback and input on new hotel brand initiatives.

Disciplined Capital Allocation Strategy. We intend to pursue a disciplined capital allocation strategy for the acquisition, operation, disposition and financing of assets in our portfolio and those that we may acquire in the future. Ashford LLC utilizes its extensive industry experience and capital markets expertise to influence the timing of capital deployment and recycling, and we may selectively sell hotel properties that are no longer consistent with our investment strategy or as to which returns appear to have been maximized. To the extent we sell hotel properties, we generally intend to redeploy the capital into investment opportunities that we believe will achieve higher returns or buy back our common stock or other securities.

Our Hotels

As of March 8, 2022, we own interests in a high-quality, geographically diverse portfolio of 14 hotel properties located in six states, the District of Columbia and St. Thomas, U.S. Virgin Islands. Our properties have 3,875 total rooms, or 3,640 net rooms, excluding those attributable to our joint venture partner. All of the hotel properties in our portfolio are generally located in markets that exhibit strong growth characteristics resulting from multiple demand generators. Eight of the 14 hotel properties in our portfolio operate under premium brands affiliated with Marriott International, Inc. (“Marriott”) and Hilton Worldwide, Inc. (“Hilton”). One hotel property is managed by Accor Management US Inc. (“Accor”), one is managed by Hyatt Corporation (“Hyatt”) and four hotel properties are managed by Remington Hotels, a subsidiary of Ashford Inc. The material terms of these hotel management agreements are described below in “Certain Agreements—Hotel Management Agreements.” Each of our hotel properties is encumbered by loans as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Indebtedness.” For the year ended December 31, 2021, approximately 88% of the rooms revenue was generated by transient business, approximately 11% was generated by group sales and 1% was generated by contract sales.

The following table sets forth additional information for our hotel properties (dollars in thousands, except ADR and RevPAR) for the year ended December 31, 2021:

					Year Ended December 31, 2021
Hotel Property	Location	Total Rooms	% Owned		Occupancy		ADR		RevPAR		Hotel EBITDA (1)
Hilton La Jolla Torrey Pines(2)	La Jolla, CA	394	75	%	57.80	%	$	203.63	$	117.70	$	6,235
Capital Hilton	Washington, D.C.	550	75	%	30.47	%	159.77		48.68		(3,342)
Marriott Seattle Waterfront	Seattle, WA	361	100	%	52.22	%	219.51		114.64		3,557
The Clancy	San Francisco, CA	410	100	%	55.97	%	174.64		97.74		(2,217)
The Notary Hotel	Philadelphia, PA	499	100	%	36.94	%	176.70		65.27		1,924
The Ritz-Carlton Lake Tahoe (3)	Truckee, CA	170	100	%	55.00	%	642.81		353.56		7,835
The Ritz-Carlton Sarasota	Sarasota, FL	276	100	%	76.99	%	545.68		420.14		25,663
Sofitel Chicago Magnificent Mile	Chicago, IL	415	100	%	46.93	%	202.88		95.21		(3,560)
Pier House Resort & Spa	Key West, FL	142	100	%	81.83	%	591.40		483.93		18,039
Bardessono Hotel and Spa (4)	Yountville, CA	65	100	%	67.92	%	1,141.39		775.18		9,208
The Ritz-Carlton St. Thomas	St. Thomas, U.S. Virgin Islands	180	100	%	79.52	%	1,049.29		834.39		27,550
Park Hyatt Beaver Creek Resort & Spa	Beaver Creek, CO	190	100	%	54.94	%	454.17		249.50		9,609
Hotel Yountville	Yountville, CA	80	100	%	57.90	%	762.15		441.29		6,433
Mr. C Beverly Hills Hotel (5)	Los Angeles, CA	143	100	%	63.88	%	332.86		212.62		1,052
Total / Weighted Average (6)		3,875			52.44	%	$	384.95	$	201.86	$	107,986

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(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of Hotel EBITDA by property. We own the Hilton La Jolla Torrey Pines and the Capital Hilton in a joint venture. The Hotel EBITDA represents the total amount for each hotel during our period of ownership, not our pro rata amount based on our ownership percentage.

(2)    Subject to a ground lease that expires in 2067. The ground lease contains one extension option of either 10 or 20 years dependent upon capital investment spend during the lease term.

(3)    The above information, excluding Hotel EBITDA, does not include the operations of ten condominium units not owned by The Ritz-Carlton Lake Tahoe.

(4)    Subject to a ground lease that initially expires in 2065. The ground lease contains two 25-year extension options, at our election.

(5)    The results of Mr. C Beverly Hills Hotel and the five adjacent luxury residences are included from August 5, 2021 through December 31, 2021.

(6)    Calculated on a portfolio basis for the 14 hotel properties in our portfolio as of December 31, 2021.

Hilton La Jolla Torrey Pines, La Jolla, California

We own a 75% partnership interest in Ashford HHC Partners III LP, which is subject to a ground lease in the Hilton La Jolla Torrey Pines expiring in 2067. CHH Torrey Pines Hotel Partners LP, a subsidiary of Ashford HHC Partners III LP, leases the Hilton La Jolla Torrey Pines hotel to CHH Torrey Pines Tenant Corp. The remaining 25% partnership interest in Ashford

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HHC Partners III LP is owned by Park Hotels & Resorts, Inc. The hotel opened in 1989 and is comprised of 394 guest rooms, including 232 king rooms, 152 queen/queen rooms and 10 suites. Approximately $30.7 million has been spent on capital expenditures since the acquisition of the hotel by Ashford HHC Partners III LP in 2007, which included lobby, restaurant, meeting space and room renovations.

The hotel’s location attracts all three major demand segments: corporate transient, group meetings and leisure transient. The famous Torrey Pines Golf Course, located on the property’s western boundary, appeals to each demand segment and provides exclusive tee times to guests staying at the hotel. Nearly every room has a private balcony or patio with ocean, garden or golf course views. In addition to the attraction of the golf course, the hotel is located within walking distance of the Torrey Pines State Nature Reserve with access to a number of outdoor activities and Pacific Ocean beaches. Numerous hospitals and research facilities are located within close proximity of the hotel.

Additional property highlights include:

•    Meeting Space: Approximately 60,000 square feet of event space, including:

•    21,000 square feet of function space in 21 rooms to accommodate up to 1,500 people;

•    over 32,000 square feet of outdoor function space; and

•    the 6,203 square foot Fairway Pavilion Ballroom overlooking the 18th fairway of Torrey Pines Golf Course South Course.

•    Food and Beverage: The Hilton La Jolla Torrey Pines hosts the Torreyana Grill and Lounge, an all-purpose, three-meal restaurant with 205 seats and the Horizons Lounge. Both outlets overlook the golf course and the Pacific Ocean.

•    Other Amenities: The hotel has a fitness center, outdoor pool, outdoor whirlpool, tennis courts, basketball court, business center, lush gardens and pathways, valet parking and a gift shop.

Location and Access. The hotel is located near the Pacific Ocean in a secluded area of the famous Torrey Pines Golf Course. The hotel is approximately 17 miles from the San Diego International Airport.

Operating History. The following table shows certain historical information regarding the Hilton La Jolla Torrey Pines since 2017:

	Year Ended December 31,
	2021			2020			2019			2018			2017
Rooms	394			394			394			394			394
Occupancy	57.8		%	37.8		%	83.1		%	85.3		%	83.7		%
ADR	$	203.63		$	175.17		$	216.18		$	214.34		$	205.19
RevPAR	$	117.70		$	66.29		$	179.56		$	182.91		$	171.64

Selected Financial Information. The following tables show certain selected financial information regarding the Hilton La Jolla Torrey Pines since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	25,816		$	15,389		$	46,973
Rooms Revenue	16,927			9,559			25,822
Hotel EBITDA(1)	6,235			353			15,695
Hotel EBITDA Margin (1)	24.2		%	2.3		%	33.4		%

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(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property. We own the Hilton La Jolla Torrey Pines in a joint venture. The Hotel EBITDA amount for this hotel represents the total amount for this hotel, not our pro rata amount based on our 75% ownership percentage.

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Capital Hilton, Washington, D.C.

We own a 75% partnership interest in Ashford HHC Partners III LP, which has a fee simple interest in the Capital Hilton. CHH Capital Hotel Partners LP, a subsidiary of Ashford HHC Partners III LP, leases the Capital Hilton to CHH Capital Tenant Corp. The remaining 25% partnership interest in Ashford HHC Partners III LP is owned by Park Hotels & Resorts, Inc. The hotel opened in 1943 and is comprised of 550 guest rooms, including 283 king rooms, 94 queen/queen rooms, 90 double/double rooms, 81 single queen rooms and two parlor suites. Approximately $65.6 million has been spent on capital expenditures since the acquisition of the hotel by Ashford HHC Partners III LP in 2007, which included renovations to the guest rooms, public space, meeting space, lobby and restaurant.

The hotel is strategically located at 16th and K Street, in close proximity to the White House and other government facilities. The hotel has significant historical connotations and is located near numerous Washington, D.C. attractions including the National Mall. The offices of a number of legal firms and national associations are located within walking distance of the property.

Additional property highlights include:

•    Meeting Space: Approximately 31,000 square feet of contiguous meeting space located on the same floor.

•    Food and Beverage: The Capital Hilton hosts (i) the Northgate Grill, a full service restaurant with 130 seats and (ii) the Statler Lounge, a lobby bar with 72 seats.

•     Other Amenities: The hotel has a health club as well as a gift shop, business center and valet parking.

Location and Access. The hotel is conveniently located in the center of Washington, D.C., north of the White House and near the National Mall and numerous tourist attractions. By virtue of its size and clear signage, it is visible from both directions on 16th street. The hotel is approximately five miles from Ronald Reagan Washington National Airport.

Operating History. The following table shows certain historical information regarding the Capital Hilton since 2017:

	Year Ended December 31,
	2021			2020			2019			2018			2017
Rooms	550			550			550			550			550
Occupancy	30.5		%	19.2		%	83.0		%	83.5		%	88.6		%
ADR	$	159.77		$	197.00		$	232.62		$	233.73		$	237.87
RevPAR	$	48.68		$	37.73		$	192.95		$	195.22		$	210.83

Selected Financial Information. The following tables show certain selected financial information regarding the Capital Hilton since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	13,929		$	12,718		$	57,285
Rooms Revenue	9,773			7,595			38,735
Hotel EBITDA(1)	(3,342)			(5,076)			14,141
Hotel EBITDA Margin (1)	(24.0)		%	(39.9)		%	24.7		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property. We own the Capital Hilton in a joint venture. The Hotel EBITDA amount for this hotel represents the total amount for this hotel, not our pro rata amount based on our 75% ownership percentage.

Marriott Seattle Waterfront, Seattle, Washington

Our subsidiary, Ashford Seattle Waterfront LP, owns a fee simple interest in the Marriott Seattle Waterfront. The hotel opened in 2003 and is comprised of 348 guest rooms and 13 suites, including 204 king rooms, 155 double/double rooms and two Murphy beds. About half of the hotel’s guest rooms have water views overlooking Elliott Bay with the remaining guest rooms having partial water views. Approximately $21.7 million has been spent on capital expenditures since the acquisition of the hotel in 2007. Capital improvements for 2017 included the relocation of the M Club from the eighth floor to the lobby level, which recaptured three guest rooms. A model room was recently completed in anticipation of a rooms renovation which is expected to occur in 2022.

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The hotel is located on the Seattle Waterfront within walking distance of Pike Place Market, a unique retail experience and a major Seattle tourist attraction. Numerous food vendors providing locally produced food, retail shops offering a variety of merchandise and the original Starbucks Coffee Shop complement the venue. The Seattle Great Wheel, one of the tallest Ferris wheels in the western United States, and the Seattle Aquarium are located along Alaskan Way in close proximity to the hotel. The hotel is also located directly across from the Pier 66 cruise terminal, a strong leisure demand generator during the six-month long cruise season.

Additional property highlights include:

•    Meeting Space: Approximately 18,000 square feet of meeting space.

•    Food and Beverage: The Marriott Seattle Waterfront hosts: (i) Hook and Plow, a full-service restaurant with 192 seats; (ii) Lobby Bar/Library with 120 seats; and (iii) the “Market” offering snacks, drinks and sundry items.

•     Other Amenities: The hotel has a fitness center, indoor/outdoor connected pool, business center, guest laundry facilities, valet parking and three electric vehicle charging stations.

Location and Access. The hotel is conveniently located on the Seattle waterfront, just off of the Alaskan Way S. exit from Highway 99 N. The hotel is approximately 13 miles from the Seattle/Tacoma International Airport.

Operating History. The following table shows certain historical information regarding the Marriott Seattle Waterfront since 2017:

	Year Ended December 31,
	2021			2020			2019			2018			2017
Rooms	361			361			361			361			361
Occupancy	52.2		%	20.7		%	83.2		%	84.8		%	88.0		%
ADR	$	219.51		$	205.12		$	266.62		$	283.59		$	272.19
RevPAR	$	114.64		$	42.41		$	221.87		$	240.49		$	239.50

Selected Financial Information. The following tables show certain selected financial information regarding the Marriott Seattle Waterfront since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	18,315		$	7,021		$	37,497
Rooms Revenue	15,105			5,604			29,235
Hotel EBITDA (1)	3,557			(1,733)			14,250
Hotel EBITDA Margin (1)	19.4		%	(24.7)		%	38.0		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The Clancy, San Francisco, California

Our subsidiary, Ashford San Francisco II LP, owns a fee simple interest in The Clancy. The hotel opened in 2001 and is comprised of 410 guest rooms, including 196 king rooms, 184 queen/queen rooms and 30 suites. Approximately $74.2 million has been spent on capital expenditures since the acquisition of the hotel in 2007, which included a restaurant renovation, a guest room soft goods renovation and a meeting space renovation. In early 2017, the hotel began an extensive custom designed guest room renovation. As part of this renovation we increased the room count from 405 to 410 rooms utilizing former conference suites. The new guest rooms reflect the hotel’s ideal location in the new and evolving SoMa district. Bold vibrant colors with calming grey undertones mimic the stunning visual beauty expressed in the iconic city of San Francisco. Innovative smart technology combined with comfort and luxury provide travelers with an intriguing and unique experience.

On October 1, 2020, we announced the opening of the Clancy, a conversion of the Courtyard San Francisco Downtown into a full service hotel within Marriott’s Autograph Collection®. The conversion included a complete redesign of the lobby, front desk, food and beverage outlets, meeting spaces, public areas and the façade. The custom designed guest rooms are commensurate with an upper upscale brand. Adding a few additional amenities and accessories completed their transition to an Autograph Collection Hotel. The reimaged public space and modern guest rooms elevate The Clancy within the upper upscale market.

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The hotel is located conveniently downtown in the heart of the SoMa district of San Francisco. The hotel is located near numerous high tech businesses and attractions, including the Moscone Convention Center, Transbay Transit Center, Oracle Park, Union Square and the Metreon Complex.

Additional property highlights include:

•    Meeting Space: Approximately 8,700 square feet of indoor meeting space and nearly 1,000 square feet of private outdoor reception areas. In 2022, we plan to convert the former indoor swimming pool space into an approximate 1,200 square foot meeting room which will include an outdoor balcony space overlooking the Block 9 Courtyard. Located on the second floor adjacent to the majority of the hotel’s meeting space, this new meeting room will allow the hotel to capture additional groups while providing much greater flexibility to the group meeting guests.

•    Food and Beverage: The transformed food and beverage outlets at The Clancy include completely reconfigured spaces to meet the requirements of today’s discerning traveler. The Seven Square Tap Room, open for breakfast, lunch, dinner and cocktails, seats 118. The dining area seats 78. The bar and lounge area seats six at the bar and 34 in the lounge. The Lobby Lounge is configured with a bar, couches, small tables and a community table, seats 43 guests including 10 at the bar, 10 at the community table and 23 in various other seating configurations. The Radiator Coffee Salon, open for breakfast and light lunches seats 35 patrons at tables and stadium style seating. An exterior sales window allows the outlet to capture business from local residents and office commuters. Two exterior venues are available for both group and transient guests: the original outdoor courtyard, renamed Block 9 and a completely new space, the Parklet. Block 9 includes a fire pit and has been redesigned to be flexible enough to offer overflow seating for the Lobby Lounge and for private receptions. Total seating in Block 9 encompasses 56 seats in lounge, table and stadium seating configurations. The Parklet is completely covered and can be used for small receptions and outdoor seating.

•    Other Amenities: The hotel has a fully equipped fitness center. In 2022 we plan to expand the fitness center by approximately 600 square feet. Once completed it will comprise approximately 1,400 square feet. SOMA Mercantile, a gift shop of approximately 100 square feet contains food, beverage and retail items unique to San Francisco, along with national brand favorites. Valet parking is available in a two level subterranean garage.

•Original Art: During the conversion process, we commissioned two new outdoor murals, located in Block 9 and the Parklet and two sculptures, one located on a lobby wall and one on the exterior of the building. The hotel’s original art piece, a globe representing San Francisco’s unique position as a world class city, was moved from Block 9 to a prominent position in the Parklet.

Location and Access. The hotel is located in downtown San Francisco and is easily accessible from Interstate 80 and US 101. The hotel is approximately 14 miles from the San Francisco International Airport. The Montgomery Street BART (Bay Area Rapid Transit) station is approximately three blocks from the hotel providing convenient access to the airport and East Bay communities.

Operating History. The following table shows certain historical information regarding The Clancy since 2017:

	Year Ended December 31,
	2021			2020			2019			2018			2017
Rooms	410			410			410			410			408
Occupancy	56.0		%	19.5		%	90.0		%	86.7		%	79.9		%
ADR	$	174.64		$	281.66		$	301.30		$	285.70		$	270.38
RevPAR	$	97.74		$	54.97		$	271.14		$	247.58		$	216.12

Selected Financial Information. The following tables show certain selected financial information regarding The Clancy since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	17,380		$	9,622		$	44,167
Rooms Revenue	14,627			8,249			40,576
Hotel EBITDA (1)	(2,217)			(3,695)			14,248
Hotel EBITDA Margin (1)	(12.8)		%	(38.4)		%	32.3		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

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The Notary Hotel, Philadelphia, Pennsylvania

Our subsidiary, Ashford Philadelphia Annex LP, owns a fee simple interest in The Notary Hotel. The hotel opened in 1999 and is comprised of 499 guest rooms, including 311 king rooms, 109 queen/queen rooms, 77 double/double rooms and two parlor suites. Approximately $57.8 million has been spent on capital expenditures since the acquisition of the hotel in 2007.

On July 17, 2019, we announced the opening of The Notary Hotel. Listed on the National Register of Historic Places, the former Courtyard by Marriott Philadelphia Downtown underwent a rebranding and renovation in excess of $20 million to create The Notary Hotel. Improvements included a complete renovation of the guest rooms, guest corridors, and lobby. Additionally the restaurant was renovated and repositioned as an upscale tapas bar.

The property joined Marriott’s Autograph Collection® Hotels, a diverse portfolio of independent hotels around the world that reflect unique vision, design and environments. It is located in the center of Philadelphia’s downtown business district, across from City Hall and one block from the Philadelphia Convention Center. The hotel is also conveniently located next to the Historical District, the Reading Terminal Market, the University of Pennsylvania and Independence Hall.

Additional property highlights include:

•    Meeting Space: Approximately 10,000 square feet of meeting space throughout 12 event rooms.

•    Food and Beverage: The Notary Hotel hosts (i) Sabroso+Sorbo, an exciting restaurant with Latin-inspired fare and specialty cocktails and (ii) La Colombe®, the hotel’s popular onsite coffee outlet featuring grab-and-go sandwiches, appetizing snacks, fresh salads and delectable pastries.

•     Other Amenities: The hotel has a fitness center, sundries shop/market, business center and valet parking.

Location and Access. The hotel is located in downtown Philadelphia and is accessible from Interstate 676. The hotel’s corner location and clear signage make it easily visible from both Juniper Street and South Penn Square. The hotel is approximately 10 miles from the Philadelphia International Airport.

Operating History. The following table shows certain historical information regarding The Notary Hotel since 2017:

	Year Ended December 31,
	2021			2020			2019			2018			2017
Rooms	499			499			499			499			499
Occupancy	36.9		%	24.2		%	72.2		%	82.9		%	81.8		%
ADR	$	176.70		$	166.25		$	197.97		$	186.10		$	176.71
RevPAR	$	65.27		$	40.24		$	142.84		$	154.32		$	144.60

Selected Financial Information. The following tables show certain selected financial information regarding The Notary Hotel since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	14,158		$	9,000		$	31,887
Rooms Revenue	11,889			7,349			26,016
Hotel EBITDA(1)	1,924			(1,633)			9,850
Hotel EBITDA Margin (1)	13.6		%	(18.1)		%	30.9		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

Sofitel Chicago Magnificent Mile, Chicago, Illinois

On February 24, 2014, we acquired a fee simple interest in the Sofitel Chicago Magnificent Mile. The hotel opened in 2002 and is comprised of 415 guest rooms, including 63 suites. Approximately $18.4 million has been spent on capital expenditures at the hotel since the acquisition of the hotel in 2014. The fitness center and lobby bar were extensively renovated in the first quarter of 2017. A comprehensive guest room and corridor renovation began in the fourth quarter of 2017 and was completed in the second quarter of 2018.

The hotel is located one block west of Chicago’s Magnificent Mile on a 0.6 acre parcel in an area of Chicago known as the Gold Coast. The 32-story building was designed by French architect Jean-Paul Viguier and has views of Lake Michigan and the

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Chicago skyline. It is located in the heart of the Gold Coast neighborhood, proximate to some of Chicago’s largest leisure demand generators, on the corner of Chestnut Street and Wabash Avenue.

Additional property highlights include:

•Meeting Space: Approximately 10,000 square feet of meeting space.

•Food and Beverage: The Sofitel Chicago Magnificent Mile includes (i) CDA, an 82 seat French inspired casual restaurant; (ii) Le Bar, a 45 seat modern cocktail lounge; (iii) La Tarrasse, a 40-seat outdoor patio and lounge serving the cuisine of CDA; and (iv) Cigale, a restaurant space featuring an exhibition kitchen and frontage on Wabash Avenue overlooking Connors Park (currently utilized only for event space).

•Other Amenities: The hotel has a fitness center, a business center and valet parking.

Location and Access. The hotel is located one block west of Chicago’s Magnificent Mile on a 0.6 acre parcel in an area of Chicago known as the Gold Coast. The hotel has easy access to the Chicago “L” train and is located approximately 18 miles from O’Hare International Airport and 13 miles from Midway International Airport.

Operating History. The following table shows certain historical information regarding the Sofitel Chicago Magnificent Mile since 2017:

	Year Ended December 31,
	2021			2020			2019			2018			2017
Rooms	415			415			415			415			415
Occupancy	46.9		%	27.9		%	82.4		%	79.2		%	80.9		%
ADR	$	202.88		$	141.25		$	203.34		$	216.11		$	202.66
RevPAR	$	95.21		$	39.36		$	167.46		$	171.04		$	164.00

Selected Financial Information. The following table shows certain selected financial information regarding the Sofitel Chicago Magnificent Mile since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	18,993		$	7,882		$	34,770
Rooms Revenue	14,422			5,979			25,366
Hotel EBITDA(1)	(3,560)			(5,388)			7,169
Hotel EBITDA Margin(1)	(18.7)		%	(68.4)		%	20.6		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

Pier House Resort & Spa, Key West, Florida

On March 1, 2014, we acquired a fee simple interest in the Pier House Resort & Spa from Ashford Trust pursuant to an option agreement that we entered into in connection with our spin-off from Ashford Trust. The hotel opened in 1968 and is comprised of 142 guest rooms, including 76 king rooms, 43 queen/queen rooms and 23 suites. Approximately $16.0 million has been spent on capital expenditures since the acquisition of the hotel in May 2013, which included spa, fitness center and guest rooms refresh renovations.

The hotel is located on a six-acre parcel in Key West, Florida. In addition to its secluded private beach, the hotel is well-situated at the north end of Duval Street providing easy access to the heart of Key West and its many demand generators.

Additional property highlights include:

•    Meeting Space: Approximately 2,600 square feet of conference space and 2,000 square feet of wedding space overlooking the Gulf of Mexico.

•    Food and Beverage: The Pier House Resort & Spa provides an al fresco beach bar, the 152-seat One Duval Restaurant as well as the 18-seat Chart Room.

•    Other Amenities: The hotel has a full-service spa, a private beach, a heated outdoor pool and a private dock for charter pick-ups.

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Location and Access. The hotel is located on a six-acre compound in the historic district of Key West, Florida, on Duval Street, at the Gulf of Mexico. Key West, which is the southernmost point of the Florida peninsula, is 160 miles south of Miami. Key West International Airport is approximately four miles from the property and the Marathon and Miami airports are all within driving distance.

Operating History. The following table shows certain historical information regarding the Pier House Resort & Spa since 2017:

	Year Ended December 31,
	2021			2020			2019			2018			2017
Rooms	142			142			142			142			142
Occupancy	81.8		%	55.4		%	82.1		%	81.0		%	77.1		%
ADR	$	591.40		$	425.89		$	451.84		$	431.67		$	430.59
RevPAR	$	483.93		$	235.99		$	371.12		$	349.64		$	331.87

Selected Financial Information. The following table shows certain selected financial information regarding the Pier House Resort & Spa since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	31,408		$	15,753		$	25,056
Rooms Revenue	25,082			12,265			19,235
Hotel EBITDA(1)	18,039			6,707			11,700
Hotel EBITDA Margin (1)	57.4		%	42.6		%	46.7		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

Bardessono Hotel and Spa, Yountville, California

On July 9, 2015, we acquired a 100% leasehold interest in the Bardessono Hotel and Spa in Yountville, California, which is subject to a ground lease that initially expires in 2065, with two 25-year extension options. The Bardessono Hotel and Spa was built in 2009 and has 65 luxurious rooms and suites. Built and operated with a primary focus on green practices, the hotel is one of three LEED Platinum certified hotels in California and one of thirteen LEED Platinum certified hotels in the United States. In 2016 the meeting space was renovated. In 2019 we completed construction of a 3,705 square foot Maple Grove Villa, which consists of three large suites, each of which boasts a distinctive great room, stately king bedroom, spa bathroom, courtyard and plunge pool. Approximately $8.3 million has been spent on capital expenditures since the acquisition of the hotel in July 2015.

The hotel is located in Yountville, California and enjoys a central location in the heart of Napa Valley. It offers exceptional amenities, including large, well-appointed guest rooms and suites with private patios/balconies. Guest rooms have fireplaces and oversized bathrooms, many featuring steam showers and a second shower located outdoors in a private garden.

Additional property highlights include:

•    Meeting Space: Approximately 2,100 square feet of indoor and outdoor meeting space.

•    Food and Beverage: The Bardessono Hotel and Spa offers the acclaimed 84-seat Lucy restaurant and bar.

•    Other Amenities: The hotel offers an on-site spa and a fitness center. Outdoor amenities include a rooftop pool and a vegetable garden. Complimentary bicycles and five Lexus vehicles are available for guest use.

Location and Access. The hotel is approximately 60 miles north of San Francisco, approximately 68 miles from the San Francisco International Airport and approximately 60 miles from the Oakland International Airport. The hotel is located within the town of Yountville, offering numerous retail and restaurant establishments including the famed French Laundry. Yountville is in the heart of the Napa Valley, a premier wine and culinary destination with over 450 wineries. In addition to the valley’s traditional wine and dining attractions, the region is also known as a popular leisure destination for hiking, biking, golfing, shopping and festivals.

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Operating History. The following table shows certain historical information regarding the Bardessono Hotel and Spa since 2017:

	Year Ended December 31,
	2021			2020			2019			2018			2017
Rooms	65			65			65			62			62
Occupancy	67.9		%	40.3		%	75.1		%	76.8		%	77.0		%
ADR	$	1,141.39		$	778.43		$	792.41		$	796.93		$	770.19
RevPAR	$	775.18		$	313.89		$	595.19		$	611.84		$	592.77

Selected Financial Information. The following table shows certain selected financial information regarding the Bardessono Hotel and Spa since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	23,329		$	9,921		$	19,060
Rooms Revenue	18,391			7,467			13,633
Hotel EBITDA (1)	9,208			1,018			5,610
Hotel EBITDA Margin (1)	39.5		%	10.3		%	29.4		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The Ritz-Carlton, St. Thomas, U.S. Virgin Islands

On December 15, 2015, we acquired a 100% interest in The Ritz-Carlton St. Thomas on the island of St. Thomas, U.S. Virgin Islands. The Ritz-Carlton St. Thomas opened in 1996 and has 155 luxurious guest rooms and 25 suites, all featuring a spacious private balcony with ocean or resort views. Approximately $111.7 million has been spent on capital expenditures since the acquisition of the hotel in December 2015. Capital investment has recently been focused on remediation and reconstruction effort due to damage sustained after Hurricane Irma. The hotel operated as a 59-room Marriott-affiliated non-branded hotel for the majority of 2019 and re-opened as a full service Ritz-Carlton resort in late November 2019.

Additional property highlights include:

•    Meeting Space: The property has more than 10,000 square feet of indoor and outdoor meeting and function space offering stunning views of Great Bay and neighboring St. John.

•    Food and Beverage: The property features (i) the 163 seat Bleuwater Restaurant; (ii) Alloro, a 100-seat Italian restaurant; (iii) Sails, a 155-seat beachside restaurant and bar; and (iv) Coconut Cove, a second beachside 118-seat restaurant, on the grounds of the adjacent Ritz-Carlton Destination Club. A new fresh service market, Southwind, opened in 2020, serving coffee, sandwiches, ice cream and other light fare.

•    Other Amenities: The resort offers a beachfront infinity-edge pool, as well as a children’s pool and hot tub, a 7,500 square foot full-service award-winning spa and a 2,000 square foot fitness center. The resort also offers the Ritz Kids Club.

Location and Access. The hotel is located on 30 oceanfront acres along Great Bay, St. Thomas, U.S. Virgin Islands. It is 1.6 miles from Urman Victor Fredericks Marine Terminal in Red Hook and 11 miles from Cyril E. King Airport.

Operating History. The following table shows certain historical information regarding The Ritz-Carlton St. Thomas since 2017:

	Year Ended December 31,
	2021			2020			2019			2018			2017
Rooms	180			180			180			180			180
Occupancy	79.5		%	38.9		%	48.6		%	79.2		%	79.9		%
ADR	$	1,049.29		$	665.20		$	616.91		$	283.22		$	553.27
RevPAR	$	834.39		$	258.43		$	299.87		$	224.31		$	442.26

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Selected Financial Information. The following table shows certain selected financial information regarding The Ritz-Carlton St. Thomas since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	80,321		$	31,595		$	26,122
Rooms Revenue	54,819			16,771			3,295
Hotel EBITDA (1)	27,550			4,624			11,399
Hotel EBITDA Margin (1)	34.3		%	14.6		%	43.6		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The Park Hyatt Beaver Creek Resort & Spa, Beaver Creek, Colorado

On March 31, 2017, we acquired a 100% interest in the 190-room Park Hyatt Beaver Creek Resort & Spa in Beaver Creek, Colorado. Located in the heart of Beaver Creek Village, approximately 100 miles west of Denver, it is located in one of the most exclusive resort destinations in North America. The Park Hyatt Beaver Creek Resort & Spa is an integral part of the Beaver Creek Village as the only full-service hotel with direct ski-in/ski-out access. The Park Hyatt Beaver Creek Resort & Spa was built in 1989 and has 190 luxurious and spacious rooms, including 81 king rooms, 66 double/double rooms, 20 double/queen rooms, one suite parlor and 22 suites. The hotel underwent a full lobby renovation in 2019, which included a new lobby bar and the addition of an epicurean market. Approximately $10.8 million has been spent on capital expenditures since the acquisition of the hotel in March 2017.

Additional property highlights include:

•    Meeting Space: The property has over 20,000 square feet of flexible indoor and outdoor event space and is home to the largest ballroom in Vail Valley.

•    Food and Beverage: The property has four food and beverage outlets, including the world-class 8100 Mountainside Bar & Grill, the Brass Bear Bar, the Fall Line epicurean market and Powder 8 Kitchen & Tap, serving the Beaver Creek community and hotel guests during the ski season.

•    Other Amenities: The resort offers an array of amenities, including the award-winning 30,000 square foot Exhale Spa, a heated outdoor pool and five outdoor hot tubs beneath a mountain waterfall, 24-hour state-of-the-art fitness club, ski valet service, outdoor fire pits and guest access to two private championship golf courses and the Beaver Creek Tennis Center. The property also features over 18,800 square feet of fully leased, highly visible retail space in the heart of Beaver Creek.

Location and Access. Located in the heart of Beaver Creek Village, Colorado, the Park Hyatt Beaver Creek Resort & Spa is positioned as the leading resort in one of North America’s most renowned luxury resort destinations. Beyond the world-class hotel, guests have easy access to Beaver Creek’s famous amenities, including exceptional dining and luxury boutique shopping, the 535-seat Vilar Performing Arts Center where festivals and large events are held and an outdoor ice skating rink. While the Vail Valley is home to some of the top ski areas in the world and is a well-known winter destination, it has become very popular as a summer destination due to its proximity to diverse leisure activities, including hiking, biking, horseback riding, white water rafting, fishing, golfing and festivals.

Operating History. The following table shows certain historical information regarding the Park Hyatt Beaver Creek Resort & Spa since 2017:

	Year Ended December 31,												Year Ended December 31, 2017 (combined)			Period from March 31, 2017 through December 31, 2017			Period from January 1, 2017 through March 30, 2017
	2021			2020			2019			2018
Rooms	190			190			190			190			190			190			190
Occupancy	54.9		%	33.9		%	59.1		%	61.7		%	61.3		%	53.9		%	83.7		%
ADR	$	454.17		$	544.68		$	444.54		$	428.59		$	441.98		$	310.52		$	700.74
RevPAR	$	249.50		$	184.75		$	262.57		$	264.59		$	270.90		$	167.51		$	586.82

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Selected Financial Information. The following table shows certain selected financial information regarding the Park Hyatt Beaver Creek Resort & Spa since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	36,184		$	25,554		$	40,688
Rooms Revenue	17,303			12,847			18,209
Hotel EBITDA(1)	9,609			4,977			10,142
Hotel EBITDA Margin (1)	26.6		%	19.5		%	24.9		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The hotel operating results for the period from March 31, 2017 through December 31, 2017, represent the operating results since the acquisition of the hotel on March 31, 2017. The hotel operating results for the period from January 1, 2017 through March 30, 2017, represent the period before our ownership and were obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition. No financial statements were prepared, audited or reviewed for the period from January 1, 2017 through March 30, 2017.

Hotel Yountville, Yountville, California

On May 11, 2017, we acquired a 100% interest in the 80-room Hotel Yountville in Yountville, California. The Hotel Yountville was originally built in 1998 and, in 2011, underwent an extensive expansion and renovation that upgraded all guest rooms, adding 29 new guest rooms, and added a restaurant, spa, meeting and event space, an outdoor pool, and lounge patio. Currently, the property has 80 luxury rooms consisting of 62 king rooms, eight double/queen rooms and 10 suites. We are in the early stages of planning a rooms renovation, which is expected to occur in 2023. Approximately $2.8 million has been spent on capital expenditures since the acquisition of the hotel in May 2017.

Additional property highlights include:

•    Meeting Space: The property has approximately 4,400 square feet of indoor and outdoor event space.

•    Food and Beverage: The property has the acclaimed 46-seat Heritage Oak restaurant and bar, in-room dining service and complimentary wine tastings.

•    Other Amenities: The property offers well-appointed guest rooms and suites with private patios/balconies and a 6,500 square foot on-site spa. Its outdoor amenities are notable as well, including a resort-style outdoor heated pool and lounge, landscaping and water features, and the availability of complimentary bicycles for guest use.

Location and Access. Located in the heart of Yountville, California, the Hotel Yountville is approximately 60 miles north of San Francisco and enjoys a central location in the heart of the Napa Valley, widely acclaimed as the continent’s premier wine and culinary destination with over 450 wineries. Known as the “Culinary Capital of the Napa Valley,” Yountville boasts an array of restaurants by famed chefs, earning more Michelin stars per capita than any other place in North America. In addition to the valley’s traditional wine and dining attractions, the region is also known as a popular leisure destination for hiking, biking, golfing, shopping and festivals.

Operating History. The following table shows certain historical information regarding the Hotel Yountville since 2017:

	Year Ended December 31,												Year Ended December 31, 2017 (combined)			Period from May 11, 2017 through December 31, 2017			Period from January 1, 2017 through May 10, 2017
	2021			2020			2019			2018
Rooms	80			80			80			80			80			80			80
Occupancy	57.9		%	29.5		%	73.9		%	74.7		%	73.1		%	71.8		%	75.5%
ADR	$	762.15		$	526.17		$	558.52		$	558.38		$	543.95		$	603.21		$	442.11
RevPAR	$	441.29		$	155.01		$	412.82		$	417.08		$	397.69		$	433.00		$	333.88

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Selected Financial Information. The following table shows certain selected financial information regarding the Hotel Yountville since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	15,175		$	5,751		$	15,305
Rooms Revenue	12,886			4,539			12,054
Hotel EBITDA (1)	6,433			(86)			6,202
Hotel EBITDA Margin (1)	42.4		%	(1.5)		%	40.5		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The hotel operating results for the period from May 11, 2017 through December 31, 2017 represent the operating results since the acquisition of the hotel on May 11, 2017. The hotel operating results for the period from January 1, 2017 through May 10, 2017 represent the period before our ownership and were obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition. No financial statements were prepared, audited or reviewed for the period from January 1, 2017 through May 10, 2017.

The Ritz-Carlton, Sarasota, Florida

On April 4, 2018, we acquired a 100% interest in the Ritz-Carlton Sarasota in Sarasota, Florida for $171.4 million and a 22-acre plot of vacant land for $9.7 million. Approximately $13.0 million has been spent on capital expenditures since the acquisition of the hotel in April 2018.

The Ritz-Carlton Sarasota was built in 2001 and has 276 luxurious and spacious rooms, including 31 suites. The resort also offers an array of amenities, including a 26,000 square foot Beach Club with 410 feet of beachfront, a private, luxury Tom Fazio designed Golf Club, the award-winning 15,000 square foot Ritz-Carlton Spa, eight food and beverage outlets, including the acclaimed Jack Dusty waterfront restaurant, 29,000 square feet of flexible indoor meeting space, two outdoor pools, 24-hour state-of-the-art fitness club and lighted tennis courts.

Additional property highlights include:

•    Meeting Space: The property has a 26,000-square-foot conference center, outdoor venues for up to 1,200 guests as well as venues overlooking the Gulf of Mexico.

•    Food and Beverage: The property features four different restaurants, including the nautically inspired Jack Dusty and Ridley’s Porch, the relaxed beachfront Lido key Tiki Bar, as well as the Golf Club Grille overlooking the entire golf course.

•    Other Amenities: The property offers 276 guest rooms with private balconies, a serene private beach club on Lido Key, 18 holes of championship golf and a luxurious spa.

Location and Access. Located on Sarasota Bay in downtown Sarasota, the property, with its premier location, luxury-brand affiliation and world-class amenities, is positioned as the leading resort in one of country’s fastest growing markets. Sarasota, located approximately 60 miles south of Tampa, is a popular and growing upscale, year-round destination on the west coast of Florida. Beyond the first-class hotel experience, guests have easy access to the Sarasota area’s many amenities and activities, including exceptional dining and shops, art galleries, beaches, museums, boating, fishing, and golfing.

Operating History. The following table shows certain historical information regarding The Ritz-Carlton Sarasota since 2017:

	Year Ended December 31,									Year Ended December 31, 2018 (combined)			Period from April 4, 2018 through December 31, 2018			Period from January 1, 2018 through April 3, 2018			Year Ended December 31, 2017
	2021			2020			2019
Rooms	276			266			266			266			266			266			266
Occupancy	77.0		%	54.0		%	73.4		%	73.4		%	71.5		%	78.9		%	78.1		%
ADR	$	545.68		$	410.53		$	391.92		$	375.23		$	334.02		$	484.46		$	364.04
RevPAR	$	420.14		$	221.49		$	287.68		$	275.25		$	238.74		$	382.06		$	284.38

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Selected Financial Information. The following table shows certain selected financial information regarding The Ritz-Carlton Sarasota since 2019 (dollars in thousands):

	Year Ended December 31,
	2021			2020			2019
Total Revenue	$	82,808		$	49,531		$	65,524
Rooms Revenue	40,892			21,564			27,931
Hotel EBITDA (1)	25,663			11,502			13,626
Hotel EBITDA Margin (1)	31.0		%	23.2		%	20.8		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The hotel operating results for the period from April 4, 2018 through December 31, 2018, represent the operating results since the acquisition of the hotel on April 4, 2018. The hotel operating results for the period from January 1, 2018 through April 3, 2018 and for the year ended December 31, 2017 represent periods before our ownership and were obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition. The financial statements as of and for the year ended December 31, 2017 were audited and included in an amendment to our Current Report on Form 8-K filed on June 20, 2018. No financial statements were prepared, audited or reviewed for the period from January 1, 2018 through April 3, 2018.

The Ritz-Carlton, Lake Tahoe, California

On January 15, 2019, we acquired a 100% interest in the 170-room Ritz-Carlton Lake Tahoe located in Truckee, California for $120.0 million. Approximately $4.6 million has been spent on capital expenditures since the acquisition of the hotel in January 2019.

The Ritz-Carlton Lake Tahoe was built in 2009 and has 170 luxurious and spacious rooms, including 17 suites. The resort also offers an array of amenities, including ski-in/ski-out access to Northstar Ski Mountain, the ultra-luxury Lake Club on the shore of Lake Tahoe, a 17,000 square foot full-service spa, six food and beverage outlets, including the acclaimed Manzanita restaurant, over 37,000 square feet of flexible indoor/outdoor meeting space, two outdoor pools, state-of-the-art fitness club and yoga studio, and the Ritz Kids Club.

Additional property highlights include:

•    Meeting Space: The property has over 37,000 square feet of meeting space including 15,000 square feet of outdoor event space with the dramatic fireside terrace, two elegant ballrooms and the waterfront Lake Club, a multi-level venue for intimate events.

•    Food and Beverage: The property features six food and beverage outlets, including the extraordinary North Lake Tahoe dining in Manzanita, featuring artfully crafted cuisine and Backyard Bar and BBQ, featuring St. Louis style BBQ favorites.

•    Other Amenities: The property offers 170 luxurious guest rooms and suites with in-room gas fireplaces and floor-to-ceiling windows, a 17,000 square foot slope-side spa with treatments themed around nature and the Ritz Kids children’s program.

Location and Access. Located in the North Lake Tahoe area, the property is situated mid-mountain at the Northstar Ski Area. With its premier location, luxury brand affiliation and world-class amenities, The Ritz-Carlton Lake Tahoe is positioned as the leading resort in one of the country’s most popular tourist destinations. North Lake Tahoe, located approximately 45 minutes from Reno, Nevada and two hours from Sacramento, is a popular and growing upscale, year-round tourist destination. Beyond the first-class hotel experience, guests have easy access to the Lake Tahoe area’s many amenities and activities, including world-class skiing and winter sports, boating, fishing, hiking, golfing, as well as exceptional dining and shops.

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Operating History. The following table shows certain historical information regarding The Ritz-Carlton Lake Tahoe since 2018:

	Year Ended December 31,						Year Ended December 31, 2019 (combined)			Period from January 15, 2019 through December 31, 2019			Period from January 1, 2019 through January 14, 2019			Year Ended December 31, 2018 (unaudited)
	2021			2020
Rooms	170			170			170			170			170			170
Occupancy	55.0		%	43.7		%	67.8		%	67.4		%	77.5		%	66.6		%
ADR	$	642.81		$	553.44		$	572.58		$	556.11		$	931.53		$	512.66
RevPAR	$	353.56		$	241.72		$	388.09		$	374.76		$	722.13		$	341.64

__________________

The above information does not include the operations of ten condominium units not owned by The Ritz-Carlton Lake Tahoe.

Selected Financial Information. The following table shows certain selected financial information regarding The Ritz-Carlton Lake Tahoe since 2019 (dollars in thousands):

	Year Ended December 31,						Year Ended December 31, 2019 (combined)			Period from January 15, 2019 through December 31, 2019			Period from January 1, 2019 through January 14, 2019
	2021			2020
Total Revenue	$	43,133		$	27,237		$	46,172		$	43,274		$	2,898
Rooms Revenue (1)	21,938			15,040			24,081			22,362			1,719
Hotel EBITDA (2)	7,835			1,867			9,007			8,175			832
Hotel EBITDA Margin (2)	18.2		%	6.9		%	19.5		%	18.9		%	28.7		%

__________________

(1) Rooms revenue does not include the operations of ten condominium units not owned by The Ritz-Carlton Lake Tahoe.

(2) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The hotel operating results for the year ended December 31, 2018, represent the period before our ownership and were obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition. No financial statements were prepared, audited or reviewed for the year ended December 31, 2018 and the period from January 1, 2019 through January 14, 2019.

Mr. C Beverly Hills Hotel, Beverly Hills, California

On August 5, 2021, the Company acquired a 100% interest in the 138-room Mr. C Beverly Hills Hotel and five luxury residences adjacent to the hotel. Approximately $134,000 has been spent on capital expenditures since the acquisition.

The Mr. C was built in 1965 and underwent an extensive renovation in 2011. It has 138 luxurious and spacious rooms, including 12 suites and 10 mini suites. It is a luxury hotel ideally located in close proximity to high-end shopping on Rodeo Drive and business demand from Century City and Culver City.

Additional property highlights include:

•    Meeting Space: The property has over 24,000 sq. ft. of flexible indoor/outdoor meeting space.

•    Food and Beverage: The property also boasts the acclaimed The Restaurant, which entices travelers and Angelenos alike with its truly authentic Italian flavor by the fourth generation Cipriani.

•    Other Amenities: The property offers outdoor pool terrace with daybeds and cabanas, state-of-the-art fitness center and a business center. Additionally, the property includes five newly-constructed and fully-furnished residences which blend contemporary architecture with elegant, minimalistic design and range in size from 2,000 to 3,400 sq. ft. The residences are currently offered for extended-stay rentals.

Location and Access. With its premier location in the heart of West Los Angeles, the property is in the middle of more than 45 million sq. ft. of office space, supporting substantial corporate demand and a wide array of world-renowned leisure demand generators, including unrivaled shopping with high-end retailers, vibrant restaurants and various art and cultural attractions.

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Operating History. The following table shows certain historical information regarding The Mr. C Beverly Hills Hotel since 2019:

	Year Ended December 31, 2021 (combined)			Period from August 5, 2021 through December 31, 2021			Period from January 1, 2021 through August 4, 2021			Year Ended December 31,
										2020			2019
Rooms	143			143			143			143			143
Occupancy	50.1		%	63.9		%	40.7		%	30.5		%	74.5		%
ADR	$	327.85		$	332.86		$	322.42		$	336.43		$	334.40
RevPAR	$	164.36		$	212.62		$	131.07		$	102.67		$	249.05

Selected Financial Information. The following table shows certain selected financial information regarding The Mr. C Beverly Hills Hotel since 2019 (dollars in thousands):

	Year Ended December 31, 2021 (combined)			Period from August 5, 2021 through December 31, 2021			Period from January 1, 2021 through August 4, 2021			Year Ended December 31,
										2020			2019
Total Revenue	$	12,864		$	6,592		$	6,272		$	8,405		$	20,610
Rooms Revenue	8,579			4,531			4,048			5,373			12,999
Hotel EBITDA (1)	2,280			1,052			1,228			434			4,694
Hotel EBITDA Margin (1)	17.7		%	16.0		%	19.6		%	5.2		%	22.8		%

__________________

(1)    See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of net income (loss) to Hotel EBITDA by property.

The hotel operating results for the period from August 5, 2021 through December 31, 2021 represent the operating results since the acquisition of the hotel on August 5, 2021. The hotel operating results for the period from January 1, 2021 through August 4, 2021 and for the years ended December 31, 2020 and 2019 represent periods before our ownership and were obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition. No financial statements were prepared, audited or reviewed for the years ended December 31, 2020 and 2019 and for the period from January 1, 2021 through August 4, 2021.

Asset Management

The senior management team, provided to us by Ashford LLC, facilitated all asset management services for our hotel properties prior to our spin-off from Ashford Trust and continues to do so, including for the properties we acquired after the spin-off. The team of professionals provided by Ashford LLC proactively works with our third-party hotel management companies and Remington Hotels to attempt to maximize profitability at each of our hotel properties. The asset management team monitors the performance of our hotel properties on a daily basis and holds frequent ownership meetings with personnel at the hotel properties and with key executives of the brands and management companies. The asset management team works closely with our third-party hotel management companies and Remington Hotels on key aspects of each hotel’s operation, including, among others, revenue management, market positioning, cost structure, capital and operational budgeting as well as the identification of return on investment initiatives and overall business strategy. In addition, we retain approval rights on key staffing positions at many of our hotel properties, such as the hotel’s general manager and director of sales. We believe that our strong asset management process helps to ensure that each hotel is being operated to our and our hotel management companies’ stated standards, that our hotel properties are being adequately maintained in order to preserve the value of the asset and the safety of the hotel to customers, and that our hotel management companies are maximizing revenue and enhancing operating margins. See “Certain Agreements—The Advisory Agreement.”

Hotel Management

As a result of Ashford Inc.’s November 2019 acquisition of the hotel management business from Remington Lodging, Ashford Inc. also provides us with hotel management services through Remington Hotels, including hotel operations, sales and marketing, revenue management, budget oversight, guest service, asset maintenance (not involving capital expenditures) and related services. See “Certain Agreements-Hotel Management Agreement.”

Design and Construction Services

As a result of Ashford Inc.’s August 2018 acquisition of Premier from affiliates of Remington Lodging, Ashford Inc. also provides us with design and construction services through Premier, including construction management, interior design, architectural oversight, and the purchasing, expediting, warehousing coordination, freight management and supervision of

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installation of furniture, fixtures and equipment (“FF&E”), and related services. See “Certain Agreements—Premier Master Project Management Agreement.”

Third-Party Agreements

Hotel Management Agreements. Ten of our hotel properties are operated pursuant to a hotel management agreement with one of four brand hotel management companies and four of our hotel properties are operated pursuant to a hotel management agreement with Remington Hotels, a hotel management company acquired by Ashford Inc. on November 6, 2019, from Mr. Monty J. Bennett, chairman of our board of directors and chairman, chief executive officer and a significant stockholder of Ashford Inc., and Mr. Archie Bennett, Jr., chairman emeritus of Ashford Trust. Each hotel management company receives a base management fee and is also eligible to receive an incentive management fee if hotel operating income, as defined in the respective management agreement, exceeds certain thresholds. The incentive management fee is generally calculated as a percentage of hotel operating income after we have received a priority return on our investment in the hotel. See “Certain Agreements—Hotel Management Agreements.”

Franchise Agreements. None of our hotel properties operate under franchise agreements. The hotel management agreements with Marriott (or its affiliates), Hilton (or its affiliates), Hyatt or Accor allow ten of our hotel properties to operate under the Marriott, Autograph Collection, The Ritz-Carlton, Hilton, Park Hyatt or Sofitel brand names, as applicable, and provide benefits typically associated with franchise agreements and licenses, including, among others, the use of the Marriott, Hilton, Hyatt or Accor, as applicable, reservation system and guest loyalty and reward program. Any intellectual property and trademarks of Marriott (or its affiliates), Hilton (or its affiliates), Hyatt (or its affiliates) or Accor (or its affiliates), as applicable, are exclusively owned and controlled by the applicable manager or an affiliate of such manager which grants the manager rights to use such intellectual property or trademarks with respect to the applicable hotel.

Licensing Agreement. The Ritz-Carlton St. Thomas is subject to a License and Royalty Agreement (the “Royalty Agreement”) which allows us to use The Ritz-Carlton brand for 50 years, subject to automatic renewal for two 10-year periods, unless the brand management company notifies us of election not to renew at least one year before the end of the initial term or the then-current renewal term. The Royalty Agreement is coterminous with the management agreement. In connection with our ability to use The Ritz-Carlton brand, we are obligated to pay a royalty fee of 2.6% of gross revenues and an incentive royalty of 20% of operating profit in excess of owner’s priority.

Additionally, in conjunction with the Mr. C Beverly Hills Hotel acquisition on August 5, 2021, we entered into an Intellectual Property Sublicense Agreement, which allows us to continue to use certain proprietary marks associated with the Mr. C brand name. In return, we pay licensing fees of: (i) 1% of total operating revenue; (ii) 2% of gross food and beverage revenues; and (iii) 25% of food and beverage profits. The agreement expires on August 5, 2022.

Our Financing Strategy

As of December 31, 2021, our indebtedness was approximately $1.2 billion, with a weighted average interest rate of 2.65% per annum. Approximately 7.3% of our debt bears interest at a fixed rate of 4.5% and the remaining 92.7% bears interest at the variable rate of LIBOR plus 2.44%. We intend to continue to use variable-rate debt or a mix of fixed and variable-rate debt as we see fit, and we may, if appropriate, enter into interest rate hedges.

We intend to finance our long-term growth and liquidity needs with operating cash flow, equity issuances of both common and preferred stock, joint ventures, a revolving line of credit and secured and unsecured debt financings having staggered maturities. We target leverage of 45% net debt to gross assets. We may also issue common units or other interests in our operating partnership to acquire properties from sellers who seek a tax-deferred transaction.

We may utilize Lismore Capital II LLC (“Lismore”), a subsidiary of Ashford Inc. and its affiliates, to provide debt placement and related services, which otherwise would be provided by third parties, for debt financings. The services provided by Lismore include access to their deep industry contacts to achieve competitive terms in the market, due diligence support and assistance in completing the financing transaction.

We may use the proceeds from any borrowings for working capital, consistent with industry practice, to:

•purchase interests in partnerships or joint ventures;

•finance the origination or purchase of debt investments; or

•finance acquisitions, expand, redevelop or improve existing properties, or develop new properties or other uses.

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Certain Agreements

The Advisory Agreement

We are advised by Ashford LLC, a subsidiary of Ashford Inc., pursuant to the Fifth Amended and Restated Advisory Agreement, dated as of April 18, 2018, as amended on January 15, 2019, and as further amended on August 16, 2021, among us, Braemar OP, Braemar TRS, Ashford Inc. and Ashford LLC. Pursuant to our advisory agreement, Ashford LLC acts as our advisor, responsible for implementing our investment strategies and decisions and the management of our day-to-day operations, subject to the supervision and oversight of our board of directors. We rely on Ashford LLC to provide, or obtain on our behalf, the personnel and services necessary for us to conduct our business, and we have no employees of our own. All of our officers are also employees of Ashford LLC.

Pursuant to the terms of our advisory agreement, Ashford LLC and its affiliates provide us with our management team, along with appropriate support personnel as Ashford LLC deems reasonably necessary. Ashford LLC and its affiliates are not obligated to dedicate any of their respective employees exclusively to us, nor are Ashford LLC, its affiliates or any of their employees obligated to dedicate any specific portion of its or their time to our business except as necessary to perform the service required of them in their capacity as our advisor. Ashford LLC is at all times subject to the supervision and oversight of our board of directors. So long as Ashford LLC is our advisor, our governing documents require us to include two persons designated by Ashford LLC as candidates for election as director at any stockholder meeting at which directors are to be elected. Such nominees may be executive officers of our advisor. If the size of our board of directors is increased at any time to more than seven directors, Ashford LLC’s right to nominate shall be increased by such number of directors as shall be necessary to maintain the ratio of directors nominated by Ashford LLC to the directors otherwise nominated, as nearly as possible (rounding to the next larger whole number), equal to the ratio that would have existed if our board of directors consisted of seven members. The advisory agreement requires Ashford LLC to manage our business affairs in conformity with the policies and the guidelines that are approved and monitored by our board of directors. Additionally, Ashford LLC must refrain from taking any action that would (a) adversely affect our status as a REIT, (b) subject us to regulation under the Investment Company Act of 1940, as amended, (c) knowingly and intentionally violate any law, rule or regulation of any governmental body or agency having jurisdiction over us, (d) violate any of the rules or regulations of any exchange on which our securities are listed, or (e) violate our charter, bylaws or resolutions of our board of directors, all as in effect from time to time.

Duties of Ashford LLC. Subject to the supervision of our board of directors, Ashford LLC is responsible for our day-to-day operations, including all of our subsidiaries and joint ventures, and shall perform (or cause to be performed) all services necessary to operate our business as outlined in the advisory agreement. Those services include sourcing and evaluating hotel acquisition and disposition opportunities, asset managing the hotel properties in our portfolio and overseeing the hotel managers, handling all of our accounting, treasury and financial reporting requirements, and negotiating terms of loan documents for our debt financings, as well as other duties and services outlined in the advisory agreement.

Any increase in the scope of duties or services to be provided by Ashford LLC must be jointly approved by us and Ashford LLC and will be subject to additional compensation as outlined in the advisory agreement.

Ashford LLC is our sole and exclusive provider of asset management, design and construction and certain other services offered by Ashford Inc. and its subsidiaries.

Ashford LLC also has the power to delegate all or any part of its rights and powers to manage and control our business and affairs to such officers, employees, affiliates, agents and representatives of Ashford LLC or our company as it may deem appropriate. Any authority delegated by Ashford LLC to any other person is subject to the limitations on the rights and powers of our advisor specifically set forth in the advisory agreement or our charter.

Ashford LLC also acknowledges receipt of our code of business conduct and ethics, code of conduct for the chief executive officer, chief financial officer and chief accounting officer and policy on insider trading and agrees to require its employees who provide services to us to comply with the codes and the policy.

Limitations on Liability and Indemnification. The advisory agreement provides that Ashford LLC has no responsibility other than to render the services and take the actions described in the advisory agreement in good faith and with the exercise of due care and will not be responsible for any action our board of directors takes in following or declining to follow any of Ashford LLC’s advice or recommendations. The advisory agreement provides that Ashford LLC (including its officers, directors, managers, employees and members) will not be liable for any act or omission by it (or them) performed in accordance with and pursuant to the advisory agreement, except by reason of acts constituting gross negligence, bad faith, willful misconduct or reckless disregard of duties under the advisory agreement.

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We have agreed to indemnify and hold harmless Ashford LLC (including its partners, directors, officers, stockholders, managers, members, agents, employees and each other person or entity, if any, controlling Ashford LLC) to the full extent lawful, from and against any and all losses, claims, damages or liabilities of any nature whatsoever with respect to or arising from Ashford LLC’s acts or omissions (including ordinary negligence) in its capacity as such, except with respect to losses, claims, damages or liabilities with respect to or arising out of Ashford LLC’s gross negligence, bad faith or willful misconduct, or reckless disregard of its duties under the advisory agreement (for which Ashford LLC will indemnify us).

Term and Termination. The initial term of our advisory agreement shall expire on January 24, 2027, with up to seven successive additional ten-year terms upon Ashford LLC’s written notice to us not less than 210 days prior to the expiration of the then-current term of Ashford LLC’s election to extend the term of our advisory agreement.

We may terminate the advisory agreement at any time, including during the 10-year initial term, without the payment of a termination fee under the following circumstances:

•immediately upon providing written notice to Ashford LLC, following its conviction (including a plea or nolo contendere) of a felony;

•immediately upon providing written notice to Ashford LLC, if it commits an act of fraud against us, misappropriates our funds or acts in a manner constituting willful misconduct, gross negligence or reckless disregard in the performance of its material duties under the advisory agreement (including a failure to act); provided, however, that if any such actions or omissions are caused by an employee and/or an officer of Ashford LLC (or an affiliate of Ashford LLC) and Ashford LLC takes all reasonable necessary and appropriate action against such person and cures the damage caused by such actions or omissions within 45 days of Ashford LLC’s actual knowledge of its commission or omission, we will not have the right to terminate the advisory agreement;

•immediately, upon the commencement of an action for dissolution of our advisor; or

•(i) upon the entry by a court of competent jurisdiction of a final non-appealable order awarding monetary damages to us based on a finding that our advisor committed a material breach or default of a material term, condition, obligation or covenant of the advisory agreement, which breach or default had a material adverse effect on us, but only where our advisor fails to pay the monetary damages in full within 60 days of the date when the monetary judgment becomes final and non-appealable; provided, however, that if our advisor notified us that our advisor is unable to pay any judgment for monetary damages in full within 60 days of when the judgment becomes final and non-appealable, we may not terminate the advisory agreement if, within the 60-day period, our advisor delivers a promissory note to us having a principal amount equal to the unpaid balance of the judgment and bearing interest at 8.00% per annum, which note shall mature on the 12-month anniversary of the date that the judgment becomes final and non-appealable; and (ii) upon no less than 60 days’ written notice to our advisor, prior to initiating any proceeding claiming a material breach or default by our advisor, of the nature of the default or breach and providing our advisor with an opportunity to cure the default or breach, or if the default or breach is not reasonably susceptible to cure within 60 days, an additional cure period as is reasonably necessary to cure the default or breach so long as our advisor is diligently and in good faith pursuing the cure.

Either party may also terminate the advisory agreement, with the payment of a termination fee, upon the occurrence of a change of control of the Company, provided that the party desiring to terminate the advisory agreement shall give written notice to the other party on a date (i) no earlier than the date on which: (1) we enter into a change of control agreement; (2) our board of directors recommends that our stockholders accept the offer made in a change of control tender; or (3) a voting control event occurs; and (ii) no later than two days after the closing of a transaction contemplated by a change of control agreement, completion of a change of control tender, or occurrence of a voting control event.

In connection with a termination due to a Company change of control event, our advisor may agree, in its sole discretion, to provide transition services agreed to by the parties for a period of up to 30 days.

Fees and Expenses.

•    Base Fee. The total monthly base fee is in an amount equal to 1/12th of the sum of (i) 0.70% of the total market capitalization of our company for the prior month, plus (ii) the Net Asset Fee Adjustment (as defined below), if any, on the last day of the prior month during which our advisory agreement was in effect; provided, however, in no event shall the base fee for any month be less than the minimum base fee as provided by our advisory agreement. The base fee is payable on the fifth business day of each month.

“Net Asset Fee Adjustment” shall be equal to (i) the product of the Sold Non-ERFP Asset Amount (as more particularly defined in the advisory agreement, but generally equal to the net sales prices of real property (other than any Enhanced Return Hotel Assets (as defined in the ERFP Agreement)) sold or disposed of after the date of the ERFP Agreement, commencing with and including the first such sale) and 0.70% plus (ii) the product of the Sold ERFP Asset Amount (as more particularly defined in the advisory agreement, but generally equal to the net sales prices of

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Enhanced Return Hotel Assets sold or disposed of after the date of the ERFP Agreement, commencing with and including the first such sale) and 1.07%.

The minimum base fee for Braemar for each month will be equal to the greater of:

▪90% of the base fee paid for the same month in the prior year; and

▪1/12th of the “G&A Ratio” multiplied by the total market capitalization of Braemar.

The “G&A Ratio” is calculated as the simple average of the ratios of total general and administrative expenses, including any dead deal costs, less any non-cash expenses, paid in the applicable quarter by each member of a select peer group, divided by the total market capitalization of such peer group member. The peer group for each company may be adjusted from time-to-time by mutual agreement between Ashford LLC and a majority of our independent directors. Each month’s base fee is determined based on prior month results and is payable in cash on the fifth business day of the month for which the fee is applied.

•    Incentive Fee. In each year that (i) our common stock is listed for trading on a national securities exchange for each day of the applicable year; and (ii) our total stockholder return (“TSR”) exceeds the “average TSR of our peer group” we have agreed to pay an incentive fee.

For purposes of this calculation, our TSR means the sum, expressed as a percentage, of (i) the change in our common stock price during the applicable period, plus (ii) the dividend yield paid during the applicable period (determined by dividing dividends paid during the applicable period by our common stock price at the beginning of the applicable period and including the value of any dividends or distributions with respect to common stock not paid in cash valued in the reasonable discretion of our advisor).

The annual incentive fee is calculated as (i) 5% of the amount (expressed as a percentage but in no event greater than 25%) by which our annual TSR exceeds the average TSR for our peer group, multiplied by (ii) the fully diluted equity value of our company at December 31 of the applicable year. To determine the fully diluted equity value, we will assume that all units in our operating partnership, including long-term incentive plan (“LTIP”) units that have achieved economic parity with the common units, if any, have been converted into shares of common stock and that the per share value of each share of our common stock is equal to the closing price of our stock on the last trading day of the year.

The incentive fee, if any, subject to the FCCR Condition (defined below), is payable in arrears in three equal annual installments with the first installment payable on January 15 following the applicable year for which the incentive fee relates and on January 15 of the next two successive years. Notwithstanding the foregoing, upon any termination of the advisory agreement for any reason, any unpaid incentive fee (including any incentive fee installment for the stub period ending on the termination date) will become fully earned and immediately due and payable without regard to the FCCR Condition defined below. Except in the case when the incentive fee is payable on the date of termination of the advisory agreement, up to 50% of the incentive fee may be paid in our common stock or in common units of our operating partnership, at our discretion, with the balance payable in cash unless at the time for payment of the incentive fee, Ashford LLC owns common stock or common units in an amount greater than or equal to three times the base fee for the preceding four quarters or payment in such securities would cause the advisor to be subject to the provision of the Investment Company Act of 1940, as amended, or payment in such securities would not be legally permissible for any reason, in which case the entire incentive fee will be payable in cash.

Upon the determination of the incentive fee, except in the case of any termination of the advisory agreement in which case the incentive fee for the stub period and all unpaid installments of an incentive fee shall be deemed earned and fully due and payable, each one-third installment of the incentive fee shall not be deemed earned by the advisor or otherwise payable by us unless we, as of the December 31 immediately preceding the due date for the payment of the incentive fee installment, have a FCCR of 0.20x or greater (the “FCCR Condition”). For purposes of this calculation, “FCCR” means our fixed charge coverage ratio, which is the ratio of adjusted EBITDA for the previous four consecutive fiscal quarters to fixed charges, which includes all (i) our and our subsidiaries’ interest expense, (ii) our and our subsidiaries’ regularly scheduled principal payments, other than balloon or similar principal payments which repay indebtedness in full and payments under cash flow mortgages applied to principal, and (iii) preferred dividends paid by us.

•    Equity Compensation. To incentivize employees, officers, consultants, non-employee directors, affiliates and representatives of Ashford LLC, or its affiliates, to achieve our goals and business objectives, as established by our board of directors, in addition to the base fee and the incentive fee described above, our board of directors has the authority to make equity awards to Ashford LLC or directly to employees, officers, consultants and non-employee directors of Ashford LLC, or its affiliates, based on our achievement of certain financial and other hurdles established by our board of directors. These annual equity awards are intended to provide an incentive to Ashford LLC and its

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employees to promote the success of our business. The compensation committee of our board of directors has full discretion regarding the grant of any annual equity awards, and other than the overall limitation on the total number of shares that are authorized to be granted under our Second Amended and Restated 2013 Equity Incentive Plan (as amended, the “2013 Equity Incentive Plan”) there are no limitations on the amount of these equity awards.

•    Expense Reimbursement. Ashford LLC is responsible for all wages, salaries, cash bonus payments and benefits related to its employees providing services to us (including any of our officers who are also employees or officers of Ashford LLC), with the exception of any equity compensation that may be awarded by us to the employees of Ashford LLC, or its affiliates, who provide services to us, the provision of certain internal audit, asset management and risk management services and the international office expenses described below. We are responsible to pay or reimburse Ashford LLC monthly for all other costs incurred by it on our behalf or in connection with the performance of its services and duties to us, including, without limitation, tax, legal, accounting advisory, investment banking and other third party professional fees, director fees and insurance (including errors and omissions insurance and any other insurance required pursuant to the terms of the advisory agreement), debt service, taxes, insurance, underwriting, brokerage, reporting, registration, listing fees and charges, travel and entertainment expenses, conference sponsorships, transaction diligence and closing costs, dead deal costs, dividends, office space, the cost of all equity awards or compensation plans established by us, including the value of awards made by us to Ashford LLC’s employees, and any other costs which are reasonably necessary for the performance by Ashford LLC, or its affiliates, of its duties and functions. In addition, we pay a pro rata share of Ashford LLC’s office overhead and administrative expenses incurred in the performance of its duties and functions under the advisory agreement. There is no specific limitation on the amount of such reimbursements.

In addition to the expenses described above, we are required to reimburse Ashford LLC monthly for our pro rata share (as reasonably agreed to between Ashford LLC and a majority of our independent directors or our audit committee, chairman of our audit committee or lead director) of (i) employment expenses of Ashford LLC’s internal audit managers, insurance advisory and other Ashford LLC employees who are actively engaged in providing internal audit services to us, (ii) the reasonable travel and other out-of-pocket expenses of Ashford LLC relating to the activities of its internal audit employees and the reasonable third-party expenses which Ashford LLC incurs in connection with its provision of internal audit services to us and (iii) all reasonable international office expenses, overhead, personnel costs, travel and other costs directly related to Ashford LLC’s non-executive personnel who are located internationally or that oversee the operations of international assets or related to our advisor’s personnel that source, investigate or provide diligence services in connection with possible acquisitions or investments internationally. Such expenses shall include but are not limited to salary, wage payroll taxes and the cost of employee benefit plans.

•    Additional Services. If, and to the extent that, we request Ashford LLC to render services on our behalf other than those required to be rendered by it under the advisory agreement, such additional services shall be compensated separately at market rates, as defined in the advisory agreement.

Assignment. Ashford LLC may assign its rights under the agreement without our approval to any affiliate under the control of Ashford Inc.

Relationship with the Advisor. Ashford LLC is a subsidiary of Ashford Inc. and advises us and Ashford Trust. Ashford LLC, its equity holders and employees are permitted to have other advisory clients, which may include other REITs operating in the real estate industry. If we materially revise our initial investment guidelines without the express written consent of Ashford LLC, Ashford LLC will use its best judgment to allocate investment opportunities to us and other entities it advises, taking into account such factors as it deems relevant, in its discretion, subject to any then-existing obligations of Ashford LLC to such other entities. We have agreed that we will not revise our initial investment guidelines to be directly competitive with the investment guidelines of Ashford Trust as of November 19, 2013. The advisory agreement gives us the right to equitable treatment with respect to other clients of Ashford LLC, but does not give us the right to preferential treatment, except that Ashford LLC and Ashford Trust have agreed that, so long as we have not materially changed our initial investment guidelines without the express consent of Ashford LLC, any individual hotel investment opportunities that satisfy our investment focus will be presented to our board of directors, who will have up to 10 business days to accept such opportunity prior to it being available to Ashford Trust or any other entity advised by Ashford LLC.

To minimize conflict between us and Ashford Trust, the advisory agreement requires us to designate an investment focus by targeted RevPAR, segments, markets and other factors or financial metrics. After consultation with Ashford LLC, we may modify or supplement our investment guidelines from time to time by giving written notice to Ashford LLC; however, if we materially change our investment guidelines without the express consent of Ashford LLC, Ashford LLC will use its best judgment to allocate investment opportunities to us and Ashford Trust, taking into account such factors as it deems relevant, in its discretion, subject to any then-existing obligations of Ashford LLC to other entities. In the advisory agreement, we declared

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our initial investment guidelines to be hotel real estate assets primarily consisting of equity or ownership interests, as well as debt investments when such debt is acquired with the intent of obtaining an equity or ownership interest, in:

•    full-service hotels and resorts with trailing 12 month average RevPAR or anticipated 12 month average RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined with reference to the most current Smith Travel Research reports, generally in the 20 most populous metropolitan statistical areas, as estimated by the United States Census Bureau and delineated by the U.S. Office of Management and Budget;

•    luxury hotels and resorts meeting the RevPAR criteria set forth above and situated in markets that may be generally recognized as resort markets; and

•    international hospitality assets predominantly focused in areas that are general destinations or in close proximity to major transportation hubs or business centers, such that the area serves as a significant entry or departure point to a foreign country or region of a foreign country for business or leisure travelers and meet the RevPAR criteria set forth above (after any applicable currency conversion to U.S. dollars).

When determining whether an asset satisfies our investment guidelines, Ashford LLC must make a good faith determination of projected RevPAR, taking into account historical RevPAR as well as such additional considerations as conversions or reposition of assets, capital plans, brand changes and other factors that may reasonably be forecasted to raise RevPAR after stabilization of such initiative.

If we elect to spin-off, carve-out, split-off or otherwise consummate a transfer of a division or subset of assets for the purpose of forming a joint venture, a newly created private platform or a new publicly traded company to hold such division or subset of assets constituting a distinct asset type and/or investment guidelines, we have agreed that any such new entity will be advised by Ashford LLC pursuant to an advisory agreement containing substantially the same material terms set forth in our advisory agreement.

If we desire to engage a third party for services or products (other than services exclusively required to be provided by our hotel managers), Ashford LLC has the exclusive right to provide such services or products at typical market rates provided that we are able to control the award of the applicable contract. Ashford LLC will have at least 20 days after we give notice of the terms and specifications of the products or services that we intend to solicit to provide such services or products at market rates, as determined by reference to fees charged by third-party providers who are not discounting their fees as a result of fees generated from other sources. If a majority of our independent directors determine that Ashford LLC’s pricing proposal is not at market rates, we are required to engage a consultant to determine the market rate for the services or products in question. We will be required to pay for the services of the consultant and to engage Ashford LLC at the market rates determined by the consultant if the consultant finds that the proposed pricing of Ashford LLC was at or below market rates. Alternatively, Ashford LLC will pay the consultant’s fees and will have the option to provide the services or product at the market rates determined by the consultant should the consultant find that the proposed pricing was above market rates.

To minimize conflicts between us and Ashford LLC on matters arising under the advisory agreement, the Company’s Corporate Governance Guidelines provide that any waiver, consent, approval, modification, enforcement matters or elections which the Company may make pursuant to the terms of the advisory agreement shall be within the exclusive discretion and control of a majority of the independent members of our board of directors (or higher vote thresholds specifically set forth in such agreements). In addition, our board of directors has established a Related Party Transactions Committee composed solely of independent members of our board of directors to review all related party transactions that involve conflicts. The Related Party Transactions Committee may make recommendations to the independent members of our board of directors (including rejection of any proposed transaction). All related party transactions are approved by either the Related Party Transactions Committee or the independent members of our board of directors.

ERFP Agreement

General. On January 15, 2019, we entered into the Enhanced Return Funding Program Agreement (the “ERFP Agreement”) and Amendment No. 1 to the Fifth Amended and Restated Advisory Agreement with the other parties to our advisory agreement. The independent members of our board of directors and the independent members of the board of directors of Ashford Inc., with the assistance of separate and independent legal counsel, engaged to negotiate the ERFP Agreement on our behalf and on behalf of Ashford Inc., respectively. The ERFP Agreement replaced the “key money investments” previously contemplated by our advisory agreement.

Under the ERFP Agreement, Ashford LLC agreed to provide $50 million to us in connection with our acquisition of additional hotels recommended by Ashford LLC, with the option to increase the funding commitment to up to $100 million upon mutual agreement by the parties. Under the ERFP Agreement, Ashford LLC is obligated to provide us with 10% of the acquired hotel’s purchase price in exchange for FF&E at our properties, which is subsequently leased by Ashford LLC to our

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TRSs on a rent-free basis. As a result of The Ritz-Carlton Lake Tahoe acquisition, we received $10.3 million from Ashford LLC in the form of future purchases of hotel FF&E at Braemar hotel properties that is leased to us by Ashford LLC rent-free.

Under the ERFP Agreement, we must provide reasonable advance notice to Ashford LLC to request ERFP funds in accordance with the ERFP Agreement. The ERFP Agreement requires that Ashford LLC acquire the related FF&E either at the time of the property acquisition or at any time generally within two years of our acquisition of the hotel property.

Conditions to Funding. Ashford LLC has no obligation to provide any enhanced return investment in the event that (i) we or our subsidiaries, as applicable, has materially breached any provision of the advisory agreement (provided that we shall be entitled to cure any such breach prior to the applicable date of required acquisition of FF&E), (ii) any event or condition has occurred or is reasonably likely to occur which would give rise to a right of termination in favor of Ashford LLC under the advisory agreement or the ERFP Agreement, (iii) there would exist, immediately after such proposed enhanced return investment, a Sold ERFP Asset Amount (as defined in the ERFP Agreement, but generally equal to the net sales prices of Enhanced Return Hotel Assets sold or disposed of after the date of the ERFP Agreement, commencing with and including the first such sale), or (iv) (a) Ashford LLC’s Unrestricted Cash Balance (as defined below) is, after taking into account the cash amount anticipated to be required for the proposed enhanced return investment, less than fifteen million dollars ($15,000,000) (the “Cash Threshold”) as of one week after the date that Braemar OP requires that Ashford LLC commit to fund an enhanced return investment with respect to an Enhanced Return Hotel Asset or (b) Ashford LLC reasonably expects, in light of its then-anticipated contractual funding commitments (including amounts committed pursuant to the ERFP Agreement but not yet paid) and cash flows, to have an Unrestricted Cash Balance that is less than the Cash Threshold immediately after the expected date of closing of the purchase of the Enhanced Return Hotel Asset.

For purposes of the ERFP Agreement, “Unrestricted Cash Balance” means, unrestricted cash of Ashford LLC; provided, that any cash or working capital of Ashford Inc. or its other subsidiaries, including without limitation, Ashford Hospitality Services LLC (“Ashford Services”), will be included in the calculation of “Unrestricted Cash Balance” if such funds have been contributed, transferred or loaned from Ashford LLC to Ashford Services or such other subsidiaries for the purpose of avoiding, hindering or delaying Ashford LLC’s obligations under the ERFP Agreement (it being understood that good faith loans or advances to, or investments in, Ashford Services’ or such other subsidiaries’ existing businesses or new services or other businesses, or the provision of working capital to Ashford Services or such other subsidiaries generally consistent with Ashford Services’ or such other subsidiaries past practices, will not be deemed to have been made for the purpose of avoiding, hindering or delaying Ashford LLC’s obligations under the ERFP Agreement).

Repayment Events. With respect to any acquisition of FF&E by Ashford LLC pursuant to the ERFP Agreement, if prior to the date that is two years after such acquisition, (i) we are subject to a Company Change of Control (as defined in the advisory agreement) or (ii) we or Ashford Inc. terminates the advisory agreement and we are required to pay the Termination Fee thereunder (each of clauses (i) and (ii), a “Repayment Event”), Braemar OP is required to pay to Ashford LLC an amount equal to one hundred percent (100%) of any enhanced return investments actually funded by Ashford LLC during such two-year period.

Disposition of Enhanced Return Hotel Assets. If Braemar OP or its subsidiaries dispose of or cause to be disposed any Enhanced Return Hotel Asset or other real property with respect to which Ashford LLC owns FF&E, including by way of a foreclosure or deed-in-lieu of foreclosure by a mortgage or mezzanine lender of Braemar OP or its subsidiaries, we will promptly identify, and Ashford LLC will acquire, in exchange for such FF&E, FF&E for use at another real property asset leased by the applicable taxable REIT subsidiary (“TRS”) and with a fair market value equal to the value of such FF&E as established in connection with such disposition.

Term. The initial term of the ERFP Agreement is two (2) years (the “Initial Term”), which began on January 15, 2019. At the end of the Initial Term, the ERFP Agreement automatically renewed for one year and will automatically renew for successive one (1) year periods (each such period a “Renewal Term”) unless either we or Ashford Inc., as applicable, provides written notice to the other at least sixty (60) days in advance of the expiration of the Initial Term or Renewal Term, as applicable, that such notifying party intends not to renew the ERFP Agreement. The ERFP Agreement may be terminated by us in the event we have a right to terminate the advisory agreement or by Ashford Inc. in the event that it is entitled to transfer cash owned by us but controlled by our advisor to the Termination Fee Escrow Account (as defined in the advisory agreement). The amendments to the advisory agreement set forth in the ERFP Agreement will continue in force notwithstanding any termination of the ERFP Agreement.

On November 8, 2021, the Company received written notice from the Advisor of its intention not to renew the ERFP program. As a result, the ERFP Agreement was terminated in accordance with its terms on January 15, 2022.

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\Hotel Management Agreements

General

For us to qualify as a REIT, we cannot directly or indirectly operate any of our hotel properties. Third parties must operate our hotel properties. Our hotel properties are leased to TRS lessees (except for The Ritz-Carlton St. Thomas, which is owned by a TRS), which in turn have engaged hotel managers to manage our hotel properties. Each of our hotel properties other than the Pier House Resort & Spa, the Bardessono Hotel and Spa, Hotel Yountville and Mr. C Beverly Hills Hotel (which are operated by Remington Hotels) are operated pursuant to a hotel management agreement with one of four independent hotel management companies: (1) Hilton Management LLC, (2) Marriott Hotel Services, Inc. or its affiliates, Ritz-Carlton (Virgin Islands), Inc. and The Ritz-Carlton Hotel Company, L.L.C., (3) Accor and (4) Hyatt. The Ritz-Carlton is a registered trademark of The Ritz-Carlton Hotel Company, L.L.C., an affiliate of Marriott, and Sofitel is a registered trademark of affiliates of Accor.

The terms of each of the hotel management agreements, as well as any remaining extension, are set forth in the table below:

Hotel	Effective Date	Expiration Date	Extension Options By Manager
Hilton La Jolla Torrey Pines	12/17/2003	12/31/2023	Three 10-year options
Capital Hilton	12/17/2003	12/31/2023	Three 10-year options
Marriott Seattle Waterfront	5/23/2003	12/31/2028	Five 10-year options
The Clancy	10/1/2020	12/31/2027	Five 5-year options
The Notary Hotel	7/16/2019	12/31/2041	Two 10-year options
The Ritz-Carlton Sarasota	1/1/2015	12/31/2030	Two 10-year options
Sofitel Chicago Magnificent Mile	3/30/2006	12/31/2030	Three 10-year options
Pier House Resort & Spa	11/6/2019	11/06/2029	Three 7-year options and one 4-year option
Bardessono Hotel and Spa	11/6/2019	11/06/2029	Three 7-year options and one 4-year option
The Ritz-Carlton St. Thomas	12/15/2015	12/31/2065	Two 10-year options
Park Hyatt Beaver Creek Resort & Spa	12/11/1987	12/31/2029	One 10-year option
Hotel Yountville	11/6/2019	11/06/2029	Three 7-year options and one 4-year option
The Ritz-Carlton Lake Tahoe	3/28/2006	12/31/2034	Two 10-year options
Mr. C Beverly Hills Hotel	8/5/2021	08/05/2031	Three 7-year options and one 4-year option

Each hotel management company receives a base management fee (expressed as a percentage of gross revenues) ranging from 3.0%–5.0%, as well as an incentive management fee calculated as a percentage of hotel operating income, in certain cases after funding of certain requirements, including the capital renewal reserve, and in certain cases after we have received a priority return on our investment in the hotel (referred to as the owner’s priority), as summarized in the chart below:

Hotel	Management Fee(1)	Incentive Fee	Marketing Fee	Owner’s Priority(2)	Owner’s Investment(2)
Hilton La Jolla Torrey Pines	3%	20% of operating cash flow (after deduction for capital renewals reserve and owner’s priority)	Reimbursement of hotel’s pro rata share of group services	11.5% of owner’s total investment	$117,465,746
Capital Hilton	3%	20% of operating cash flow (after deduction for capital renewals reserve and owner’s priority)	Reimbursement of hotel’s pro rata share of group services	11.5% of owner’s total investment	$139,691,230
Marriott Seattle Waterfront	3%	After payment of owner’s 1st priority, remaining operating profit is split between owner and manager, such that manager receives 30% of remaining operating profit that is less than the sum of $15,113,000 plus 10.75% of owner-funded capital expenses, and 50% of the operating profit in excess of such sum	Reimbursement of the hotel’s pro rata share of chain services, capped at 2.2% of gross revenues per fiscal year	Owner’s 1st Priority: 10.75% of owner’s investment Owner’s 2nd Priority: After payment of the owner’ 1st priority, remaining operating profit is split between owner and manager, such that owner receives 70% of remaining operating profit that is less than the sum of $15,113,000 plus 10.75% of owner-funded capital expenses, and 50% of the operating profit in excess of such sum	$89,732,668

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Hotel	Management Fee(1)	Incentive Fee	Marketing Fee	Owner’s Priority(2)	Owner’s Investment(2)
The Clancy	5%	50% of the excess of operating profit (after deduction for contributions to the FF&E reserve) over owner’s priority up to the Spread Threshold of $3,000,000, reduced to 25% for Operating Profit exceeding the Spread Threshold.	System wide contribution to the marketing fund (1.5% of gross room sales)	$12,279,659, plus 11.5% of owner funded capital expenses	Not applicable
The Notary Hotel	4%	20% of the excess of operating profit over owner’s priority	System wide contribution to the marketing fund (1.5% of gross room sales).	2019: $7,021,388 Thereafter: $8,938,867 Plus 10.25% of owner-funded capital expenditures after the effective date, the amount of reserve shortfalls funded by Owner after the effective date, and the amount of owner-funded capital expenditures spent for completion of the conversion of the hotel to The Notary Hotel, up to $18,000,000	Not applicable
Sofitel Chicago Magnificent Mile	3%	20% of the amount by which the hotel’s annual net operating income exceeds a threshold amount (equal to 8% of our total investment in the hotel), capped at 2.5% of gross hotel revenues	2% of gross hotel revenues	Not applicable	Not applicable
Pier House Resort & Spa	Greater of $15,045.44  monthly or 3%	The lesser of 1% of gross revenues or the amount by which actual house profit exceeds budgeted house profit	Not applicable	Not applicable	Not applicable
Bardessono Hotel and Spa	Greater of $15,045.44  monthly or 3%	The lesser of 1% of gross revenues or the amount by which actual house profit exceeds budgeted house profit	Not applicable	Not applicable	Not applicable
The Ritz-Carlton St. Thomas	3.0%, comprised of a management fee of 0.4% and a royalty fee of 2.6%	20% of the excess, if any, of Operating Profit for such Fiscal Year over owner’s priority for such Fiscal Year	1.0% of gross revenues	$8,000,000 plus 10.25% of the amount of owner-funded capital expenditures (3)	Not applicable
Park Hyatt Beaver Creek Resort & Spa	Greater of 3.0% or $2,258,726 on an annual basis (increased annually by lesser of CPI or 8% of prior year management fee)	12.5% Profit plus 15% of Profit less the Base Fee that is in excess of $4 million	Not applicable	Not applicable	Not applicable
Hotel Yountville	Greater of $15,045.44 monthly or 3%	The lesser of 1% of gross revenues or the amount by which actual house profit exceeds budgeted house profit	Not applicable	Not applicable	Not applicable
The Ritz-Carlton Sarasota	3%	20% of Available cash flow defined as Net Operating Income minus the owner’s priority	1% of gross hotel revenues for each fiscal year, excluding member dues, initiation, or joining fees or deposits of Club members	$7,465,000 plus 10.25% of the amount of owner-funded capital expenditures	Not applicable

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Hotel	Management Fee(1)	Incentive Fee	Marketing Fee	Owner’s Priority(2)	Owner’s Investment(2)
The Ritz-Carlton Lake Tahoe	3%	The sum of (i) 15% of the amount by which Adjusted House Profit (“AHP”) for such Fiscal Year exceeds the owner’s priority but is less than $10.8 million plus (ii) 20% of the amount by which AHP exceeds $10.8 million; provided, however, that in no event shall the total, aggregate sum of the Base Fee and the Incentive Fee paid to Operator in any given Fiscal Year exceed 6% of gross revenues for such Fiscal Year	1% of gross revenues for each fiscal year	$8,200,000 plus 10% of the amount of owner-funded capital expenditures in excess of amounts in the reserve	Not applicable
Mr. C Beverly Hills Hotel	Greater of $15,045.44 monthly or 3%	The lesser of 1% of gross revenues or the amount by which actual house profit exceeds budgeted house profit	Not applicable	Not applicable	Not applicable

__________________

(1)    Management fee is expressed as a percentage of gross hotel revenue.

(2)    Owner’s priority and owner’s investment amounts disclosed in the table are based on the most recent certification provided to us by the applicable manager. For some properties these amounts will continue to increase over time by the amount of additional owner-funded capital expenses.

(3)    In addition, dollar amounts no greater than $19,000,000 in the aggregate that are funded by owner for renovation projects will be treated as owner-funded capital expenditures and give a one-time adjustment to owner’s priority for 13% of the amounts.

The hotel management agreements allow each hotel to operate under the Marriott, The Ritz-Carlton, Hilton, Sofitel or Park Hyatt brand names, as applicable, and provide benefits typically associated with franchise agreements, including, among others, the use of the Marriott, The Ritz-Carlton, Hilton, Sofitel or Hyatt, as applicable, reservation system and guest loyalty and reward program. Any intellectual property and trademarks of Marriott (or its affiliates), The Ritz-Carlton, Hilton (or its affiliates), Accor (or its affiliates), or Hyatt (or its affiliates), as applicable, are exclusively owned and controlled by the applicable manager or an affiliate of such manager who grants the manager rights to use such intellectual property or trademarks with respect to the applicable hotel.

Below is a summary of the principal terms of the hotel management agreements with Marriott (or its affiliates), Hilton (or its affiliates), Accor, Hyatt and Remington Hotels.

Marriott Management Agreements

Term. The remaining base term of each of our six management agreements with Marriott (or its affiliates) ranges from approximately 6 to 44 years, expiring between December 31, 2027 and December 31, 2065. Each of these agreements has remaining automatic extension options at the discretion of the manager, ranging from two 10-year extensions to five 10-year extensions.

Events of Default. An “Event of Default” under the hotel management agreements with Marriott (or its affiliates) is generally defined to include the bankruptcy or insolvency of either party, the failure to make a payment under the hotel management agreement and failure to cure such non-payment after due notice, and a breach by either party of any other covenants or obligations in the hotel management agreement which continues beyond the applicable notice and cure period.

Termination Upon Event of Default. A non-defaulting party may terminate the hotel management agreement upon an Event of Default (as defined in the applicable hotel management agreement) generally after the expiration of any notice and cure periods; provided, however, the hotel management agreement may not be terminated by the non-defaulting party unless and until such Event of Default has a material adverse effect on the non-defaulting party. In the case of The Notary Hotel and The Clancy, if the defaulting party contests such Event of Default or such material adverse effect, the non-defaulting party may not terminate unless a court of competent jurisdiction has issued a final, binding and non-appealable order finding that the Event of Default has occurred and that the default resulted in a material adverse effect.

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Early Termination for Casualty. The termination provisions for our hotel properties in the event of casualty are summarized as follows:

•    If the hotel suffers a total casualty (meaning the cost of the damage to be repaired or replaced would be equal to 30% or more of the then-total replacement cost in the case of the Marriott Seattle Waterfront, 33% or more of the then replacement cost in the case of The Ritz-Carlton Lake Tahoe and The Ritz-Carlton Sarasota, and 60% or more of the then-total replacement cost in the case of The Ritz-Carlton St. Thomas, The Clancy and The Notary Hotel), then either party may terminate the hotel management agreement.

Early Termination for Condemnation. If all or substantially all of the hotel (meaning 1/3 or more of the replacement cost therefor with respect to The Ritz-Carlton Lake Tahoe and The Ritz-Carlton Sarasota and 50% or more of the replacement value of the hotel with respect to The Ritz-Carlton St. Thomas) is taken in any condemnation or similar proceeding, or a portion of the hotel is so taken, and the result is that it is unreasonable to continue to operate the hotel in accordance with the hotel management agreement, the hotel management agreement shall terminate (provided, however, with respect to The Ritz-Carlton Lake Tahoe and The Ritz-Carlton Sarasota the hotel management agreement will be terminated at our option or the manager’s option, and with respect to The Clancy and The Notary Hotel, the hotel management agreement will be terminated only at the manager’s option).

Performance Termination. All of the hotel management agreements with Marriott (or its affiliates) are structured to provide us with a right to terminate the hotel management agreement without the payment of a termination fee if the manager fails to achieve certain criteria relating to the performance of the applicable hotel. The performance period is measured with respect to any two consecutive fiscal years. The performance criteria generally includes each of the following: (i) operating profit for each such fiscal year is less than the applicable performance termination threshold (as defined in the hotel management agreement) which ranges from 9.5% to 10.25% of the approximate total investment in the hotel; provided, however, in the case of The Notary Hotel, it is 85% of the owner’s priority return (as defined in the hotel management agreement), and in the case of The Clancy, it is 82.6% of the owner’s priority return (as defined in the hotel management agreement), (ii) the RevPAR penetration index of the hotel during each such fiscal year is less than the revenue index threshold (as such terms are defined in the hotel management agreements) which range from 0.65 to 1.00 (this item is not applicable for The Ritz-Carlton Lake Tahoe), and (iii) the fact that the criteria set forth in (i) or (ii) is not the result of an extraordinary event or force majeure, any major renovation of the hotel adversely affecting a material portion of the income generating areas (or any major renovation with respect to The Notary Hotel, The Clancy, The Ritz-Carlton Lake Tahoe, The Ritz-Carlton Sarasota, and The Ritz-Carlton St. Thomas), or any default by us under the hotel management agreement. The manager has a right to avoid a performance termination by paying to us the total amount by which the operating profit for each of the fiscal years in question was less than the performance termination threshold for such fiscal years, or in the case of The Notary Hotel and The Clancy, by waiving base management fees (and, with respect to The Ritz-Carlton St. Thomas, certain royalty fees owed to Marriott Switzerland Licensing Company S.ar.L (St. Kitts & Nevis Branch)) until such time as the total amount of waived base management fees equals the shortfall of operating profit for each of the fiscal years in question to the performance termination threshold for such fiscal years.

Limitation on Termination Rights. Our ability to exercise termination rights is subject to certain limitations if the manager or any of its affiliates are providing certain credit enhancements, loans or fundings as described in the hotel management agreement, or in certain cases, if manager’s incentive management fee is outstanding.

Assignment and Sale. Each management agreement with Marriott (or its affiliates) contains restrictions on our ability to sell the applicable hotel property or engage in certain change of control actions if (i) we are in default under the hotel management agreement, (ii) the transferee is known to be of bad moral character or has been convicted of a felony or is in control of or is controlled by persons who have been convicted of felonies, (iii) the transferee does not (in the reasonable judgment of manager) have sufficient financial resources and liquidity to fulfill the owner’s obligations under the hotel management agreement, or (iv) the transferee has an ownership interest, either directly or indirectly, in a brand or group of hotels that competes with the manager or any affiliate thereof. The management agreements with Marriott (or its affiliates) may have additional restrictions on our ability to sell the applicable hotel property or engage in certain change of control actions. Any sale of the property (which includes any equity transfer, whether directly or indirectly) is subject to certain conditions, including the provision of notice of such sale to the manager.

Right of First Offer. All of the management agreements with Marriott (or its affiliates) (except for the management agreement for The Ritz-Carlton Lake Tahoe) provide the manager with a right of first negotiation with respect to a sale of the hotel (which includes the equity transfer of a controlling interest in the owner of the hotel property, whether directly or indirectly). A sale or transfer to an affiliate is specifically excluded from this right (except in the management agreement for The Ritz-Carlton Sarasota). After notice of a proposed sale to the manager, we have a specified time period, ranging from 10 business days to 60 days, to negotiate an acceptable purchase and sale agreement. If after such time period no agreement is signed, we are free to sell or lease the hotel to a third party, subject to certain conditions, such as providing notice of sale to the

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manager (with certain details regarding the terms of sale). The manager then has a specified time period, ranging from 20 to 45 days, depending on our compliance with the assignment and sale provisions above, to either consent to such sale or not consent to such sale. If the manager does not timely respond or consents to such sale, certain of the management agreements provide that the sale must occur 180 days after provision of the notice of sale (the management agreement for The Ritz-Carlton St. Thomas also requires that the sale must occur within 15 months after the manager’s 30-day negotiation period if the manager makes an offer acceptable to us pursuant to the manager’s right of first offer; The Ritz-Carlton Sarasota management agreement requires that the sale must occur within 365 days after the manager’s receipt of our original notice pertaining to the manager’s right of first offer and The Notary Hotel and The Clancy management agreements require that the sale must occur within one year after the expiration of the right of first negotiation period) or the notice of sale is deemed void and we must provide a new notice to the manager.

Hilton Management Agreements

Term. The base term of each of our two management agreements with Hilton (or its affiliates) was 10 years, expiring December 31, 2013. All of these agreements have been extended through December 31, 2023, and all of these agreements have three 10-year automatic extension options remaining, at the discretion of the manager.

Events of Default. An “Event of Default” under the hotel management agreements with Hilton (or its affiliates) is generally defined to include the bankruptcy or insolvency of either party, the failure to make a payment under the hotel management agreement and failure to cure such non-payment after due notice, a breach by either party of any other covenants or obligations in the hotel management agreement which continues beyond the applicable notice and grace period, failure to maintain certain alcohol licenses and permits under certain circumstances, failure by us to provide manager with sufficient working capital to operate the hotel after due notice and a termination of our operating lease due to our default under the operating lease.

Termination Upon Event of Default. If an event of default occurs and continues beyond any applicable notice and cure periods set forth in the hotel management agreement, the non-defaulting party generally has, among other remedies, the option of terminating the applicable hotel management agreement upon written notice to the defaulting party.

Performance Termination. Each of the management agreements with Hilton (or its affiliates) provide us with a right to terminate the hotel management agreement without the payment of a termination fee if the manager fails to achieve certain criteria relating to the performance of the applicable hotel. The performance period is measured with respect to any two consecutive fiscal years. The performance criteria are: (i) the hotel’s operating cash flow (before deducting our priority return) does not equal or exceed 85% of our priority return (as defined in the hotel management agreement); and (ii) the hotel’s yield index is below the base yield index (as such terms are defined in the hotel management agreement), which is 90%. The manager has a right to avoid a performance termination by paying to us an amount within 30 days of due notice equal to the deficiency set forth in (i) above to cure such performance default, but in no event may the manager exercise such cure with respect to more than four full operating years during the initial term or with respect to more than four full operating years during any single extension term. The amount of any shortfall payable by manager to us shall be reduced to the extent of any portion attributable to a force majeure event, performance of certain capital renewals and major capital improvements adversely affecting a material portion of the income generating areas of the hotel, or certain uncontrollable expenses that could not have been reasonably anticipated by the manager.

Early Termination for Casualty. In the event the applicable hotel is substantially damaged by fire or other casualty such that it cannot be restored within 240 days, or in the event our lender doesn’t provide adequate insurance proceeds to restore the hotel, we may terminate the hotel management agreement. If we undertake to restore the hotel or if we are required to restore the hotel because it was not substantially damaged and fail to commence such repairs within 60 days of receiving sufficient insurance proceeds to complete such work, or fail to complete such repairs within 240 days of the casualty, the manager may terminate the agreement. We have no obligation to restore the premises, however, if the casualty occurs in the last five years of the third renewal term or thereafter.

Early Termination for Condemnation. If all or substantially all of the applicable hotel is taken in any condemnation or similar proceeding which, in our reasonable opinion, makes it infeasible to restore or continue to operate the hotel in accordance with the hotel management agreement, the hotel management agreement shall terminate. If it is reasonably feasible to restore the premises and operate the hotel and we fail to complete the restoration within two years of the taking, the manager may terminate the agreement. We have no obligation to restore the premises, however, if the taking occurs in the last five years of the third renewal term or thereafter.

Assignment and Sale. Each management agreement with Hilton (or its affiliates) provides that we cannot sell the applicable hotel to any unrelated third party, which includes the transfer of an equity interest, or engage in certain change of

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control actions (i) if such party has an ownership interest, either directly or indirectly, in a brand of hotels totaling at least 10 hotels and such brand competes with the manager or any affiliate thereof; (ii) if such party is known to be of ill repute or an unsuitable business associate (per gaming industry regulations where the manager holds a gaming license); (iii) if such party does not have the ability to fulfill our financial obligations under the hotel management agreement; or (iv) if certain conditions are not satisfied, including cure of any existing or potential defaults, receipt of evidence of proper insurance coverage, payment of fees and expenses which will accrue to the manager through the date of closing, and provision of sufficient notice of the contemplated sale to the manager.

Right of First Offer. Each of the management agreements with Hilton (or its affiliates) provides the manager with a right of first negotiation with respect to a sale of the hotel (which includes any equity transfer, whether directly or indirectly) or lease of the hotel (if applicable). After notice of a proposed sale or lease to the manager, the manager has 30 days to elect or decline to exercise its right to purchase or lease. If the manager makes an election to purchase or lease, the parties have 30 days to execute an agreement for purchase (or lease, if applicable) and an additional 30 days to consummate the purchase or lease (if applicable). If the manager declines to exercise its right to purchase or lease, the sale or lease must occur within 180 days at greater than 90% of the price or the notice of sale must be renewed to manager.

Accor Management Agreement

In connection with our acquisition of the Sofitel Chicago Magnificent Mile, our TRS lessee, as lessee of the hotel, assumed a management agreement (as amended, the “Accor management agreement”) with Accor that allows us to operate under the Sofitel brand name and utilize Accor’s services and experience in connection with the management and operation of the Sofitel Chicago Magnificent Mile. The material terms of the Accor management agreement are summarized as follows:

Term. The initial term of the management agreement expires on December 31, 2030 and automatically renews for three consecutive 10-year renewal terms, unless the manager terminates the agreement by written notice at least 180 days prior to the expiration of the then-current term.

Events of Default. An “Event of Default” is generally defined to include the failure to make a payment under the Accor management agreement and failure to cure such non-payment after the applicable notice and cure period, the bankruptcy or insolvency of either party, a failure by either party to maintain at all times all of the insurance required to be maintained by such party and failure to cure such default after the applicable notice and cure period, the failure by either party to perform any of the material covenants in the Accor management agreement which continues beyond the applicable notice and cure period and a transfer of the Accor management agreement by either party in violation of the provisions of the Accor management agreement. The occurrence of an Event of Default prevents the defaulting party from transferring the Accor management agreement without the consent of the non-defaulting party.

Termination. A non-defaulting party may terminate the Accor management agreement if the defaulting party (i) has breached any material representation or fails to perform any material provision of the Accor management agreement or (ii) becomes insolvent or bankrupt, in each case after the expiration of any applicable notice and cure period. In addition, the manager may terminate the Accor management agreement if we default under a mortgage relating to the hotel and fail to cure such default within the times provided.

Performance Termination. We have the right to terminate the Accor management agreement without the payment of a termination fee if the manager fails to achieve certain criteria relating to the performance of the hotel managed by Accor. The performance period is measured with respect to any two consecutive operating years. The performance criteria are: (i) the RevPAR for the hotel is less than 90% of the RevPAR for the hotel’s competitive set for each such operating year and (ii) the adjusted net operating income (meaning the net operating income less the hurdle amount of approximately $10.2 million plus 8% of any amounts we spent on capital expenditures) is a negative number (i.e. less than zero) for each such operating year, provided that for any operating year in which the operation of the hotel is materially and adversely affected by a force majeure event, a refurbishing program or major capital improvements, the RevPAR for the hotel and the adjusted net operating income for such operating years shall be adjusted equitably. The manager will have a right up to three times in any eight-year period to avoid a performance termination by paying to us a cure amount that equals, for any operating year, the lower of (i) the amount by which the adjusted net operating income is less than zero and (ii) the amount that we would have been entitled to receive as a distribution from the hotel had the hotel not had a RevPAR shortfall.

Early Termination for Condemnation. If all of the hotel, or a portion of the hotel that in our reasonable opinion makes it imprudent or unsuitable to use and operate the remaining portion of the hotel in accordance with the standards maintained by the Sofitel brand, is taken in any condemnation or similar proceeding, we may terminate the Accor management agreement.

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Early Termination for Casualty. If a material part of the hotel is damaged or destroyed by fire or other casualty, then we may terminate the Accor management agreement and elect not to restore the hotel. If we elect to restore the hotel, we must commence such process within 120 days after the date of the casualty and diligently proceed with the restoration of the hotel so that it meets the standards maintained by the Sofitel brand. If we fail to complete the restoration within two years after the date of the casualty, then for so long as such failure continues, the manager may terminate the Accor management agreement. If we or the manager terminate the management agreement because of a casualty, or if we have not restored the hotel and desire to lease or sell it, we must first offer to sell the hotel to the manager. If we repair, rebuild or replace the premises within five years, the manager may reinstate the Accor management agreement.

Assignment and Sale. So long as we are not in default under the Accor management agreement and any advances made by the manager on our behalf would be repaid in connection with the sale, we may sell the Sofitel Chicago Magnificent Mile and assign the Accor management agreement (including as a result of a change of control) without the consent of the manager to any of our affiliates or to any person that (i) is not a competitor of the manager (as defined in the Accor management agreement), (ii) is not generally recognized in the community as being a person of ill repute or with whom a prudent business person would not wish to associate in a commercial venture, and (iii) has a minimum net worth required by the Accor management agreement, if the assignee expressly assumes the Accor management agreement.

For recent developments regarding the Accor management agreement, see “Item 3. Legal Proceedings.”

Park Hyatt Beaver Creek Resort & Spa Management Agreement

Term. The term of the Park Hyatt Beaver Creek Resort & Spa management agreement was 30 years, expiring December 31, 2019. This management agreement has been extended through December 31, 2029, and has one 10-year extension option remaining, at the discretion of the manager.

Events of Default. An “Event of Default” under the Park Hyatt Beaver Creek Resort & Spa hotel management agreement is generally defined to include the failure to make a payment under the hotel management agreement and failure to cure such non-payment after due notice and a breach by either party of any other covenants or obligations in the hotel management agreement which continues beyond the applicable notice and grace period.

Termination Upon Event of Default. If an event of default occurs and continues beyond any applicable notice and cure periods set forth in the hotel management agreement, the non-defaulting party generally has, among other remedies, the option of terminating the applicable hotel management agreement upon 15 days’ written notice to the defaulting party.

Early Termination for Casualty. In the event the applicable hotel is substantially damaged by fire or other casualty, and if, in connection with any casualty, the cost of restoring the hotel equals or exceeds 25% of the replacement cost of the hotel in the case that the casualty is covered by insurance, or 10% of the replacement cost of the hotel in the case that the casualty is not covered by insurance, then we may elect, by providing notice to Hyatt within 90 days of the occurrence of the casualty to not restore the hotel and to terminate the agreement.

Early Termination for Eminent Domain. If all or substantially all of the hotel is taken in any eminent domain procedure so as to render the hotel untenantable, we have the right to terminate the agreement upon 90 days’ prior written notice to Hyatt.

Assignment and Sale. The agreement provides that we cannot sell or assign our interest in the hotel without the prior approval of Hyatt, which shall not be unreasonably withheld. Hyatt’s approval of a sale or assignment is based on the following factors: (i) the ability of the prospective assignee to fulfill the financial obligations of the owner of the hotel; (ii) the integrity and business reputation of the prospective assignee; and (iii) any potential conflicts of interest which may arise in connection with the assignment. Pursuant to the agreement, an assignment is deemed to have occurred if more than 40% of the beneficial ownership of the owner of the hotel is transferred.

Remington Hotels Master Hotel Management Agreement

General. In 2013, we entered into a master hotel management agreement with Remington Lodging governing the terms of Remington Lodging’s provision of hotel management services and design and construction services with respect to hotels owned or leased by us. In connection with Ashford Inc.’s acquisition of Premier from Remington Lodging in August 2018, we amended and restated the original master hotel management agreement to provide only for hotel management services to be provided to our TRS lessees by Remington Lodging by entering into the Amended and Restated Hotel Master Management Agreement dated as of August 8, 2018, which agreement we refer to below as the “master hotel management agreement.” In connection with Ashford Inc.’s acquisition of the hotel management business of Remington Lodging on November 6, 2019, Remington Hotels became a subsidiary of Ashford Inc., and the master hotel management agreement between Remington Hotels and us remains in effect. Pursuant to the master hotel management agreement, Remington Hotels currently manages the

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Pier House Resort & Spa, the Bardessono Hotel and Spa, Hotel Yountville and Mr. C Beverly Hills Hotel. The master hotel management agreement will also govern the management of hotels we acquire in the future that are managed by Remington Hotels, which has the right to manage and operate hotel properties we acquire in the future unless our independent directors either (i) unanimously elect not to engage Remington Hotels, or (ii) by a majority vote, elect not to engage Remington Hotels because they have determined, in their reasonable business judgment, (A) special circumstances exist such that it would be in our best interest not to engage Remington Hotels for the particular hotel, or (B) based on the prior performance of Remington Hotels, another manager or developer could perform the management duties materially better than Remington Lodging for the particular hotel. See “Certain Agreements—Mutual Exclusivity Agreements—Remington Hotels Hotel Management MEA—Exclusivity Rights of Remington Hotels.” Prior to its acquisition by Ashford Inc. on November 6, 2019, Remington Lodging was owned 100% by Mr. Monty J. Bennett, chairman of our board of directors and the chairman, chief executive officer and significant stockholder of Ashford Inc. and Mr. Archie Bennett, Jr.

Term. The master hotel management agreement provides for an initial term of 10 years as to each hotel governed by the agreement. The term may be renewed by Remington Hotels, at its option, subject to certain performance tests, for three successive periods of seven years each and, thereafter, a final term of four years, provided that at the time the option to renew is exercised, Remington Hotels is not then in default under the master hotel management agreement. If at the time of the exercise of any renewal period, Remington Hotels is in default, then the exercise of the renewal option will be conditional on timely cure of such default, and if such default is not timely cured, then our TRS lessee may terminate the master hotel management agreement regardless of the exercise of such option and without the payment of any fee or liquidated damages. If Remington Hotels desires to exercise any option to renew, it must give our TRS lessee written notice of its election to renew the master hotel management agreement no less than 90 days before the expiration of the then current term of the master hotel management agreement.

Amounts Payable under the Master Hotel Management Agreement. Remington Hotels receives a base management fee, and if the hotels meet and exceed certain thresholds, an additional incentive fee. The base management fee for each hotel will be due monthly and will be equal to the greater of:

•    $15,045 (increased annually based on consumer price index adjustments); or

•    3% of the gross revenues associated with that hotel for the related month.

The incentive management fee, if any, for each hotel will be due annually in arrears within 90 days of the end of the fiscal year and will be equal to the lesser of (i) 1% of gross revenues and (ii) the amount by which the actual house profit (gross operating profit of the applicable hotel before deducting management fees or franchise fees) exceeds the target house profit as set forth in the annual operating budget approved for the applicable fiscal year, except with respect to hotels where Remington Hotels takes over management upon our acquisition, in which case, for the first five years, the incentive management fee to be paid to Remington Hotels, if any, is the amount by which the hotel’s actual house profit exceeds the projected house profit for such calendar year as set forth in our acquisition pro forma. If, however, based on actual operations and revised forecasts from time to time, it is reasonably anticipated that the incentive fee is reasonably expected to be earned, the TRS lessee will consider payment of the incentive fee pro rata on a quarterly basis.

The incentive fee is designed to encourage Remington Hotels to generate higher house profit at each hotel by increasing the fee due to Remington Hotels when the hotels generate house profit above certain threshold levels. Any increased revenues will generate increased lease payments under the percentage leases and should thereby benefit our stockholders.

Termination. The master hotel management agreement may be terminated as to one or more of the hotels earlier than the stated term if certain events occur, including:

•    a sale of a hotel;

•    the failure of Remington Hotels to satisfy certain performance standards;

•    for the convenience of our TRS lessee;

•    in the event of a casualty to, condemnation of, or force majeure involving a hotel; or

•    upon a default by Remington Hotels or us that is not cured prior to the expiration of any applicable cure periods.

In certain cases of early termination of the master hotel management agreement with respect to one or more of the hotels, we must pay Remington Hotels termination fees, plus any amounts otherwise due to Remington Hotels pursuant to the terms of the master hotel management agreement. We will be obligated to pay termination fees in the circumstances described below, provided that Remington Hotels is not then in default, subject to certain cure and grace periods:

•    Sale. If any hotel subject to the master hotel management agreement is sold during the first 12 months of the date such hotel becomes subject to the master hotel management agreement, our TRS lessee may terminate the master hotel management agreement with respect to such sold hotel, provided that it pays to Remington Hotels an amount equal to

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the management fee (both base fees and incentive fees) estimated to be payable to Remington Hotels with respect to the applicable hotel pursuant to the then-current annual operating budget for the balance of the first year of the term. If any hotel subject to the master hotel management agreement is sold at any time after the first year of the term and the TRS lessee terminates the master hotel management agreement with respect to such hotel, our TRS lessee will have no obligation to pay any termination fees.

•    Casualty. If any hotel subject to the master hotel management agreement is the subject of a casualty during the first year of the initial 10-year term and the TRS lessee elects not to rebuild, then we must pay to Remington Hotels the termination fee, if any, that would be owed if the hotel had been sold. However, after the first year of the initial 10-year term, if a hotel is the subject of a casualty and the TRS lessee elects not to rebuild the hotel even though sufficient casualty insurance proceeds are available to do so, then the TRS lessee must pay to Remington Hotels a termination fee equal to the product obtained by multiplying (i) 65% of the aggregate management fees (both base fees and incentive fees) estimated to be paid to Remington Hotels with respect to the applicable hotel pursuant to the then-current annual operating budget (but in no event less than the management fees for the preceding full fiscal year) by (ii) nine.

•    Condemnation or Force Majeure. In the event of a condemnation of, or the occurrence of any force majeure event with respect to, any of the hotels, the TRS lessee has no obligation to pay any termination fees if the master hotel management agreement terminates as to those hotels.

•    Failure to Satisfy Performance Test. If any hotel subject to the master hotel management agreement fails to satisfy a certain performance test, the TRS lessee may terminate the master hotel management agreement with respect to such hotel, and in such case, the TRS lessee must pay to Remington Hotels an amount equal to 60% of the product obtained by multiplying (i) 65% of the aggregate management fees (both base fees and incentive fees) estimated to be paid to Remington Hotels with respect to the applicable hotel pursuant to the then-current annual operating budget (but in no event less than the management fees for the preceding full fiscal year) by (ii) nine. Remington Hotels will have failed the performance test with respect to a particular hotel if during any fiscal year during the term (i) such hotel’s gross operating profit margin for such fiscal year is less than 75% of the average gross operating profit margins of comparable hotels in similar markets and geographical locations, as reasonably determined by Remington Hotels and the TRS lessee, and (ii) such hotel’s RevPAR yield penetration is less than 80%. Upon a performance test failure, the TRS lessee must give Remington Hotels two years to cure. If, after the first year, the performance test failure has not been cured, then the TRS lessee may, in order not to waive any such failure, require Remington Hotels to engage a consultant with significant hotel lodging experience reasonably acceptable to both Remington Hotels and the TRS lessee, to make a determination as to whether or not another management company could manage the hotel in a materially more efficient manner. If the consultant’s determination is in the affirmative, then Remington Hotels must engage such consultant to assist with the cure of such performance failure for the second year of the cure period after that failure. If the consultant’s determination is in the negative, then Remington Hotels will be deemed not to be in default under the performance test. The cost of such consultant will be shared by the TRS lessee and Remington Hotels equally. If Remington Hotels fails the performance test for the second year of the cure period and, after that failure, the consultant again makes a finding that another management company could manage the hotel in a materially more efficient manner than Remington Hotels, then the TRS lessee has the right to terminate the management agreement with respect to such hotel upon 45 days’ written notice to Remington Hotels and to pay to Remington Hotels the termination fee described above. Further, if any hotel subject to the Remington Hotels master hotel management agreement is within a cure period due to a failure of the performance test, an exercise of a renewal option shall be conditioned upon timely cure of the performance test failure, and if the performance failure is not timely cured, the TRS lessee may elect to terminate the management agreement without paying any termination fee.

•    For Convenience. With respect to any hotel managed by Remington Hotels pursuant to the master hotel management agreement, if the TRS lessee elects for convenience to terminate the management of such hotel, at any time, including during any renewal term, the TRS lessee must pay a termination fee to Remington Hotels, equal to the product of (i) 65% of the aggregate management fees for such hotel (both base fees and incentive fees) estimated to be payable to Remington Hotels with respect to the applicable hotel pursuant to the then-current annual operating budget (but in no event less than the management fees for the preceding full fiscal year) and (ii) nine.

If the master hotel management agreement terminates as to all of the hotels covered in connection with a default under the master hotel management agreement, the hotel management MEA can also be terminated at the non-defaulting party’s election. See “Certain Agreements—Mutual Exclusivity Agreements—Remington Hotels Hotel Management MEA.”

Maintenance and Modifications. Remington Hotels must maintain each hotel in good repair and condition and make such routine maintenance, repairs and minor alterations as it deems reasonably necessary. The cost of all such routine maintenance, repairs and alterations will be paid by the TRS lessee. All non-routine repairs and maintenance, either to a hotel or its fixtures,

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furniture and equipment pursuant to the capital improvement budget described below, will be managed by Premier pursuant to the master project management agreement.

Insurance. Remington Hotels must coordinate with the TRS lessee the procurement and maintenance of all workers’ compensation, employer’s liability, and other appropriate and customary insurance related to its operations as a property manager, the cost of which is the responsibility of the TRS lessee.

Assignment and Subleasing. Neither Remington Hotels nor the TRS lessee may assign or transfer the master hotel management agreement without the other party’s prior written consent. However, Remington Hotels may assign its rights and obligations to an affiliate that satisfies the eligible independent contractor requirements and is “controlled” by Mr. Monty J. Bennett, Mr. Archie Bennett, Jr., or their respective family partnerships or trusts, the sole members or beneficiaries of which are at all times lineal descendants of Messrs. Monty or Archie Bennett, Jr. (including step children) and spouses. “Controlled” means (i) the possession of a majority of the capital stock (or ownership interest) and voting power of such affiliate, directly or indirectly, or (ii) the power to direct or cause the direction of the management and policies of such affiliate in the capacity of chief executive officer, president, chairman, or other similar capacity where they are actively engaged or involved in providing such direction or control and spend a substantial amount of time managing such affiliate. No assignment will release Remington Hotels from any of its obligations under the master hotel management agreement.

Damage to Hotels. If any of our insured properties is destroyed or damaged, the TRS lessee is obligated, subject to the requirements of the underlying lease, to repair or replace the damaged or destroyed portion of the hotel to the same condition as existed prior to such damage or destruction. If the lease relating to such damaged hotel is terminated pursuant to the terms of the lease, the TRS lessee has the right to terminate the master hotel management agreement with respect to such damaged hotel upon 60 days’ written notice. In the event of a termination, neither the TRS lessee nor Remington Hotels will have any further liabilities or obligations under the master hotel management agreement with respect to such damaged hotel, except that we may be obligated to pay to Remington Hotels a termination fee, as described above. If the hotel management agreement remains in effect with respect to such damaged hotel, and the damage does not result in a reduction of gross revenues at the hotel, the TRS lessee’s obligation to pay management fees will be unabated. If, however, the master hotel management agreement remains in effect with respect to such damaged hotel, but the damage does result in a reduction of gross revenues at the hotel, the TRS lessee will be entitled to partial, pro rata abatement of the management fees while the hotel is being repaired.

Condemnation of a Property or Force Majeure. If all or substantially all of a hotel is subject to a total condemnation or a partial taking that prevents use of the property as a hotel, the master hotel management agreement, with respect to such hotel, will terminate, subject to the requirements of the applicable lease. In the event of termination, neither the TRS lessee nor Remington Hotels will have any further rights, remedies, liabilities or obligations under the master hotel management agreement with respect to such hotel. If any partial taking of a property does not make it unreasonable to continue to operate the hotel, there is no right to terminate the master hotel management agreement. If there is an event of force majeure or any other cause beyond the control of Remington Hotels that directly involves a hotel and has a significant adverse effect upon the continued operations of that hotel, then the master hotel management agreement may be terminated by the TRS lessee. In the event of such a termination, neither the TRS lessee nor Remington Hotels will have any further rights, remedies, liabilities or obligations under the master hotel management agreement with respect to such hotel.

Annual Operating Budget. The master hotel management agreement provides that not less than 45 days prior to the beginning of each fiscal year during the term of the master hotel management agreement, Remington Hotels will submit to the TRS lessee for each of the hotels, an annual operating budget setting forth in detail an estimated profit and loss statement for each of the next 12 months (or for the balance of the fiscal year in the event of a partial first fiscal year), including a schedule of hotel room rentals and other rentals and a marketing and business plan for each of the hotels. The budget is subject to the TRS lessee approval, which may not be unreasonably withheld. The budget may be revised from time to time, taking into account such circumstances as the TRS lessee deems appropriate or as business and operating conditions shall demand, subject to the reasonable approval of Remington Hotels.

Capital Improvement Budget. Premier must prepare a capital improvement budget of the expenditures necessary for replacement of FF&E and building repairs for the hotels during the following fiscal year and provide such budget to the relevant TRS lessee and landlord for approval at the same time Remington Hotels submits the proposed annual operating budget for approval by TRS lessee. Remington Hotels may not make any other expenditures for these items without the relevant TRS lessee and landlord approval, except expenditures which are provided in the capital improvements budget or are required by reason of any (i) emergency, (ii) applicable legal requirements, (iii) the terms of any franchise agreement or (iv) are otherwise required for the continued safe and orderly operation of our hotels.

Indemnity Provisions. Remington Hotels has agreed to indemnify the TRS lessee against all damages not covered by insurance that arise from: (i) the fraud, willful misconduct or gross negligence of Remington Hotels subject to certain

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limitations; (ii) infringement by Remington Hotels of any third party’s intellectual property rights; (iii) employee claims based on a substantial violation by Remington Hotels of employment laws or that are a direct result of the corporate policies of Remington Hotels; (iv) the knowing or reckless placing, discharge, leakage, use or storage of hazardous materials in violation of applicable environmental laws on or in any of our hotels by Remington Hotels; or (v) the breach by Remington Hotels of the master hotel management agreement, including action taken by Remington Hotels beyond the scope of its authority under the master hotel management agreement, which is not cured.

Except to the extent indemnified by Remington Hotels as described in the preceding paragraph, the TRS lessee will indemnify Remington Hotels against all damages not covered by insurance and that arise from: (i) the performance of Remington Hotels’ services under the master hotel management agreement; (ii) the condition or use of our hotels; (iii) certain liabilities to which Remington Hotels is subjected, including pursuant to the WARN Act, in connection with the termination of the master hotel management agreement; (iv) all employee cost and expenses; or (v) any claims made by an employee of Remington Hotels against Remington Hotels that are based on a violation or alleged violation of the employment laws.

Events of Default. Events of default under the master hotel management agreement include:

•The TRS lessee or Remington Hotels files a voluntary bankruptcy petition, or experiences a bankruptcy-related event not discharged within 90 days.

•The TRS lessee or Remington Hotels fails to make any payment due under the master hotel management agreement, subject to a 10-day notice and cure period.

•The TRS lessee or Remington Hotels fails to observe or perform any other term of the master hotel management agreement, subject to a 30-day notice and cure period. There are certain instances in which the 30-day notice and cure period can be extended to up to 120 days.

•Remington Hotels does not qualify as an “eligible independent contractor” as such term is defined in Section 856(d)(9) of the Code.

If an event of default occurs and continues beyond any grace period, the non-defaulting party will have the option of terminating the master hotel management agreement, on 30 days’ notice to the other party.

To minimize conflicts between us and Remington Hotels on matters arising under the master hotel management agreement, the Company’s Corporate Governance Guidelines provide that any waiver, consent, approval, modification, enforcement matters or elections which the Company may make pursuant to the terms of the master hotel management agreement shall be within the exclusive discretion and control of a majority of the independent members of the board of directors (or higher vote thresholds specifically set forth in such agreements). In addition, our board of directors has established a Related Party Transactions Committee comprised solely of independent members of our board of directors to review all related party transactions that involve conflicts. The Related Party Transactions Committee may make recommendations to the independent members of our board of directors (including rejection of any proposed transaction). All related party transactions are approved by either the Related Party Transactions Committee or the independent members of our board of directors.

Premier Master Project Management Agreement

General. In 2013, we entered into a master hotel management agreement with Remington Lodging governing the terms of Remington Lodging’s provision of hotel management services and design and construction services with respect to hotels owned or leased by us. In connection with Ashford Inc.’s acquisition of Premier from Remington Lodging in August 2018, Braemar OP, our TRSs and Premier entered into an agreement for design and construction services to be provided to us by Premier, solely in order to effect the transfer of the design and construction business to Premier, by entering into the Master Project Management Agreement dated as of August 8, 2018, which agreement we refer to below as the “master project management agreement.” Pursuant to the master project management agreement, Premier currently provides design and construction services to all of our hotels. The master project management agreement will also govern the provision of design and construction services to hotels we acquire in the future, as Premier has the right to provide design and construction services to hotel properties we acquire in the future, to the extent we have the right and/or control the right to direct the development and construction of and/or capital improvements to or refurbishment of, such hotels, unless our independent directors either (i) unanimously elect not to engage Premier, or (ii) by a majority vote, elect not to engage Premier because they have determined, in their reasonable business judgment, (A) special circumstances exist such that it would be in our best interest not to engage Premier for the particular hotel, or (B) based on the prior performance of Premier, another manager or developer could perform the project management, project related services or development duties materially better than Premier for the particular hotel. See “Certain Agreements—Mutual Exclusivity Agreements—Premier Project Management MEA—Exclusivity Rights of Premier.”

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Term. The master project management agreement provides for an initial term of 10 years as to each hotel governed by the agreement; provided that the initial term of the master project agreement with respect to hotels owned or leased by us as of the date of the master project management agreement shall be until January 17, 2029. The term may be renewed by Premier, at its option, for three successive periods of seven years each and, thereafter, a final term of four years, provided that at the time the option to renew is exercised, Premier is not then in default under the master project management agreement. If at the time of the exercise of any renewal period, Premier is in default, then the exercise of the renewal option will be conditional on timely cure of such default, and if such default is not timely cured, then our TRS lessee may terminate the master project management agreement regardless of the exercise of such option and without the payment of any fee or liquidated damages. If Premier desires to exercise any option to renew, it must give our TRS lessee written notice of its election to renew the master project management agreement no less than 90 days before the expiration of the then-current term of the master project management agreement.

Amounts Payable under the Master Project Management Agreement. The master project management agreement provides that the TRS lessee will pay Premier a design and construction fee equal to 4% of the total project costs associated with the implementation of the approved capital improvement budget for a hotel until such time that the capital improvement budget and/or renovation project costs involve expenditures in excess of 5% of gross revenues of such hotel, whereupon the design and construction fee will be 3% of total project costs in excess of the 5% of gross revenue threshold. In addition, the TRS lessee will pay Premier additional fees as follows:

•architecture - 6.5% of total construction costs;

•construction management - 10.0% of total construction costs (for projects without a general contractor);

•interior design - 6.0% of the amount selected (including the cost of any and all items selected by Premier or which are specified in the general contractor’s scope of work but excluding any associated charges for labor, freight and tax); and

•FF&E purchasing - 8.0% of the purchased amount (which includes the selected items, freight and tax) unless the total purchased amount for a single hotel property in a single year is greater than $2.0 million, in which case the fee is reduced to 6.0% of the purchased amount in excess of $2 million.

Termination. The master project management agreement may be terminated as to one or more of the hotels earlier than the stated term if certain events occur, including:

•a sale of a hotel;

•for the convenience of our TRS lessee;

•in the event of a casualty to, condemnation of, or force majeure involving a hotel; or

•upon a default by Premier or us that is not cured prior to the expiration of any applicable cure periods.

In certain cases of early termination of the master project management agreement with respect to one or more of the hotels, we must pay Premier termination fees, plus any amounts otherwise due to Premier pursuant to the terms of the master project management agreement. We will be obligated to pay termination fees in the circumstances described below, provided that Premier is not then in default, subject to certain cure and grace periods:

•Sale. If any hotel subject to the master project management agreement is sold, our TRS lessee may terminate the master project management agreement with respect to such sold hotel, and our TRS lessee will have no obligation to pay any termination fees.

•Casualty, Condemnation or Force Majeure. In the event of a casualty with respect to, condemnation of, or the occurrence of any force majeure event with respect to, any of the hotels, the TRS lessee has no obligation to pay any termination fees if the master project management agreement terminates as to those hotels.

•For Convenience. With respect to any hotel project-managed by Premier pursuant to the master project management agreement, if the TRS lessee elects for convenience to terminate the project management of such hotel, at any time, including during any renewal term, the TRS lessee must pay a termination fee to Premier, equal to the product of (i) 65% of the aggregate design and construction fees and market service fees for such hotel estimated to be payable to Premier with respect to the applicable hotel for the full current fiscal year in which such termination is to occur (but in no event less than the design and construction fees and market service fees for the preceding full fiscal year) and (ii) nine.

Implementation of Capital Improvement Budget. Premier, on behalf of TRS lessee, shall cause to be made non-routine repairs and other work, either to the hotel’s building or its FF&E, pursuant to the capital improvement budget prepared by Premier pursuant to the master project management agreement and approved by TRS lessee.

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Insurance. Premier must coordinate with the TRS lessee the procurement and maintenance of all general compensation, employer’s liability, and other appropriate and customary insurance related to its operations as a project manager, the cost of which is the responsibility of the TRS lessee.

Assignment and Subleasing. Neither Premier nor the TRS lessee may assign or transfer the master project management agreement without the other party’s prior written consent. However, Premier may assign its rights and obligations to any entity that is “controlled” by Mr. Monty J. Bennett, Mr. Archie Bennett, Jr., or their respective family partnerships or trusts, the sole members or beneficiaries of which are at all times lineal descendants of Messrs. Monty or Archie Bennett, Jr. (including step children) and spouses. “Controlled” means (i) the possession of a majority of the capital stock (or ownership interest) and voting power of such affiliate, directly or indirectly, or (ii) the power to direct or cause the direction of the management and policies of such affiliate in the capacity of chief executive officer, president, chairman, or other similar capacity where they are actively engaged or involved in providing such direction or control and spend a substantial amount of time managing such affiliate. No assignment will release Premier from any of its obligations under the master project management agreement.

Damage to Hotels. If any of our insured properties is destroyed or damaged, the TRS lessee is obligated, subject to the requirements of the underlying lease, to repair or replace the damaged or destroyed portion of the hotel to the same condition as existed prior to such damage or destruction. If the lease relating to such damaged hotel is terminated pursuant to the terms of the lease, the TRS lessee has the right to terminate the master project management agreement with respect to such damaged hotel upon 60 days’ written notice. In the event of a termination, neither the TRS lessee nor Premier will have any further liabilities or obligations under the master project management agreement with respect to such damaged hotel.

Condemnation of a Property or Force Majeure. If all or substantially all of a hotel is subject to a total condemnation or a partial taking that prevents use of the property as a hotel, the master project management agreement, with respect to such hotel, will terminate, subject to the requirements of the applicable lease. In the event of termination, neither the TRS lessee nor Premier will have any further rights, remedies, liabilities or obligations under the master project management agreement with respect to such hotel. If any partial taking of a property does not make it unreasonable to continue to operate the hotel, there is no right to terminate the master project management agreement. If there is an event of force majeure or any other cause beyond the control of Premier that directly involves a hotel and has a significant adverse effect upon the continued operations of that hotel, then the master project management agreement may be terminated by the TRS lessee. In the event of such a termination, neither the TRS lessee nor Premier will have any further rights, remedies, liabilities or obligations under the master project management agreement with respect to such hotel.

Indemnity Provisions. Premier has agreed to indemnify the TRS lessee against all damages not covered by insurance that arise from: (i) the fraud, willful misconduct or gross negligence of Premier; (ii) infringement by Premier of any third party’s intellectual property rights; (iii) the knowing or reckless placing, discharge, leakage, use or storage of hazardous materials in violation of applicable environmental laws on or in any of our hotels by Premier; or (iv) the breach by Premier of the master project management agreement, including action taken by Premier beyond the scope of its authority under the master project management agreement, which is not cured.

Except to the extent indemnified by Premier as described in the preceding paragraph, the TRS lessee will indemnify Premier against all damages not covered by insurance and that arise from: (i) the performance of Premier’s services under the master project management agreement; or (ii) the condition or use of our hotels.

Events of Default. Events of default under the master project management agreement include:

•The TRS lessee or Premier files a voluntary bankruptcy petition, or experiences a bankruptcy-related event not discharged within 90 days.

•The TRS lessee or Premier fails to make any payment due under the master project management agreement, subject to a 10-day notice and cure period.

•The TRS lessee or Premier fails to observe or perform any other term of the master project management agreement, subject to a 30-day notice and cure period. There are certain instances in which the 30-day notice and cure period can be extended to up to 120 days.

If an event of default occurs and continues beyond any grace period, the non-defaulting party will have the option of terminating the master project management agreement, on 30 days’ notice to the other party.

To minimize conflicts between us and Premier on matters arising under the master project management agreement, the Company’s Corporate Governance Guidelines provide that any waiver, consent, approval, modification, enforcement matters or elections which the Company may make pursuant to the terms of the master project management agreement shall be within the exclusive discretion and control of a majority of the independent members of the board of directors (or higher vote thresholds

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specifically set forth in such agreements). In addition, our board of directors has established a Related Party Transactions Committee comprised solely of independent members of our board of directors to review all related party transactions that involve conflicts. The Related Party Transactions Committee may make recommendations to the independent members of our board of directors (including rejection of any proposed transaction). All related party transactions are approved by either the Related Party Transactions Committee or the independent members of our board of directors.

Mutual Exclusivity Agreements

Remington Hotels Hotel Management MEA

General. In 2013, we entered into a mutual exclusivity agreement with Remington Lodging. Remington Lodging gave us a first right of refusal to purchase any lodging-related investments identified by Remington Lodging and any of its affiliates that met our initial investment criteria, and we agreed to engage Remington Lodging to provide hotel management, project management and development services for hotels we acquired or invested in, to the extent that we had the right or controlled the right to direct such matters, subject to certain conditions. In connection with Ashford Inc.’s acquisition of Premier from Remington Lodging in August 2018, we amended and restated the original mutual exclusivity agreement to provide that Remington Lodging gave us a first right of refusal to purchase any lodging-related investments identified by Remington Lodging and any of its affiliates that met our initial investment criteria, and we agreed to engage Remington Lodging to provide hotel management for hotels we acquired or invested in, to the extent that we had the right or controlled the right to direct such matters. As a result, concurrently with Ashford Inc.’s acquisition of Premier, we, Braemar OP and Remington Lodging entered into the Amended and Restated Mutual Exclusivity Agreement dated as of August 8, 2018, which agreement we refer to below as the “hotel management MEA.” In connection with Ashford Inc.’s acquisition of the hotel management business of Remington Lodging on November 6, 2019, Remington Hotels became a subsidiary of Ashford Inc., and the mutual exclusivity agreement between Remington Hotels and us remains in effect.

Term. The initial term of the hotel management MEA is 10 years from November 19, 2013. This term automatically extends for three additional renewal periods of seven years each and a final renewal period of four years, for a total of up to 35 years. The agreement may be sooner terminated because of:

•an event of default (see “Events of Default”),

•a party’s early termination rights (see “Early Termination”), or

•a termination of all our master hotel management agreement between TRS lessee and Remington Hotels because of an event of default under the master hotel management agreement that affects all properties (see “Relationship with Master Hotel Management Agreement”).

Modification of Investment Guidelines. In the event that we materially modify our initial investment guidelines without the written consent of Remington Hotels, which consent may be withheld at its sole and absolute discretion, and may further be subject to the consent of Ashford Trust parties, the Remington Hotels parties will have no obligation to present or offer us investment opportunities at any time thereafter. Instead, the Remington Hotels parties, subject to the superior rights of the Ashford Trust parties or any other party with which the Remington Hotels parties may have an existing agreement, shall use their reasonable discretion to determine how to allocate investment opportunities it identifies. In the event we materially modify our investment guidelines without the written consent of Remington Hotels, the Ashford Trust parties will have superior rights to investment opportunities identified by the Remington Hotels parties, and we will no longer retain preferential treatment to investment opportunities identified by the Remington Hotels parties. A material modification for this purpose means any modification of our initial investment guidelines to be competitive with Ashford Trust’s investment guidelines.

Our Exclusivity Rights. Remington Hotels and Mr. Monty J. Bennett have granted us a first right of refusal to pursue certain lodging investment opportunities identified by Remington Hotels or its affiliates (including Mr. Bennett), including opportunities to buy hotel properties, to buy land and build hotels, or to otherwise invest in hotel properties that satisfy our initial investment guidelines and are not considered excluded transactions pursuant to the hotel management MEA. If investment opportunities are identified and are subject to the hotel management MEA, and we have not materially modified our initial investment guidelines without the written consent of Remington Hotels, then Remington Hotels, Mr. Bennett and their affiliates, as the case may be, will not pursue those opportunities (except as described below) and will give us a written notice and description of the investment opportunity, and we will have 10 business days to either accept or reject the investment opportunity. If we reject the opportunity, Remington Hotels may then pursue such investment opportunity, subject to a right of first refusal in favor of Ashford Trust pursuant to an existing agreement between Ashford Trust and Remington Hotels, on materially the same terms and conditions as offered to us. If the terms of such investment opportunity materially change, then Remington Hotels must offer the revised investment opportunity to us, whereupon we will have 10 business days to either accept or reject the opportunity on the revised terms.

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Reimbursement of Costs. If we accept an investment opportunity from Remington Hotels, we will be obligated to reimburse Remington Hotels or its affiliates for the actual out-of-pocket and third-party costs and expenses paid by Remington Hotels or its affiliates in connection with such investment opportunity, including any earnest money deposits, but excluding any finder’s fee, brokerage fee, development fee or other compensation paid by Remington Hotels or its affiliates. Remington Hotels must submit to us an accounting of the costs in reasonable detail.

Exclusivity Rights of Remington Hotels. If we elect to pursue an investment opportunity that consists of the management and operation of a hotel property, we will hire Remington Hotels to provide such services unless our independent directors either (i) unanimously elect not to engage Remington Hotels, or (ii) by a majority vote, elect not to engage Remington Hotels because they have determined, in their reasonable business judgment, (A) special circumstances exist such that it would be in our best interest not to engage Remington Hotels for the particular hotel, or (B) based on the prior performance of Remington Hotels, another manager or developer could perform the management duties materially better than Remington Hotels for the particular hotel. In return, Remington Hotels has agreed that it will provide those services.

Excluded Investment Opportunities. The following are excluded from the hotel management MEA and are not subject to any exclusivity rights or right of first refusal:

•With respect to Remington Hotels, an investment opportunity where our independent directors have unanimously voted not to engage Remington Hotels as the manager or developer.

•With respect to Remington Hotels, an investment opportunity where our independent directors, by a majority vote, have elected not to engage Remington Hotels as the manager or developer based on their determination, in their reasonable business judgment, that special circumstances exist such that it would be in our best interest not to engage Remington Hotels with respect to the particular hotel.

•With respect to Remington Hotels, an investment opportunity where our independent directors, by a majority vote, have elected not to engage Remington Hotels as the manager or developer because they have determined, in their reasonable business judgment, that another manager or developer could perform the management, development or other duties materially better than Remington Hotels for the particular hotel, based on Remington Hotels’ prior performance.

•Existing hotel investments of Remington Hotels or its affiliates with any of their existing joint venture partners, investors or property owners.

•Existing bona fide arm’s length third-party management arrangements (or arrangements for other services) of Remington Hotels or any of its affiliates with third parties other than us and our affiliates.

•Like-kind exchanges made pursuant to existing contractual obligations by any of the existing joint venture partners, investors or property owners in which Remington Hotels or its affiliates have an ownership interest, provided that Remington Hotels provides us with notice 10 days’ prior to such transaction.

Management or Development. If we hire Remington Hotels to manage or operate a hotel, it will be pursuant to the terms of the master hotel management agreement agreed to between us and Remington Hotels.

Events of Default. Each of the following is a default under the hotel management MEA:

•we or Remington Hotels experience a bankruptcy-related event;

•we fail to reimburse Remington Hotels as described under “Reimbursement of Costs,” subject to a 30-day cure period; and

•we or Remington Hotels does not observe or perform any other term of the agreement, subject to a 30-day cure period (which may be increased to a maximum of 120 days in certain instances).

If a default occurs, the non-defaulting party will have the option of terminating the hotel management MEA subject to 30 days’ written notice and pursuing its rights and remedies under applicable law.

Early Termination. Remington Hotels has the right to terminate the exclusivity rights granted to us if:

•Mr. Monty J. Bennett is removed as our chief executive officer or as chairman of our board of directors or is not re-appointed to either position, or he resigns as chief executive officer or chairman of our board of directors;

•we terminate the Remington Hotels exclusivity rights pursuant to the terms of the hotel management MEA; or

•our advisory agreement with Ashford LLC is terminated for any reason pursuant to its terms and Mr. Monty J. Bennett is no longer serving as our chief executive officer and chairman of our board of directors.

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We may terminate the exclusivity rights granted to Remington Hotels if:

•Remington Hotels fails to qualify as an “eligible independent contractor” as defined in Section 856(d)(9) of the Code and for that reason, we terminate the master hotel management agreement with Remington Hotels;

•Remington Hotels is no longer “controlled” by Mr. Monty J. Bennett or Mr. Archie Bennett, Jr. or their respective family partnership or trusts, the sole members of which are at all times lineal descendants of Mr. Archie Bennett, Jr. or Mr. Monty J. Bennett (including step children) and spouses;

•we experience a change in control and terminate the master hotel management agreement between us and Remington Hotels with respect to all hotels and have paid a termination fee equal to the product of (i) 65% of the aggregate management fees budgeted in the annual operating budget applied to the hotels for the full current fiscal year in which such termination is to occur for such hotels (both base fees and incentive fees, but in no event less than the base fees and incentive fees for the preceding full fiscal year) and (ii) nine;

•the Remington Hotels parties terminate our exclusivity rights pursuant to the terms of the mutual exclusivity agreement; or

•our advisory agreement with Ashford LLC is terminated for any reason pursuant to its terms and Mr. Monty J. Bennett is no longer serving as our chief executive officer and chairman of our board of directors.

Assignment. The hotel management MEA may not be assigned by any of the parties without the prior written consent of the other parties, provided that Remington Hotels can assign its interest in the hotel management MEA, without the written consent of the other parties, to a “manager affiliate entity” as that term is defined in the agreement, so long as such affiliate qualifies as an “eligible independent contractor” at the time of such transfer.

Relationship with Master Hotel Management Agreement. The rights provided to us and to Remington Hotels in the hotel management MEA may be terminated if the master hotel management agreement between us and Remington Hotels terminates in its entirety because of an event of default as to all of the then-managed properties. A termination of Remington Hotels’ management rights with respect to one or more hotels (but not all hotels) does not terminate the hotel management MEA. A termination of the hotel management MEA does not terminate the master hotel management agreement either in part or in whole, and the master hotel management agreement would continue in accordance with its terms as to the hotels covered, despite a termination of the hotel management MEA.

Premier Project Management MEA

General. In connection with Ashford Inc.’s acquisition of Premier from Remington Lodging in August 2018, we entered into the Mutual Exclusivity Agreement dated as of August 8, 2018 with Braemar OP and Premier, which agreement we refer to below as the “project management MEA,” pursuant to which Premier gave us a first right of refusal to purchase any lodging-related investments identified by Premier and any of its affiliates that met our initial investment criteria, and we agreed to engage Premier to provide project management for hotels we acquired or invested in, to the extent that we had the right or controlled the right to direct such matters.

Term. The initial term of the project management MEA is 10 years from November 19, 2013. This term automatically extends for three additional renewal periods of seven years each and a final renewal period of four years, for a total of up to 35 years. The agreement may be sooner terminated because of:

•an event of default (see “Events of Default”),

•a termination of all our master project management agreements between the TRS lessee and Premier because of an event of default under the master project management agreement that affects all properties (see “Relationship with Master Project Management Agreement”).

Modification of Investment Guidelines. In the event that we materially modify our initial investment guidelines without the written consent of Premier, which consent may be withheld at its sole and absolute discretion, Premier will have no obligation to present or offer us investment opportunities at any time thereafter pursuant to the project management MEA. Instead, Premier shall allocate investment opportunities it identifies pursuant to the terms of our advisory agreement. A material modification for this purpose means any modification of our initial investment guidelines to be competitive with Ashford Trust’s investment guidelines.

Our Exclusivity Rights. Premier and its affiliates have granted us a first right of refusal to pursue certain lodging investment opportunities identified by Premier and its affiliates (including Mr. Bennett), including opportunities to buy hotel properties, to buy land and build hotels, or to otherwise invest in hotel properties that satisfy our initial investment guidelines and are not considered excluded transactions pursuant to the project management MEA. If investment opportunities are identified and are subject to the project management MEA, and we have not materially modified our initial investment

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guidelines, then Premier and its affiliates, as the case may be, will not pursue those opportunities (except as described below) and will give us a written notice and description of the investment opportunity, and we will have 10 business days to either accept or reject the investment opportunity. If we reject the opportunity, Premier may then pursue such investment opportunity, on materially the same terms and conditions as offered to us. If the terms of such investment opportunity materially change, then Premier and its affiliates must offer the revised investment opportunity to us, whereupon we will have 10 business days to either accept or reject the opportunity on the revised terms.

Reimbursement of Costs. If we accept an investment opportunity from Premier, we will be obligated to reimburse Premier or its affiliates for the actual out-of-pocket and third-party costs and expenses paid by Premier or its affiliates in connection with such investment opportunity, including any earnest money deposits, but excluding any finder’s fee, brokerage fee, development fee or other compensation paid by Premier or its affiliates. Premier must submit to us an accounting of the costs in reasonable detail.

Exclusivity Rights of Premier. If we acquire or invest in a hotel or a property for the development or construction of a hotel and have the right and/or control the right to direct the development and construction of and/or capital improvements to or refurbishment of, or the provision of project management or other services, such as purchasing, interior design, freight management, or construction management for such hotel or hotel improvements, we will hire Premier to provide such services unless our independent directors either (i) unanimously elect not to engage Premier, or (ii) by a majority vote, elect not to engage Premier because they have determined, in their reasonable business judgment, (A) special circumstances exist such that it would be in our best interest not to engage Premier for the particular hotel, or (B) based on the prior performance of Premier, another manager or developer could perform the project management, project related services or development duties materially better than Premier for the particular hotel. In return, Premier has agreed that it will provide those services.

Excluded Investment Opportunities. The following are excluded from the project management MEA and are not subject to any exclusivity rights or right of first refusal:

•With respect to Premier, an investment opportunity where our independent directors have unanimously voted not to engage Premier as the manager or developer.

•With respect to Premier, an investment opportunity where our independent directors, by a majority vote, have elected not to engage Premier as the manager or developer based on their determination, in their reasonable business judgment, that special circumstances exist such that it would be in our best interest not to engage Premier with respect to the particular hotel.

•With respect to Premier, an investment opportunity where our independent directors, by a majority vote, have elected not to engage Premier as the manager or developer because they have determined, in their reasonable business judgment, that another manager or developer could perform the project management, project related services or development duties materially better than Premier for the particular hotel, based on Premier’s prior performance.

•Existing hotel investments of Premier or its affiliates with any of their existing joint venture partners, investors or property owners.

•Existing bona fide arm’s length third-party project management arrangements of Premier or any of its affiliates with third parties other than us and our affiliates.

•Like-kind exchanges made pursuant to existing contractual obligations by any of the existing joint venture partners, investors or property owners in which Premier or its affiliates have an ownership interest, provided that Premier provides us with notice 10 days’ prior to such transaction.

•Any hotel investment that does not satisfy our initial investment guidelines.

Development or Construction. If we hire Premier to develop and construct a hotel, the terms of the development and construction will be pursuant to the terms of the master project management agreement that has been agreed to by us and Premier.

Events of Default. Each of the following is a default under the project management MEA:

•we or Premier experience a bankruptcy-related event;

•we fail to reimburse Premier as described under “Reimbursement of Costs,” subject to a 30-day cure period; and

•we or Premier does not observe or perform any other term of the agreement, subject to a 30-day cure period (which may be increased to a maximum of 120 days in certain instances).

If a default occurs, the non-defaulting party will have the option of terminating the project management MEA subject to 30 days’ written notice and pursuing its rights and remedies under applicable law.

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Assignment. The project management MEA may not be assigned by any of the parties without the prior written consent of the other parties, provided that Premier can assign its interest in the project management MEA, without the written consent of the other parties, to a “manager affiliate entity” as that term is defined in the agreement.

Relationship with Master Project Management Agreement. The rights provided to us and to Premier in the project management MEA may be terminated if the master project management agreement between us and Premier terminates in its entirety because of an event of default as to all of the then-managed properties. A termination of Premier’s project management rights with respect to one or more hotels (but not all hotels) does not terminate the project management MEA. A termination of the project management MEA does not terminate the master project management agreement either in part or in whole, and the management agreements would continue in accordance with its terms as to the hotels covered, despite a termination of the project management MEA.

Ashford Trust Right of First Offer Agreement

The right of first offer agreement provides us the first right to acquire each of the subject hotels owned by Ashford Trust, to the extent the board of directors of Ashford Trust determines to market and sell the hotel, subject to any prior rights of the managers of the hotel or other third parties and the limitations with respect to hotels in a joint venture set forth in the right of first offer agreement. In addition, so long as we do not materially change our initial investment guidelines without the express consent of Ashford LLC, the right of first offer agreement extends to hotels later acquired by Ashford Trust that satisfy our initial investment guidelines.

If Ashford Trust decides to offer for sale an asset that fits our investment guidelines, it must give us a written notice describing the sale terms and granting us the right to purchase the asset at a purchase price equal to the price set forth in the offer. We will have 30 days to agree to the terms of the sale. If terms are not met, Ashford Trust will be free to sell the asset to any person upon substantially the same terms as those contained in the written notice for 180 days, but not for a price less than 95% of the offered purchase price. If during such 180-day period, Ashford Trust desires to accept an offer that is not on substantially the same terms as those contained in the written notice or that is less than 95% of the offered purchase price, Ashford Trust must give us written notice of the new terms and we will have 10 days in which to agree to the terms of the sale. If Ashford Trust does not close on the sale or refinancing of the asset within 180 days following the expiration of the initial 30-day period, the right to purchase the asset will be reinstated on the same terms.

Likewise, we have agreed to give Ashford Trust a right of first offer with respect to any properties that we acquire in a portfolio transaction, to the extent our board of directors determines it is appropriate to market and sell such assets and we control the disposition, provided such assets satisfy Ashford Trust’s investment guidelines. Any such right of first offer granted to Ashford Trust will be subject to certain prior rights, if any, granted to the managers of the related properties or other third parties.

The right of first offer agreement has an initial term of 10 years and is subject to automatic one year renewal periods unless one party notifies the other at least 180 days prior to the expiration of the current term that it does not intend to renew the agreement. The agreement may be terminated by either party (i) upon a default of the other party upon giving notice of such default and the defaulting party fails to cure within 45, or in some circumstances up to 90, days subject to certain exclusions, and (ii) if the other party experiences specified bankruptcy events. Also, if we materially modify our initial investment guidelines without consent of Ashford Trust (which consent may be withheld in its sole discretion), our right of first refusal for any assets owned or later acquired by Ashford Trust and its affiliates, other than the initial assets subject to the right of first offer agreement, will terminate unless otherwise agreed by the parties. Further, the agreement will automatically terminate upon a termination of our advisory agreement or upon a change of control of either us or Ashford Trust, excluding any change of control that may occur as a result of a spin-off, carve-out, split-off or other similar event.

TRS Leases

Three of the hotels we acquired from Ashford Trust in connection with the spin-off are owned by our operating partnership and leased to subsidiaries of Braemar TRS. Two of our hotels are held in a joint venture in which we have a 75% equity interest. The two hotels owned by the joint venture are leased to subsidiaries of the joint venture, which two subsidiaries we have elected to treat as TRSs. Since 2013 Braemar TRS has formed multiple subsidiaries which lease acquired hotels. Braemar TRS has elected to be treated as a TRS. Generally, we intend to lease all hotels we acquire in the future, other than pursuant to sale-leaseback transactions with unrelated third parties, to a TRS lessee, pursuant to the terms of leases that are generally similar to the terms of the existing leases, unless not appropriate based on relevant regulatory factors. Ashford LLC will negotiate the terms and provisions of each future lease, considering such things as the purchase price paid for the hotel, then current economic conditions and any other factors deemed relevant at the time. One hotel property, located in the U.S. Virgin Islands, is owned by our USVI TRS.

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Term. The leases for our hotel properties include a term of five years, which expires on December 31, 2025 (December 31, 2026 in the case of the Mr. C Beverly Hills Hotel). The leases may be terminated earlier than the stated term if certain events occur, including specified damages to the related hotel, a condemnation of the related hotel or the sale of the related hotel, or an event of default that is not cured within any applicable cure or grace periods. The lessor must pay a termination fee to the TRS lessee if and to the extent the TRS lessee is obligated to pay a termination fee to the managers as a result of the termination of the lease.

Amounts Payable Under Leases. The leases generally provide for each TRS lessee to pay in each calendar month the base rent plus, in each calendar quarter, percentage rent, if any. The percentage rent for each hotel equals: (i) an agreed percentage of gross revenue that exceeds a threshold amount, less (ii) all prior percentage rent payments.

Maintenance and Modifications. Each TRS lessee is required to establish and fund, in respect of each fiscal year during the terms of the leases, a reserve account, in the amount of at least 4% of gross revenues per year to cover the cost of capital expenditures, which costs will be paid by our operating partnership. Each TRS lessee shall be required to make (at our sole cost and expense) all capital expenditures required in connection with emergency situations, legal requirements, maintenance of the applicable franchise agreement, the performance by lessee of its obligations under the lease and other permitted additions to the leased property. We also have the right to make additions, modifications or improvements so long as our actions do not significantly alter the character or purposes of the property, significantly detract from the value or operating efficiency of the property, significantly impair the revenue producing capability of the property or affect the ability of the lessee to comply with the terms of their lease. All capital expenditures relating to material structural components involving expenditures of $1 million or more are subject to the approval of our operating partnership. Each TRS lessee is responsible for all routine repair and maintenance of the hotels, and our operating partnership will be responsible for non-routine capital expenditures.

We own substantially all personal property (other than inventory, linens, ERFP FF&E and other nondepreciable personal property) not affixed to, or deemed a part of, the real estate or improvements on our hotels, unless ownership of such personal property would cause the rent under a lease not to qualify as “rents from real property” for REIT income test purposes.

Insurance and Property Taxes. We pay real estate and personal property taxes on the hotels (except to the extent that personal property associated with the hotels is owned by the applicable TRS lessee). We pay for property and casualty insurance relating to the hotel properties and any personal property owned by us. Each TRS lessee pays for all insurance on its personal property, comprehensive general public liability, workers’ compensation, vehicle, and other appropriate and customary insurance. Each TRS lessee must name us as an additional insured on any policies it carries.

Assignment and Subleasing. The TRS lessees are not permitted to sublet any part of the hotels or assign their respective interests under any of the leases without our prior written consent, which cannot be unreasonably withheld. No assignment or subletting will release any TRS lessee from any of its obligations under the leases.

Damage to Hotels. If any of our insured hotels is destroyed or damaged, whether or not such destruction or damage prevents use of the property as a hotel, the applicable TRS lessee will have the obligation, but only to the extent of insurance proceeds that are made available, to restore the hotel. All insurance proceeds will be paid to our operating partnership (except such proceeds payable for loss or damage to the TRS lessee’s personal property) and be paid to the applicable TRS lessee for the reasonable costs of restoration or repair. Any excess insurance proceeds remaining after the cost of repair or restoration will be retained by us. If the insurance proceeds are not sufficient to restore the hotel, the TRS lessee or we have the right to terminate the lease upon written notice. In that event, neither we nor the TRS lessee will have any further liabilities or obligations under the lease, except that, if we terminate the lease, we have to pay the TRS lessee termination fees, if any, within 45 days that become due under the management agreement. If the lease is so terminated, we will keep all insurance proceeds received as a result of such destruction or damage. If the lease is terminated by a TRS lessee, we have the right to reject the termination of the lease and to require the TRS lessee to restore the hotel, provided we agree to pay for all restoration costs in excess of available insurance proceeds. In that event, the related lease will not terminate and we will pay all insurance proceeds to the TRS lessee.

If the cost of restoration exceeds the amount of insurance proceeds, we will contribute any excess amounts necessary to complete the restoration to the TRS lessee before requiring the work to begin. In the event of damage or destruction not covered by insurance, our obligations, as well as those of the applicable TRS lessee, will be the same as in the case of inadequate insurance proceeds. However, regardless of insurance coverage, if damage or destruction rendering the property unsuitable for its primary intended purpose occurs within 24 months of the end of the lease term, we may terminate the lease with 30 days’ notice. If the lease remains in effect and the damage does not result in a reduction of gross revenues at the hotel, the TRS lessee’s obligation to pay rent will be unabated. If, however, the lease remains in effect but the damage does result in a reduction of gross revenues at the hotel, the TRS lessee will be entitled to a certain amount of rent abatement while the hotel is being repaired. We will keep all proceeds from loss of income insurance.

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Condemnation. If any of our hotels is subject to a total condemnation or a partial taking that prevents use of the property as a hotel, we and the TRS lessee each have the option to terminate the related lease. We will share in the condemnation award with the TRS lessee in accordance with the provisions of the related lease. If any partial taking of a hotel does not prevent use of the property as a hotel, the TRS lessee is obligated to restore the untaken portion of the hotel to a complete architectural unit but only to the extent of any available condemnation award. If the condemnation award is not sufficient to restore the hotel, the TRS lessee or we have the right to terminate the lease upon written notice. If the lease is terminated by the TRS lessee, we have the right to reject the termination of the lease within 30 days and to require the TRS lessee to restore the hotel, provided we agree to pay for all restoration costs in excess of the available condemnation award. We will contribute the cost of such restoration to the TRS lessee. If a partial taking occurs, the base rent will be abated to some extent, taking into consideration, among other factors, the number of usable rooms, the amount of square footage, or the revenues affected by the partial taking.

Events of Default. Events of Default under the leases include:

•    The TRS lessee fails to pay rent or other amounts due under the lease, provided that the TRS lessee has a 10-day cure period after receiving a written notice from us that such amounts are due and payable before an event of default would occur.

•    The TRS lessee does not observe or perform any other term of a lease, provided that the TRS lessee has a 30-day cure period after receiving a written notice from us that a term of the lease has been violated before an event of default of default would occur. There are certain instances in which the 30-day grace period can be extended to a maximum of 120 days.

•    The TRS lessee is the subject of a bankruptcy, reorganization, insolvency, liquidation or dissolution event.

•    The TRS lessee voluntarily ceases operations of the hotels for a period of more than 30 days, except as a result of damage, destruction, condemnation, or certain specified unavoidable delays.

•    The default of the TRS lessee under the management agreement for the related hotel because of any action or failure to act by the TRS lessee and the TRS lessee has failed to cure the default within 30 days.

If an event of default occurs and continues beyond any grace period, we have the option of terminating the related lease. If we decide to terminate a lease, we must give the TRS lessee 10 days’ written notice. Unless the event of default is cured before the termination date we specify in the termination notice, the lease will terminate on the specified termination notice. In that event, the TRS lessee will be required to surrender possession of the related hotel and pay liquidated damages at our option, as provided by the applicable lease.

Termination of Leases. Our operating partnership generally has the right to terminate any lease prior to the expiration date so long as we pay a termination fee. The termination fee is equal to any termination fee due to a manager under the management agreement.

Indemnification. Each TRS lessee is required to indemnify us for claims arising out of (i) accidents occurring on or about the leased property, (ii) any past, present or future use or condition of the hotel by TRS lessee or any of its agents, employees or invitees, (iii) any impositions that are the obligation of the TRS hotel by lessee, (iv) any failure of the TRS lessee to perform under the lease, and (v) the non-performance of obligations under any sub-lease by the landlord thereunder. We are required to indemnify each TRS lessee for any claim arising out of our gross negligence or willful misconduct arising in connection with the lease and for any failure to perform our obligations under the lease. All indemnification amounts must be paid within 10 days of a determination of liability.

Breach by Us. If we breach any of the leases, we will have 30 days from the time we receive written notice of the breach from the TRS lessee to cure the breach. This cure period may be extended in the event of certain specified, unavoidable delays.

Ground Leases

Two of our hotels are subject to ground leases that cover all of the land underlying the respective hotels.

Hilton La Jolla Torrey Pines. The Hilton La Jolla Torrey Pines is subject to a ground lease with the City of San Diego and expires May 31, 2067. The lease term may be extended by either 10 years or 20 years depending on the amount of capital spent at the hotel. If 5% of gross income is spent on capital expenditures during the lease term, the term may be extended by 10 years. If 6% of gross income is spent on capital expenditures during the lease term, the term may be extended by 20 years. Rent is payable monthly and is the greater of minimum rent or percentage rent, determined monthly, with an annual true-up. Commencing January 1, 1993 and every five years thereafter, minimum rent is adjusted to be 80% of the annual average of actual rents paid or accrued during the preceding five-year period, but in no event may such rent be adjusted downwards. Percentage rent is determined from a percentage of room and banquet rental revenue, food and beverage sales, alcohol sales, lobby, gift shop and coin operated machine and telephone sales and other authorized uses. Percentage rent is adjusted at least

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six months prior to the end of (December 31, 2027) and thereafter at least six months prior to each 10th year by mutual agreement to provide fair rental to landlord. The lease may be assigned with the landlord’s prior written consent. Upon any assignment or a sublease of a majority of the premises, 2% of the gross amounts paid for the assignment or sublease are payable to the landlord except in the instances of a transfer to an affiliate or a mortgage foreclosure. In addition, 2% of the net proceeds are payable to the landlord in the event of a refinancing.

Bardessono Hotel and Spa. The Bardessono Hotel and Spa is subject to a ground lease with Bardessono Brothers LLC and expires October 31, 2065, with two 25-year extension options. Rent is payable monthly and is the greater of minimum rent or percentage rent with an annual true-up on October 1. Each year, annual base minimum rent is increased (but never decreased) by an amount equal to the percentage increase in CPI Index during the prior 12-month period that starts on September 1 and ends on August 31. In no event will the index percentage be less than 101.5% nor more than 103.5% multiplied by the annual base minimum rent payable by tenant during the lease year just ending. A percentage rent, which is calculated on the positive difference (if any) between the greater of 8% of net rooms revenue or 4.5% of net operating revenue and the aggregate base minimum rent actually paid by the tenant during the same calendar year will be paid on a calendar year basis. Within 90 days after end of calendar year tenant must provide landlord an officer’s certificate containing tenant’s financial statements and percentage rent payment, if any. The lease may be assigned with the landlord’s prior written consent at least 60 days but not more than 90 days before the effective date of the proposed assignment. Tenant must submit to landlord a statement containing contact and financial information, operating and property ownership history, and other information with respect to the proposed assignee or subtenant as landlord may reasonably require, the type of use proposed for the inn parcel or resort, and all of the principal terms of the proposed assignment; copy of proposed assignment; and a copy of the landlord’s consent to assignment. In August of 2016, the lease was amended to allow for the expansion of the leased premises by 10,000 square feet to accommodate construction of the Presidential Villa.

Regulation

General

Our hotels are subject to various U.S. federal, state and local laws, ordinances and regulations, including regulations relating to common areas and fire and safety requirements. We believe that each of our hotels has the necessary permits and approvals to operate its business.

Governmental Regulations

Our properties are subject to various federal, state and local regulatory laws and requirements, including, but not limited to, the Americans with Disabilities Act of 1990, as amended (the “ADA”), zoning regulations, building codes and land use laws, and building, occupancy and other permit requirements. Noncompliance could result in the imposition of governmental fines or the award of damages to private litigants. While we believe that we are currently in material compliance with these regulatory requirements, the requirements may change or new requirements may be imposed that could require significant unanticipated expenditures by us. Additionally, local zoning and land use laws, environmental statutes, health and safety rules and other governmental requirements may restrict, or negatively impact, our property operations, or expansion, rehabilitation and reconstruction activities and such regulations may prevent us from taking advantage of economic opportunities. Future changes in federal, state or local tax regulations applicable to REITs, real property or income derived from our real estate could impact the financial performance, operations, and value of our properties and the Company.

Environmental Matters

Under various laws relating to the protection of the environment, a current or previous owner or operator (including tenants) of real estate may be liable for contamination resulting from the presence or discharge of hazardous or toxic substances at that property and may be required to investigate and clean up such contamination at that property or emanating from that property. These costs could be substantial and liability under these laws may attach without regard to whether the owner or operator knew of, or was responsible for, the presence of the contaminants, and the liability may be joint and several. The presence of contamination or the failure to remediate contamination at our hotels may expose us to third-party liability or materially and adversely affect our ability to sell, lease or develop the real estate or to incur debt using the real estate as collateral.

Our hotels are subject to various federal, state, and local environmental, health and safety laws and regulations that address a wide variety of issues, including, but not limited to, storage tanks, air emissions from emergency generators, storm water and wastewater discharges, lead-based paint, mold and mildew and waste management. Our hotels incur costs to comply with these laws and regulations and could be subject to fines and penalties for non-compliance.

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Some of our hotels may contain or develop harmful mold or suffer from other adverse conditions, which could lead to liability for adverse health effects and costs of remediation. The presence of significant mold or other airborne contaminants at any of our hotels could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected hotel or increase indoor ventilation. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from guests or employees at our hotels and others if property damage or health concerns arise.

Insurance

We carry comprehensive general liability, “All Risk” property, business interruption, cybersecurity, directors and officers, rental loss coverage and umbrella liability coverage on all of our hotels and earthquake, wind, flood and hurricane coverage on hotels in areas where we believe such coverage is warranted, in each case with limits of liability that we deem adequate. Similarly, we are insured against the risk of direct physical damage in amounts we believe to be adequate to reimburse us, on a replacement basis, for costs incurred to repair or rebuild each hotel, including loss of rental income during the reconstruction period. We have selected policy specifications and insured limits which we believe to be appropriate given the relative risk of loss, the cost of the coverage and industry practice. We do not carry insurance for generally uninsured losses, including, but not limited to losses caused by riots, global pandemics war or acts of God as well as certain types coverages previously available under policies set forth above (for example, communicable disease, abuse & molestation coverages previously available under general liability policies). In the opinion of our management, our hotels are adequately insured.

Competition

The hotel industry is highly competitive and the hotels in which we invest are subject to competition from other hotels for guests. Competition is based on a number of factors, most notably convenience of location, availability of rooms, brand affiliation, price, range of services, guest amenities or accommodations offered and quality of customer service. Competition is often specific to the individual markets in which our properties are located and includes competition from existing and new hotels. Increased competition could have a material adverse effect on the occupancy rate, average daily room rate and rooms revenue per available room of our hotels or may require us to make capital improvements that we otherwise would not have to make, which may result in decreases in our profitability.

Our principal competitors include other hotel operating companies, ownership companies and national and international hotel brands. We face increased competition from providers of less expensive accommodations, such as select service hotels or independent owner-managed hotels, during periods of economic downturn when leisure and business travelers become more sensitive to room rates. We also experience competition from alternative types of accommodations such as home sharing companies.

We face competition for the acquisition of hotels from institutional pension funds, private equity funds, REITs, hotel companies and others who are engaged in the acquisition of hotels. Some of these competitors have substantially greater financial and operational resources and access to capital than we have and may have greater knowledge of the markets in which we seek to invest. This competition may reduce the number of suitable investment opportunities offered to us and decrease the attractiveness of the terms on which we may acquire our targeted hotel investments, including the cost thereof.

Employees

We have no employees. Our appointed officers are provided by Ashford LLC, a subsidiary of Ashford Inc. (collectively, our “advisor”). Advisory services which would otherwise be provided by employees are provided by subsidiaries of Ashford Inc. and by our appointed officers. Subsidiaries of Ashford Inc. have approximately 119 full-time employees who provide advisory services to us. These employees directly or indirectly perform various acquisition, development, asset management, capital markets, accounting, tax, risk management, legal, redevelopment, and corporate management functions pursuant to the terms of our advisory agreement.

Seasonality

Our properties’ operations historically have been seasonal as certain properties maintain higher occupancy rates during the summer months, while certain other properties maintain higher occupancy rates during the winter months. This seasonality pattern can cause fluctuations in our quarterly revenue. Quarterly revenue also may be adversely affected by renovations and repositionings, our managers’ effectiveness in generating business and by events beyond our control, such as the COVID-19 pandemic and government-issued travel restrictions in response, extreme weather conditions, natural disasters, terrorist attacks or alerts, civil unrest, government shutdowns, airline strikes or reduced airline capacity, economic factors and other considerations affecting travel. To the extent that cash flows from operations are insufficient during any quarter to enable us to make quarterly distributions to maintain our REIT status due to temporary or seasonal fluctuations in lease revenue, we expect

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to utilize cash on hand, cash generated through borrowings and issuances of common or preferred stock to fund required distributions. However, we cannot make any assurances that we will make distributions in the future.

Access to Reports and Other Information

We maintain a website at www.bhrreit.com. On our website, we make available free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with the Securities and Exchange Commission (“SEC”). All of our filed reports can also be obtained at the SEC’s website at www.sec.gov. In addition, our Code of Business Conduct and Ethics, Code of Ethics for the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, Corporate Governance Guidelines, and Board Committee Charters are also available free-of-charge on our website or can be made available in print upon request. A description of any substantive amendment or waiver of our Code of Business Conduct and Ethics or our Code of Ethics for the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer will be disclosed on our website under the Corporate Governance section. Any such description will be located on our website for a period of 12 months following the amendment or waiver. We also use our website to distribute company information, and such information may be deemed material. Accordingly, investors should monitor our website, in addition to our press releases, SEC filings and public conference calls and webcasts. The contents of our website are not, however, a part of this report.

Item 1A. Risk Factors

Summary Risk Factors

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. Moreover, many risk factors set forth below should be interpreted as heightened risks as a result of the impact of the COVID-19 pandemic. These risks are discussed more fully below and include, but are not limited to, risks related to:

•the impact of the ongoing COVID-19 pandemic, including the resurgence of cases relating to the spread of the Delta, Omicron or other potential variants, on our business, financial condition, liquidity and results of operations;

•adverse effects of the COVID-19 pandemic, including a significant reduction in business and personal travel and travel restrictions in regions where our hotels are located, and one or more possible recurrences of COVID-19 case surges causing a further reduction in business and personal travel and potential reinstatement of travel restrictions by state or local governments;

•our ability to raise sufficient capital and/or take other actions to improve our liquidity position or otherwise meet our liquidity requirements;

•actions by our lenders to accelerate loan balances and foreclose on the hotel properties that are security for our loans if we are unable to make debt service payments or satisfy our other obligations under the forbearance agreements;

•general volatility of the capital markets and the market price of our common and preferred stock;

•availability, terms and deployment of capital;

•unanticipated increases in financing and other costs, including a rise in interest rates;

•availability of qualified personnel to our advisor;

•actual and potential conflicts of interest with Ashford Trust, Ashford Inc. and its subsidiaries (including Ashford LLC, Remington Hotels and Premier) and our executive officers and our non-independent director;

•changes in personnel of Ashford LLC or the lack of availability of qualified personnel;

•changes in governmental regulations, accounting rules, tax rates and similar matters;

•legislative and regulatory changes, including changes to the Internal Revenue Code of 1986, as amended (the “Code”) and related rules, regulations and interpretations governing the taxation of REITs; and

•limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes.

Risks Related to Our Business and Properties

A financial crisis, economic slowdown, pandemic, or epidemic or other economically disruptive event may harm the operating performance of the hotel industry generally. If such events occur, we may be impacted by declines in occupancy, average daily room rates and/or other operating revenues.

The performance of the lodging industry has been closely linked with the performance of the general economy and, specifically, growth in the U.S. GDP. We invest in hotels that are classified as luxury. In an economic downturn, these types of hotels may be more susceptible to a decrease in revenue, as compared to hotels in other categories that have lower room rates. This characteristic may result from the fact that luxury hotels generally target business and high-end leisure travelers. In periods

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of economic difficulties or concerns with respect to communicable disease, business and leisure travelers may seek to reduce travel costs and/or health risks by limiting travel or seeking to reduce costs on their trips. Any economic recession will likely have an adverse effect on our business, operating results and prospects. Our business has been and will continue to be materially affected by the impact of the COVID-19 pandemic, see the risk factor “The outbreak of COVID-19 has and will continue to reduce our occupancy rates and RevPAR.”

We did not pay dividends on our common stock in fiscal years 2020 and 2021 and we may not pay dividends on our common stock or preferred stock in the future.

We did not pay dividends on our common stock in fiscal years 2020 and 2021. On January 10, 2022, our board of directors declared dividends on our preferred stock for the first quarter of 2022 in the amount that such holders of our preferred stock are entitled to receive. On March 4, 2022, our board of directors declared a quarterly cash dividend of $0.01 per diluted share for the Company’s common stock for the first quarter of 2022. Additionally, in March 2022, the board of directors approved an update to our previously announced dividend policy for 2022 to revise our then-expectation to pay a quarterly dividend of $0.01 per share of common stock during 2022. The approval of our dividend policy does not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof and the board of directors may decide not to pay any dividends on our common stock and/or preferred stock. We may not pay dividends on our common stock or preferred stock in the future, particularly in light of the downturn in our business occasioned by the COVID-19 pandemic and the demands of our property-level lenders. If we fail to pay dividends on our common stock or preferred stock, the market price of our common stock or preferred stock will likely be adversely affected.

We are required to make minimum base advisory fee payments to our advisor, Ashford Inc., under our advisory agreement, which must be paid even if our total market capitalization and performance decline. Similarly, we are required to make minimum base hotel management fee payments under our hotel management agreements with Remington Hotels, a subsidiary of Ashford Inc., which must be paid even if revenues at our hotels decline significantly.

Pursuant to the advisory agreement between us and our advisor, we must pay our advisor on a monthly basis a base advisory fee (based on our total market capitalization), subject to a minimum base advisory fee. The minimum base advisory fee is equal to the greater of: (i) 90% of the base fee paid for the same month in the prior fiscal year; and (ii) 1/12th of the “G&A Ratio” for the most recently completed fiscal quarter multiplied by our total market capitalization on the last balance sheet date included in the most recent quarterly report on Form 10-Q or annual report on Form 10-K that we file with the SEC. Thus, even if our total market capitalization and performance decline, including as a result of the impact of COVID-19, we will still be required to make monthly payments to our advisor equal to the minimum base management fee, which could adversely impact our liquidity and financial condition.

Similarly, pursuant to our hotel management agreement with Remington Hotels, a subsidiary of Ashford Inc., we pay Remington Hotels monthly base hotel management fees on a per hotel basis equal to the greater of approximately $15,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues. As a result, even if revenues at our hotels decline significantly, we will still be required to make minimum monthly payments to Remington Hotels equal to approximately $15,000 per hotel (increased annually based on consumer price index adjustments), which could adversely impact our liquidity and financial condition.

Our business is significantly influenced by the economies and other conditions in the specific markets in which we operate, particularly in the metropolitan areas where we have high concentrations of hotels.

Our hotels are located in the Washington, D.C., San Francisco, San Diego, Sarasota, Seattle, Philadelphia, Chicago, Key West, Vail/Beaver Creek, Lake Tahoe, Los Angeles and St. Thomas metropolitan areas. As a result, we are particularly susceptible to adverse market conditions in these areas and any additional areas in which we may acquire assets in the future, including industry downturns, relocation of businesses and any oversupply of hotel rooms or a reduction in lodging demand. Adverse economic developments in the markets in which we have a concentration of hotels, or in any of the other markets in which we operate, or any increase in hotel supply or decrease in lodging demand resulting from the local, regional or national business climate, could adversely affect our business, operating results and prospects.

Our investments are concentrated in the hotel industry, and our business would be adversely affected by an economic downturn in that sector.

Our investments are concentrated in the hotel industry. This concentration may expose us to the risk of economic downturns in the hotel real estate sector, including as a result of COVID-19, to a greater extent than if our properties were more diversified across other sectors of the real estate industry.

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We face risks related to changes in the global economic and political environment, including capital and credit markets.

Our business may be harmed by global economic conditions, which recently have been volatile. Political crises in individual countries or regions, including sovereign risk related to a deterioration in the creditworthiness of or a default by local governments, has contributed to this volatility. If the global economy experiences continued volatility or significant disruptions, such disruptions or volatility could hurt the U.S. economy and our business. More specifically, in addition to experiencing reduced demand for business and leisure travel because of a slow-down in the general economy, we could be harmed by disruptions resulting from tighter credit markets or by illiquidity resulting from an inability to access credit markets to obtain cash to support operations or make distributions to our stockholders as a result of global or international developments.

We invest in the luxury segments of the lodging market, which are highly competitive and generally subject to greater volatility than most other market segments and could negatively affect our profitability.

The luxury segments of the hotel business are highly competitive. Our hotel properties compete on the basis of location, room rates, quality, amenities, service levels, reputation and reservations systems, among many factors. There are many competitors in the luxury segments, and many of these competitors may have substantially greater marketing and financial resources than we have. This competition could reduce occupancy levels and rooms revenue at our hotels. Over-building in the lodging industry may increase the number of rooms available and may decrease occupancy and room rates. In addition, in periods of weak demand, as may occur during a general economic recession, our profitability may be negatively affected by the relatively high fixed costs of operating luxury hotels. If our hotels cannot compete effectively for guests, they will earn less revenue, which would result in lower cash available for us to meet debt service obligations, operating expenses, and make requisite distributions to stockholders.

Because we depend upon Ashford LLC and its affiliates to conduct our operations, any adverse changes in the financial condition of Ashford LLC or its affiliates or our relationship with them could hinder our operating performance.

We depend on Ashford LLC to manage our assets and operations. Any adverse changes in the financial condition of Ashford LLC, or its affiliates or our relationship with Ashford LLC could hinder its ability to manage us successfully.

We depend on Ashford LLC’s key personnel with long-standing business relationships. The loss of Ashford LLC’s key personnel could threaten our ability to operate our business successfully.

Our future success depends, to a significant extent, upon the continued services of Ashford LLC’s management team. In particular, the hotel industry experience of Messrs. Monty J. Bennett, Richard J. Stockton, Alex Rose, Deric S. Eubanks, Jeremy Welter, Mark L. Nunneley, and J. Robison Hays III, and the extent and nature of the relationships they have developed with hotel franchisors, operators, and owners and hotel lending and other financial institutions are critically important to the success of our business. The loss of services of one or more members of Ashford LLC’s management team could harm our business and our prospects.

The aggregate amount of fees and expense reimbursements paid to our advisor will exceed the average of internalized expenses of our industry peers (as provided in our advisory agreement), as a percentage of total market capitalization. As a part of these fees, we must pay a minimum advisory fee to our advisor regardless of our performance.

Pursuant to the advisory agreement between us and our advisor, we must pay our advisor a monthly base management fee (subject to a minimum fee described below) in an amount equal to 1/12th of the sum of (i) 0.70% of the total market capitalization of our company for the prior month, and (ii) the Net Asset Fee Adjustment (as defined in our advisory agreement), an annual incentive fee that will be based on our achievement of certain minimum performance thresholds and certain expense reimbursements. The monthly minimum base management fee will be equal to the greater of (i) 90% of the base fee paid for the same month in the prior year; and (ii) 1/12th of the “G&A Ratio” for the most recently completed fiscal quarter multiplied by the Total Market Capitalization (as defined in our advisory agreement) on the last balance sheet date included in the most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed by the Company with the SEC. The “G&A Ratio” will be calculated as the simple average of the ratios of total general and administrative expenses paid, less any non-cash expenses but including any dead-deal costs, in the applicable quarter by each member of a select peer group, divided by the total market capitalization of such peer group member (as provided in our advisory agreement). Since the base management fee is subject to this minimum amount and because a portion of such fees are contingent on our performance, the fees we pay to our advisor may fluctuate over time. However, regardless of our advisor’s performance, the total amount of fees and reimbursements paid to our advisor as a percentage of market capitalization will never be less than the average of internalized expenses of our industry peers (as provided in our advisory agreement), and there may be times when the total amount of fees and incentives paid to our advisor greatly exceeds the average of internalized expenses of our industry peers.

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Our advisor’s entitlement to non-performance-based compensation, including the minimum base management fee, might reduce its incentive to devote its time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio. Further, our incentive fee structure may induce our advisor to encourage us to acquire certain assets, including speculative or high risk assets, or to acquire assets with increased leverage, which could increase the risk to our portfolio. For additional information, see the risk factor “We are required to make minimum base advisory fee payments to our advisor, Ashford Inc., under our advisory agreement, which must be paid even if our total market capitalization and performance decline. Similarly, we are required to make minimum base hotel management fee payments under our hotel management agreements with Remington Hotels, a subsidiary of Ashford Inc., which must be paid even if revenues at our hotels decline significantly.”

Our business strategy depends on acquiring additional hotel properties on attractive terms and the failure to do so or to otherwise manage our planned growth successfully may adversely affect our business and operating results.

We intend to acquire additional hotel properties in the future. We face significant competition for attractive investment opportunities from other well-capitalized investors, some of which have greater financial resources and greater access to debt and equity capital than we have. This competition increases as investments in real estate become increasingly attractive relative to other forms of investment. This competition could limit the number of suitable investment opportunities offered to us. It may also increase the bargaining power of property owners seeking to sell to us, making it more difficult for us to acquire new properties on attractive terms or on the terms contemplated in our business plan. As a result of such competition, we may be unable to acquire hotel properties that we deem attractive at prices that we consider appropriate or on terms that are satisfactory to us. If we do identify an appropriate acquisition candidate, we may not be able to successfully negotiate the terms of the acquisition. In addition, we expect to finance future acquisitions through a combination of the use of retained cash flows, property-level debt, and offerings of equity and debt securities, which may result in additional leverage or dilution to our stockholders. Any delay or failure on our part to identify, negotiate, finance on favorable terms, consummate and integrate such acquisitions could materially impede our growth.

In addition, we expect to compete to sell hotel properties. Availability of capital, the number of hotel properties available for sale and market conditions, all affect prices. We may not be able to sell hotel assets at our targeted price.

There is no guarantee that Ashford Trust will sell us any of the properties that are subject to the right of first offer agreement.

We may not be able to acquire any of the properties that are subject to the right of first offer agreement, either because Ashford Trust does not elect to sell such properties or we are not in a position to acquire the properties when Ashford Trust elects to sell. Further, if we materially change our investment guidelines without the express consent of Ashford LLC, no hotels acquired by Ashford Trust after the date of such change will be subject to the right of first offer.

We may be unable to successfully integrate and operate acquired properties, which may have a material adverse effect on our business and operating results.

Even if we are able to make acquisitions on favorable terms, we may not be able to successfully integrate and operate them. We may be required to invest significant capital and resources after an acquisition to maintain or grow the properties that we acquire. In addition, we may need to adapt our management, administrative, accounting, and operational systems, or hire and retain sufficient operational staff, to integrate and manage successfully any future acquisitions of additional assets. These and other integration efforts may disrupt our operations, divert Ashford LLC’s attention away from day-to-day operations and cause us to incur unanticipated costs. The difficulties of integration may be increased by the necessity of coordinating operations in geographically dispersed locations. Our failure to integrate successfully any acquisitions into our portfolio could have a material adverse effect on our business and operating results. Further, acquired properties may have liabilities or adverse operating issues that we fail to discover through due diligence prior to the acquisition. The failure to discover such issues prior to such acquisition could have a material adverse effect on our business and results of operations.

Because our board of directors and Ashford LLC have broad discretion to make future investments, we may make investments that result in returns that are substantially below expectations or in net operating losses. In addition, our investment policies may be revised from time to time at the discretion of our board of directors, without a vote of our stockholders. Such discretion could result in investments with yield returns inconsistent with stockholders’ expectations.

Our joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on a co-venturer’s financial condition and disputes between us and our co-venturers.

We own interests in two hotels through a joint venture and we do not have sole decision-making authority regarding these two properties. In addition, we may continue to co-invest with third parties through partnerships, joint ventures or other entities,

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acquiring controlling or noncontrolling interests in, or sharing responsibility for, managing the affairs of a property, partnership, joint venture or other entity. We may not be in a position to exercise sole decision-making authority regarding any future properties that we may hold in a partnership or joint venture. Investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt, suffer a deterioration in their financial condition or fail to fund their share of required capital contributions. Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, budgets, or financing, because neither we nor the partner or co-venturer have full control over the partnership or joint venture. Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business. Consequently, actions by, or disputes with, partners or co-venturers might result in subjecting properties owned by the partnership or joint venture to additional risk. In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers.

Hotel franchise or management agreement requirements or the loss of such an agreement could adversely affect us.

We must comply with operating standards, terms, and conditions imposed by the franchisors or managers of the hotel brands under which our hotels operate. Franchisors periodically inspect their licensed hotels to confirm adherence to their operating standards. The failure of a hotel to maintain these standards could result in the loss or cancellation of a franchise license or other authority pursuant to which our hotels are branded and operated. With respect to operational standards, we rely on our hotel managers to conform to such standards. Franchisors or managers may also require us to make certain capital improvements to maintain the hotel in accordance with system standards, the cost of which can be substantial. A franchisor or manager could condition the continuation of branding and operational support based on the completion of capital improvements that Ashford LLC or our board of directors determines is not economically feasible in light of general economic conditions, the operating results or prospects of the affected hotel or other circumstances. In that event, Ashford LLC or our board of directors may elect to allow the franchise or management agreement to lapse or be terminated, which could result in a termination charge as well as a change in branding or operation of the hotel as an independent hotel. In addition, when the term of such agreement expires there is no obligation to issue a new franchise.

The loss of a franchise or management agreement could have a material adverse effect on the operations and/or the underlying value of the affected hotel because of the loss of associated name recognition, marketing support and centralized reservation systems provided by the franchisor or manager. Any such material adverse effect on one or more of our hotels may, in turn, have a material adverse effect on our business and operating results.

We do not have any employees, and rely on our hotel managers to employ the personnel required to operate the hotels we own. As a result, we have less ability in the COVID-19 environment to reduce staffing at our hotels than we would if we employed such personnel directly. Additionally, our reliance on third-party hotel managers to operate our hotels and for a substantial majority of our cash flow may adversely affect us.

We do not have any employees. We contractually engage hotel managers, such as Marriott (or its affiliates), Hilton (or its affiliates), Hyatt, Accor and our affiliate, Remington Hotels, which is owned by Ashford Inc., to operate, and to employ the personnel required to operate, our hotels. Each hotel manager is required under the applicable hotel management agreement to determine appropriate staffing levels; and we are required to reimburse the applicable hotel manager for the cost of these employees. As a result, we are dependent on our hotel managers to make appropriate staffing decisions and to appropriately reduce staffing when market conditions are poor, and have less ability in the COVID-19 environment to reduce staffing at our hotels than we would if we employed such personnel directly. As a result, our hotels may be staffed at a level higher than we would choose if we employed the personnel required to operate the hotels. In addition, we may be less likely to take aggressive actions (such as delaying payments owed to our hotel managers) in order to influence the staffing decisions made by Remington Hotels, which is our affiliate.

Additionally, because U.S. federal income tax laws restrict REITs and their subsidiaries from operating or managing hotels, third parties must operate our hotels. A REIT may lease its hotels to TRSs in which the REIT can own up to a 100% interest. A TRS pays corporate-level income tax and may retain any after-tax income. A REIT must satisfy certain conditions to use the TRS structure. One of those conditions is that the TRS must hire, to manage the hotels, an “eligible independent contractor” (“EIC”) that is actively engaged in the trade or business of managing hotels for parties other than the REIT. An EIC cannot (i) own more than 35% of the REIT, (ii) be owned more than 35% by persons owning more than 35% of the REIT, or (iii) provide any income to the REIT (i.e., the EIC cannot pay fees to the REIT, and the REIT cannot own any debt or equity securities of the EIC). Accordingly, while we may lease hotels to a TRS that we own, the TRS must engage a third-party operator to manage the hotels. Thus, our ability to direct and control how our hotels are operated is less than if we were able to manage our hotels directly.

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We are parties to hotel management agreements under which unaffiliated third-party hotel managers manage our hotels. We have also entered into a master hotel management agreement with Remington Hotels, a subsidiary of Ashford Inc., pursuant to which Remington Hotels currently manages the Pier House Resort & Spa, the Bardessono Hotel and Spa, Hotel Yountville and Mr. C Beverly Hills Hotel. We do not supervise any of the hotel managers or their respective personnel on a day-to-day basis. Without such supervision, our hotel managers may not manage our properties in a manner that is consistent with their respective obligations under the applicable management agreement or our obligations under our hotel management agreements, which are similar to franchise agreements, be negligent in their performance, engage in criminal or fraudulent activity, or otherwise default on their respective management obligations to us. If any of these events occur, our relationships with any managers may be damaged, we may be in breach of our management agreement, and we could incur liabilities resulting from loss or injury to our property or to persons at our properties. In addition, from time to time, disputes may arise between us and our third-party managers regarding their performance or compliance with the terms of the hotel management agreements, which in turn could adversely affect us. If we are unable to resolve such disputes through discussions and negotiations, we may choose to terminate our management agreement, litigate the dispute or submit the matter to third-party dispute resolution, the expense of which may be material and the outcome of which may harm our business, operating results or prospects.

On October 24, 2019, the Company provided notice to Accor of the material breach of its responsibilities under the Accor management agreement for the Sofitel Chicago Magnificent Mile at 20 East Chestnut Street in Chicago, Illinois. On November 7, 2019, Accor filed a complaint against Ashford TRS Chicago II in the Supreme Court of the State of New York, New York County, seeking a declaratory judgment that no breach had occurred. Accor’s complaint was dismissed on or about February 27, 2020. On January 6, 2020, Ashford TRS Chicago II filed a complaint against Accor in the Supreme Court of the State of New York, New York County, alleging breach of the Accor management agreement and seeking declaration of its right to terminate the Accor management agreement. On July 20, 2020, Accor filed an Amended Answer and Counterclaims against Ashford TRS Chicago II. On February 23, 2022, Ashford TRS Chicago II and Accor filed a stipulation of discontinuance dismissing all claims, counterclaims, and cross-claims in the January 6, 2020 action with prejudice.

Our management agreements could adversely affect our ability to sell or finance our hotel properties.

Our management agreements do not allow us to replace hotel managers on relatively short notice or with limited cost and also contain other restrictive covenants. We may enter into additional such agreements or acquire properties subject to such agreements in the future. For example, the terms of a management agreement may restrict our ability to sell a property unless the purchaser is not a competitor of the manager, assumes the management agreement and meets other conditions. Also, the terms of a long-term management agreement encumbering our property may reduce the value of the property. When we enter into or acquire properties subject to any such management agreements, we may be precluded from taking actions that we believe to be in our best interest and could incur substantial expense as a result.

Eight of our hotels currently operate under Marriott or Hilton brands; therefore, we are subject to risks associated with concentrating our portfolio in just two brand families.

Eight of our 14 hotels utilize brands owned by Marriott (or its affiliates) or Hilton (or its affiliates). As a result, our success is dependent in part on the continued success of Marriott and Hilton and their respective brands (or the brands of their affiliates). We believe that building brand value is critical to increase demand and build customer loyalty. Consequently, if market recognition or the positive perception of Marriott and/or Hilton is reduced or compromised, the goodwill associated with the Marriott- and Hilton-branded hotels in our portfolio may be adversely affected. Furthermore, if our relationship with Marriott or Hilton were to deteriorate as a result of disputes regarding the management of our hotels or for other reasons, Marriott and/or Hilton might terminate its current management agreements or franchise licenses with us or decline to manage or provide franchise licenses for hotels we may acquire in the future.

If we cannot obtain additional capital, our growth will be limited.

We are required to distribute to our stockholders at least 90% of our REIT taxable income, excluding net capital gains, each year to qualify and maintain our qualification as a REIT. As a result, our retained earnings, if any, available to fund acquisitions, development, or other capital expenditures are nominal. As such, we rely upon the availability of additional debt or equity capital to fund these activities. Our long-term ability to grow through acquisitions or development, which is an important strategy for us, will be limited if we cannot obtain additional financing or equity capital. Market conditions may make it difficult to obtain financing or equity capital, and we may not be able to obtain additional debt or equity financing or obtain it on favorable terms. Also, see the risk factor, “As a result of the impact of the COVID-19 pandemic, our ability to continue to have the liquidity necessary to service our debt, meet contractual payment obligations under our loan and forbearance agreements and fund our operations depends on many factors and we are unable to estimate future financial performance with certainty.”

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Some of our hotels are subject to ground leases; if we are found to be in breach of a ground lease or are unable to renew a ground lease, our business could be materially and adversely affected.

Some of our hotels are on land subject to ground leases, two of which cover the entire property. Accordingly, we only own a long-term leasehold or similar interest, rather than a fee interest, in those two hotels. We may not continue to make payments due on our ground leases, particularly in light of the downturn in our business occasioned by COVID-19. If we fail to make a payment on a ground lease or are otherwise found to be in breach of a ground lease, we could lose the right to use the hotel or the portion of the hotel property that is subject to the ground lease. In addition, unless we can purchase the fee simple interest in the underlying land and improvements, or extend the terms of these ground leases before their expiration, we will lose our right to operate these properties and our interest in the improvements upon expiration of the ground leases. We may not be able to renew any ground lease upon its expiration, of if renewed, the terms may not be favorable. Our ability to exercise any extension options relating to our ground leases is subject to the condition that we are not in default under the terms of the ground lease at the time we exercise such options. If we lose the right to use a hotel due to a breach or non-renewal of the ground lease, we would be unable to derive income from such hotel and would need to purchase an interest in another hotel to attempt to replace that income, which could materially and adversely affect our business, operating results and prospects. Our ability to refinance a hotel property subject to a ground lease may be negatively impacted as the ground lease expiration date approaches.

In any eminent domain proceeding with respect to a hotel, we will not recognize any increase in the value of the land or improvements subject to our ground leases or at expiration and may only receive a portion of compensation paid.

Unless we purchase a fee interest in the land and improvements subject to our ground leases, we will not have any economic interest in the land or improvements at the expiration of our ground leases. As a result, we will not share in any increase in value of the land or improvements beyond the term of a ground lease, notwithstanding our capital outlay to purchase our interest in the hotel or fund improvements thereon, and will lose our right to use the hotel. Furthermore, if the state or federal government seizes a hotel subject to a ground lease under its eminent domain power, we may only be entitled to a portion of any compensation awarded for the seizure.

The expansion of our business into new markets outside of the United States will expose us to risks relating to owning hotels in those international markets.

As part of our business strategy, we may acquire hotels that meet our investment criteria and are located in international markets. We may have difficulty managing our expansion into new geographic markets where we have limited knowledge and understanding of the local economy, an absence of business relationships in the area, or unfamiliarity with local governmental and permitting procedures and regulations. There are risks inherent in conducting business outside of the United States, which include risks related to:

•foreign employment laws and practices, which may increase the reimbursable costs incurred under our advisory agreement associated with international employees;

•foreign tax laws, which may provide for income or other taxes or tax rates that exceed those of the U.S. and which may provide that foreign earnings that are repatriated, directly or indirectly, are subject to dividend withholding tax requirements or other restrictions;

•compliance with and unexpected changes in regulatory requirements or monetary policy;

•the willingness of domestic or international lenders to provide financing and changes in the availability, cost and terms of such financing;

•adverse changes in local, political, economic and market conditions;

•increased costs of insurance coverage related to terrorist events;

•changes in interest rates and/or currency exchange rates;

•regulations regarding the incurrence of debt; and

•difficulties in complying with U.S. rules governing REITs while operating outside of the United States.

Any of these factors could affect adversely our ability to obtain all of the intended benefits of expanding internationally. If we do not effectively manage this expansion and successfully integrate the international hotels into our organization, our operating results and financial condition may be adversely affected.

Compliance with international laws and regulations may require us to incur substantial costs.

The operations of our international properties, if any, will be subject to a variety of U.S. and international laws and regulations, including the United States Foreign Corrupt Practices Act (“FCPA”). Before we invest in international markets, we will adopt policies and procedures designed to promote compliance with the FCPA and other anti-corruption laws, but we may

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not continue to be found to be operating in compliance with, or be able to detect violations of, any such laws or regulations. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international properties might be subject and the manner in which existing laws might be administered or interpreted.

Exchange rate fluctuations could adversely affect our financial results.

If we acquire hotels or conduct operations in an international jurisdiction, currency exchange rate fluctuations could adversely affect our results of operations and financial position. If we have international operations, a portion of our revenue and expenses could be generated in foreign currencies such as the Euro, the Canadian dollar and the British pound sterling. Any steps we take to reduce our exposure to fluctuations in the value of foreign currencies, such as entering into foreign exchange agreements or currency exchange hedging arrangements will not eliminate such risk entirely. To the extent that we are unable to match revenue received in foreign currencies with expenses paid in the same currency, exchange rate fluctuations could have a negative impact on our results of operations and financial condition. Additionally, because our consolidated financial results are reported in U.S. dollars, if we generate revenues or earnings in other currencies, the conversion of such amounts into U.S. dollars can result in an increase or decrease in the amount of our revenues or earnings.

We are increasingly dependent on information technology, and potential cyber-attacks, security problems or other disruption and expanding social media vehicles present new risks.

Ashford LLC and our hotel managers rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, personal identifying information, reservations, billing and operating data. The collection and use of personally identifiable information is governed by federal and state laws and regulations. Privacy and information security laws continue to evolve and may be inconsistent from one jurisdiction to another. Compliance with all such laws and regulations may increase the Company’s operating costs and adversely impact the Company’s ability to market the Company’s properties and services.

Ashford LLC and our hotel managers may purchase some of our information technology from vendors, on whom our systems will depend, and Ashford LLC relies on commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential operator and other customer information. We depend upon the secure transmission of this information over public networks. Ashford LLC’s and hotel managers’ networks and storage applications could be subject to unauthorized access by hackers or others through cyber-attacks, which are rapidly evolving and becoming increasingly sophisticated, or by other means, or may be breached due to operator error, malfeasance or other system disruptions. Privacy and information security risks have generally increased in recent years because of the proliferation of new technologies, such as ransomware, and the increased sophistication and activities of perpetrators of cyber-attacks. In light of the increased risks, including due to the increased remote access associated with work-from-home arrangements as a result of the COVID-19 pandemic. Ashford LLC has dedicated additional resources on our behalf to strengthen the security of our computer systems. In the future, Ashford LLC may expend additional resources on our behalf to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities. Despite these steps, there can be no assurance that we will not suffer a significant data security incident in the future, that unauthorized parties will not gain access to sensitive data stored on our systems or that any such incident will be discovered in a timely manner.

In addition, the use of social media could cause us to suffer brand damage or information leakage. Negative posts or comments about us, our hotel managers or our hotels on any social networking website could damage our or our hotels’ reputations. In addition, employees or others might disclose non-public sensitive information relating to our business through external media channels. The continuing evolution of social media will present us with new challenges and risks.

We may experience losses caused by severe weather conditions or natural disasters.

Our properties are susceptible to extreme weather conditions, which may cause property damage or interrupt business, which could harm our business and results of operations. Certain of our hotels are located in areas that may be subject to extreme weather conditions, including, but not limited to, hurricanes, floods, tornados and winter storms in the United States and the Caribbean. Such extreme weather conditions may interrupt our operations, damage our hotels, and reduce the number of guests who visit our hotels in such areas. In addition, our operations could be adversely impacted by a drought or other cause of water shortage. A severe drought of extensive duration experienced in California or in the other regions in which we operate or source critical supplies could adversely affect our business. Over time, these conditions could result in declining hotel demand, significant damage to our properties or our inability to operate the affected hotels at all.

We believe that our properties are adequately insured, consistent with industry standards, to cover reasonably anticipated losses that may be caused by hurricanes, earthquakes, tornados, floods and other severe weather conditions and natural

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disasters. Nevertheless, we are subject to the risk that such insurance will not fully cover all losses and, depending on the severity of the event and the impact on our properties, such insurance may not cover a significant portion of the losses including but not limited to the costs associated with evacuation. These losses may lead to an increase in our cost of insurance, a decrease in our anticipated revenues from an affected property or a loss of all or a portion of the capital we have invested in an affected property. In addition, we may not purchase insurance under certain circumstances if the cost of insurance exceeds, in our judgment, the value of the coverage relative to the risk of loss.

Changes in laws, regulations or policies may adversely affect our business.

The laws and regulations governing our business or the regulatory or enforcement environment at the federal level or in any of the states in which we operate may change at any time and may have an adverse effect on our business. We are unable to predict how this or any other future legislative or regulatory proposals or programs will be administered or implemented or in what form, or whether any additional or similar changes to statutes or regulations, including the interpretation or implementation thereof, will occur in the future. Any such action could affect us in substantial and unpredictable ways and could have an adverse effect on our results of operations and financial condition. Our inability to remain in compliance with regulatory requirements in a particular jurisdiction could have a material adverse effect on our operations in that market and on our reputation generally. Applicable laws or regulations may be amended or construed differently and new laws and regulations may be adopted, either of which could materially adversely affect our business, financial condition, or results of operations.

We may from time to time be subject to litigation, which could have a material adverse effect on our financial condition, results of operations, cash flow and trading price of our common stock.

We may from time to time be subject to litigation. Some of these claims may result in defense costs, settlements, fines or judgments against us, some of which may not be covered by insurance. Payment of any such costs, settlements, fines or judgments that are not insured could have a material adverse impact on our financial position and results of operations. Negative publicity regarding claims or judgments made against us or involving our hotels may damage our, or our hotels’, reputations. In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flows, expose us to increased risks that would be uninsured, and/or adversely impact our ability to attract officers and directors.

A class action lawsuit has been filed against one of the Company’s hotel management companies alleging violations of certain California employment laws, which class action affects two hotels owned by subsidiaries of the Company. For more information, see “Item 3. Legal Proceedings.”

Risks Related to our Debt Financing

We have a significant amount of debt, and our organizational documents have no limitation on the amount of additional indebtedness that we may incur in the future.

As of December 31, 2021, we had approximately $1.2 billion of outstanding indebtedness, including approximately $1.1 billion of variable interest rate debt, and we expect to incur additional indebtedness, including additional variable-rate debt. In the future, we may incur additional indebtedness to finance future hotel acquisitions, capital improvements and development activities and other corporate purposes.

A substantial level of indebtedness could have adverse consequences for our business, results of operations and financial position because it could, among other things:

•require us to dedicate a substantial portion of our cash flow from operations to make principal and interest payments on our indebtedness, thereby reducing our cash flow available to fund working capital, capital expenditures and other general corporate purposes, including to pay dividends on our common stock and our preferred stock as currently contemplated or necessary to satisfy the requirements for qualification as a REIT;

•increase our vulnerability to general adverse economic and industry conditions and limit our flexibility in planning for, or reacting to, changes in our business and our industry;

•limit our ability to borrow additional funds or refinance indebtedness on favorable terms or at all to expand our business or ease liquidity constraints; and

•place us at a competitive disadvantage relative to competitors that have less indebtedness.

Our charter and bylaws do not limit the amount or percentage of indebtedness that we may incur, and we are subject to risks normally associated with debt financing. Generally, our mortgage debt carries maturity dates or call dates such that the loans become due prior to their full amortization. It may be difficult to refinance or extend the maturity of such loans on terms acceptable to us, or at all. These conditions could adversely affect our financial position, results of operations, and cash flows or the market price of our stock.

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Under our advisory agreement, Ashford LLC is entitled to receive a monthly base fee in an amount equal to 1/12th of the sum of (i) 0.70% of the total market capitalization of our company for the prior month, and (ii) the Net Asset Fee Adjustment, which is defined in the advisory agreement to include our indebtedness and other factors. This fee increases as the aggregate principal amount of our consolidated indebtedness (including our proportionate share of debt of any entity that is not consolidated but excluding our joint venture partners’ proportionate share of consolidated debt) increases. As a result, any increase in our consolidated indebtedness will also increase the fees we pay to Ashford LLC. The structure of this fee may incentivize Ashford LLC to recommend we increase our indebtedness, thereby increasing the fee, when it may not be in the best interest of our stockholders to do so.

In addition, changes in economic conditions, our financial condition or operating results or prospects could:

•result in higher interest rates on our variable-rate debt,

•reduce the availability of debt financing generally or debt financing at favorable rates,

•reduce cash available for distribution to stockholders, or

•increase the risk that we could be forced to liquidate assets to repay debt.

Increases in interest rates could increase our debt payments.

As of December 31, 2021, we had approximately $1.2 billion of outstanding indebtedness, including approximately $1.1 billion of variable interest rate debt, and we expect to incur additional indebtedness, including additional variable-rate debt. Increases in interest rates increase our interest costs on our variable-rate debt and could increase interest expense on any future fixed rate debt we may incur, and interest we pay reduces our cash available for distributions, expansion, working capital and other uses. Moreover, periods of rising interest rates heighten the risks described immediately above under “We have a significant amount of debt, and our organizational documents have no limitation on the amount of additional indebtedness that we may incur in the future.”

We may enter into other transactions that could further exacerbate the risks to our financial condition. The use of debt to finance future acquisitions could restrict operations, inhibit our ability to grow our business and revenues, and negatively affect our business and financial results.

We intend to incur additional debt in connection with future hotel acquisitions. We may borrow new funds to acquire hotels. In addition, we may incur mortgage debt by obtaining loans secured by a portfolio of some or all of the hotels that we own or acquire. If necessary or advisable, we also may borrow funds to make distributions to our stockholders to maintain our qualification as a REIT for U.S. federal income tax purposes. To the extent that we incur debt in the future and do not have sufficient funds to repay such debt at maturity, it may be necessary to refinance the debt through debt or equity financings, which may not be available on acceptable terms or at all and which could be dilutive to our stockholders. If we are unable to refinance our debt on acceptable terms or at all, we may be forced to dispose of hotels at inopportune times or on disadvantageous terms, which could result in losses. To the extent we cannot meet our future debt service obligations, we will risk losing to foreclosure some or all of our hotels that may be pledged to secure our obligation.

Covenants, “cash trap” provisions or other terms in our mortgage loans and our senior convertible notes, as well as any future credit facility, could limit our flexibility and adversely affect our financial condition or our qualification as a REIT.

Some of our loan agreements contain financial and other covenants. If we violate covenants in any debt agreements, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. Violations of certain debt covenants may also prohibit us from borrowing unused amounts under our lines of credit, even if repayment of some or all the borrowings is not required. In addition, financial covenants under our current or future debt obligations could impair our planned business strategies by limiting our ability to borrow beyond certain amounts or for certain purposes.

Some of our loan agreements also contain cash trap provisions that are triggered if the performance of our hotels decline. When these provisions are triggered, substantially all of the profit generated by our hotels is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. Cash is not distributed to us at any time after the cash trap provisions have been triggered until we have cured performance issues. This could affect our liquidity and our ability to make distributions to our stockholders. If we are not able to make distributions to our stockholders, we may not qualify as a REIT.

There is refinancing risk associated with our debt.

We finance our long-term growth and liquidity needs with, among other things, secured and unsecured debt financings having staggered maturities, and use variable-rate debt or a mix of fixed and variable-rate debt as appropriate based on favorable interest rates, principal amortization and other terms. In the event that we do not have sufficient funds to repay the

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debt at the maturity of these loans, we will need to refinance this debt. If the credit environment is constrained at the time of our debt maturities, we would have a very difficult time refinancing debt. When we refinance our debt, prevailing interest rates and other factors may result in paying a greater amount of debt service, which will adversely affect our cash flow, and, consequently, our cash available for distribution to our stockholders. If we are unable to refinance our debt on acceptable terms, we may be forced to choose from a number of unfavorable options. These options include agreeing to otherwise unfavorable financing terms on one or more of our unencumbered assets, selling one or more hotels on disadvantageous terms, including unattractive prices or defaulting on the mortgage and permitting the lender to foreclose. Any one of these options could have a material adverse effect on our business, financial condition, results of operations and our ability to make distributions to our stockholders.

Our hedging strategies may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on an investment in our Company.

We may use various financial instruments, including derivatives, to provide a level of protection against interest rate increases and other risks, but no hedging strategy can protect us completely. These instruments, such as the risk that the counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes or other risks and that a court could rule that such agreements are not legally enforceable. These instruments may also generate income that may not be treated as qualifying REIT income. In addition, the nature and timing of hedging transactions may influence the effectiveness of our hedging strategies. Poorly designed strategies or improperly executed transactions could actually increase our risk and losses. Moreover, hedging strategies involve transaction and other costs. We cannot assure you that our hedging strategy and the instruments that we use will not adequately offset the risk of interest rate volatility or other risks or that our hedging transactions will not result in losses that may reduce the overall return on your investment.

We may be adversely affected by changes in LIBOR reporting practices, the method in which LIBOR is determined or the transition away from LIBOR to use of alternative reference rates.

In July 2017, the United Kingdom regulator that regulates London Interbank Offered Rate (“LIBOR”) announced its intention to phase out LIBOR rates by the end of 2021. On March 5, 2021, the ICE Benchmark Administration Limited, the administrator of LIBOR, and the Financial Conduct Authority announced that all LIBOR rates will either cease to be published by any benchmark administrator, or no longer be representative immediately after December 31, 2021 for all GBP, EUR, CHF and JPY LIBOR rates and one-week and two-month U.S. dollar LIBOR rates, and immediately after June 30, 2023 for the remaining U.S. dollar LIBOR rates. As of January 1, 2022, publication of one-week and two-month U.S. dollar LIBOR has ceased, and regulated U.S. financial institutions are no longer permitted to enter into new contracts referencing any LIBOR rates. The Alternative Reference Rates Committee (“ARRC”), a committee convened by the Federal Reserve Board and the New York Federal Reserve Bank, has proposed replacing U.S. dollar LIBOR with a new index based on trading in overnight repurchase agreements, the Secured Overnight Financing Rate (“SOFR”). The ARRC has formally announced and recommended SOFR as an alternative reference rate to LIBOR. As of December 31, 2021, we had approximately $1.1 billion of variable interest rate debt as well as interest rate derivatives including caps on the majority of our variable rate debt that are indexed to LIBOR.

At this time we are not able to accurately predict when SOFR will become the most prevalent alternative reference rate in the market, or what impact the transition from LIBOR to alternative reference rates may have on our business, results of operations and financial condition. Additionally, it is difficult to predict whether and to what extent banks will continue to provide submissions to the administrator of rate quotes for the U.S. dollar LIBOR rates that have not already been discontinued or, if they do, whether such rates will be representative of the underlying market or economic reality before they are schedule to be discontinued on June 30, 2023 or whether any additional reforms to LIBOR may be enacted in the United Kingdom or elsewhere. If a published U.S. dollar LIBOR rate is unavailable after 2021, the interest rates on our debt which is indexed to LIBOR will be determined using various alternative methods, any of which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if U.S. dollar LIBOR was available in its current form. Further, the same costs and risks that may lead to the unavailability of U.S. dollar LIBOR may make one or more of the alternative methods difficult or impracticable to determine. Our financial instruments may require changes to documentation as well as enhancements and modifications to systems, controls, procedures and models, which could present operational and legal challenges for us and our clients, customers, investors and counterparties. There can be no assurance that we will be able to modify all existing financial instruments before the discontinuation of LIBOR. If such financial instruments are not remediated to provide a method for transitioning from LIBOR to an alternative reference rate, the New York state LIBOR legislation and proposed federal legislation related to the LIBOR transition may provide statutory solutions to implement an alternative reference rate and provide legal protection against litigation. Any of these proposals or consequences could have a material adverse effect on our financing costs, and as a result, our financial condition, operating

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results and cash flows. We continue to monitor developments in the LIBOR transition and the proposed federal legislation related to the LIBOR transition to facilitate an orderly transition away from the use of LIBOR.

Risks Related to Conflicts of Interest

Our separation and distribution agreement, our advisory agreement, the original master hotel management agreement, the original mutual exclusivity agreement and other agreements entered into in connection with the spin-off, as well as the master project management agreement, the master hotel management agreement, the hotel management MEA and the project management MEA entered into in connection with Ashford Inc.’s August 2018 acquisition of Premier and the ERFP Agreement were not negotiated on an arm’s-length basis with an unaffiliated third party, and we may pursue less vigorous enforcement of the terms of the current agreements because of conflicts of interest with certain of our executive officers and directors and key employees of Ashford LLC.

Because our officers and the chairman of our board of directors are also key employees of Ashford LLC or its affiliates and have ownership interests in Ashford Trust, our separation and distribution agreement, our advisory agreement, our original master hotel management agreement, our original mutual exclusivity agreement and other agreements entered into in connection with the spin-off were not negotiated on an arm’s-length basis, and we did not have the benefit of arm’s-length negotiations of the type normally conducted with an unaffiliated third party. Due to the subsequent spin-off of Ashford Inc., the parent company of Ashford LLC in November 2014, these officers and directors also have ownership interests in the parent company of Ashford LLC and its subsidiaries. As a result of our affiliations with Ashford Trust, Ashford Inc. and its subsidiaries (including Ashford LLC, Remington Hotels and Premier), the terms, including fees and other amounts payable, of agreements between us and Ashford Trust, Ashford LLC or Remington Hotels, including our master hotel management agreement and hotel management MEA with Remington Hotels and our master project management agreement and project management MEA with Premier, may not be as favorable to us as the terms under an arm’s-length agreement. Furthermore, we may choose not to enforce, or to enforce less vigorously, our rights under these agreements because of our desire to maintain our ongoing relationship with Ashford Trust and Ashford LLC.

Ashford LLC may also manage other entities or assets in the future. Our officers and certain of our directors may also be key officers or directors of such future entities or their affiliates and may have ownership interests in such entities. Any such positions or interests could present additional conflicts of interest for our officers and certain of our directors.

Ashford LLC was a subsidiary of Ashford Trust until its spin-off and may be able to direct attractive investment opportunities to Ashford Trust and away from us.

Until its spin-off on November 12, 2014, Ashford LLC was a subsidiary of Ashford Trust, a publicly-traded hotel REIT, with investment objectives that are similar to ours. So long as Ashford LLC is our external advisor, our governing documents require us to include persons designated by Ashford LLC as candidates for election as director at any stockholder meeting at which directors are to be elected, as described in our governing documents. Each of our executive officers and one of our directors also serve as employees and/or officers of Ashford LLC. In addition each of our officers, other than Mr. Richard Stockton, and one of our directors serve as officers and/or directors of Ashford Trust. Furthermore, Mr. Monty J. Bennett, our previous chief executive officer and current chairman, is also the chairman of Ashford Trust and the chairman, chief executive officer and a significant stockholder of Ashford Inc. Our advisory agreement requires Ashford LLC to present investments that satisfy our investment guidelines to us before presenting them to Ashford Trust or any future client of Ashford LLC. Our board may modify or supplement our investment guidelines from time to time so long as we do not change our investment guidelines in such a way as to be directly competitive with all or any portion of Ashford Trust’s investment guidelines as of the date of the advisory agreement. If we materially change our investment guidelines without the express consent of Ashford LLC, then Ashford LLC will not have an obligation to present investment opportunities to us and instead Ashford LLC will use its best judgment to allocate investment opportunities and other entities it advises, taking into account such factors as Ashford LLC deems relevant, in its discretion, subject to any then-existing obligations of Ashford LLC to such other entities.

However, some portfolio investment opportunities may include hotels that satisfy our investment objectives as well as hotels that satisfy the investment objectives of Ashford Trust or other entities advised by Ashford LLC. If the portfolio cannot be equitably divided, Ashford LLC will necessarily have to make a determination as to which entity will be presented with the opportunity. In such a circumstance, our advisory agreement requires Ashford LLC to allocate portfolio investment opportunities between us and Ashford Trust or other entities advised by Ashford LLC in a fair and equitable manner, consistent with our, Ashford Trust’s and such other entities’ investment objectives. In making this determination, Ashford LLC, using substantial discretion, is required to consider the investment strategy and guidelines of each entity with respect to acquisition of properties, portfolio concentrations, tax consequences, regulatory restrictions, liquidity requirements, leverage and other factors deemed appropriate. In making the allocation determination, Ashford LLC has no obligation to make any such investment opportunity available to us. Ashford LLC and Ashford Trust have agreed that any new investment opportunities that satisfy our

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investment guidelines will be presented to our board of directors; however, our board will have only ten business days to make a determination with respect to such opportunity prior to it being available to Ashford Trust. The above mentioned dual responsibilities may create conflicts of interest for our officers that could result in decisions or allocations of investments that may benefit Ashford Trust more than they benefit our company, and Ashford Trust may compete with us with respect to certain investments that we may want to acquire.

Ashford LLC and its employees, some of whom are our executive officers, face competing demands relating to their time and this may adversely affect our operations.

We rely on Ashford LLC, its subsidiaries and its employees for the day-to-day operation of our business and management of our assets and the provision of design and construction services. Until its spin-off, Ashford LLC was wholly-owned by Ashford Trust. Ashford LLC is led by our current management team, which is also the current management team of Ashford Trust (in each case, other than Mr. Richard Stockton). Because some of Ashford LLC’s employees have duties to Ashford Trust as well as to our company, we do not have their undivided attention and they face conflicts in allocating their time and resources between our company, Ashford Inc. and Ashford Trust. If Ashford LLC advises and/or leads any additional entities, or manages additional assets, in the future, this could present additional conflicts with respect to the allocation of the time and resources of our management team. As a result of the spin-off of Ashford LLC, its employees have additional responsibilities relating to Ashford Inc.’s status as a public company. During turbulent market conditions, such as during the COVID-19 pandemic, or other times when we need focused support and assistance from Ashford LLC, other entities for which Ashford LLC also acts as an external advisor or Ashford Trust may likewise require greater focus and attention, placing competing high levels of demand on the limited time and resources of Ashford LLC’s employees. We may not receive the necessary support and assistance we require or would otherwise receive if we were internally managed by persons working exclusively for us.

We provide funds to Ashford Inc. to fund the formation, registration and ongoing funding needs of Ashford Securities, which could result in certain conflicts of interest. There can be no assurance Ashford Securities will continue to be successful in helping us raise capital.

In connection with the formation of Ashford Securities by Ashford Inc. in September of 2019, we and Ashford Trust entered into a contribution agreement to provide funds to Ashford Inc. to fund the formation, registration and ongoing funding requirements of Ashford Securities. As a result, Ashford Securities’ operation and management may be influenced or affected by conflicts of interest arising out of its relationship with us, and Ashford Trust. Additionally, the agreements between us and our related parties, including Ashford Securities, may not be arm's-length agreements and may not be as favorable to our investors as would be the case if the parties were operating at arm’s-length. There can be no assurance that Ashford Securities will continue to be successful in helping us to raise capital.

Conflicts of interest with Remington Hotels and Premier, each of which is a subsidiary of Ashford Inc., could result in our management acting other than in our stockholders’ best interest.

Remington Hotels, a subsidiary of Ashford Inc., currently manages the Pier House Resort & Spa, the Bardessono Hotel and Spa, Hotel Yountville and Mr. C Beverly Hills Hotel. We expect Remington Hotels will manage certain of the hotels we acquire in the future. Premier, also a subsidiary of Ashford Inc., currently provides design and construction services to us. We expect Premier will also provide design and construction services to us in the future. Conflicts of interest in general and specifically relating to Remington Hotels and Premier may lead to management decisions that are not in our stockholders’ best interest. Mr. Monty J. Bennett and Mr. Archie Bennett, Jr., beneficially owned 100% of Remington Lodging prior to its acquisition by Ashford Inc. on November 6, 2019. As of December 31, 2021, Mr. Monty J. Bennett, chairman of our board of directors and chairman, chief executive officer and a significant stockholder of Ashford Inc. and Mr. Archie Bennett, Jr. together owned approximately 610,246 shares of Ashford Inc. common stock, which represented an approximate 20.2% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc. Series D Convertible Preferred Stock, which was exercisable (at an exercise price of $117.50 per share) into an additional approximate 3,991,191 shares of Ashford Inc. common stock, which if exercised as of December 31, 2021 would have increased the Bennetts’ ownership interest in Ashford Inc. to 65.6%, subject to applicable voting limitations. The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts.

We have entered into a hotel management MEA and a master hotel management agreement with Remington Hotels and a project management MEA and master project management agreement with Premier. To the extent we have the right or control the right to direct such matters, the hotel management MEA requires us to engage Remington Hotels to provide, under the master hotel management agreement, hotel management services for all future properties that we acquire, unless our independent directors either (i) unanimously vote not to hire Remington Hotels, or (ii) based on special circumstances or past performance, by a majority vote, elect not to engage Remington Hotels because they have determined, in their reasonable business judgment, that it would be in our best interest not to engage Remington Hotels or that another manager or developer

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could perform the duties materially better. The project management MEA and master project management agreement with Premier contains similar provisions. A beneficial owner of a significant position in Ashford Inc. would receive (through Premier) any project management and termination fees payable by us under the master project management agreement. Mr. Monty J. Bennett may influence our decisions to sell, acquire, or develop hotels when it is not in the best interest of our stockholders to do so.

Mr. Monty J. Bennett’s ownership interests in and management obligations to Ashford Inc. present him with conflicts of interest in making management decisions related to the commercial arrangements between us and Ashford Inc., and his management obligations to Ashford Inc. reduce the time and effort he spends overseeing our company. Our board of directors has adopted a policy that requires all material approvals, actions or decisions which we have the right to make under the master hotel management agreement with Remington Hotels and the master project management agreement with Premier be approved by a majority or, in certain circumstances, all, of our independent directors. However, given the authority and/or operational latitude provided to Remington Hotels under the master hotel management agreement and to Premier under the master project management agreement, Mr. Monty J. Bennett, as the chairman and chief executive officer of Ashford Inc., could take actions or make decisions that are not in our stockholders’ best interest or that are otherwise inconsistent with his obligations to us under the master hotel management agreement or our obligations under the applicable franchise agreements or his obligations to us under the master project management agreement.

Ashford Inc.’s ability to exercise significant influence over the determination of the competitive set for any hotels managed by Remington Hotels could artificially enhance the perception of the performance of a hotel, making it more difficult to use managers other than Remington Hotels for future properties.

Under our master hotel management agreement with Remington Hotels, we have the right to terminate Remington Hotels based on the performance of the applicable hotel, subject to the payment of a termination fee. The determination of performance is based on the applicable hotel’s gross operating profit margin and its RevPAR penetration index, which provides the relative revenue per room generated by a specified property as compared to its competitive set. For each hotel managed by Remington Hotels, its competitive set consists of a small group of hotels in the relevant market that we and Remington Hotels believe are comparable for purposes of benchmarking the performance of such hotel. Ashford Inc. has significant influence over the determination of the competitive set for any of our hotels that it manages. Ashford Inc. could artificially enhance the perception of the performance of a hotel by selecting a competitive set that is not performing well or is not comparable to the Remington Hotels-managed hotel, thereby making it more difficult for us to elect not to use Remington Hotels for future hotel management.

Remington Hotels may be able to pursue lodging investment opportunities that compete with us.

Pursuant to the terms of our hotel management MEA with Remington Hotels, if investment opportunities that satisfy our investment criteria are identified by Remington Hotels or its affiliates, Remington Hotels will give us a written notice and description of the investment opportunity. We will have 10 business days to either accept or reject the investment opportunity. If we reject the opportunity, Remington Hotels may then pursue such investment opportunity, subject to a right of first refusal in favor of Ashford Trust pursuant to an existing agreement between Ashford Trust and Remington Hotels, on materially the same terms and conditions as offered to us. If we reject such an investment opportunity, either Ashford Trust or Remington Hotels could pursue the opportunity and compete with us. In such a case, Mr. Monty J. Bennett, chairman of our board, in his capacity as chairman and chief executive officer of Ashford Trust could be in a position of directly competing with us, and Remington Hotels may compete with us with respect to certain investments that we may want to acquire.

Our fiduciary duties as the general partner of our operating partnership could create conflicts of interest, which may impede business decisions that could benefit our stockholders.

As the general partner of our operating partnership, we have fiduciary duties to the other limited partners in our operating partnership, the discharge of which may conflict with the interests of our stockholders. The limited partners of our operating partnership have agreed that, in the event of a conflict in the fiduciary duties owed by us to our stockholders and, in our capacity as general partner of our operating partnership, to such limited partners, we are under no obligation to give priority to the interests of such limited partners. In addition, persons holding common units have the right to vote on certain amendments to the operating partnership agreement (which require approval by a majority in interest of the limited partners, including us) and individually to approve certain amendments that would adversely affect their rights. These voting rights may be exercised in a manner that conflicts with the interests of our stockholders. For example, we cannot modify the rights of limited partners to receive distributions as set forth in the operating partnership agreement in a manner that adversely affects their rights without their consent, even though such modification might be in the best interest of our stockholders.

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In addition, conflicts may arise when the interests of our stockholders and the limited partners of our operating partnership diverge, particularly in circumstances in which there may be an adverse tax consequence to the limited partners. As a result of unrealized built-in gain attributable to contributed property at the time of contribution, some holders of common units may suffer different and more adverse tax consequences than holders of our common stock upon the sale or refinancing of the properties owned by our operating partnership, including disproportionately greater allocations of items of taxable income and gain upon a realization event. As those holders will not receive a correspondingly greater distribution of cash proceeds, they may have different objectives regarding the appropriate pricing, timing and other material terms of any sale or refinancing of certain properties, or whether to sell or refinance such properties at all. As a result, Ashford LLC may cause us to sell, not sell or refinance certain properties, even if such actions or inactions might be financially advantageous to our stockholders, or to enter into tax deferred exchanges with the proceeds of such sales when such a reinvestment might not otherwise be in our best interest.

Our conflicts of interest policy may not adequately address all of the conflicts of interest that may arise with respect to our activities.

We have adopted a conflicts of interest policy to address specifically some of the conflicts relating to our activities which requires the approval of a majority of our disinterested directors to approve any transaction, agreement or relationship in which any of our directors or officers, Ashford LLC or its employees or Ashford Trust has an interest. In connection with this policy, our board of directors has established a Related Party Transactions Committee (consisting of Messrs. Fearn and Rinaldi and Ms. Carter), which is empowered to deny a new proposed interested party transaction or recommend the transaction for approval by a majority of the independent directors. Our policies, however may not be adequate to address all of the conflicts that may arise. In addition, it may not address such conflicts in a manner that is favorable to us.

The potential for conflicts of interest as a result of our management structure may provoke dissident stockholder activities that result in significant costs.

Particularly following periods of volatility in the overall market or declines in the market price of the company’s securities, REITs, including us have been targets of stockholder litigation, stockholder director nominations and stockholder proposals by dissident stockholders that allege conflicts of interest in business dealings with affiliated and related persons and entities. Our relationships with Ashford LLC, Ashford Inc., Ashford Trust, the other businesses and entities to which Ashford LLC and Ashford Inc. provide management or other services, Mr. Monty J. Bennett, Mr. Archie Bennett, Jr. and with other related parties of Ashford Inc. and Ashford Trust may precipitate such activities. These activities, if instituted against us, could result in substantial costs and a diversion of our management’s attention even if the action is unfounded.

Responding to actions by activist investors can be costly and time-consuming, disrupting our operations and diverting the attention of management and our employees. Stockholder activism could create perceived uncertainties as to our future direction, which could result in the loss of potential business opportunities and make it more difficult for our advisor to attract and retain qualified personnel and business partners. Furthermore, the election of individuals to our board of directors with a specific agenda could adversely affect our ability to effectively and timely implement our strategic plans.

Risks Related to Hotel Investments

We are subject to general risks associated with operating hotels.

We own hotel properties, which have different economic characteristics than many other real estate assets and a hotel REIT is structured differently than many other types of REITs. A typical office property, for example, has long-term leases with third-party tenants, which provides a relatively stable long-term stream of revenue. Hotels, on the other hand, generate revenue from guests that typically stay at the hotel for only a few nights, which causes the room rate and occupancy levels at each of our hotels to change every day, and results in earnings that can be highly volatile. In addition, our hotels are subject to various operating risks common to the hotel industry, many of which are beyond our control, and are discussed in more detail below.

The outbreak of COVID-19 has and will continue to reduce our occupancy rates and RevPAR.

Despite recent progress in the administration of vaccines, both the outbreak of recent variants, including Delta and Omicron, and the related containment and mitigation measures that have been put into place across the globe, have had and are likely to continue to have a serious adverse impact on the global economy and our business, the severity and duration of which are uncertain. Since late February 2020, we have experienced a significant decline in occupancy and RevPAR and we expect the occupancy and RevPAR reduction associated with COVID-19 to continue. The continued outbreak of the virus in the U.S. has and will continue to further reduce travel and demand at our hotels. The prolonged occurrence of the virus has resulted in health or other government authorities imposing widespread restrictions on travel or other market impacts. The hotel industry and our portfolio have and we expect will continue to experience the postponement or cancellation of a significant number of

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business conferences and similar events. At this time those restrictions are very fluid and evolving. We have been and will continue to be negatively impacted by those restrictions. Given that the type, degree and length of such restrictions are not known at this time, we cannot predict the overall impact of such restrictions on us or the overall economic environment. In addition, one or more possible recurrences of COVID-19 case surges could result in further reductions in business and personal travel and could cause state and local governments to reinstate travel restrictions. We may also face increased risk of litigation if we have guests or employees who become ill due to COVID-19.

As such, the full impact these restrictions may have on our financial position, operating results and liquidity cannot be reasonably estimated at this time, but the impact will be material. Additionally, the public perception of a risk of a pandemic or media coverage of these diseases, or public perception of health risks linked to perceived regional food and beverage safety has materially adversely affected us by reducing demand for our hotels. These events have resulted in a sustained, significant drop in demand for our hotels and could have a material adverse effect on us.

Declines in or disruptions to the travel industry could adversely affect our business and financial performance.

Our business and financial performance are affected by the health of the worldwide travel industry. Travel expenditures are sensitive to personal and business-related discretionary spending levels, tending to decline or grow more slowly during economic downturns, as well as to disruptions due to other factors, including those discussed below. Decreased travel expenditures could reduce the demand for our services, thereby causing a reduction in revenue. For example, during regional or global recessions, domestic and global economic conditions can deteriorate rapidly, resulting in increased unemployment and a reduction in expenditures for both business and leisure travelers. A slower spending on the services we provide could have a negative impact on our revenue growth.

Other factors that could negatively affect our business include: terrorist incidents and threats and associated heightened travel security measures; political and regional strife; acts of God such as earthquakes, hurricanes, fires, floods, volcanoes and other natural disasters; war; concerns with or threats of pandemics, contagious diseases or health epidemics, such as COVID-19, Ebola, H1N1 influenza (swine flu), MERS, SARs, avian flu, the Zika virus or similar outbreaks; environmental disasters; lengthy power outages; increased pricing, financial instability and capacity constraints of air carriers; airline job actions and strikes; fluctuations in hotel supply, occupancy and ADR; changes to visa and immigration requirements or border control policies; imposition of taxes or surcharges by regulatory authorities; and increases in gasoline and other fuel prices.

Because these events or concerns, and the full impact of their effects, are largely unpredictable, they can dramatically and suddenly affect travel behavior by consumers and decrease demand. Any decrease in demand, depending on its scope and duration, together with any future issues affecting travel safety, could significantly and adversely affect our business, working capital and financial performance over the short and long-term. In addition, the disruption of the existing travel plans of a significant number of travelers upon the occurrence of certain events, such as severe weather conditions, actual or threatened terrorist activity, war or travel-related health events, could result in significant additional costs and decrease our revenues, in each case, leading to constrained liquidity. Also, see the risk factor “The outbreak of COVID-19 has and will continue to reduce our occupancy rates and RevPAR.”

We may have to make significant capital expenditures to maintain our hotel properties, and any development activities we undertake may be more costly than we anticipate.

Our hotels have an ongoing need for renovations and other capital improvements, including replacements, from time to time, of furniture, fixtures, and equipment. Managers or franchisors of our hotels also require that we make periodic capital improvements pursuant to our management agreements or as a condition of maintaining franchise licenses. Generally, we are responsible for the cost of these capital improvements. As part of our long-term growth strategy, we may also develop hotels. Hotel renovation and development involves substantial risks, including:

•construction cost overruns and delays;

•the disruption of operations at, displacement of revenue at, and damage to operating hotels, including revenue lost while rooms, restaurants or meeting space under renovation are out of service;

•increases in operating costs at our hotels, to the extent they rely on portions of development sites for hotel operations;

•the cost of funding renovations or developments and inability to obtain financing on attractive terms;

•the return on our investment in these capital improvements or developments failing to meet expectations;

•inability to obtain all necessary zoning, land use, building, occupancy, and construction permits;

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•loss of substantial investment in a development project if a project is abandoned before completion;

•environmental problems;

•disputes with franchisors or hotel managers regarding compliance with relevant franchise agreements or management agreements: and

•development related liabilities, such as claims for design/construction defects.

If we have insufficient cash flow from operations to fund needed capital expenditures, then we will need to borrow, sell assets or sell additional equity securities to fund future capital improvements.

The hotel business is seasonal, which affects our results of operations from quarter to quarter.

The hotel industry is seasonal in nature. This seasonality can cause quarterly fluctuations in our financial condition and operating results, including in the amount available for distributions on our common stock. Our quarterly operating results may be adversely affected by factors outside our control, including weather conditions and poor economic factors in certain markets in which we operate. Our cash flows may not be sufficient to offset any shortfalls that occur as a result of these fluctuations. As a result, we may have to reduce distributions or enter into short-term borrowings in certain quarters in order to make distributions to our stockholders. Such borrowings may not be available on favorable terms, if at all.

The cyclical nature of the lodging industry may cause fluctuations in our operating performance, which could have a material adverse effect on our business and operating results.

The lodging industry historically has been highly cyclical in nature. Fluctuations in lodging demand and, therefore, hotel operating performance, are caused largely by general economic and local market conditions, which subsequently affect levels of business and leisure travel. In addition to general economic conditions, new hotel room supply is an important factor that can affect the lodging industry’s performance, and overbuilding has the potential to further exacerbate the negative impact of an economic recession. Room rates and occupancy, and thus RevPAR, tend to increase when demand growth exceeds supply growth. An adverse change in lodging fundamentals could result in returns that are substantially below our expectations or result in losses, which could have a material adverse effect on our business and operating results.

Many of our real estate-related costs are fixed, and will not decrease even if revenue from our hotels decreases.

Many costs, such as real estate taxes, insurance premiums and maintenance costs, generally are not reduced even when a hotel is not fully occupied, room rates decrease or other circumstances cause a reduction in revenues. In addition, newly acquired or renovated hotels may not produce the revenues we anticipate immediately, or at all, and the hotel’s operating cash flow may be insufficient to pay the operating expenses and debt service associated with these new hotels. If we are unable to offset real estate costs with sufficient revenues across our portfolio, our operating results and our ability to make distributions to our stockholders may be adversely affected.

The increasing use of Internet travel intermediaries by consumers may adversely affect our profitability.

Some of our hotel rooms are booked through Internet travel intermediaries, including, but not limited to, Tripadvisor.com, Travelocity.com, Expedia.com and Priceline.com. As Internet bookings increase, these intermediaries may be able to obtain higher commissions, reduced room rates or other significant contract concessions from our management companies. Moreover, some of these Internet travel intermediaries are attempting to offer hotel rooms as a commodity, by increasing the importance of price and general indicators of quality (such as “three-star downtown hotel”) at the expense of brand identification. These intermediaries hope that consumers will eventually develop brand loyalties to their reservations system rather than to the brands under which our properties are franchised. If the amount of sales made through Internet intermediaries increases significantly and results in a decrease in consumer loyalty to the brands under which our hotels are franchised, our rooms revenues may be lower than expected, and our profitability may be adversely affected.

Our revenues and profitability may be adversely affected by increased use of business-related technology, which may reduce the need for business-related travel.

The increased use of teleconference and video-conference technology by businesses could result in decreased business travel as companies increase the use of technologies that allow multiple parties from different locations to participate at meetings without traveling to a centralized meeting location. To the extent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases, hotel room demand may decrease and our revenues, profitability and ability to make distributions to our stockholders may be adversely affected.

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Future terrorist attacks or changes in terror alert levels could materially and adversely affect our business.

Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries since 2001, often disproportionately to the effect on the overall economy. The extent of the impact that actual or threatened terrorist attacks in the U.S. or elsewhere could have on domestic and international travel and our business in particular cannot be determined, but any such attacks or the threat of such attacks could have a material adverse effect on travel and hotel demand, our ability to finance our business and our ability to insure our hotels. Any of these events could materially and adversely affect our business, our operating results and our prospects.

We are subject to risks associated with the employment of hotel personnel, particularly with respect to hotels that employ unionized labor.

Our managers, including Remington Hotels, a subsidiary of Ashford Inc., and unaffiliated third-party managers are responsible for hiring and maintaining the labor force at each of our hotels. Although we do not directly employ or manage employees at our hotels, we still are subject to many of the costs and risks generally associated with the hotel labor force, particularly at those hotels with unionized labor. From time to time, hotel operations may be disrupted as a result of strikes, lockouts, public demonstrations or other negative actions and publicity. We also may incur increased legal costs and indirect labor costs as a result of contract disputes involving our managers and their labor force or other events. The resolution of labor disputes or re-negotiated labor contracts could lead to increased labor costs, a significant component of our hotel operating costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs. We do not have the ability to affect the outcome of these negotiations. Our third party managers may also be unable to hire quality personnel to adequately staff hotel departments, which could result in a sub-standard level of service to hotel guests and hotel operations.

Hotels where our managers have collective bargaining agreements with their employees are more highly affected by labor force activities than others. The resolution of labor disputes or re-negotiated labor contracts could lead to increased labor costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs. Furthermore, labor agreements may limit the ability of our hotel managers to reduce the size of hotel workforces during an economic downturn because collective bargaining agreements are negotiated between the hotel managers and labor unions. Our ability, if any, to have any material impact on the outcome of these negotiations is restricted by and dependent on the individual management agreement covering a specific property, and we may have little ability to control the outcome of these negotiations.

In addition, changes in labor laws may negatively impact us. For example, the implementation of new occupational health and safety regulations, minimum wage laws, and overtime, working conditions, employment status and citizenship requirements and the Department of Labor’s proposed regulations expanding the scope of non-exempt employees under the Fair Labor Standards Act to increase the entitlement to overtime pay could significantly increase the cost of labor in the workforce, which would increase the operating costs of our hotel properties and may have a material adverse effect on our business or profitability.

Risks Related to the Real Estate Industry

Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our hotel properties and harm our financial condition.

Because real estate investments are relatively illiquid, our ability to sell promptly one or more hotel properties for reasonable prices in response to changing economic, financial, and investment conditions is limited.

We may decide to sell hotel properties in the future. We cannot predict whether we will be able to sell any hotel property for the price or on the terms set by us, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a hotel property.

We may be required to expend funds to correct defects or to make improvements before a property can be sold. We may not have funds available to correct those defects or to make those improvements. In addition, when we acquire a hotel property, we may agree to lock-out provisions that materially restrict us from selling that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These and other factors could impede our ability to respond to adverse changes in the performance of our hotel properties or a need for liquidity.

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Increases in property taxes would increase our operating costs, reduce our income and adversely affect our ability to make distributions to our stockholders.

Each of our hotel properties is subject to real and personal property taxes. These taxes may increase as tax rates change and as the properties are assessed or reassessed by taxing authorities. If property taxes increase, our financial condition, results of operations and our ability to make distributions to our stockholders could be materially and adversely affected and the market price of our common stock could decline.

The costs of compliance with or liabilities under environmental laws may harm our operating results.

Operating expenses at our hotels could be higher than anticipated due to the cost of complying with existing or future environmental laws and regulations. In addition, our hotel properties may be subject to environmental liabilities. An owner or operator of real property can face liability for environmental contamination created by the presence or discharge of hazardous substances on the property. We may face liability regardless of:

•our knowledge of the contamination;

•the timing of the contamination;

•the cause of the contamination; or

•the party responsible for the contamination.

There may be environmental problems associated with our hotel properties of which we are unaware. Some of our hotel properties use, or may have used in the past, underground tanks for the storage of petroleum-based or waste products that could create a potential for release of hazardous substances. If environmental contamination exists on a hotel property, we could become subject to strict, joint and several liabilities for the contamination if we own the property.

The discovery of material environmental liabilities at our properties could subject us to unanticipated significant costs. The presence of hazardous substances on a property may adversely affect our ability to sell the property on favorable terms or at all, and we may incur substantial remediation costs.

Our environmental insurance policies may not provide sufficient coverage for any environmental liabilities at our properties. In addition, if environmental liabilities are discovered during the underwriting of the insurance policies for any property that we acquire in the future, we may be unable to obtain insurance coverage for the liabilities at commercially reasonable rates or at all. We may experience losses as a result of any of these events.

Numerous treaties, laws and regulations have been enacted to regulate or limit carbon emissions. Changes in the regulations and legislation relating to climate change, and complying with such laws and regulations, may require us to make significant investments in our hotels and could result in increased energy costs at our properties.

Our properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. Some of the properties in our portfolio may contain microbial matter such as mold and mildew. As a result, the presence of significant mold at any of our properties could require us to undertake a costly remediation program to contain or remove the mold from the affected property. In addition, the presence of significant mold could expose us to liability from hotel guests, hotel employees, and others if property damage or health concerns arise.

Compliance with the ADA and fire, safety, and other regulations may require us to incur substantial costs.

All of our properties are required to comply with the ADA. The ADA requires that “public accommodations,” such as hotels, be made accessible to people with disabilities. Compliance with the ADA’s requirements could require removal of access barriers and non-compliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. In addition, we are required to operate our properties in compliance with fire and safety regulations, building codes, and other land use regulations as they may be adopted by governmental agencies and bodies and become applicable to our properties. Any requirement to make substantial modifications to our hotel properties, whether to comply with the ADA or other changes in governmental rules and regulations, could be costly.

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We may experience uninsured or underinsured losses.

We maintain property and casualty insurance with respect to our hotel properties and other insurance, in each case, with loss limits and coverage thresholds deemed reasonable by our management team (and to satisfy the requirements of lenders and franchisors). In doing so, we make decisions with respect to what deductibles, policy limits, and terms are reasonable based on management’s experience, our risk profile, the loss history of our hotel managers and our properties, the nature of our properties and our businesses, our loss prevention efforts, and the cost of insurance.

Various types of catastrophic losses may not be insurable or may not be economically insurable. In the event of a substantial loss, our insurance coverage may not cover the full current market value or replacement cost of our lost investment. Inflation, changes in building codes and ordinances, environmental considerations, and other factors might cause insurance proceeds to be insufficient to fully replace or renovate a hotel after it has been damaged or destroyed. Accordingly, it is possible that:

•the insurance coverage thresholds that we have obtained may not fully protect us against insurable losses (i.e., losses may exceed coverage limits);

•we may incur large deductibles that adversely affect our earnings;

•we may incur losses from risks that are not insurable or that are not economically insurable; and

•current coverage thresholds may not continue to be available at reasonable rates.

In the future, we may choose not to maintain terrorism insurance on any of our properties. As a result, one or more large uninsured or underinsured losses could have a material adverse effect on our business, operating results and financial condition.

Each of our current lenders requires us to maintain certain insurance coverage thresholds. If a lender does not believe we have complied with these requirements, the lender could obtain additional coverage thresholds and seek payment from us, or declare us in default under the loan documents. In the former case, we could spend more for insurance than we otherwise deem reasonable or necessary or, in the latter case, the hotels collateralizing one or more loans could be foreclosed upon. In addition, a material casualty to one or more hotels collateralizing loans may result in the insurance company applying to the outstanding loan balance insurance proceeds that otherwise would be available to repair the damage caused by the casualty, which would require us to fund the repairs through other sources. The lender may also foreclose on the hotels if there is a material loss that is not insured.

Risks Related to Investments in Securities

Our earnings are dependent, in part, upon the performance of our investment portfolio.

To the extent permitted by the Code, we may invest in and own securities of private companies, other public companies and REITs. To the extent that the value of those investments declines or those investments do not provide an attractive return, our earnings and cash flow could be adversely affected.

Our prior investment performance is not indicative of future results.

The performance of our prior investments is not necessarily indicative of the results that can be expected for the investments to be made by our subsidiaries. On any given investment, total loss of the investment is possible. Although our management team has experience and has had success in making investments in real estate-related lodging debt and hotel assets, the past performance of these investments is not necessarily indicative of the results of our future investments.

Our investment portfolio will likely contain investments concentrated in a single industry and will not be fully diversified.

We hold an investment in OpenKey, which operates in the lodging industry. To the extent we seek additional investments, we would expect that they will generally be in lodging-related entities. As such, our investment portfolio will likely contain investments concentrated in a single industry and may not be fully diversified by asset class, geographic region or other criteria, which will expose us to significant loss due to concentration risk. Investors have no assurance that the degree of diversification in our investment portfolio will increase at any time in the future.

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Risks Related to Our Organization and Structure

Our charter contains provisions that may delay or prevent a change of control transaction.

Our charter contains 9.8% ownership limits. For the purpose of preserving our REIT qualification, our charter prohibits direct or constructive ownership by any person of more than:

•9.8% of the lesser of the total number or value of the outstanding shares of our common stock, or

•9.8% of the lesser of the total number or value of the outstanding shares of any class or series of our preferred stock or any other stock of our company, unless our board of directors grants a waiver.

Our charter’s constructive ownership rules are complex and may cause stock owned actually or constructively by a group of related individuals and/or entities to be deemed to be constructively owned by one individual or entity. As a result, the acquisition of less than 9.8% of our common stock by an individual or entity could nevertheless cause that individual or entity to own constructively in excess of 9.8% of the outstanding common stock, and thus be subject to our charter’s ownership limit. Any attempt to own or transfer shares of our common stock in excess of the ownership limit without the consent of our board of directors will be void, and could result in the shares being automatically transferred to a charitable trust.

Our board of directors may create and issue an additional class or series of common stock or preferred stock without stockholder approval.

Our charter authorizes our board of directors to issue common stock or preferred stock in one or more classes and to establish the preferences and rights of any class of common stock or preferred stock issued. Subject to the terms of any outstanding classes or series of preferred stock, these actions can be taken without obtaining stockholder approval. Our issuance of additional classes of common stock or preferred stock could have the effect of delaying or preventing someone from taking control of us, even if our stockholders believe that a change in control was in their best interests.

Certain provisions in the partnership agreement for our operating partnership may delay or prevent unsolicited acquisitions of us.

Provisions in the partnership agreement of our operating partnership may delay or make more difficult unsolicited acquisitions of us or changes in our control. These provisions could discourage third parties from making proposals involving an unsolicited acquisition of us or change of our control, although some stockholders might consider such proposals, if made, desirable. These provisions include, among others:

•redemption rights of qualifying parties;

•transfer restrictions on our common units;

•the ability of the general partner in some cases to amend the partnership agreement without the consent of the limited partners; and

•the right of the limited partners to consent to transfers of the general partnership interest and mergers of the operating partnership under specified circumstances.

Because provisions contained in Maryland law and our charter may have an anti-takeover effect, investors may be prevented from receiving a “control premium” for their shares.

Provisions contained in our charter and the Maryland General Corporation Law (the “MGCL”) may have effects that delay, defer, or prevent a takeover attempt, which may prevent stockholders from receiving a “control premium” for their shares. For example, these provisions may defer or prevent tender offers for our common stock or purchases of large blocks of our common stock, thereby limiting the opportunities for our stockholders to receive a premium for their common stock over then-prevailing market prices.

These provisions include the following:

•The ownership limit in our charter limits related investors, including, among other things, any voting group, from acquiring over 9.8% of our common stock or of any class of our preferred stock without our permission.

•Our charter authorizes our board of directors to issue common stock or preferred stock in one or more classes and to establish the preferences and rights of any class of common stock or preferred stock issued. These actions can be taken without soliciting stockholder approval. Our common stock and preferred stock issuances could have the effect of delaying or preventing someone from taking control of us, even if a change in control were in our stockholders’ best interests.

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Maryland statutory law provides that an act of a director relating to or affecting an acquisition or a potential acquisition of control of a corporation may not be subject to a higher duty or greater scrutiny than is applied to any other act of a director. Hence, directors of a Maryland corporation by statute are not required to act in certain takeover situations under the same standards of care, and are not subject to the same standards of review, as apply in Delaware and other corporate jurisdictions.

Certain provisions of Maryland law could inhibit changes in control.

Certain provisions of the MGCL may have the effect of inhibiting a third party from making a proposal to acquire us under circumstances that otherwise could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of our common stock or a “control premium” for their shares or inhibit a transaction that might otherwise be viewed as being in the best interest of our stockholders. These provisions include:

•“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose special stockholder voting requirements on these business combinations, unless certain fair price requirements set forth in the MGCL are satisfied; and

•“control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

In addition, Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, notwithstanding any contrary provision in the charter or bylaws, to any or all of the following five provisions: a classified board; a two-thirds stockholder vote requirement for removal of a director; a requirement that the number of directors be fixed only by vote of the directors; a requirement that a vacancy on the board of directors be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and a requirement that the holders of at least a majority of all votes entitled to be cast request a special meeting of stockholders.

Our charter opts out of the business combination/moratorium and control share provisions of the MGCL. Our charter also prevents us from making any elections under Subtitle 8 of the MGCL unless approved by our stockholders by a majority of the votes cast. Through a provision unrelated to Subtitle 8, our charter provides that directors may only be removed for cause and by the vote of a majority of the stockholders. Because the opt outs from the business combination/moratorium and control share provisions of the MGCL are contained in our charter, they cannot be amended unless the board of directors recommends the amendment and the stockholders approve the amendment.

Our board of directors can take many actions without stockholder approval.

Our board of directors has overall authority to oversee our business and affairs and determine our major corporate policies. This authority includes significant flexibility. For example, our board of directors can do the following without stockholder approval:

•amend or revise at any time our dividend policy with respect to our common stock or preferred stock (including by eliminating, failing to declare, or significantly reducing dividends on these securities);

•terminate Ashford LLC under certain conditions pursuant to our advisory agreement;

•amend or revise at any time and from time to time our investment, financing, borrowing and dividend policies and our policies with respect to all other activities, including growth, debt, capitalization and operations;

•amend our policies with respect to conflicts of interest provided that such changes are consistent with applicable legal requirements;

•subject to the terms of our charter, prevent the ownership, transfer and/or accumulation of shares in order to protect our status as a REIT or for any other reason deemed to be in the best interests of us and our stockholders;

•subject to the terms of any outstanding classes or series of preferred stock, issue additional shares without obtaining stockholder approval, which could dilute the ownership of our then-current stockholders;

•subject to the terms of any outstanding classes or series of preferred stock, amend our charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series, without obtaining stockholder approval;

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•subject to the terms of any outstanding classes or series of preferred stock, classify or reclassify any unissued shares of our common stock or preferred stock and set the preferences, rights and other terms of such classified or reclassified shares, including provisions that may have an anti-takeover effect, without obtaining stockholder approval;

•employ and compensate affiliates (subject to disinterested director approval);

•direct our resources toward investments that do not ultimately appreciate over time; and

•determine that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT.

Any of these actions could increase our operating expenses, impact our ability to make distributions or reduce the value of our assets without giving our stockholders the right to vote on whether we should take such actions.

Our rights and the rights of our stockholders to take action against our directors and officers are limited.

Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, our charter eliminates our directors’ and officers’ liability to us and our stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or a judgment of active and deliberate dishonesty that was material to the cause of action. Our charter requires us to indemnify our directors and officers and to advance expenses prior to the final disposition of a proceeding to the maximum extent permitted by Maryland law for liability actually incurred in connection with any proceeding to which they may be made, or threatened to be made, a party, except to the extent that the act or omission of the director or officer was material to the matter giving rise to the proceeding and was either committed in bad faith or was the result of active and deliberate dishonesty, the director or officer actually received an improper personal benefit in money, property or services, or, in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist under common law. In addition, we are generally obligated to advance the defense costs incurred by our directors and officers, prior to any determination regarding the availability of indemnification if actions are taken against them in their capacity as directors and officers.

Future issuances of securities, including our common stock and preferred stock, could reduce existing investors’ relative voting power and percentage of ownership and may dilute our share value.

Our charter authorizes the issuance of up to 250,000,000 shares of common stock and 80,000,000 shares of preferred stock. As of March 8, 2022, we had 65,348,848 shares of our common stock issued and outstanding, 3,078,017 shares of our Series B Cumulative Convertible Preferred Stock, 1,600,000 shares of our Series D Cumulative Preferred Stock, 2,912,159 shares of our Series E Redeemable Preferred Stock and 36,804 shares of our Series M Redeemable Preferred Stock. We also have also authorized 10,000,000 shares of our Series C Preferred Stock, 28,000,000 shares of our Series E Preferred Stock and 28,000,000 shares of our Series M Preferred Stock, and no shares of Series C Preferred Stock are issued. Our charter allows us to create new series of preferred stock at any time. Accordingly, we may issue up to an additional 184,651,152 shares of common stock and 72,373,020 shares of preferred stock.

Future issuances of common stock or preferred stock, including through our “at-the-market” equity offering program, our SEDA (as defined below), the issuance of Series E Preferred Stock and Series M Preferred Stock (for which we have an effective registration statement on file with the SEC) and privately negotiated exchange agreements with holders of our preferred stock in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), could decrease the relative voting power of our common stock or preferred stock and may cause substantial dilution in the ownership percentage of our then existing holders of common or preferred stock. We may value any common stock or preferred stock issued in the future on an arbitrary basis including for services or acquisitions or other corporate actions that may have the effect of reducing investors’ relative voting power and/or diluting the net tangible book value of the shares held by our stockholders, and might have an adverse effect on any trading market for our securities. Our board of directors may designate the rights, terms and preferences of our authorized but unissued common shares or preferred shares at its discretion, including conversion and voting preferences without stockholder approval.

Risks Related to Our Status as a REIT

Failure to qualify as a REIT, or failure to remain qualified as a REIT, would cause us to be taxed as a regular corporation, which would substantially reduce funds available for distributions to our stockholders.

We operate in a manner intended to allow us to qualify as a REIT for U.S. federal income tax purposes. We believe that our organization and current and proposed method of operation will enable us to meet the requirements for qualification and taxation as a REIT commencing with our taxable year ended December 31, 2013. However, we may not qualify or remain

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qualified as a REIT or we may be required to rely on a REIT “savings clause.” If we were to rely on a REIT “savings clause,” we would have to pay a penalty tax, which could be material.

If we fail to qualify as a REIT in any taxable year, we will face serious tax consequences that will substantially reduce the funds available for distributions to our stockholders because:

•we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular corporate rates;

•we could be subject to the federal alternative minimum tax for the taxable years beginning before January 1, 2018, and possibly increased state and local income taxes; and

•unless we are entitled to relief under certain U.S. federal income tax laws, we could not re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT.

If, as a result of covenants applicable to our future debt, we are restricted from making distributions to our stockholders, we may be unable to make distributions necessary for us to avoid U.S. federal corporate income and excise taxes and to qualify and maintain our qualification as a REIT, which could materially and adversely affect us. In addition, if we fail to qualify as a REIT, we will no longer be required to make distributions. As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, make distributions to our stockholders and it would adversely affect the value of our securities.

If Ashford Trust failed to qualify as a REIT in any of its 2009 through 2013 taxable years, we would be prevented from electing to qualify as a REIT under applicable Treasury Regulations until the fifth year after such failure.

Under applicable Treasury Regulations, if Ashford Trust failed to qualify as a REIT in any of its 2009 through 2013 taxable years, unless Ashford Trust’s failure to qualify as a REIT was subject to relief under U.S. federal income tax laws, we would be prevented from electing to qualify as a REIT prior to the fifth calendar year following the year in which Ashford Trust failed to qualify.

Even if we qualify and remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow.

Even if we qualify and remain qualified for taxation as a REIT, we may be subject to certain federal, state, and local taxes on our income and assets, as well as foreign taxes to the extent that we own assets or conduct operations in international jurisdictions. For example:

•We will be required to pay tax on undistributed REIT taxable income.

•If we have net income from the disposition of foreclosure property held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay tax on that income at the highest corporate rate.

•If we sell a property in a “prohibited transaction,” our gain from the sale would be subject to a 100% penalty tax.

•Each of our TRSs is a fully taxable corporation and will be subject to federal and state taxes on its income.

•We may experience increases in our state and local income tax burden. Over the past several years, certain state and local taxing authorities have significantly changed their income tax regimes in order to raise revenues. The changes enacted include the taxation of modified gross receipts (as opposed to net taxable income), the suspension of and/or limitation on the use of net operating loss deductions, increases in tax rates and fees, the addition of surcharges, and the taxation of our partnership income at the entity level. Facing mounting budget deficits, more state and local taxing authorities have indicated that they are going to revise their income tax regimes in this fashion and/or eliminate certain federally allowed tax deductions such as the REIT dividends paid deduction.

Failure to make required distributions would subject us to U.S. federal corporate income tax.

We intend to operate in a manner that allows as a REIT for U.S. federal income tax purposes. In order to qualify as a REIT, we generally are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain, each year to our stockholders. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our REIT taxable income, we will be subject to U.S. federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under the Code.

Our TRS structure increases our overall tax liability.

Our TRSs are subject to federal, state and local income tax on their taxable income, which consists of the revenues from the hotel properties leased by our TRS lessees, or, in the case of The Ritz-Carlton St. Thomas hotel, owned by our TRS, net of

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the operating expenses for such hotel properties and, in the case of hotel properties leased by our TRS lessees, rent payments to us. Accordingly, although our ownership of our TRS allows us to participate in the operating income from our hotel properties in addition to receiving rent, the net operating income is fully subject to income tax. The after-tax net income of our TRS is available for distribution to us, subject to any applicable withholding requirements.

If our leases with our TRS lessees are not respected as true leases for U.S. federal income tax purposes, we would fail to qualify as a REIT.

To qualify as a REIT, we are required to satisfy two gross income tests, pursuant to which specified percentages of our gross income must be passive income, such as rent. For the rent paid pursuant to the hotel leases with our TRS lessees, which constitutes substantially all of our gross income, to qualify for purposes of the gross income tests, the leases must be respected as true leases for U.S. federal income tax purposes and must not be treated as service contracts, joint ventures or some other type of arrangement. We have structured our leases, and intend to structure any future leases, so that the leases will be respected as true leases for U.S. federal income tax purposes, but the IRS may not agree with this characterization. If the leases were not respected as true leases for U.S. federal income tax purposes, we would not be able to satisfy either of the two gross income tests applicable to REITs and likely would fail to qualify as a REIT.

Our ownership of TRSs is limited and our transactions with our TRSs will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms.

A REIT may own up to 100% of the stock of one or more TRSs. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT, including gross operating income from hotels that are operated by eligible independent contractors pursuant to hotel management agreements. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. Finally the 100% excise tax also applies to the underpricing of services by a TRS to its parent REIT in contexts where the services are unrelated to services for REIT tenants.

Our TRSs are subject to federal, foreign, state and local income tax on their taxable income, and their after-tax net income is available for distribution to us but is not required to be distributed to us. We believe that the aggregate value of the stock and securities of our TRSs is less than 20% of the value of our total assets (including our TRS stock and securities).

We monitor the value of our respective investments in our TRSs for the purpose of ensuring compliance with TRS ownership limitations. In addition, we scrutinize all of our transactions with our TRSs to ensure that they are entered into on arm’s-length terms to avoid incurring the 100% excise tax described above. For example, in determining the amounts payable by our TRSs under our leases, we engaged a third party to prepare transfer pricing studies to ascertain whether the lease terms we established are on an arm’s-length basis as required by applicable Treasury Regulations. However, the receipt of a transfer pricing study does not prevent the IRS from challenging the arm’s length nature of the lease terms between a REIT and its TRS lessees. Consequently, we may not be able to avoid application of the 100% excise tax discussed above. Moreover, the IRS may impose excise taxes and penalties based on transactions that occurred prior to the spin-off.

If our hotel managers, including Ashford Hospitality Services, LLC and its subsidiaries (including Remington Hotels) do not qualify as “eligible independent contractors,” we would fail to qualify as a REIT.

Rent paid by a lessee that is a “related party tenant” of ours will not be qualifying income for purposes of the two gross income tests applicable to REITs. We lease all of our hotels to our TRS lessees, except for The Ritz-Carlton St. Thomas hotel, which is owned by one of our TRSs. A TRS lessee will not be treated as a “related party tenant,” and will not be treated as directly operating a lodging facility, which is prohibited, to the extent the TRS lessee leases properties from us that are managed by an “eligible independent contractor.”

We believe that the rent paid by our TRS lessees is qualifying income for purposes of the REIT gross income tests and that our TRSs qualify to be treated as TRSs for U.S. federal income tax purposes, but there can be no assurance that the IRS will not challenge this treatment or that a court would not sustain such a challenge. If we failed to meet either the asset or gross income tests, we would likely lose our REIT qualification for U.S. federal income tax purposes, unless certain relief provisions applied.

If our hotel managers, including Ashford Hospitality Services, LLC (“AHS”) and its subsidiaries (including Remington Hotels), do not qualify as “eligible independent contractors,” we would fail to qualify as a REIT. Each of the hotel management companies that enters into a management contract with our TRS lessees must qualify as an “eligible independent contractor”

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under the REIT rules in order for the rent paid to us by our TRS lessees to be qualifying income for our REIT income test requirements. Among other requirements, in order to qualify as an eligible independent contractor a manager must not own more than 35% of our outstanding shares (by value) and no person or group of persons can own more than 35% of our outstanding shares and the ownership interests of the manager, taking into account only owners of more than 5% of our shares and, with respect to ownership interests in such managers that are publicly-traded, only holders of more than 5% of such ownership interests. Complex ownership attribution rules apply for purposes of these 35% thresholds. Although we intend to monitor ownership of our shares by our hotel managers and their owners, it is possible that these ownership levels could be exceeded. Additionally, we and AHS and its subsidiaries, including Remington Hotels, must comply with the provisions of the private letter ruling we obtained from the IRS in connection with Ashford Inc.’s acquisition of Remington Hotels to ensure that AHS and its subsidiaries, including Remington Hotels, continue to qualify as “eligible independent contractors.”

Complying with REIT requirements may cause us to forego otherwise attractive opportunities.

To qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our shares of beneficial interest. In order to meet these tests, we may be required to forego investments we might otherwise make. Thus, compliance with the REIT requirements may have a material adverse effect on our performance.

Complying with REIT requirements may force us to liquidate otherwise attractive investments.

To qualify as a REIT, we must also ensure that at the end of each calendar quarter at least 75% of the value of our assets consists of cash, cash items, government securities, and qualified REIT real estate assets. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, no more than 20% of the value of our total assets can be represented by securities of one or more TRSs and no more than 25% of the value of our total assets can be represented by certain publicly offered REIT debt instruments.

If we fail to comply with these requirements at the end of any calendar quarter, we must correct such failure within 30 days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments.

Complying with REIT requirements may force us to borrow to make distributions to stockholders.

As a REIT, we must distribute at least 90% of our annual REIT taxable income, excluding net capital gains, (subject to certain adjustments) to our stockholders. To the extent that we satisfy the distribution requirement, but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under federal tax laws.

From time to time, we may generate taxable income greater than our net income for financial reporting purposes or our taxable income may be greater than our cash flow available for distribution to stockholders. If we do not have other funds available in these situations, we could be required to borrow funds, sell investments at disadvantageous prices, or find another alternative source of funds to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce the value of our equity.

We may elect to pay dividends on our common stock in cash or a combination of cash and shares of securities as permitted under U.S. federal income tax laws governing REIT distribution requirements. To the extent that we make distributions in excess of our current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), such distributions would generally be considered a return of capital for U.S. federal income tax purposes to the extent of the holder’s adjusted tax basis in its shares. A return of capital is not taxable, but it has the effect of reducing the holder’s adjusted tax basis in its investment. To the extent that distributions exceed the adjusted tax basis of a holder’s shares, they will be treated as gain from the sale or exchange of such stock.

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We may in the future choose to pay taxable dividends in our common stock instead of cash, in which case stockholders may sell our common stock to pay tax on such dividends, placing downward pressure on the market price of our common stock.

We may distribute taxable dividends that are payable in cash and common stock at the election of each stockholder subject to certain limitations, including that the cash portion be at least 20% of the total distribution (10% for distributions declared on or after November 1, 2021, and on or before June 30, 2022; while not clear, such 10% limitation could be extended in the future).

If we make a taxable dividend payable in cash and common stock, taxable stockholders receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of our current and accumulated earnings and profits, as determined for U.S. federal income tax purposes. As a result, stockholders may be required to pay income tax with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. If we made a taxable dividend payable in cash and our common stock and a significant number of our stockholders determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our common stock. We do not currently intend to pay taxable dividends of our common stock and cash, although we may choose to do so in the future.

The prohibited transactions tax may limit our ability to dispose of our properties.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. We may be subject to the prohibited transaction tax equal to 100% of net gain upon a disposition of real property. We may not be able to comply with the safe harbor to the characterization of the sale of real property by a REIT as a prohibited transaction. Consequently, we may choose not to engage in certain sales of our properties or we may conduct such sales through our TRS, which would be subject to federal and state income taxation.

The ability of our board of directors to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholders.

Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to qualify as a REIT, we would become subject to U.S. federal and state and local income taxes on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on the total return received by our stockholders.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.

The maximum U.S. federal income tax rate applicable to “qualified dividend income” payable to U.S. stockholders that are taxed at individual rates is 20%. Dividends payable by REITs, however, generally are not eligible for this reduced maximum rate on qualified dividend income. However, under the Tax Cuts and Jobs Act, a non-corporate taxpayer may deduct 20% of ordinary REIT dividends that are not “capital gain dividends” or “qualified dividend income” resulting in an effective maximum U.S. federal income tax rate of 29.6%. Individuals, trusts and estates whose income exceeds certain thresholds are also subject to a 3.8% Medicare tax on dividends received from us. The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our stock.

We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our securities.

At any time, the U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict when or if any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation, or interpretation may take effect retroactively. We and our stockholders could be adversely affected by any such change in the U.S. federal income tax laws, regulations or administrative interpretations. It is possible that future legislation would result in a REIT having fewer advantages, and it could become more advantageous for a company that invests in real estate to elect to be taxed, for U.S. federal income tax purposes, as a corporation.

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If our operating partnership failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT and suffer other adverse consequences.

We believe that our operating partnership will be treated as a partnership for U.S. federal income tax purposes. As a partnership, our operating partnership is not subject to U.S. federal income tax on its income. Instead, each of its partners, including us, is allocated, and may be required to pay tax with respect to, its share of our operating partnership’s income. The IRS could challenge the status of our operating partnership or any other subsidiary partnership in which we own an interest as a partnership for U.S. federal income tax purposes, and a court could sustain such a challenge. If the IRS were successful in treating our operating partnership or any such other subsidiary partnership as an entity taxable as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we would likely cease to qualify as a REIT. Also, the failure of our operating partnership or any subsidiary partnerships to qualify as a partnership could cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.

Note that although partnerships have traditionally not been subject to U.S. federal income tax at the entity level as described above, new audit rules, effective for tax years ending after December 31, 2017, will generally apply to the partnership. Under the new rules, unless an entity elects otherwise, taxes arising from audit adjustments are required to be paid by the entity rather than by its partners or members. We will have the authority to utilize, and intend to utilize, any exceptions available under the new provisions (including any changes) and Treasury Regulations so that the partners, to the fullest extent possible, rather than the partnership itself, will be liable for any taxes arising from audit adjustments to the issuing entity’s taxable income. One such exception is to apply an elective alternative method under which the additional taxes resulting from the adjustment are assessed from the affected partners (often referred to as a “push-out election”), subject to a higher rate of interest than otherwise would apply. When a push-out election causes a partner that is itself a partnership to be assessed with its share of such additional taxes from the adjustment, such partnership may cause such additional taxes to be pushed out to its own partners. In addition, Treasury Regulations provide that a partner that is a REIT may be able to use deficiency dividend procedures with respect to such adjustments. Many questions remain as to how the partnership audit rules will apply, and it is not clear at this time what effect these rules will have on us. However, it is possible that these changes could increase the U.S. federal income tax, interest, and/or penalties otherwise borne by us in the event of a U.S. federal income tax audit of a subsidiary partnership (such as our operating partnership).

Qualifying as a REIT involves highly technical and complex provisions of the Code.

Qualification as a REIT involves the application of highly technical and complex Code provisions for which, in certain instances, only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. Our qualification as a REIT will depend on our satisfaction or deemed satisfaction (through the application of REIT “savings clauses”) of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. New legislation, court decisions or administrative guidance, in each case possibly with retroactive effect, may make it more difficult or impossible for us to qualify as a REIT.

Declines in the values of our investments may make it more difficult for us to maintain our qualification as a REIT or exemption from the Investment Company Act.

If the market value or income potential of real estate-related investments declines as a result of increased interest rates or other factors, we may need to increase our real estate-related investments and income or liquidate our non-qualifying assets in order to maintain our REIT qualification or exemption from the Investment Company Act of 1940 (the “Investment Company Act”). If the decline in real estate asset values and/or income occurs quickly, this may be especially difficult to accomplish. This difficulty may be exacerbated by the illiquid nature of any non-qualifying assets that we may own. We may have to make investment decisions that we otherwise would not make absent the REIT and Investment Company Act considerations.

Risks Related to our Common Stock

Broad market fluctuations could negatively impact the market price of our stock.

The market price of our common stock may be volatile. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. Some of the factors that could affect our stock price or result in fluctuations in the price or trading volume of our common stock include:

•actual or anticipated variations in our quarterly operating results;

•changes in our operations or earnings estimates or publication of research reports about us or the industry;

•changes in market valuations of similar companies;

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•adverse market reaction to any increased indebtedness we incur in the future;

•additions or departures of key management personnel;

•actions by institutional stockholders;

•failure to meet and maintain REIT qualification;

•speculation in the press or investment community; and

•general market and economic conditions.

In addition, the stock market has experienced price and volume fluctuations that have affected the market prices of many companies in industries similar or related to ours and may have been unrelated to operating performances of these companies. These broad market fluctuations could reduce the market price of our common stock. During the fiscal year ended December 31, 2021, the high of our stock price was $7.45 and the low was $4.18.

Future offerings of debt securities, which would be senior to our common stock upon liquidation, and future offerings of equity securities, which would dilute our existing stockholders and may be senior to our common stock for the purposes of dividend and liquidating distributions, may adversely affect the market price of our common stock.

In the future, we may attempt to increase our capital resources by making offerings of debt or equity securities, including commercial paper, medium-term notes, senior or subordinated notes, convertible securities, and classes of preferred stock or common stock or classes of preferred units. Upon liquidation, holders of our debt securities and preferred stock or preferred units and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our common stock. Equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both. Preferred stock and preferred units, if issued, could have a preference on liquidating distributions or a preference on dividend payments that could limit our ability to make a distribution to the holders of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the market price of our securities and diluting their securities holdings in us.

The number of shares available for future sale could adversely affect the per share trading price of our common stock.

We cannot predict whether future issuances of shares of our common stock or the availability of shares for resale in the open market will decrease the per share trading price of our common stock. The issuance of substantial numbers of shares of our common stock in the public market, or upon exchange of common units of our operating partnership, or the perception that such issuances might occur, could adversely affect the per share trading price of our common stock. Sales of substantial amounts of shares of our common stock in the public market, or upon exchange of the common units, or speculation that such sales might occur, could adversely affect the liquidity of the market for our common stock or the prevailing market price of our common stock. In addition, the exchange of common units for common stock, the exercise of any stock options or the vesting of any restricted stock granted under the 2013 Equity Incentive Plan, the issuance of our common stock or common units in connection with property, portfolio or business acquisitions and other issuances of our common stock or common units could adversely affect the market price of our common stock. Our directors and executive officers own common units in our Company. Such common units may be redeemed by the holders for shares of our common stock or, at our option, cash on a one-for-one basis. The holders of these common units may sell shares issued to them, if any, upon redemption of the common units. So long as the holders of common units retain significant ownership in us and are able to sell such shares in the public markets, the market price of our common stock may be adversely affected. Moreover, the existence of shares of our common stock reserved for issuance as restricted shares or upon exchange of options or common units may adversely affect the terms upon which we may be able to obtain additional capital through the sale of equity securities. Any future sales by us of our common stock or securities convertible into common stock may be dilutive to existing stockholders.

The market price of our common stock could be adversely affected by our level of cash distributions.

The market value of the equity securities of a REIT is based primarily upon the market’s perception of the REIT’s growth potential and its current and potential future cash distributions, whether from operations, sales or refinancings, and is secondarily based upon the real estate market value of the underlying assets. For that reason, our common stock may trade at prices that are higher or lower than our net asset value per share. To the extent we retain operating cash flow for investment purposes, working capital reserves or other purposes, these retained funds, while increasing the value of our underlying assets, may not correspondingly increase the market price of our common stock. Our failure to meet the market’s expectations with regard to future earnings and cash distributions likely would adversely affect the market price of our common stock. See the risk factor “The outbreak of COVID-19 has and will continue to reduce our occupancy rates and RevPAR.”

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Our stock repurchase program could increase the volatility of the price of our common stock.

Our board of directors has approved a share repurchase program under which we may purchase up to $50 million of our common stock from time to time. The specific timing, manner, price, amount and other terms of the repurchases, if any, will be at management’s discretion and will depend on market conditions, corporate and regulatory requirements and other factors. We are not required to repurchase shares under the repurchase program, and the board of directors may modify, suspend or terminate the repurchase program at any time for any reason. As of March 8, 2022, $50.0 million remains available for repurchases under the current stock repurchase program. We cannot predict the impact that future repurchases, if any, of our common stock under this program will have on our stock price or earnings per share. Important factors that could cause us to discontinue or decrease our share repurchases include, among others, unfavorable market conditions, the market price of our common stock, the nature of other investment or strategic opportunities presented to us from time to time, the rate of dilution of our equity compensation programs, our ability to make appropriate, timely, and beneficial decisions as to when, how, and whether to purchase shares under the stock repurchase program, and the availability of funds necessary to continue purchasing stock. If we curtail our repurchase program, our stock price may be negatively affected.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Offices

We lease our headquarters located at 14185 Dallas Parkway, Suite 1200, Dallas, Texas 75254.

Hotel Properties

As of December 31, 2021, we held ownership interests in 14 hotel properties that were included in our consolidated operations, which included direct ownership in 12 hotel properties and 75% ownership in two hotel properties through equity investments with our partner. Thirteen of our hotel properties are located in the United States and one is located in the U.S. Virgin Islands. Each of the 14 hotel properties is encumbered by loans as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Indebtedness.”

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Hotel Properties

The following table presents certain information related to our hotel properties:

Hotel Property	Location	Total Rooms	% Owned		Owned Rooms	Year Ended December 31, 2021
						Occupancy		ADR		RevPAR
Fee Simple Properties
Capital Hilton	Washington, D.C.	550	75	%	413	30.47	%	$	159.77	$	48.68
Marriott Seattle Waterfront	Seattle, WA	361	100	%	361	52.22	%	219.51		114.64
The Notary Hotel	Philadelphia, PA	499	100	%	499	36.94	%	176.70		65.27
The Clancy	San Francisco, CA	410	100	%	410	55.97	%	174.64		97.74
Sofitel Chicago Magnificent Mile	Chicago, IL	415	100	%	415	46.93	%	202.88		95.21
Pier House Resort & Spa	Key West, FL	142	100	%	142	81.83	%	591.40		483.93
The Ritz-Carlton St. Thomas	St. Thomas, USVI	180	100	%	180	79.52	%	1,049.29		834.39
Park Hyatt Beaver Creek Resort & Spa	Beaver Creek, CO	190	100	%	190	54.94	%	454.17		249.50
Hotel Yountville	Yountville, CA	80	100	%	80	57.90	%	762.15		441.29
The Ritz-Carlton Sarasota	Sarasota, FL	276	100	%	276	76.99	%	545.68		420.14
The Ritz-Carlton Lake Tahoe (1)	Truckee, CA	170	100	%	170	55.00	%	642.81		353.56
Mr. C Beverly Hills Hotel (2)	Los Angeles, CA	143	100	%	143	63.88	%	332.86		212.62
Ground Lease Properties (3)
Hilton La Jolla Torrey Pines (4)	La Jolla, CA	394	75	%	296	57.80	%	203.63		117.70
Bardessono Hotel and Spa (5)	Yountville, CA	65	100	%	65	67.92	%	1,141.39		775.18
Total		3,875			3,640	52.44	%	$	384.95	$	201.86

________

(1)    The above information does not include the operations of ten condominium units not owned by The Ritz-Carlton Lake Tahoe.

(2)    Includes 138 hotel rooms and five residences adjacent to the hotel. The results of the Mr. C Beverly Hills Hotel and the five adjacent luxury residences are included from August 5, 2021 through December 31, 2021.

(3)    Some of our hotel properties are on land subject to ground leases, two of which cover the entire property.

(4)    The ground lease expires in 2067. The ground lease contains one extension option of either 10 or 20 years dependent upon capital investment spend during the lease term.

(5)    The initial ground lease expires in 2065. The ground lease contains two 25-year extension options, at our election.

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Item 3. Legal Proceedings

On October 24, 2019, the Company provided notice to Accor of the material breach of Accor’s responsibilities under the Accor management agreement for the Sofitel Chicago Magnificent Mile at 20 East Chestnut Street in Chicago, Illinois. On November 7, 2019, Accor filed a complaint against Ashford TRS Chicago II in the Supreme Court of the State of New York, New York County, seeking a declaratory judgment that no breach under the management agreement has occurred and an injunction to prevent Ashford TRS Chicago II from terminating the management agreement. Accor’s complaint was dismissed on or about February 27, 2020. On January 6, 2020, Ashford TRS Chicago II filed a complaint against Accor in the Supreme Court of the State of New York, New York County, alleging breach of the Accor management agreement and seeking damages and a declaration of its right to terminate the Accor management agreement. On July 20, 2020, Accor filed an Amended Answer and Counterclaims against Ashford TRS Chicago II, in which Accor asserts two causes of action: First, Accor asserts a counterclaim for declaratory judgment that Accor correctly calculated the amount payable to Ashford TRS Chicago II under the management agreement to “cure” Accor’s performance test failure (the “Cure Amount”). Second, Accor asserts a counterclaim for breach of contract alleging that Ashford TRS Chicago II breached the management agreement by wrongfully maintaining that the Cure Amount for the 2018 and 2019 Performance Test failure is $1,031,549 instead of $535,120. As of December 31, 2021, no amounts have been accrued. On February 16, 2022, the parties entered into a settlement agreement agreeing to: 1) amend the management agreement; 2) dismiss the lawsuit and counterclaims; 3) stipulate to the failure of the performance tests and cure amounts for 2018 of $867,682 and 2019 of $784,919; and 4) arbitrate whether the performance tests for 2020 and 2021 were valid and/or required equitable adjustment. On February 23, 2022, Ashford TRS Chicago II and Accor filed a stipulation of discontinuance dismissing all claims, counterclaims, and cross-claims in the January 6, 2020 action with prejudice.

One of the Company’s hotel management companies is currently involved in litigation regarding its employment policies and practices at multiple California hotels, including one of the Company’s hotels. On January 28, 2022, the Court approved a settlement of this litigation. The resulting loss to the Company is approximately $448,000; although it is entitled to indemnification in the amount of approximately $291,000, based on the respective periods of ownership of the Company’s hotel. As of December 31, 2021, approximately $500,000 was accrued.

In June 2020, each of the Company, Ashford Trust, Ashford Inc., and Lismore, a subsidiary of Ashford Inc. (collectively with the Company, Ashford Trust, Ashford Inc. and Lismore, the “Ashford Companies”), received an administrative subpoena from the SEC. The Company’s administrative subpoena required the production of documents and other information since January 1, 2018 relating to, among other things, (1) related party transactions among the Ashford Companies (including the Lismore Agreement between the Company and Lismore pursuant to which the Company engaged Lismore to negotiate the refinancing, modification or forbearance of certain mortgage debt) or between any of the Ashford Companies and any officer, director or owner of the Ashford Companies or any entity controlled by any such person, and (2) the Company’s accounting policies, procedures, and internal controls related to such related party transactions. In addition, in October 2020, Mr. Monty J. Bennett, chairman of our board of directors, received an administrative subpoena from the SEC requiring testimony and the production of documents and other information substantially similar to the requests in the subpoenas received by the Ashford Companies. On January 11, 2022, the Company received a letter from the staff of the SEC stating that the SEC's investigation is concluded, and that the SEC enforcement staff does not intend to recommend any action by the SEC against the Company. Ashford Trust and Ashford Inc. also each received a letter stating that the SEC's investigation is concluded, and that the SEC enforcement staff does not intend to recommend any action against the respective companies.

On December 20, 2016, a class action lawsuit was filed against one of the Company’s hotel management companies in the Superior Court of the State of California in and for the County of Contra Costa alleging violations of certain California employment laws, which class action affects two hotels owned by subsidiaries of the Company. The court has entered an order granting class certification with respect to: (1) a statewide class of non-exempt employees of our manager who were allegedly deprived of rest breaks as a result of our manager’s previous written policy requiring its employees to stay on premises during rest breaks; and (2) a derivative class of non-exempt former employees of our manager who were not paid for allegedly missed breaks upon separation from employment. Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class; however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. While we believe it is reasonably possible that we may incur a loss associated with this litigation, because there remains uncertainty under California law with respect to a significant legal issue, discovery relating to class members continues, and the trial judge retains discretion to award lower penalties than set forth in the applicable California employment laws, we do not believe any potential loss to the Company is reasonably estimable at this time. As of December 31, 2021, no amounts have been accrued.

As of December 31, 2021, the Company had a $728,000 receivable from Ashford Trust, included in Due from related parties, net. The receivable related to a legal settlement between Ashford Trust and the City of San Francisco regarding a

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transfer tax matter associated with the transfer of The Clancy from Ashford Trust to Braemar upon Braemar’s 2013 spin-off from Ashford Trust. The transfer taxes were initially paid by Braemar at the time of the spin-off. The $728,000 gain is included in “(gain) loss on legal settlements” on the consolidated statements of operations. In January 2022, the City of San Francisco remitted payment to Ashford Trust, which subsequently remitted payment to Braemar.

We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated. To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters and matters relating to compliance with applicable law (for example, the ADA and similar state laws). The likelihood of loss from these legal proceedings is based on the definitions within contingency accounting literature. We recognize a loss when we believe the loss is both probable and reasonably estimable. Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations, or cash flow. However, our assessment may change depending upon the development of these legal proceedings, and the final results of these legal proceedings cannot be predicted with certainty. If we do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.

Item 4. Mine Safety Disclosures

None.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Price and Dividend Information

Our common stock is listed and traded on the NYSE under the symbol “BHR.” On March 8, 2022, there were 623 holders of record.

Distributions and Our Distribution Policy

We did not pay dividends on our common stock in fiscal year 2020 and 2021. On March 4, 2022, our board of directors declared a quarterly cash dividend of $0.01 per diluted share for the Company’s common stock for the first quarter of 2022. Additionally, in March 2022, the board of directors approved an update to our previously announced dividend policy for 2022 to revise our then-expectation to pay a quarterly dividend of $0.01 per share of common stock during 2022. The approval of our dividend policy does not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof. The board of directors will continue to review our dividend policy and make announcements with respect thereto. For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof.

To qualify as a REIT, we must distribute to our stockholders an amount at least equal to:

(i)90% of our REIT taxable income, determined before the deduction for dividends paid and excluding any net capital gain (which does not necessarily equal net income as calculated in accordance with GAAP); plus

(ii)90% of the excess of our net income from foreclosure property over the tax imposed on such income by the Code; less

(iii)any excess non-cash income (as determined under the Code).

Distributions made by us are authorized and determined by our board of directors in its sole discretion out of funds legally available therefor and are dependent upon a number of factors, including restrictions under applicable law, actual and projected financial condition, liquidity, EBITDA, FFO and results of operations, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements and such other factors as our board of directors deems relevant. For more information regarding risk factors that could materially and adversely affect our ability to make distributions. See “Risk Factors-Risks Related to Our Status as a REIT.” We expect that, at least initially, our distributions may exceed our net income under GAAP because of non-cash expenses included in net income. To the extent that our cash available for distribution is less than 90% of our REIT taxable income, we may consider various means to cover any such shortfall, including borrowing under new loans, selling certain of our assets or using a portion of the net proceeds we receive from future offerings of equity, equity-related or debt securities or declaring taxable stock dividends. In addition, our charter allows us to issue preferred stock that could have a preference on distributions, and, if we elect such issuance, the

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distribution preference on the preferred stock could limit our ability to make distributions to the holders of our common stock. We cannot assure our stockholders that our distribution policy will not change in the future.

Characterization of Distributions

For income tax purposes, distributions paid consist of ordinary income or capital gains. Distributions paid per share were characterized as follows:

	2021					2020					2019
	Amount			%		Amount			%		Amount			%
Common Stock (cash):
Ordinary income	$	—		—	%	$	—		—	%	$	—		—	%
Capital gain	—			—		—			—		—			—
Unrecaptured 1250 gain	—			—		—			—		—			—
Return of capital	—			—		0.1600		(1)	100.0000		0.6400		(1)	100.0000
Total	$	—		—	%	$	0.1600		100.0000	%	$	0.6400		100.0000	%
Common Stock (stock - NYSE: AINC):
Ordinary income	$	—		—	%	$	—		—	%	$	—		—	%
Capital gain	—			—		—			—		—			—
Unrecaptured 1250 gain	—			—		—			—		—			—
Return of capital	—			—		—			—		0.1066		(2)	100.0000
Total	$	—		—	%	$	—		—	%	$	0.1066		100.0000	%
Preferred Stock – Series B:
Ordinary income	$	—		—	%	$	—		—	%	$	—		—	%
Capital gain	—			—		—			—		—			—
Unrecaptured 1250 gain	—			—		—			—		—			—
Return of capital	1.3752		(1)	100.0000		1.3752		(1)	100.0000		1.3752		(1)	100.0000
Total	$	1.3752		100.0000	%	$	1.3752		100.0000	%	$	1.3752		100.0000	%
Preferred Stock – Series D:
Ordinary income	$	—		—	%	$	—		—	%	$	—		—	%
Capital gain	—			—		—			—		—			—
Unrecaptured 1250 gain	—			—		—			—		—			—
Return of capital	2.0624		(1)	100.0000		2.0624		(1)	100.0000		1.7817		(1)	100.0000
Total	$	2.0624		100.0000	%	$	2.0624		100.0000	%	$	1.7817		100.0000	%
Preferred Stock – Series E:	$	—		—	%	$	—		—	%	$	—		—	%
Ordinary income	—			—		—			—		—			—
Capital gain	—			—		—			—		—			—
Unrecaptured 1250 gain	—			—		—			—		$	—		—
Return of capital	0.8330		(1)	100.0000		—			—		$	—		—
Total	$	0.8330		100.0000	%	$	—		—	%	$	—		—	%
Preferred Stock – Series M:	$	—		—	%	$	—		—	%	$	—		—	%
Ordinary income	—			—		—			—		—			—
Capital gain	—			—		—			—		—			—
Unrecaptured 1250 gain	—			—		—			—		$	—		—
Return of capital	0.6832		(1)	100.0000		—			—		$	—		—
Total	$	0.6832		100.0000	%	$	—		—	%	$	—		—	%

____________________

(1)The fourth quarter 2018 distributions paid January 15, 2019 to stockholders of record as of December 31, 2018 are treated as 2019 distributions for tax purposes. The fourth quarter 2019 distributions paid January 15, 2020 to stockholders of record as of December 31, 2019 are treated as 2020 distributions for tax purposes. The fourth quarter 2020 distributions paid January 15, 2021 to stockholders of

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record as of December 31, 2020 are treated as 2021 distributions for tax purposes. The fourth quarter 2021 distributions paid January 18, 2022 to stockholders of record as of December 31, 2021 are treated as 2022 distributions for tax purposes.

(2)On November 5, 2019 Braemar distributed its remaining shares of common stock in Ashford Inc. (NYSE: AINC) to the common stockholders of record as of the close of business of the New York Stock Exchange on October 29, 2019.

Equity Compensation Plan Information

The following table sets forth certain information with respect to securities authorized and available for issuance under our equity compensation plans.

	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights	Weighted-Average Exercise Price Of Outstanding Options, Warrants, And Rights	Number of Securities Remaining Available for Future Issuance
Equity compensation plans approved by security holders	None	N/A	774,108	(1)
Equity compensation plans not approved by security holders	None	N/A	None
Total	None	N/A	774,108

____________________

(1) As of December 31, 2021, approximately 774,000 shares of our common stock, or securities convertible into approximately 774,000 shares of our common stock, remained available for issuance under our 2013 Equity Incentive Plan. On February 23, 2021, the board of directors terminated the Advisor Equity Incentive Plan. 1.6 million shares of common stock reserved pursuant with the Advisor Incentive Plan were never utilized (and no shares were ever issued thereunder). Following the termination of the Advisor Equity Incentive Plan, no shares may be issued thereunder.

Purchases of Equity Securities by the Issuer

On December 5, 2017, our board of directors approved the stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock having an aggregate value of up to $50 million. The board of directors’ authorization replaced any previous repurchase authorizations.

No shares were purchased during the year ended December 31, 2021, pursuant to the authorization. $50 million remains authorized by the board of directors pursuant to the December 5, 2017 approval.

The following table provides the information with respect to purchases of our common stock during each of the months in the quarter ended December 31, 2021:

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Plan	Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plan
Common stock:
October 1 to October 31	3,254	(1)	$	—	—	$	50,000,000
November 1 to November 30	44	(1)	$	—	—	$	50,000,000
December 1 to December 31	642	(1)	$	—	—	$	50,000,000
Total	3,940		$	—	—

__________________

(1)There is no cost associated with the forfeiture of restricted shares of 3,254, 44 and 642 of our common stock in October, November and December, respectively.

Performance Graph

The following graph compares the percentage change in the cumulative total stockholder return on our common stock with the cumulative total return of the S&P 500 Stock Index and the FTSE NAREIT Lodging & Resorts Index for the period from December 31, 2016 through December 31, 2021, assuming an initial investment of $100 in stock on December 31, 2016 with reinvestment of dividends. The NAREIT Lodging Resorts Index is not a published index; however, we believe the companies included in this index provide a representative example of enterprises in the lodging resort line of business in which we engage. Stockholders who wish to request a list of companies in the FTSE NAREIT Lodging & Resorts Index may send written requests to Braemar Hotels & Resorts Inc., Attention: Investor Relations, 14185 Dallas Parkway, Suite 1200, Dallas, Texas 75254.

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The stock price performance shown below on the graph is not necessarily indicative of future stock price performance.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN

Among Braemar Hotels & Resorts Inc., the S&P Index and the FTSE NAREIT Lodging & Resorts Index

Item 6. Reserved

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the accompanying notes thereto included in Item 8. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K. See “Forward-Looking Statements.”

This section of this Form 10-K generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Overview

We are a Maryland corporation formed in April 2013 that invests primarily in high revenue per available room (“RevPAR”), luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by Smith Travel Research. Two times the

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U.S. national average was $144 for the year ended December 31, 2021. We have elected to be taxed as a REIT under the Code. We conduct our business and own substantially all of our assets through our operating partnership, Braemar OP.

We operate in the direct hotel investment segment of the hotel lodging industry. As of December 31, 2021, we owned interests in 14 hotel properties in six states, the District of Columbia and St. Thomas, U.S. Virgin Islands with 3,875 total rooms, or 3,640 net rooms, excluding those attributable to our joint venture partner. The hotel properties in our current portfolio are predominantly located in U.S. urban markets and resort locations with favorable growth characteristics resulting from multiple demand generators. We own 12 of our hotel properties directly, and the remaining two hotel properties through an investment in a majority-owned consolidated entity.

We are advised by Ashford LLC, a subsidiary of Ashford Inc., through an advisory agreement. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.

We do not operate any of our hotel properties directly; instead we employ hotel management companies to operate them for us under management contracts. As of December 31, 2021, Remington Hotels, a subsidiary of Ashford Inc., managed four of our 14 hotel properties. Third-party management companies managed the remaining hotel properties.

Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory services, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and mobile key technology.

Liquidity

In December 2019, COVID-19 was identified in Wuhan, China, subsequently spread to other regions of the world, and has resulted in significant travel restrictions and extended shutdown of numerous businesses throughout the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Beginning in late February 2020, we experienced a significant decline in occupancy and RevPAR associated with COVID-19 as we experienced significant reservation cancellations as well as a significant reduction in new reservations. The prolonged presence of the virus has resulted in health and other government authorities imposing widespread restrictions on travel and other businesses.

As of December 31, 2021, the Company maintained unrestricted cash of $216.0 million and restricted cash of $47.4 million. The vast majority of the restricted cash comprises lender and manager held reserves. At the end of the year, there was also $27.5 million due to the Company from third-party hotel managers, which is primarily the Company’s cash held by one of its property managers which is also available to fund hotel operating costs. For the year ended December 31, 2021, cash flows provided by operating activities were approximately $64.0 million. On March 4, 2022, our board of directors declared a quarterly cash dividend of $0.01 per diluted share for the Company’s common stock for the first quarter of 2022. Additionally, in March 2022, the board of directors approved an update to our previously announced dividend policy for 2022 to revise our then-expectation to pay a quarterly dividend of $0.01 per share of common stock during 2022. The approval of our dividend policy does not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof.

We cannot predict when hotel operating levels will return to normalized levels after the effects of the pandemic fully subside, whether our hotels will be forced to shut down operations or whether one or more possible recurrences of COVID-19 case surges could result in further reductions in business and personal travel or potentially cause state and local governments to reinstate travel restrictions. Facts and circumstances could change in the future that are outside of management’s control, such as additional government mandates, health official orders, travel restrictions and extended business shutdowns due to COVID-19.

Recent Developments

In December 2021, the Company made an additional investment of approximately $116,000 in OpenKey.

On December 27, 2021, the Company entered into a definitive agreement to acquire the 96-room Dorado Beach, a Ritz-Carlton Reserve in Dorado, Puerto Rico. In addition, the Company is also acquiring the income stream attributable to 14 residential units adjacent to the property that participate in a rental management program. The acquisition is expected to close on or about March 11, 2022, subject to certain customary closing conditions. The consideration consists of $104 million in cash and 6.0 million shares of Braemar common stock. The Company will also assume a mortgage loan with a principal balance of approximately $54 million.

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On February 2, 2022, the Company refinanced its mortgage loan secured by the Park Hyatt Beaver Creek Resort & Spa, which had a final maturity date in April 2022. The new, non-recourse mortgage loan totals $70.5 million and has a two-year initial term with three 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 + 2.86%

Key Indicators of Operating Performance

We use a variety of operating and other information to evaluate the operating performance of our business. These key indicators include financial information that is prepared in accordance with GAAP as well as other financial measures that are non-GAAP measures. In addition, we use other information that may not be financial in nature, including statistical information and comparative data. We use this information to measure the operating performance of our individual hotels, groups of hotels and/or business as a whole. We also use these metrics to evaluate the hotels in our portfolio and potential acquisitions to determine each hotel’s contribution to cash flow and its potential to provide attractive long-term total returns. These key indicators include:

•Occupancy. Occupancy means the total number of hotel rooms sold in a given period divided by the total number of rooms available. Occupancy measures the utilization of our hotels’ available capacity. We use occupancy to measure demand at a specific hotel or group of hotels in a given period.

•ADR. ADR means average daily rate and is calculated by dividing total hotel rooms revenues by total number of rooms sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. We use ADR to assess the pricing levels that we are able to generate.

•RevPAR. RevPAR means revenue per available room and is calculated by multiplying ADR by the average daily occupancy. RevPAR is one of the commonly used measures within the hotel industry to evaluate hotel operations. RevPAR does not include revenues from food and beverage sales or parking, telephone or other non-rooms revenues generated by the property. Although RevPAR does not include these ancillary revenues, it is generally considered the leading indicator of core revenues for many hotels. We also use RevPAR to compare the results of our hotels between periods and to analyze results of our comparable hotels (comparable hotels represent hotels we have owned for the entire period). RevPAR improvements attributable to increases in occupancy are generally accompanied by increases in most categories of variable operating costs. RevPAR improvements attributable to increases in ADR are generally accompanied by increases in limited categories of operating costs, such as management fees and franchise fees.

RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR. For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increased other operating department revenue and expense. Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.

Occupancy, ADR and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring operating performance at the individual hotel level and across our entire business. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only rooms revenue. Rooms revenue is dictated by demand (as measured by occupancy), pricing (as measured by ADR) and our available supply of hotel rooms.

We also use funds from operations (“FFO”), Adjusted FFO, earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) and Adjusted EBITDAre as measures of the operating performance of our business. See “Non-GAAP Financial Measures.”

Principal Factors Affecting Our Results of Operations

The principal factors affecting our operating results include overall demand for hotel rooms compared to the supply of available hotel rooms, and the ability of our third-party management companies to increase or maintain revenues while controlling expenses.

Demand. The demand for lodging, including business travel, is directly correlated to the overall economy; as GDP increases, lodging demand typically increases. Historically, periods of declining demand are followed by extended periods of relatively strong demand, which typically occurs during the growth phase of the lodging cycle. Beginning in 2020, the COVID-19 pandemic had a direct impact on demand.

Supply. The development of new hotels is driven largely by construction costs, the availability of financing and expected performance of existing hotels. Short-term supply is also expected to be below long-term averages. While the industry is

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expected to have supply growth below historical averages, we may experience supply growth, in certain markets, in excess of national averages that may negatively impact performance. Beginning in 2020, the COVID-19 pandemic had a direct impact on supply.

We expect that our ADR, occupancy and RevPAR performance will be impacted by macroeconomic factors such as national and local employment growth, personal income and corporate earnings, GDP, consumer confidence, office vacancy rates and business relocation decisions, airport and other business and leisure travel, new hotel construction, the pricing strategies of competitors and currency fluctuations. In addition, our ADR, occupancy and RevPAR performance are dependent on the continued success of the Marriott, Hilton, Hyatt and Sofitel brands.

Revenue. Substantially all of our revenue is derived from the operation of hotels. Specifically, our revenue is comprised of:

•Rooms revenue: Occupancy and ADR are the major drivers of rooms revenue. Rooms revenue accounts for the substantial majority of our total revenue.

•Food and beverage revenue: Occupancy and the type of customer staying at the hotel are the major drivers of food and beverage revenue (i.e., group business typically generates more food and beverage business through catering functions when compared to transient business, which may or may not utilize the hotel’s food and beverage outlets or meeting and banquet facilities).

•Other hotel revenue: Occupancy and the nature of the property are the main drivers of other ancillary revenue, such as telecommunications, parking and leasing services.

Hotel Operating Expenses. The following presents the components of our hotel operating expenses:

•Rooms expense: These costs include housekeeping wages and payroll taxes, reservation systems, room supplies, laundry services and front desk costs. Like rooms revenue, occupancy is the major driver of rooms expense and, therefore, rooms expense has a significant correlation to rooms revenue. These costs can increase based on increases in salaries and wages, as well as the level of service and amenities that are provided.

•Food and beverage expense: These expenses primarily include food, beverage and labor costs. Occupancy and the type of customer staying at the hotel (i.e., catered functions generally are more profitable than restaurant, bar or other on-property food and beverage outlets) are the major drivers of food and beverage expense, which correlates closely with food and beverage revenue.

•Management fees: Base management fees are computed as a percentage of gross revenue. Incentive management fees generally are paid when operating profits exceed certain threshold levels.

•Other hotel expenses: These expenses include labor and other costs associated with the other operating department revenues, as well as labor and other costs associated with administrative departments, franchise fees, sales and marketing, repairs and maintenance and utility costs.

Most categories of variable operating expenses, including labor costs such as housekeeping, fluctuate with changes in occupancy. Increases in occupancy are accompanied by increases in most categories of variable operating expenses, while increases in ADR typically only result in increases in limited categories of operating costs and expenses, such as franchise fees, management fees and credit card processing fee expenses which are based on hotel revenues. Thus, changes in ADR have a more significant impact on operating margins than changes in occupancy.

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RESULTS OF OPERATIONS

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

The following table summarizes changes in key line items from our consolidated statements of operations for the years ended December 31, 2021 and 2020 (in thousands except percentages):

	Year Ended December 31,				Favorable (Unfavorable)
	2021		2020		$ Change		% Change
Revenue
Rooms	$	280,568	$	136,265	$	144,303	105.9	%
Food and beverage	90,299		50,263		40,036		79.7
Other	56,675		40,446		16,229		40.1
Total hotel revenue	427,542		226,974		200,568		88.4
Expenses
Hotel operating expenses:
Rooms	59,818		38,054		(21,764)		(57.2)
Food and beverage	75,177		46,246		(28,931)		(62.6)
Other expenses	138,914		98,467		(40,447)		(41.1)
Management fees	13,117		7,210		(5,907)		(81.9)
Total hotel operating expenses	287,026		189,977		(97,049)		(51.1)
Property taxes, insurance and other	34,997		28,483		(6,514)		(22.9)
Depreciation and amortization	73,762		73,371		(391)		(0.5)
Gain on legal settlement	(917)		—		917
Advisory services fee	22,641		18,486		(4,155)		(22.5)
Transaction costs	563		—		(563)
Corporate general and administrative	8,717		6,657		(2,060)		(30.9)
Total expenses	426,789		316,974		(109,815)		(34.6)
Gain (loss) on insurance settlement and disposition of assets	696		10,149		(9,453)		(93.1)
Operating income (loss)	1,449		(79,851)		81,300		101.8
Equity in earnings (loss) of unconsolidated entity	(252)		(217)		(35)		(16.1)
Interest income	48		176		(128)		(72.7)
Other income (expense)	—		(5,126)		5,126		100.0
Interest expense and amortization of discounts and loan costs	(30,901)		(45,104)		14,203		31.5
Write-off of loan costs and exit fees	(1,963)		(3,920)		1,957		49.9
Unrealized gain (loss) on derivatives	32		4,959		(4,927)		(99.4)
Income (loss) before income taxes	(31,587)		(129,083)		97,496		75.5
Income tax (expense) benefit	(1,324)		4,406		(5,730)		(130.0)
Net income (loss)	(32,911)		(124,677)		91,766		73.6
(Income) loss attributable to noncontrolling interest in consolidated entities	2,650		6,436		(3,786)		(58.8)
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	3,597		12,979		(9,382)		(72.3)
Net income (loss) attributable to the Company	$	(26,664)	$	(105,262)	$	78,598	74.7	%

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All hotel properties owned for the years ended December 31, 2021 and 2020 have been included in our results of operations during the respective periods in which they were owned. Based on when a hotel property was acquired or disposed of, operating results for certain hotel properties are not comparable for the years ended December 31, 2021 and 2020. 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 acquisitions and dispositions affect reporting comparability related to our consolidated financial statements:

Hotel Properties	Location	Acquisition/Disposition	Acquisition/Disposition Date
Mr. C Beverly Hills Hotel	Los Angeles, California	Acquisition	August 5, 2021

The following table illustrates the key performance indicators of all hotel properties for the periods indicated:

	Year Ended December 31,
	2021			2020
Occupancy	52.47		%	30.27		%
ADR (average daily rate)	$	386.45		$	329.83
RevPAR (revenue per available room)	$	202.76		$	99.83
Rooms revenue (in thousands)	$	280,568		$	136,265
Total hotel revenue (in thousands)	$	427,542		$	226,974

The following table illustrates the key performance indicators of the 13 hotel properties that were included for the years ended December 31, 2021 and 2020:

	Year Ended December 31,
	2021			2020
Occupancy	52.29		%	30.27		%
ADR (average daily rate)	$	387.47		$	329.83
RevPAR (revenue per available room)	$	202.61		$	99.83
Rooms revenue (in thousands)	$	276,038		$	136,265
Total hotel revenue (in thousands)	$	420,949		$	226,974

Net Income (Loss) Attributable to the Company. Net loss attributable to the Company decreased $78.6 million, from $105.3 million for the year ended December 31, 2020 (“2020”), to $26.7 million for the year ended December 31, 2021 (“2021”), as a result of the factors discussed below.

Rooms Revenue. Rooms revenue increased $144.3 million, or 105.9%, to $280.6 million during 2021 compared to 2020. During 2021, we experienced a 2,220 basis point increase in occupancy and a 17.2% increase in room rates compared to 2020. The increase in rooms revenue is due to the hotel properties recovering from the COVID-19 pandemic as well as an increase of $4.5 million associated with the acquisition of the Mr. C Beverly Hills Hotel on August 5, 2021.

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Fluctuations in rooms revenue between 2021 and 2020 is a result of the changes in occupancy and ADR between 2021 and 2020 as reflected in the table below (dollars in thousands):

Hotel Property	Favorable (Unfavorable)
	Rooms Revenue		Occupancy (change in bps)	ADR (change in %)
Comparable
Capital Hilton (1)	$	2,178	1,132	(18.9)	%
Marriott Seattle Waterfront	9,501		3,155	7.0	%
The Notary Hotel	4,540		1,274	6.3	%
The Clancy (2)	6,378		3,645	(38.0)	%
Sofitel Chicago Magnificent Mile	8,443		1,906	43.6	%
Pier House Resort & Spa	12,817		2,642	38.9	%
The Ritz-Carlton St. Thomas	38,048		4,067	57.7	%
Park Hyatt Beaver Creek Resort & Spa	4,456		2,102	(16.6)	%
Hotel Yountville	8,347		2,844	44.8	%
The Ritz-Carlton Sarasota	19,328		2,304	32.9	%
Hilton La Jolla Torrey Pines	7,368		1,996	16.2	%
Bardessono Hotel and Spa	10,924		2,759	46.6	%
The Ritz-Carlton Lake Tahoe	7,444		1,217	13.6	%
Total	$	139,772	2,202	17.5	%
Non-comparable
Mr. C Beverly Hills Hotel	$	4,531	n/a	n/a

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(1) The hotel was closed from April 2020 through mid-August in 2020.

(2) The hotel was being renovated during 2020. Additionally the hotel was closed from April 11, 2020 through September 30, 2020.

Food and Beverage Revenue. Food and beverage revenue increased $40.0 million, or 79.7%, to $90.3 million during 2021 compared to 2020. This increase is primarily driven by the recovery from the COVID-19 pandemic. We experienced an aggregate increase in food and beverage revenue of $38.9 million at 12 comparable hotel properties as well as an increase of $1.7 million at the Mr. C Beverly Hills Hotel. These increases were partially offset by a decrease of $505,000 at the Capital Hilton.

Other Hotel Revenue. Other hotel revenue, which consists mainly of condo management fees, health center fees, resort fees, golf, telecommunications, parking, rentals and business interruption revenue, increased $16.2 million, or 40.1%, to $56.7 million during 2021 compared to 2020.

The increase is attributable to higher other hotel revenue of $20.3 million at 12 comparable hotel properties and an increase of $407,000 at the Mr. C Beverly Hills Hotel, partially offset by a decrease of $462,000 at Capital Hilton.

During 2020, we also recognized business interruption revenue of $4.0 million at The Ritz-Carlton St. Thomas as a result of Hurricane Irma.

Rooms Expense. Rooms expense increased $21.8 million, or 57.2%, to $59.8 million in 2021 compared to 2020. The increase is attributable to an aggregate increase in rooms expense of $20.6 million at 13 comparable hotel properties due to the hotel properties recovering from the COVID-19 pandemic and an increase of $1.2 million at the Mr. C Beverly Hills Hotel.

Food and Beverage Expense. Food and beverage expense increased $28.9 million, or 62.6%, to $75.2 million during 2021 compared to 2020.

The increase is attributable to an aggregate increase of $28.7 million at 11 comparable hotel properties and an increase of $1.5 million at the Mr. C Beverly Hills Hotel, partially offset by an aggregate decrease of $1.2 million at the Capital Hilton and The Notary Hotel.

Other Operating Expenses. Other operating expenses increased $40.4 million, or 41.1%, to $138.9 million in 2021 compared to 2020. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and incentive management fees. We experienced an increase of $6.7 million in direct expenses and $33.7 million in indirect expenses and incentive management fees in 2021 compared to 2020.

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Direct expenses were 4.9% of total hotel revenue in 2021 and 6.2% in 2020. The increase in direct expenses is associated with higher revenues as all of our comparable hotel properties are recovering from the COVID-19 pandemic and an increase of $30,000 at the Mr. C Beverly Hills Hotel.

The increase in indirect expenses is attributable to increases in (i) general and administrative costs of $9.2 million comprising an increase of $8.2 million at our 13 comparable hotel properties and $943,000 at the Mr. C Beverly Hills Hotel; (ii) marketing costs of $8.3 million comprising an increase of $7.7 million at our 13 comparable hotel properties and $524,000 at the Mr. C Beverly Hills Hotel; (iii) repairs and maintenance of $5.3 million comprising an increase of $5.0 million at our 13 comparable hotel properties and $314,000 at the Mr. C Beverly Hills Hotel; (iv) lease expense of $976,000 comprising an increase of $953,000 at our 13 comparable hotel properties and $23,000 at the Mr. C Beverly Hills Hotel; (v) energy costs of $3.6 million comprised of an increase of $3.3 million at our 13 comparable hotel properties and $309,000 at the Mr. C Beverly Hills Hotel; and (vi) incentive management fees of $6.4 million comprising an increase of $6.4 million at our 13 comparable hotel properties and $65,000 at the Mr. C Beverly Hills Hotel.

Management Fees. Base management fees increased $5.9 million, or 81.9%, to $13.1 million in 2021 compared to 2020. Management fees increased $5.8 million at 13 comparable hotel properties and $195,000 at the Mr. C Beverly Hills Hotel.

Property Taxes, Insurance and Other. Property taxes, insurance and other increased $6.5 million, or 22.9%, to $35.0 million in 2021 compared to 2020. The increase is comprised of an aggregate increase of approximately $7.3 million at seven hotel properties. Approximately $6.6 million of the increase is primarily attributable to higher current year assessments at two hotel properties. The increase also includes $545,000 at the Mr. C Beverly Hills Hotel. These increases were partially offset by an aggregate decrease of approximately $1.4 million at six hotel properties.

Depreciation and Amortization. Depreciation and amortization increased $391,000, or 0.5%, to $73.8 million for 2021 compared to 2020. The increase is comprised of an increase of $972,000 at the Mr. C Beverly Hills Hotel and an aggregate increase of $2.6 million at The Clancy, Marriott Seattle Waterfront, Hotel Yountville, The Ritz-Carlton St. Thomas, The Ritz-Carlton Sarasota and The Ritz-Carlton Lake Tahoe. These increases are partially offset by an aggregate decrease of $3.2 million at seven comparable hotel properties as a result of fully depreciated assets.

Advisory Services Fee. Advisory services fee increased $4.2 million, or 22.5%, to $22.6 million in 2021 compared to 2020 due to increases in the base advisory fee of $825,000, reimbursable expenses of $507,000, incentive fee of $678,000 as well as an increase in equity-based compensation of $2.1 million.

In 2021, we recorded an advisory services fee of $22.6 million, which included a base advisory fee of $10.8 million, reimbursable expenses of $2.3 million and $9.5 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

In 2020, we recorded an advisory services fee of $18.5 million, which included a base advisory fee of $10.0 million, reimbursable expenses of $1.8 million and $7.4 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and a credit to the incentive fee of $678,000 as a result of not meeting the FCCR threshold required for paying the final installment of the incentive fee incurred in 2018.

Gain on Legal Settlement. In 2021, we recognized a gain of $728,000 related to the settlement of a transfer tax matter with the City of San Francisco and $189,000 related to a billing dispute. In 2020, there was no such gain recognized.

Transaction Costs. In 2021, we recognized $563,000 of transaction costs associated with the acquisition of the Mr. C Beverly Hills Hotel. There were no transaction costs in 2020.

Corporate General and Administrative. Corporate general and administrative expense was $8.7 million in 2021 and $6.7 million in 2020. The increase in corporate general and administrative expenses is primarily due to higher public company costs of $658,000, higher miscellaneous expenses of $575,000 and an increase of $1.3 million related to our share of the reimbursed operating expenses of Ashford Securities, partially offset by lower professional fees of $497,000.

Gain (loss) on Insurance Settlement and Disposition of Assets. In 2020, we recognized a gain of $10.1 million as a result of finalizing the insurance settlement from Hurricane Irma. In 2021, we recognized a gain of $481,000 associated with proceeds received from an insurance claim, a gain of $18,000 upon disposition of certain fixed assets, as well as a gain of $197,000 associated with the sale of certain ERFP assets to Ashford Inc.

Equity in Earnings (Loss) of Unconsolidated Entity. In 2021 and 2020, we recorded equity in loss of unconsolidated entity of $252,000 and $217,000, respectively, related to our investment in OpenKey.

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Interest Income. Interest income decreased $128,000, or 72.7%, to $48,000 for 2021 compared to 2020.

Other Income (Expense). Other expense decreased $5.1 million, or 100.0% to $0 in 2021 compared to 2020. In 2020, we recorded a realized loss of $3.6 million and $1.3 million on our disposition of interest rate floors and CMBX credit default swaps, respectively. We also recorded expense of $191,000 related to CMBX premiums and interest paid on collateral.

Interest Expense and Amortization of Discounts and Loan Costs. Interest expense and amortization of discounts and loan costs decreased $14.2 million, or 31.5%, to $30.9 million for 2021 compared to 2020. The decrease is primarily due to lower interest expense from a lower average LIBOR rate, a credit to interest expense related to the amortization of default interest and late charges recorded on loans that were previously in default and the repayment of our secured term loan. These decreases were partially offset by higher interest expense from our Convertible Senior Notes and the mortgage loan associated with the Mr. C Beverly Hills Hotel acquisition. The average LIBOR rates for 2021 and 2020 were 0.10% and 0.52%, respectively.

Write-off of Loan Costs and Exit Fees. Write-off of loan costs and exit fees was $2.0 million in 2021. This included a $1.2 million write-off of unamortized loan costs upon the payoff of our secured term loan payoff and $387,000 of third-party fees from amendments executed with various lenders, which included deferral of debt service payments and allowed the use of reserves for property-level operating shortfalls and/or to cover debt service payments. These third-party fees incurred in conjunction with these amendments were expensed in accordance with applicable accounting guidance. In addition, there was a write-off of loan costs of approximately $419,000 upon the $20 million pay-down of the mortgage loan assumed with the acquisition of the Mr. C Beverly Hills Hotel.

Write-off of loan costs and exit fees was $3.9 million for 2020, resulting from amendments executed with various lenders, which included deferral of debt service payments and allowed the use of reserves for property-level operating shortfalls and/or to cover debt service payments. These third-party fees incurred in conjunction with these amendments were expensed in accordance with applicable accounting guidance.

Unrealized Gain (Loss) on Derivatives. Unrealized gain on derivatives of $32,000 for 2021 consisted of an unrealized gain of approximately $94,000 on warrants, partially offset by an unrealized loss of approximately $62,000 on interest rate caps.

Unrealized gain on derivatives of $5.0 million for 2020 consisted of a $3.6 million unrealized gain on interest rate floors associated with the recognition of realized losses and a $1.4 million unrealized gain on CMBX credit default swaps associated with the recognition of realized losses, partially offset by an unrealized loss of $93,000 on interest rate caps.

Income Tax (Expense) Benefit. Income tax expense changed $5.7 million, from an income tax benefit of $4.4 million in 2020 to income tax expense of $1.3 million in 2021. This change was primarily due to an increase in the profitability of our TRS entities in 2021 compared to 2020.

(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities. Our noncontrolling interest partner in consolidated entities was allocated a loss of $2.7 million and $6.4 million for 2021 and 2020, respectively. At both December 31, 2021 and 2020, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.

Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated a net loss of $3.6 million and $13.0 million for 2021 and 2020, respectively. Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 8.83% and 9.43% as of December 31, 2021 and 2020, respectively.

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Indebtedness

The following table sets forth our indebtedness (dollars in thousands):

Lender/Property(ies)	Number of Assets Encumbered	Outstanding Balance at December 31, 2021		Interest Rate at December 31, 2021		Amortization	Maturity Date (1)	Fully Extended Maturity Date
Securitized (2)	1	67,500		3.10	%	Interest only	Apr-2022	Apr-2022
Park Hyatt Beaver Creek Resort & Spa, Beaver Creek, CO
Securitized (3)	4	435,000		2.26	%	Interest only	Jun-2022	Jun-2025
The Notary Hotel, Philadelphia, PA
The Clancy, San Francisco, CA
Marriott Seattle Waterfront, Seattle, WA
Sofitel Chicago Magnificent Mile, Chicago, IL
Apollo (4)	1	42,500		4.95	%	Interest only	Aug-2022	Aug-2024
The Ritz-Carlton, St. Thomas, USVI
BAML (5)	1	99,500		2.90	%	Amortizing	Apr-2023	Apr-2023
The Ritz-Carlton, Sarasota, FL
BAML (6)	1	51,000		2.80	%	Interest only	May-2023	May-2023
Hotel Yountville, Yountville, CA
BAML (6)	1	40,000		2.80	%	Interest only	Aug-2023	Aug-2023
Bardessono Hotel and Spa, Yountville, CA
BAML (7)	1	54,000		2.35	%	Interest only	Jan-2024	Jan-2024
The Ritz-Carlton, Lake Tahoe, CA
Prudential (8)	2	195,000		1.80	%	Interest only	Feb-2024	Feb-2024
Capital Hilton, Washington, D.C.
Hilton La Jolla Torrey Pines, La Jolla, CA
LoanCore (9)	1	30,000		5.10	%	Interest only	Aug-2024	Aug-2024
Mr. C Beverly Hills Hotel
BAML (10)	1	80,000		2.10	%	Interest only	Sep-2024	Sep-2024
Pier House Resort & Spa, Key West, FL
Convertible Senior Notes	Equity	86,250		4.50	%	Interest only	June-2026	June-2026
Equity
Total/Weighted Average	14	$	1,180,750	2.65	%

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(1)    Maturity date assumes no future extensions.

(2)    Interest rate is variable at LIBOR plus 3.00%. This mortgage loan requires that we maintain an interest rate cap agreement with a counterparty, and the terms of that agreement provide for a LIBOR cap of 3.0%. This mortgage loan includes three one-year extension options subject to satisfaction of certain conditions, of which the third was exercised in April 2021.

(3)    Interest rate is variable at LIBOR plus 2.16%. This mortgage loan requires that we maintain an interest rate cap agreement with a counterparty, and the terms of that agreement provide for a LIBOR cap of 4.0%. This mortgage loan includes five one-year extension options subject to the satisfaction of certain conditions, of which the second was exercised in June 2021.

(4)    Interest rate is variable at LIBOR plus 3.95% with a LIBOR floor of 1.00%. This mortgage loan has three one-year extension options, subject to the satisfaction of certain conditions, of which the first was exercised in August 2021.

(5)    Interest rate is variable at LIBOR plus 2.65% with a LIBOR floor of 0.25%. This mortgage loan requires that we maintain an interest rate cap agreement with a counterparty, and the terms of that agreement provide for a LIBOR cap of 3.5%. The mortgage loan was interest only until July 1, 2021, at which time it began amortizing 1% annually for the remaining term. The stated maturity is April 2023.

(6)    Interest rate is variable at LIBOR plus 2.55%, with a LIBOR floor of 0.25%. This mortgage loan requires that we maintain an interest rate cap agreement with a counterparty, and the terms of that agreement provide for a LIBOR cap of 3.5%.

(7)    Interest rate is variable at LIBOR plus 2.10%, with a LIBOR floor of 0.25%. This mortgage loan requires that we maintain an interest rate cap agreement with a counterparty, and the terms of that agreement provide for a LIBOR cap of 3.5%.

(8)    Interest rate is variable at LIBOR plus 1.70%.

(9)    Interest rate is variable at LIBOR plus 3.60%, with a LIBOR floor of 1.50%. This mortgage loan requires that we maintain an interest rate cap agreement with a counterparty, and the terms of that agreement provide for a LIBOR cap of 2.0%.

(10)    Interest rate is variable at LIBOR plus 1.85%, with a LIBOR floor of 0.25%. This mortgage loan requires that we maintain an interest rate cap agreement with a counterparty, and the terms of that agreement provide for a LIBOR cap of 3.5%.

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In May 2021, the Company issued $86.25 million aggregate principal amount of 4.50% Convertible Senior Notes due June 2026 (the “Convertible Senior Notes”). The net proceeds from this offering of the Convertible Senior Notes were approximately $82.8 million after deducting the underwriting fees and other expenses paid by the Company. A portion of the proceeds were used to fully repay the secured term loan. See note 6 to our consolidated financial statements for a full description of our Convertible Senior Notes.

On September 23, 2021, the Company finalized an extension of its mortgage loans for the Bardessono Hotel and Spa with a final maturity in August 2022 and the Hotel Yountville with a final maturity in May 2022. Each of the loans was extended for one year beyond its original maturity on the same terms as the original loan.

On February 2, 2022, the Company refinanced its mortgage loan secured by the Park Hyatt Beaver Creek Resort & Spa, which had a final maturity date in April 2022. The new, non-recourse mortgage loan totals $70.5 million and has a two-year initial term with three 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 + 2.86%.

The following mortgage loans include various financial cash trap triggers. The BAML Pier House mortgage loan, the BAML Bardessono mortgage loan, the BAML Yountville mortgage loan, the BAML Sarasota mortgage loan and the BAML Lake Tahoe mortgage loan all have a 1.20x debt service coverage ratio requirement. The Park Hyatt Beaver Creek Resort & Spa mortgage loan, outstanding at December 31, 2021, had a 10.0% debt yield requirement. The mortgage loan secured by four hotel properties has a 7.5% debt yield requirement, and the Apollo mortgage loan has a 12.0% debt yield requirement. When these provisions are triggered, substantially all of the profits generated by the hotel properties securing such loan are deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. This could affect our liquidity and our ability to make distributions to our stockholders until such time that a cash trap is no longer in effect for such loan.

As of December 31, 2021, our $435 million mortgage loan, our $195 million mortgage loan and our $54 million mortgage loan were in cash traps and approximately $157,000 of our restricted cash was subject to these cash traps. Additionally, at December 31, 2021, there was approximately $2.4 million of restricted cash, associated with two mortgage loans that were no longer in cash traps as of that date, which was subsequently released.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

In December 2019, COVID-19 was identified in Wuhan, China, subsequently spread to other regions of the world, and has resulted in significant travel restrictions and extended shutdown of numerous businesses throughout the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Beginning in late February 2020, we experienced a significant decline in occupancy and RevPAR associated with COVID-19 as we experienced significant reservation cancellations as well as a significant reduction in new reservations. The prolonged presence of the virus has resulted in health and other government authorities imposing widespread restrictions on travel and other businesses.

As of December 31, 2021, the Company maintained unrestricted cash of $216.0 million and restricted cash of $47.4 million. The vast majority of the restricted cash comprises lender and manager held reserves. At the end of the year, there was also $27.5 million due to the Company from third-party hotel managers, which is primarily the Company’s cash held by one of its property managers which is also available to fund hotel operating costs. For the year ended December 31, 2021, cash flows provided by operating activities were approximately $64.0 million. On March 4, 2022, our board of directors declared a quarterly cash dividend of $0.01 per diluted share for the Company’s common stock for the first quarter of 2022. Additionally, in March 2022, the board of directors approved an update to our previously announced dividend policy for 2022 to revise our then-expectation to pay a quarterly dividend of $0.01 per share of common stock during 2022. The approval of our dividend policy does not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof.

We cannot predict when hotel operating levels will return to normalized levels after the effects of the pandemic fully subside, whether our hotels will be forced to shut down operations or whether one or more possible recurrences of COVID-19 case surges could result in further reductions in business and personal travel or potentially cause state and local governments to reinstate travel restrictions. Facts and circumstances could change in the future that are outside of management’s control, such as additional government mandates, health official orders, travel restrictions and extended business shutdowns due to COVID-19.

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Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our hotel properties, including:

•advisory fees payable to Ashford LLC;

•recurring maintenance necessary to maintain our hotel properties in accordance with brand standards;

•interest expense and scheduled principal payments on outstanding indebtedness, including our secured term loan (see “Contractual Obligations and Commitments”);

•distributions, if any, in the form of dividends on our common stock, necessary to qualify for taxation as a REIT;

•dividends on our preferred stock; and

•capital expenditures to improve our hotel properties.

We expect to meet our short-term liquidity requirements generally through net cash provided by operations, capital market activities and existing cash balances.

Pursuant to the advisory agreement between us and our advisor, we must pay our advisor on a monthly basis a base advisory fee, subject to a minimum base advisory fee. The minimum base advisory fee is equal to the greater of: (i) 90% of the base fee paid for the same month in the prior fiscal year; and (ii) 1/12th of the “G&A Ratio” for the most recently completed fiscal quarter multiplied by our total market capitalization on the last balance sheet date included in the most recent quarterly report on Form 10-Q or annual report on Form 10-K that we file with the SEC. Thus, even if our total market capitalization and performance decline, we will still be required to make payments to our advisor equal to the minimum base advisory fee, which could adversely impact our liquidity and financial condition.

Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional hotel properties and redevelopments, renovations, expansions and other capital expenditures that need to be made periodically with respect to our hotel properties and scheduled debt payments. We expect to meet our long-term liquidity requirements through various sources of capital, including future common and preferred equity issuances, existing working capital, net cash provided by operations, hotel mortgage indebtedness and other secured and unsecured borrowings. However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, including the current and ongoing effects of COVID-19 on our business and the hotel industry, the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity and market perceptions about us. The success of our business strategy will depend, in part, on our ability to access these various capital sources. While management cannot provide any assurances, management believes that our cash flow from operations and our existing cash balances will be adequate to meet upcoming anticipated requirements for interest and principal payments on debt (excluding any potential final maturity principal payments), working capital, and capital expenditures for the next 12 months and dividends required to maintain our status as a REIT for U.S. federal income tax purposes.

Our hotel properties will require periodic capital expenditures and renovation to remain competitive. In addition, acquisitions, redevelopments or expansions of hotel properties may require significant capital outlays. We may not be able to fund such capital improvements solely from net cash provided by operations because we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deductions for dividends paid and excluding net capital gains, to qualify and maintain our qualification as a REIT, and we are subject to tax on any retained income and gains. As a result, our ability to fund capital expenditures, acquisitions or hotel redevelopment through retained earnings is very limited. Consequently, we expect to rely heavily upon the availability of debt or equity capital for these purposes. If we are unable to obtain the necessary capital on favorable terms, or at all, our financial condition, liquidity, results of operations and prospects could be materially and adversely affected.

Certain of our loan agreements contain cash trap provisions that may be triggered if the performance of our hotel properties decline. When these provisions are triggered, substantially all of the profit generated by the hotel properties securing such loan is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. This could affect our liquidity and our ability to make distributions to our stockholders until such time that a cash trap is no longer in effect for such loan. These cash trap provisions have been triggered on some of our mortgage loans, as discussed above. Our loans may remain subject to cash trap provisions for a substantial period of time which could limit our flexibility and adversely affect our financial condition or our qualification as a REIT.

Our estimated future obligations as of December 31, 2021 include both current and long-term obligations. With respect to our indebtedness, as discussed in note 6 to our consolidated financial statements, we have current obligations of $546.0 million and long-term obligations of $634.8 million. As of December 31, 2021, we held extension options to extend the principal for all

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of the debt due in the next twelve months except for $68.5 million. $67.5 million relates to the mortgage loan secured by the Park Hyatt Beaver Creek Resort & Spa that was refinanced on February 2, 2022. Additionally we have mortgage loan payments of approximately $1.0 million due in the next twelve months.

As discussed in note 17 to our consolidated financial statements, under our operating leases we have current obligations of approximately $3.3 million and long-term obligations of approximately $156.9 million. Additionally, as discussed in note 16 to our consolidated financial statements, we have short-term capital commitments of approximately $23.0 million.

Equity Transactions

On December 5, 2017, our board of directors approved the stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share and preferred stock having an aggregate value of up to $50 million. The board of directors’ authorization replaced any previous repurchase authorizations. No shares were repurchased during the year ended December 31, 2021, pursuant to this authorization.

On December 11, 2017, we entered into equity distribution agreements with certain sales agents to sell from time to time shares of our common stock having an aggregate offering price of up to $50.0 million. Sales of shares of our common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act, including sales made directly on the NYSE, the existing trading market for our common stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network. We will pay each of the sales agents a commission, which in each case shall not be more than 2.0% of the gross sales price of the shares of our common stock sold through such sales agent. On July 7, 2020, we entered into a side letter (the “Side Letter”) with the sales agents pursuant to which we agreed to pay all reasonable documented out-of-pocket expenses, including the reasonable fees and disbursements of counsel incurred by the sales agents, in connection with the ongoing services contemplated by the equity distribution agreements (subject to a $75,000 cap on certain expenses incurred in June 2020). Pursuant to the Side Letter, the sales agents have agreed to reimburse us for up to $50,000 of such expenses, if the sales agents offer and sell an amount of our common stock with an aggregate offering price of $15,000,000, and have agreed to reimburse us for up to an additional $50,000 of such expenses, provided the sales agents offer and sell an amount of our common stock with an aggregate offering price of $30,000,000. As of March 8, 2022, the Company has sold approximately 7.4 million shares of common stock and received gross proceeds of approximately $30.8 million under this program.

On November 13, 2019, we filed an initial registration statement with the SEC, as amended on January 24, 2020, for shares of our non-traded Series E Redeemable Preferred Stock (the “Series E Preferred Stock”) and our non-traded Series M Redeemable Preferred Stock (the “Series M Preferred Stock”). The registration statement became effective on February 21, 2020, and contemplates the issuance and sale of up to 20,000,000 shares of Series E Preferred Stock or Series M Preferred Stock in a primary offering and up to 8,000,000 shares of Series E Preferred Stock or Series M Preferred Stock pursuant to a dividend reinvestment plan. On February 25, 2020, we filed our prospectus with the SEC. Ashford Securities, a subsidiary of Ashford Inc., serves as the dealer manager and wholesaler of the Series E Preferred Stock and Series M Preferred Stock. On April 2, 2021, the Company filed with the State Department of Assessments and Taxation of the State of Maryland (the “SDAT”) articles supplementary to the Company’s Articles of Amendment and Restatement that provided for: (i) reclassifying the existing 28,000,000 shares of Series E Preferred Stock and 28,000,000 shares of Series M Preferred Stock as unissued shares of preferred stock; (ii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series E Preferred Stock (the “Series E Articles Supplementary”); and (iii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series M Preferred Stock (the “Series M Articles Supplementary”). The Series E Articles Supplementary and Series M Articles Supplementary were filed to revise the preferred stock terms related to the dividend rate, our optional redemption right and certain other voting rights. The Company also caused its operating partnership to execute Amendment No. 5 to the Third Amended and Restated Agreement of Limited Partnership to amend the terms of its operating partnership agreement to conform to the terms of the Series E Articles Supplementary and Series M Articles Supplementary. As of March 8, 2022, the Company has issued approximately 2.9 million shares of Series E Preferred Stock and received net proceeds of approximately $65.4 million and issued approximately 37,000 shares of Series M Preferred Stock and received net proceeds of approximately $892,000. The Company also issued approximately 4,000 shares of Series E Preferred Stock pursuant to the dividend reinvestment plan.

On December 4, 2019, we entered into equity distribution agreements with certain sales agents to sell from time to time shares of our 5.50% Series B Cumulative Convertible Preferred Stock (the “Series B Convertible Preferred Stock”) having an aggregate offering price of up to $40.0 million. Sales of shares of the Series B Convertible Preferred Stock may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act, including sales made directly on the NYSE, the existing trading market for the Series B Convertible Preferred Stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network. We will

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pay each of the sales agents a commission, which in each case shall not be more than 2.0% of the gross sales price of the shares of the Series B Convertible Preferred Stock sold through such sales agents. Since the inception of the program, we issued approximately 63,000 shares of the Series B Convertible Preferred Stock through our “at-the-market” equity offering program resulting in gross proceeds of approximately $1.0 million before discounts and commissions to the selling agents of approximately $19,000.

On February 4, 2021, the Company entered into a Standby Equity Distribution Agreement (the “SEDA”) with YA II PN, Ltd. (“YA”), pursuant to which the Company will be able to sell up to 7,780,786 shares of its common stock (the “Commitment Amount”) at the Company’s request any time during the commitment period commencing on February 4, 2021, and terminating on the earliest of (i) the first day of the month next following the 36-month anniversary of the SEDA or (ii) the date on which YA shall have made payment of Advances (as defined in the SEDA) pursuant to the SEDA for shares of the Company’s common stock equal to the Commitment Amount (the “Commitment Period”). Other than with respect to the Initial Advance (as defined below) the shares sold to YA pursuant to the SEDA would be purchased at 95% of the Market Price (as defined below) and would be subject to certain limitations, including that YA could not purchase any shares that would result in it owning more than 4.99% of the Company’s common stock. “Market Price” means the lowest daily VWAP of the Company’s common stock during the five consecutive trading days commencing on the trading day following the date the Company submits an advance notice to YA. “VWAP” means, for any trading day, the daily volume weighted average price of the Company’s common stock for such date on the principal market as reported by Bloomberg L.P. during regular trading hours.

At any time during the Commitment Period the Company may require YA to purchase shares of the Company’s common stock by delivering a written notice to YA setting forth the Advance Shares (as defined in the SEDA) that the Company desires to issue and sell to YA (the “Advance Notice”). The Company may deliver an Advance Notice for an initial Advance for up to 1,200,000 Advance Shares (the “Initial Advance”). The preliminary purchase price per share for such shares shall be 100% of the average daily VWAP for the five consecutive trading days immediately prior to the date of the Advance Notice.

Pursuant to the SEDA, we currently intend to use the net proceeds from any sale of the shares for working capital purposes, including the repayment of outstanding debt. There are no other restrictions on future financing transactions. The SEDA does not contain any right of first refusal, participation rights, penalties or liquidated damages. We are not required to pay any additional amounts to reimburse or otherwise compensate YA in connection with the transaction except for a $10,000 structuring fee. As of March 8, 2022, the Company has sold approximately 1.7 million shares of common stock and received proceeds of approximately $10.0 million under the SEDA.

From March 16, 2021 through March 8, 2022, Braemar entered into privately negotiated exchange agreements with certain holders of the Series B Convertible Preferred Stock in reliance on Section 3(a)(9) of the Securities Act. The Company agreed to exchange a total of approximately 2.0 million shares of its Series B Convertible Preferred stock for approximately 7.3 million shares of its common stock.

On April 21, 2021, the Company entered into a purchase agreement (the “Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company may issue or sell to Lincoln Park up to 8,893,565 shares of the Company’s common stock from time to time during the term of the Lincoln Park Purchase Agreement. The issuance of the shares of common stock pursuant to the Lincoln Park Purchase Agreement has been registered pursuant to the Company’s shelf registration statement on Form S-3 (the “Registration Statement”), and the related base prospectus included in the Registration Statement, as supplemented by a prospectus supplement filed with the SEC on April 21, 2021. The Company and Lincoln Park also entered into a registration rights agreement, pursuant to which the Company agreed to maintain the effectiveness of the Registration Statement. Upon entering into the Lincoln Park Purchase Agreement, the Company issued 15,000 shares of the Company’s common stock as consideration for Lincoln Park’s execution and delivery of the Lincoln Park Purchase Agreement. As of March 8, 2022, the Company has issued approximately 766,000 shares of common stock for gross proceeds of approximately $4.2 million under the Lincoln Park Purchase Agreement.

On May 25, 2021, the Company entered into an equity distribution agreement (the “Virtu May 2021 EDA”) with Virtu Americas LLC (“Virtu”), to sell from time to time shares of our common stock having an aggregate offering price of up to $50 million. We will pay Virtu a commission of approximately 1.0% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale. As of March 8, 2022, the Company has sold approximately 8.3 million shares of common stock under the Virtu May 2021 EDA and received gross proceeds of approximately $50.0 million. All shares of common stock under the Virtu May 2021 EDA have been sold.

On July 12, 2021, the Company entered into a second equity distribution agreement (the “Virtu July 2021 EDA”)with Virtu to sell from time to time shares of our common stock having an aggregate offering price of up to $100 million. We will pay Virtu a commission of approximately 1.0% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the

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time of sale. As of March 8, 2022, the Company has sold approximately 4.7 million shares of common stock under the Virtu July 2021 EDA and received gross proceeds of approximately $24.0 million.

Debt Transactions

In May 2021, the Company issued $86.25 million aggregate principal amount of 4.50% Convertible Senior Notes due June 2026 (the “Convertible Senior Notes”). The net proceeds from this offering of the Convertible Senior Notes were approximately $82.8 million after deducting the underwriting fees and other expenses paid by the Company.

The Convertible Senior Notes are governed by an indenture (the “Base Indenture”) between the Company and U.S. Bank National Association, as trustee. The Convertible Senior Notes bear interest at a rate of 4.50% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2021. The Convertible Senior Notes will mature on June 1, 2026.

The Convertible Senior Notes are convertible at any time prior to the close of business on the business day immediately preceding the maturity date for cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the election of the Company, based on an initial conversion rate of 157.7909 shares of the Company’s common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $6.34 per share of common stock), subject to adjustment of the conversion rate under certain circumstances. In addition, following the occurrence of certain corporate events, if the Company provides notice of redemption or if it exercises its option to convert the Convertible Senior Notes, the Company will, in certain circumstances, increase the conversion rate for a holder that converts its Convertible Senior Notes in connection with such corporate event, such notice of redemption, or such issuer conversion option, as the case may be.

The Company may redeem the Convertible Senior Notes at the Company’s option, in whole or in part, on any business day on or after the date of issuance if the last reported sale price per share of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Senior Notes to be redeemed subject to certain adjustments, plus accrued and unpaid interest to, but excluding, the redemption date.

On September 23, 2021, the Company finalized an extension of its mortgage loans for the Bardessono Hotel and Spa with a final maturity in August 2022 and the Hotel Yountville with a final maturity in May 2022. Each of the loans was extended for one year beyond its original maturity on the same terms as the original loan.

On February 2, 2022, the Company refinanced its mortgage loan secured by the Park Hyatt Beaver Creek Resort & Spa, which had a final maturity date in April 2022. The new, non-recourse mortgage loan totals $70.5 million and has a two-year initial term with three 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 + 2.86%.

Sources and Uses of Cash

We had approximately $216.0 million and $78.6 million of cash and cash equivalents at December 31, 2021 and December 31, 2020, respectively.

We anticipate using funds to pay for (i) capital expenditures for our 14 hotel properties, estimated to be approximately $60 million to $70 million in fiscal year 2022 and (ii) debt interest payments are estimated to be approximately $30.2 million in 2022 based on future payments using the one month LIBOR rate as of December 31, 2021. This estimate will fluctuate based on changes in the one-month LIBOR rate.

Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided by (used in) operating activities were $64.0 million and $(50.3) million for the years ended December 31, 2021 and 2020, respectively. Cash flows from operations were impacted by the COVID-19 pandemic and changes in hotel operations of our 13 comparable hotel properties as well the acquisition of the Mr. C Beverly Hills Hotel on August 5, 2021. Cash flows from operations are also impacted by the timing of working capital cash flows such as collecting receivables from hotel guests, paying vendors, settling with derivative counterparties, settling with related parties, settling with hotel managers and timing differences between the receipt of proceeds from business interruption insurance claims and the recognition of the related revenue.

Net Cash Flows Provided by (Used in) Investing Activities. For the year ended December 31, 2021, net cash flows used in investing activities were $41.7 million. These cash outflows were primarily attributable to $25.6 million of capital improvements made to various hotel properties, approximately $17.6 million associated with the acquisition of the Mr. C

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Beverly Hills Hotel and earnest money associated with the pending acquisition of Dorado Beach, a Ritz-Carlton Reserve, partially offset by proceeds of $1.8 million from the sale of certain ERFP assets to Ashford Inc.

For the year ended December 31, 2020, net cash flows used in investing activities were $16.5 million. These cash outflows were primarily attributable to $25.6 million of capital improvements made to various hotel properties offset by $9.0 million of insurance proceeds related to Hurricane Irma.

Net Cash Flows Provided by (Used in) Financing Activities. For the year ended December 31, 2021, net cash flows provided by financing activities were $128.0 million. Cash inflows primarily consisted of net proceeds of $83.2 million from the issuance of our Convertible Senior Notes, $102.5 million from the issuance of common stock, $36.9 million from the issuance of preferred stock and contributions of $1.2 million from a noncontrolling interest in consolidated entities. The cash inflows were partially offset by repayments of indebtedness of $84.2 million, $9.1 million of dividend and distribution payments and $1.9 million of payments for loan costs and fees.

For the year ended December 31, 2020, net cash flows provided by financing activities were $49.6 million. Cash inflows primarily consisted of borrowings on indebtedness of $109.3 million, net proceeds of $13.3 million from the “at-the-market” common stock offering and $474,000 from the issuance of preferred stock, partially offset by repayments of indebtedness of $47.8 million, $16.2 million of dividend and distribution payments, $6.5 million of payments for loan costs and fees associated with loan forbearance, and distributions of $2.6 million to the holder of a noncontrolling interest in consolidated entities.

Inflation

We rely entirely on the performance of our properties and the ability of the properties’ managers to increase revenues to keep pace with inflation. Hotel operators can generally increase room rates rather quickly, but competitive pressures may limit their ability to raise rates faster than inflation. Our general and administrative costs, real estate and personal property taxes, property and casualty insurance, and utilities are subject to inflation as well.

Critical Accounting Policies

Our accounting policies are fully described in note 2 to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data.” We believe that the following discussion addresses our most critical accounting policies, representing those policies considered most vital to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments.

Impairment of Investments in Hotel Properties. Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating the impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period and expected useful life. Fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. There was no impairment charge recorded for the year ended December 31, 2021.

Income Taxes. At December 31, 2021 and 2020, we had a valuation allowance of approximately $17.3 million and $14.9 million, respectively, to partially reserve our deferred tax assets of our TRSs. At each reporting date, we evaluate whether it is more likely than not that we will utilize all or a portion of our deferred tax assets. We consider all available positive and negative evidence, including historical results of operations, projected future taxable income, carryback potential and scheduled reversals of deferred tax liabilities. In evaluating the objective evidence that historical results provide, we consider three years of consolidated cumulative operating income (loss). At December 31, 2021, we had TRS net operating loss carry forwards for U.S. federal income tax purposes of $61.2 million, of which $52.3 million is subject to expiration and will begin to expire in 2023. The remainder was generated after December 31, 2017 and is not subject to expiration under the Tax Cuts and Jobs Act. The loss carry forwards subject to expiration may be available to offset future taxable income, if any, for 2023 through 2034, with the remainder available to offset taxable income beyond 2034; however, there could be substantial limitations on their use imposed by the Code. Management determined that it is more likely than not that $17.3 million of our net deferred tax assets will not be realized and a valuation allowance has been recorded accordingly.

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The “Income Taxes” Topic of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance requires us to determine whether tax positions we have taken or expect to take in a tax return are more likely than not to be sustained upon examination by the appropriate taxing authority based on the technical merits of the positions. Tax positions that do not meet the more likely than not threshold would be recorded as additional tax expense in the current period. We analyze all open tax years, as defined by the statute of limitations for each jurisdiction, which includes the federal jurisdiction and various states. We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and cities. Tax years 2017 through 2021 remain subject to potential examination by certain federal and state taxing authorities.

Recently Adopted Accounting Standards

In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (“ASU 2020-01”), which clarifies the interaction between the accounting for equity securities, equity method investments, and certain derivative instruments. The ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments-Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years and should be applied prospectively. We adopted the standard effective January 1, 2021, and the adoption of this standard did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”) to provide guidance and relief for transitioning to alternative reference rates. ASU 2021-01 is effective immediately for all entities. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, this ASU is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. We plan to adopt ASU 2020-06 through the modified retrospective method on January 1, 2022. Upon adoption, the Convertible Senior Notes will be recorded as a single debt instrument at amortized cost, instead of being recorded as both a liability and equity. The Company will also cease recording non-cash interest expense associated with amortization of the debt discount associated with the conversion features. The adoption of ASU 2020-06 will result in an adjustment to additional paid-in capital, accumulated deficit, and the carrying value of our Convertible Senior Notes. The impact of adopting ASU 2020-06 will be an increase to “indebtedness, net” and a decrease to stockholders’ equity of approximately $5.6 million. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements, beyond the impact to our Convertible Senior Notes described above.

Non-GAAP Financial Measures

The following non-GAAP presentations of EBITDA, EBITDAre, Adjusted EBITDAre, Funds From Operations (“FFO”) and Adjusted FFO are presented to help our investors evaluate our operating performance.

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EBITDA is defined as net income (loss) before interest expense and amortization of loan costs, depreciation and amortization, income taxes, equity in (earnings) loss of unconsolidated entity and after the Company’s portion of EBITDA of OpenKey. In addition, we excluded impairment on real estate, (gain) loss on insurance settlement and disposition of assets and Company’s portion of EBITDAre of OpenKey from EBITDA to calculate EBITDA for real estate, or EBITDAre, as defined by NAREIT.

We then further adjust EBITDAre to exclude certain additional items such as amortization of favorable (unfavorable) contract assets (liabilities), transaction and conversion costs, write-off of loan costs and exit fees, legal, advisory and settlement costs, advisory services incentive fee, other/income expense, Company’s portion of adjustments to EBITDAre of OpenKey and non-cash items such as unrealized gain/ loss on derivatives and stock/unit-based compensation.

We present EBITDA, EBITDAre and Adjusted EBITDAre because we believe they reflect more accurately the ongoing performance of our hotel assets and other investments and provide more useful information to investors as they are indicators of our ability to meet our future debt payment requirements, working capital requirements and they provide an overall evaluation of our financial condition. EBITDA, EBITDAre and Adjusted EBITDAre as calculated by us may not be comparable to EBITDA, EBITDAre and Adjusted EBITDAre reported by other companies that do not define EBITDA, EBITDAre and Adjusted EBITDAre exactly as we define the terms. EBITDA, EBITDAre and Adjusted EBITDAre do not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as determined by GAAP as an indicator of liquidity.

The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre (in thousands) (unaudited):

	Year Ended December 31,
	2021		2020		2019
Net income (loss)	$	(32,911)	$	(124,677)	$	1,196
Interest expense and amortization of loan costs	30,901		45,104		54,507
Depreciation and amortization	73,762		73,371		70,112
Income tax expense (benefit)	1,324		(4,406)		1,764
Equity in (earnings) loss of unconsolidated entity	252		217		199
Company’s portion of EBITDA of OpenKey	(250)		(214)		(195)
EBITDA	73,078		(10,605)		127,583
(Gain) loss on insurance settlement and disposition of assets	(696)		(10,149)		(25,165)
EBITDAre	72,382		(20,754)		102,418
Amortization of favorable (unfavorable) contract assets (liabilities)	512		834		651
Transaction and conversion costs	2,637		1,370		2,076
Other (income) expense	—		5,126		13,947
Write-off of loan costs and exit fees	1,963		3,920		647
Unrealized (gain) loss on investment in Ashford Inc.	—		—		(7,872)
Unrealized (gain) loss on derivatives	(32)		(4,959)		1,103
Non-cash stock/unit-based compensation	10,204		7,892		7,943
Legal, advisory and settlement costs	(208)		2,023		527
Company’s portion of adjustments to EBITDAre of OpenKey	7		13		25
Adjusted EBITDAre	$	87,465	$	(4,535)	$	121,465

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The following table reconciles net income (loss) to EBITDA attributable to the Company and OP unitholders on a property-by-property basis for each of our hotel properties owned and on a corporate basis during the year ended December 31, 2021. The results of The Mr. C Beverly Hills Hotel are included from its acquisition date through December 31, 2021 (in thousands) (unaudited):

	Year Ended December 31, 2021
	Capital Hilton		Hilton La Jolla Torrey Pines		Sofitel Chicago Magnificent Mile		Bardessono Hotel and Spa		Pier House Resort & Spa		Hotel Yountville		Park Hyatt Beaver Creek Resort & Spa		The Notary Hotel		The Clancy		The Ritz-Carlton Sarasota		The Ritz-Carlton Lake Tahoe		Marriott Seattle Waterfront		The Ritz-Carlton St. Thomas		Mr. C Beverly Hills Hotel		Hotel Total		Corporate / Allocated(1)		Braemar Hotels & Resorts Inc.
Net income (loss)	$	(11,082)	$	1,915	$	(10,181)	$	5,053	$	13,411	$	2,310	$	4,005	$	(6,261)	$	(15,467)	$	15,342	$	2,793	$	(293)	$	17,453	$	(1,630)	$	17,368	$	(50,279)	$	(32,911)
Non-property adjustments (2)	—		—		—		(117)		(96)		—		—		—		—		1		1		—		(671)		936		54		(54)		—
Interest income	—		—		—		—		—		—		—		—		(3)		(22)		—		(12)		(2)		—		(39)		39		—
Interest expense	—		—		—		1,039		1,606		1,303		2,075		—		—		3,518		1,205		54		2,134		644		13,578		15,117		28,695
Amortization of loan costs	—		—		—		162		294		180		14		—		—		352		144		—		68		66		1,280		926		2,206
Depreciation and amortization	7,448		4,293		6,582		2,581		2,883		2,572		3,526		8,333		13,258		6,347		2,931		3,965		8,071		972		73,762		—		73,762
Income tax expense (benefit)	—		(43)		—		—		—		—		—		(7)		—		—		—		—		101		—		51		1,273		1,324
Non-hotel EBITDA ownership expense (income)	292		70		39		490		(59)		68		(11)		(141)		(5)		125		761		(157)		396		64		1,932		(1,932)		—
Hotel EBITDA including amounts attributable to noncontrolling interest	(3,342)		6,235		(3,560)		9,208		18,039		6,433		9,609		1,924		(2,217)		25,663		7,835		3,557		27,550		1,052		107,986		(34,910)		73,076
Less: EBITDA adjustments attributable to consolidated noncontrolling interest	839		(1,562)		—		—		—		—		—		—		—		—		—		—		—		—		(723)		723		—
Equity in earnings (loss) of unconsolidated entities	—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		252		252
Company’s portion of EBITDA of OpenKey	—		—		—		—		—		—		—		—		—		—		—		—		—		—		—		(250)		(250)
Hotel EBITDA attributable to the Company and OP unitholders	$	(2,503)	$	4,673	$	(3,560)	$	9,208	$	18,039	$	6,433	$	9,609	$	1,924	$	(2,217)	$	25,663	$	7,835	$	3,557	$	27,550	$	1,052	$	107,263	$	(34,185)	$	73,078

__________________

(1)Represents expenses not recorded at the individual hotel property level.

(2)Includes allocated amounts which were not specific to hotel properties, such as gain on sale of hotel property, corporate taxes, insurance and legal expenses.

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The following table reconciles net income (loss) to EBITDA attributable to the Company and OP unitholders on a property-by-property basis for each of our hotel properties owned and on a corporate basis during the year ended December 31, 2020 (in thousands) (unaudited):

	Year Ended December 31, 2020
	Capital Hilton		Hilton La Jolla Torrey Pines		Sofitel Chicago Magnificent Mile		Bardessono Hotel and Spa		Pier House Resort & Spa		Hotel Yountville		Park Hyatt Beaver Creek Resort & Spa		The Notary Hotel		The Clancy		The Ritz-Carlton Sarasota		The Ritz-Carlton Lake Tahoe		Marriott Seattle Waterfront		The Ritz-Carlton St. Thomas		Hotel Total		Corporate / Allocated(1)		Braemar Hotels & Resorts Inc.
Net income (loss)	$	(12,722)	$	(4,013)	$	(12,230)	$	(4,360)	$	766	$	(4,772)	$	(2,204)	$	(10,642)	$	(16,177)	$	(294)	$	(3,913)	$	(6,001)	$	4,844	$	(71,718)	$	(52,959)	$	(124,677)
Non-property adjustments (2)	—		—		—		100		200		128		—		—		—		250		135		—		(10,149)		(9,336)		9,336		—
Interest income	(12)		(16)		—		—		—		—		—		(6)		(9)		(29)		—		(27)		(1)		(100)		100		—
Interest expense	—		—		—		1,474		2,426		1,865		2,281		—		—		4,634		1,769		—		2,283		16,732		24,963		41,695
Amortization of loan costs	—		—		—		145		282		153		13		—		—		334		136		—		104		1,167		2,242		3,409
Depreciation and amortization	7,648		5,032		6,667		3,126		3,006		2,441		4,562		8,768		12,028		5,992		2,772		3,949		7,380		73,371		—		73,371
Income tax expense (benefit)	—		(703)		—		—		—		—		—		(11)		—		—		—		—		(83)		(797)		(3,609)		(4,406)
Non-hotel EBITDA ownership expense (income)	10		53		175		533		27		99		325		258		463		615		968		346		246		4,118		(4,118)		—
Hotel EBITDA including amounts attributable to noncontrolling interest	(5,076)		353		(5,388)		1,018		6,707		(86)		4,977		(1,633)		(3,695)		11,502		1,867		(1,733)		4,624		13,437		(24,045)		(10,608)
Less: EBITDA adjustments attributable to consolidated noncontrolling interest	1,269		(88)		—		—		—		—		—		—		—		—		—		—		—		1,181		(1,181)		—
Equity in earnings (loss) of unconsolidated entities	—		—		—		—		—		—		—		—		—		—		—		—		—		—		217		217
Company's portion of EBITDA of OpenKey	—		—		—		—		—		—		—		—		—		—		—		—		—		—		(214)		(214)
Hotel EBITDA attributable to the Company and OP unitholders	$	(3,807)	$	265	$	(5,388)	$	1,018	$	6,707	$	(86)	$	4,977	$	(1,633)	$	(3,695)	$	11,502	$	1,867	$	(1,733)	$	4,624	$	14,618	$	(25,223)	$	(10,605)

_____________

(1)Represents expenses not recorded at the individual hotel property level.

(2)Includes allocated amounts which were not specific to hotel properties, such as gain on sale of hotel property, corporate taxes, insurance and legal expenses.

104

The following table reconciles net income (loss) to EBITDA attributable to the Company and OP unitholders on a property-by-property basis for each of our hotel properties owned and on a corporate basis during the year ended December 31, 2019. The results of The Ritz-Carlton Lake Tahoe are included from its acquisition date through December 31, 2019 (in thousands) (unaudited):

	Year Ended December 31, 2019
	Capital Hilton		Hilton La Jolla Torrey Pines		Sofitel Chicago Magnificent Mile		Bardessono Hotel and Spa		Pier House Resort & Spa		Hotel Yountville		Park Hyatt Beaver Creek Resort & Spa		The Notary Hotel		The Clancy		The Ritz-Carlton Sarasota		The Ritz-Carlton Lake Tahoe		Marriott Seattle Waterfront		The Ritz-Carlton St. Thomas		Hotel Total		Corporate / Allocated(1)		Braemar Hotels & Resorts Inc.
Net income (loss)	$	6,220	$	9,817	$	(24)	$	(36)	$	8,303	$	868	$	1,609	$	(493)	$	3,739	$	(484)	$	606	$	10,124	$	30,595	$	70,844	$	(69,648)	$	1,196
Non-property adjustments (2)	—		—		—		—		(89)		(9)		—		1,186		—		(23)		—		—		(25,953)		(24,888)		24,888		—
Interest income	(57)		(75)		—		—		—		—		—		(20)		(16)		(69)		—		(48)		(2)		(287)		287		—
Interest expense	—		—		—		1,952		764		2,489		3,427		—		—		5,847		2,294		—		3,087		19,860		30,304		50,164
Amortization of loan costs	—		—		—		138		69		146		138		—		—		318		129		—		154		1,092		3,251		4,343
Depreciation and amortization	7,915		5,616		6,659		3,108		2,615		2,576		4,495		8,369		10,355		7,715		4,426		3,976		2,476		70,301		(189)		70,112
Income tax expense (benefit)	—		251		—		—		—		—		—		(42)		—		—		—		—		77		286		1,478		1,764
Non-hotel EBITDA ownership expense (income)	63		86		534		448		38		132		473		850		170		322		720		198		965		4,999		(4,999)		—
Hotel EBITDA including amounts attributable to noncontrolling interest	14,141		15,695		7,169		5,610		11,700		6,202		10,142		9,850		14,248		13,626		8,175		14,250		11,399		142,207		(14,628)		127,579
Less: EBITDA adjustments attributable to consolidated noncontrolling interest	(3,535)		(3,924)		—		—		—		—		—		—		—		—		—		—		—		(7,459)		7,459		—
Equity in earnings (loss) of unconsolidated entities	—		—		—		—		—		—		—		—		—		—		—		—		—		—		199		199
Company’s portion of EBITDA of OpenKey	—		—		—		—		—		—		—		—		—		—		—		—		—		—		(195)		(195)
Hotel EBITDA attributable to the Company and OP unitholders	$	10,606	$	11,771	$	7,169	$	5,610	$	11,700	$	6,202	$	10,142	$	9,850	$	14,248	$	13,626	$	8,175	$	14,250	$	11,399	$	134,748	$	(7,165)	$	127,583

__________________

(1)Represents expenses not recorded at the individual hotel property level.

(2)Includes allocated amounts which were not specific to hotel properties, such as gain on sale of hotel property, corporate taxes, insurance and legal expenses.

105

FFO is calculated on the basis defined by NAREIT, which is net income (loss) attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses on insurance settlement and disposition of assets, plus impairment charges on real estate, depreciation and amortization of real estate assets, and after redeemable noncontrolling interests in the operating partnership and adjustments for unconsolidated entities. NAREIT developed FFO as a relative measure of performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined by GAAP. Our calculation of Adjusted FFO excludes dividends on Series B Convertible Preferred Stock, gain/loss on extinguishment of preferred stock, transaction and conversion costs, write-off of loan costs and exit fees, legal, advisory and settlement costs, advisory services incentive fee, other income/expense and non-cash items such as interest expense on Convertible Senior Notes, interest expense accretion on refundable membership club deposits, amortization of loan costs, unrealized gain/loss on derivatives, stock/unit-based compensation and the Company’s portion of adjustments to FFO of OpenKey. FFO and Adjusted FFO exclude amounts attributable to the portion of a partnership owned by the third-party. We consider FFO and Adjusted FFO to be appropriate measures of our ongoing normalized operating performance as a REIT. We compute FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that either do not define the term in accordance with the current NAREIT definition or interpret the NAREIT definition differently than us. FFO and Adjusted FFO do not represent cash generated from operating activities as determined by GAAP and should not be considered as an alternative to GAAP net income or loss as an indication of our financial performance or GAAP cash flows from operating activities as a measure of our liquidity. FFO and Adjusted FFO are also not indicative of funds available to satisfy our cash needs, including our ability to make cash distributions. However, to facilitate a clear understanding of our historical operating results, we believe that FFO and Adjusted FFO should be considered along with our net income or loss and cash flows reported in our consolidated financial statements.

106

The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands) (unaudited):

	Year Ended December 31,
	2021		2020		2019
Net income (loss)	$	(32,911)	$	(124,677)	$	1,196
(Income) loss attributable to noncontrolling interest in consolidated entities	2,650		6,436		(2,032)
Net (Income) loss attributable to redeemable noncontrolling interests in operating partnership	3,597		12,979		1,207
Preferred dividends	(8,745)		(10,219)		(10,142)
Gain (loss) on extinguishment of preferred stock	(4,595)		—		—
Net income (loss) attributable to common stockholders	(40,004)		(115,481)		(9,771)
Depreciation and amortization on real estate (1)	71,072		70,426		66,933
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership	(3,597)		(12,979)		(1,207)
Equity in (earnings) loss of unconsolidated entity	252		217		199
(Gain) loss on insurance settlement and disposition of assets	(696)		(10,149)		(25,165)
Company’s portion of FFO of OpenKey	(251)		(216)		(201)
FFO available to common stockholders and OP unitholders	26,776		(68,182)		30,788
Series B Convertible Preferred Stock dividends	4,747		6,919		6,842
(Gain) loss on extinguishment of preferred stock	4,595		—		—
Transaction and conversion costs	2,637		1,370		2,076
Other (income) expense	—		5,126		13,947
Interest expense on Convertible Senior Notes	3,378		—		—
Interest expense accretion on refundable membership club benefits	772		818		864
Write-off of loan costs and exit fees	1,963		3,920		647
Amortization of loan costs (1)	2,121		3,332		4,263
Unrealized (gain) loss on investment in Ashford Inc.	—		—		(7,872)
Unrealized (gain) loss on derivatives	(32)		(4,959)		1,103
Non-cash stock/unit-based compensation	10,204		7,892		7,943
Legal, advisory and settlement costs	(208)		2,023		527
Company’s portion of adjustments to FFO of OpenKey	7		13		28
Adjusted FFO available to common stockholders, OP unitholders, Series B Cumulative Convertible preferred stockholders and convertible note holders on an “as converted” basis	$	56,960	$	(41,728)	$	61,156

____________________

(1)Net of adjustment for noncontrolling interest in consolidated entities. The following table presents the amounts of the adjustments for noncontrolling interests for each line item:

	Year Ended December 31,
	2021		2020		2019
Depreciation and amortization on real estate	$	(2,690)	$	(2,945)	$	(3,179)
Amortization of loan costs	(87)		(77)		(80)

107

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Our primary market risk exposure consists of changes in interest rates on borrowings under our debt instruments that bear interest at variable rates that fluctuate with market interest rates. To the extent that we acquire assets or conduct operations in an international jurisdiction, we will also have currency exchange risk. We may enter into certain hedging arrangements in order to manage interest rate and currency fluctuations. The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market interest rates.

At December 31, 2021, our total indebtedness of approximately $1.2 billion included approximately $1.1 billion of variable-rate debt. The impact on the results of operations of a 25-basis point change in the interest rate on the outstanding balance of variable-rate debt at December 31, 2021, would be approximately $2.7 million per year. Interest rate changes have no impact on the remaining $86.3 million of fixed-rate debt.

The above amounts were determined based on the impact of hypothetical interest rates on our borrowings and assume no changes in our capital structure. The information presented above includes those exposures that existed at December 31, 2021, but it does not consider exposures or positions that could arise after that date. Accordingly, the information presented herein has limited predictive value. As a result, the ultimate realized gain or loss with respect to interest rate fluctuations will depend on exposures that arise during the period, the hedging strategies at the time, and the related interest rates.

108

Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (BDO USA, LLP; Dallas, Texas; PCAOB ID #243)	110
Consolidated Balance Sheets — December 31, 2021 and 2020	112
Consolidated Statements of Operations — Years Ended December 31, 2021, 2020 and 2019	113
Consolidated Statements of Comprehensive Income (Loss) — Years Ended December 31, 2021, 2020 and 2019	114
Consolidated Statements of Equity — Years Ended December 31, 2021, 2020 and 2019	115
Consolidated Statements of Cash Flows — Years Ended December 31, 2021, 2020 and 2019	117
Notes to Consolidated Financial Statements	119

109

Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors

Braemar Hotels & Resorts Inc.

Dallas, Texas

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Braemar Hotels & Resorts Inc. (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated March 10, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Hotel Property Acquisition for Mr. C Beverly Hills Hotel

As described in Note 4 to the consolidated financial statements, the Company acquired a 100% interest in the Mr. C Beverly Hills Hotel and five luxury residences adjacent to the hotel on August 5, 2021 (“the Acquisition”). The total consideration consisted of $10.0 million of cash, 2.5 million Braemar OP common units with a fair value of approximately $13.2 million and 500,000 warrants for the purchase of Braemar common stock with a fair value of approximately $1.5 million. Management utilized various estimates in the fair value assessment related to the Acquisition.

We identified the evaluation of the fair value of the investment in hotel properties acquired in the Acquisition as a critical audit matter. Specifically, there was judgment applied by management when developing the fair value estimates used to allocate the purchase consideration to the acquired land, hotel building, residences and respective improvements, which also included

110

making judgments about the valuation methodologies (e.g., market approach and cost approach) and inputs to the valuation model. Auditing these matters involved especially challenging auditor effort due to the specialized skills and knowledge required to evaluate the valuation methodologies and the reasonableness of the inputs used to determine the fair value of the investment in hotel properties acquired.

The primary procedures we performed to address this critical audit matter utilized valuation professionals with specialized knowledge and skills, who assisted in:

•Assessing the appropriateness of the valuation methodologies utilized to allocate the purchase consideration;

•Assessing the relevance of the market comparable transactions utilized by management to determine the fair value of the acquired land, by independently reviewing similar transactions from industry sources compared to transactions used by the Company in reaching its conclusion on the fair value of the acquired elements; and

•Assessing the reasonableness of the fair value of the hotel building, residences and respective improvements by comparing the replacement cost to observable market information.

/s/ BDO USA, LLP

We have served as the Company’s auditor since 2015.

Dallas, Texas

March 10, 2022

111

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	December 31, 2021		December 31, 2020
ASSETS
Investments in hotel properties, gross	$	1,845,078	$	1,784,849
Accumulated depreciation	(399,481)		(360,259)
Investments in hotel properties, net	1,445,597		1,424,590
Cash and cash equivalents	215,998		78,606
Restricted cash	47,376		34,544
Accounts receivable, net of allowance of $126 and $227, respectively	23,701		13,557
Inventories	3,128		2,551
Prepaid expenses	4,352		4,405
Investment in unconsolidated entity	1,689		1,708
Derivative assets	139		—
Operating lease right-of-use assets	80,462		81,260
Other assets	23,588		14,898
Intangible assets, net	4,261		4,640
Due from related parties, net	1,770		991
Due from third-party hotel managers	27,461		12,271
Total assets	$	1,879,522	$	1,674,021
LIABILITIES AND EQUITY
Liabilities:
Indebtedness, net	$	1,172,678	$	1,130,594
Accounts payable and accrued expenses	96,316		61,758
Dividends and distributions payable	2,173		2,736
Due to Ashford Inc.	1,474		2,772
Due to third-party hotel managers	610		1,393
Operating lease liabilities	60,937		60,917
Other liabilities	20,034		18,077
Derivative liabilities	1,435		—
Total liabilities	1,355,657		1,278,247
Commitments and contingencies (note 16)
5.50% Series B cumulative convertible preferred stock, $0.01 par value, 3,078,017 and 5,031,473 shares issued and outstanding at December 31, 2021 and December 31, 2020	65,426		106,949
Series E redeemable preferred stock, $0.01 par value, 1,710,399 and 0 shares issued and outstanding at December 31, 2021 and December 31, 2020	39,339		—
Series M redeemable preferred stock, $0.01 par value, 29,044 and 0 shares issued and outstanding at December 31, 2021 and December 31, 2020	715		—
Redeemable noncontrolling interests in operating partnership	36,087		27,655
Equity:
Preferred stock, $0.01 value, 80,000,000 shares authorized:
8.25% Series D cumulative preferred stock, 1,600,000 shares issued and outstanding at December 31, 2021 and December 31, 2020	16		16
Common stock, $0.01 par value, 250,000,000 shares authorized, 65,365,470 and 38,274,770 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively	653		382
Additional paid-in capital	707,418		541,870
Accumulated deficit	(309,240)		(266,010)
Total stockholders’ equity of the Company	398,847		276,258
Noncontrolling interest in consolidated entities	(16,549)		(15,088)
Total equity	382,298		261,170
Total liabilities and equity	$	1,879,522	$	1,674,021

See Notes to Consolidated Financial Statements.

112

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Year Ended December 31,
	2021		2020		2019
REVENUE
Rooms	$	280,568	$	136,265	$	303,848
Food and beverage	90,299		50,263		115,085
Other	56,675		40,446		68,674
Total hotel revenue	427,542		226,974		487,607
Other	—		—		7
Total revenue	427,542		226,974		487,614
EXPENSES
Hotel operating expenses:
Rooms	59,818		38,054		70,297
Food and beverage	75,177		46,246		85,679
Other expenses	138,914		98,467		151,063
Management fees	13,117		7,210		16,573
Total hotel operating expenses	287,026		189,977		323,612
Property taxes, insurance and other	34,997		28,483		27,985
Depreciation and amortization	73,762		73,371		70,112
Advisory services fee	22,641		18,486		20,527
(Gain) loss on legal settlements	(917)		—		—
Transaction costs	563		—		704
Corporate general and administrative	8,717		6,657		5,435
Total expenses	426,789		316,974		448,375
Gain (loss) on insurance settlement and disposition of assets	696		10,149		25,165
OPERATING INCOME (LOSS)	1,449		(79,851)		64,404
Equity in earnings (loss) of unconsolidated entity	(252)		(217)		(199)
Interest income	48		176		1,087
Other income (expense)	—		(5,126)		(13,947)
Interest expense and amortization of discounts and loan costs	(30,901)		(45,104)		(54,507)
Write-off of loan costs and exit fees	(1,963)		(3,920)		(647)
Unrealized gain (loss) on investment in Ashford Inc.	—		—		7,872
Unrealized gain (loss) on derivatives	32		4,959		(1,103)
INCOME (LOSS) BEFORE INCOME TAXES	(31,587)		(129,083)		2,960
Income tax (expense) benefit	(1,324)		4,406		(1,764)
NET INCOME (LOSS)	(32,911)		(124,677)		1,196
(Income) loss attributable to noncontrolling interest in consolidated entities	2,650		6,436		(2,032)
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	3,597		12,979		1,207
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	(26,664)		(105,262)		371
Preferred dividends	(8,745)		(10,219)		(10,142)
Gain (loss) on extinguishment of preferred stock	(4,595)		—		—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(40,004)	$	(115,481)	$	(9,771)
INCOME (LOSS) PER SHARE - BASIC:
Net income (loss) attributable to common stockholders	$	(0.76)	$	(3.39)	$	(0.32)
Weighted average common shares outstanding – basic	52,684		33,998		32,289
INCOME (LOSS) PER SHARE - DILUTED:
Net income (loss) attributable to common stockholders	$	(0.76)	$	(3.39)	$	(0.32)
Weighted average common shares outstanding – diluted	52,684		33,998		32,289

See Notes to Consolidated Financial Statements.

113

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

	Year Ended December 31,
	2021		2020		2019
NET INCOME (LOSS)	$	(32,911)	$	(124,677)	$	1,196
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Total other comprehensive income (loss)	—		—		—
TOTAL COMPREHENSIVE INCOME (LOSS)	(32,911)		(124,677)		1,196
Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities	2,650		6,436		(2,032)
Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership	3,597		12,979		1,207
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	$	(26,664)	$	(105,262)	$	371

See Notes to Consolidated Financial Statements.

114

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands except per share amounts)

	8.25% Series D Cumulative Preferred Stock										Noncontrolling Interests in Consolidated Entities		Total		5.50% Series B Cumulative Convertible Preferred Stock			Series E Redeemable Preferred Stock			Series M Redeemable Preferred Stock			Redeemable Noncontrolling Interest in Operating Partnership
				Common Stock			Additional Paid-in Capital		Accumulated Deficit
	Shares	Amount		Shares	Amount										Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2018	1,600	$	16	32,512	$	325	$	512,545	$	(115,410)	$	(5,391)	$	392,085	4,966	$	106,123	—	$	—	—	$	—	$	44,885
Impact of adoption of new accounting standard	—	—		—	—		—		(103)		—		(103)		—	—		—	—		—	—		—
Distribution of Ashford Inc. common stock	—	—		—	—		—		(3,509)		—		(3,509)		—	—		—	—		—	—		(456)
Purchase of common stock	—	—		(45)	—		(520)		—		—		(520)		—	—		—	—		—	—		—
Equity-based compensation	—	—		—	—		5,342		—		—		5,342		—	—		—	—		—	—		2,601
Issuance of restricted shares/units	—	—		260	2		(2)		—		—		—		—	—		—	—		—	—		8
Forfeiture of restricted common shares	—	—		(7)	—		—		—		—		—		—	—		—	—		—	—		—
Issuance of preferred shares	—	—		—	—		—		—		—		—		42	797		—	—		—	—		—
Preferred shares issuance costs	—	—		—	—		(13)		—		—		(13)		—	—		—	—		—	—		—
Dividends declared – common stock ($0.64/share)	—	—		—	—		—		(21,302)		—		(21,302)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series B ($1.3750/share)	—	—		—	—		—		(6,842)		—		(6,842)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series D ($2.0625/share)	—	—		—	—		—		(3,300)		—		(3,300)		—	—		—	—		—	—		—
Distributions to noncontrolling interests	—	—		—	—		—		—		(2,654)		(2,654)		—	—		—	—		—	—		(2,594)
Redemption/conversion of operating partnership units	—	—		165	2		2,199		—		—		2,201		—	—		—	—		—	—		(2,201)
Net income (loss)	—	—		—	—		—		371		2,032		2,403		—	—		—	—		—	—		(1,207)
Redemption value adjustment	—	—		—	—		—		(534)		—		(534)		—	—		—	—		—	—		534
Balance at December 31, 2019	1,600	$	16	32,885	$	329	$	519,551	$	(150,629)	$	(6,013)	$	363,254	5,008	$	106,920	—	$	—	—	$	—	$	41,570
Purchase of common stock	—	—		(47)	—		(155)		—		—		(155)		—	—		—	—		—	—		—
Equity-based compensation	—	—		—	—		5,746		—		—		5,746		—	—		—	—		—	—		2,146
Issuance of restricted shares/units	—	—		379	3		(3)		—		—		—		—	—		—	—		—	—		—
Forfeiture of restricted common shares	—	—		(10)	—		—		—		—		—		—	—		—	—		—	—		—
Issuance of preferred shares	—	—		—	—		—		—		—		—		23	29		—	—		—	—		—
Issuance of common stock	—	—		4,729	47		13,280		—		—		13,327		—	—		—	—		—	—		—
PSU dividend claw back upon cancellation	—	—		—	—		—		202		—		202		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series B ($1.3750/share)	—	—		—	—		—		(6,919)		—		(6,919)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series D ($2.0625/share)	—	—		—	—		—		(3,300)		—		(3,300)		—	—		—	—		—	—		—
Distributions to noncontrolling interests	—	—		—	—		—		—		(2,639)		(2,639)		—	—		—	—		—	—		—
Performance LTIP dividend claw back upon cancellation	—	—		—	—		—		—		—		—		—	—		—	—		—	—		270
Redemption/conversion of operating partnership units	—	—		339	3		3,451		—		—		3,454		—	—		—	—		—	—		(3,454)
Net income (loss)	—	—		—	—		—		(105,262)		(6,436)		(111,698)		—	—		—	—		—	—		(12,979)
Redemption value adjustment	—	—		—	—		—		(102)		—		(102)		—	—		—	—		—	—		102
Balance at December 31, 2020	1,600	$	16	38,275	$	382	$	541,870	$	(266,010)	$	(15,088)	$	261,170	5,031	$	106,949	—	$	—	—	$	—	$	27,655
Purchase of common stock	—	—		(50)	—		(348)		—		—		(348)		—	—		—	—		—	—		—
Equity-based compensation	—	—		—	—		6,891		—		—		6,891		—	—		—	—		—	—		3,292
Issuance of common stock	—	—		18,243	183		102,134		—		—		102,317		—	—		—	—		—	—		—
Issuance of preferred stock	—	—		—	—		—		—		—		—		—	—		1,710	36,211		29	582		—
Issuance of restricted shares/units	—	—		764	8		(8)		—		—		—		—	—		—	—		—	—		—
Issuance of common units for hotel acquisition	—	—		—	—		—		—		—		—		—	—		—	—		—	—		13,175
Forfeiture of restricted common shares	—	—		(26)	—		—		—		—		—		—	—		—	—		—	—		—
PSU dividend claw back upon cancellation	—	—		—	—		—		143		—		143		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series B ($1.3750/share)	—	—		—	—		—		(4,747)		—		(4,747)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series D ($2.0625/share)	—	—		—	—		—		(3,300)		—		(3,300)		—	—		—	—		—	—		—
Dividends declared – preferred stock - Series E ($1.00/share)	—	—		—	—		—		(683)		—		(683)		—	—		—	—		—	—		—

115

	8.25% Series D Cumulative Preferred Stock										Noncontrolling Interests in Consolidated Entities		Total		5.50% Series B Cumulative Convertible Preferred Stock			Series E Redeemable Preferred Stock			Series M Redeemable Preferred Stock			Redeemable Noncontrolling Interest in Operating Partnership
				Common Stock			Additional Paid-in Capital		Accumulated Deficit
	Shares	Amount		Shares	Amount										Shares	Amount		Shares	Amount		Shares	Amount
Dividends declared – preferred stock - Series M ($0.85/share)	—	—		—	—		—		(15)		—		(15)		—	—		—	—		—	—		—
Contributions from noncontrolling interests	—	—		—	—		—		—		1,189		1,189		—	—		—	—		—	—		—
Performance LTIP dividend claw back upon cancellation	—	—		—	—		—		—		—		—		—	—		—	—		—	—		38
Redemption/conversion of operating partnership units	—	—		868	9		4,575		—		—		4,584		—	—		—	—		—	—		(4,584)
Net income (loss)	—	—		—	—		—		(26,664)		(2,650)		(29,314)		—	—		—	—		—	—		(3,597)
Extinguishment of preferred stock	—	—		7,291	71		46,047		(4,595)		—		41,523		(1,953)	(41,523)		—	—		—	—		—
Equity component of Convertible Senior Notes	—	—		—	—		6,257		—		—		6,257		—	—		—	—		—	—		—
Redemption value adjustment - preferred stock	—	—		—	—		—		(3,261)		—		(3,261)		—	—		—	3,128		—	133		—
Redemption value adjustment	—	—		—	—		—		(108)		—		(108)		—	—		—	—		—	—		108
Balance at December 31, 2021	1,600	$	16	65,365	$	653	$	707,418	$	(309,240)	$	(16,549)	$	382,298	3,078	$	65,426	1,710	$	39,339	29	$	715	$	36,087

See Notes to Consolidated Financial Statements.

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BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2021		2020		2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(32,911)	$	(124,677)	$	1,196
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:
Depreciation and amortization	73,762		73,371		70,112
Equity-based compensation	10,183		7,892		7,943
Bad debt expense	436		727		444
Amortization of loan costs, discounts and capitalized default interest	(205)		854		4,343
Write-off of loan costs and exit fees	1,963		3,920		647
Amortization of intangibles	512		834		651
Amortization of non-refundable membership initiation fees	(1,029)		(440)		(181)
Interest expense accretion on refundable membership club deposits	772		818		864
(Gain) loss on insurance settlement and disposition of assets	(696)		(10,149)		(25,165)
Realized and unrealized (gain) loss on investment in Ashford Inc.	—		—		5,552
Realized and unrealized (gain) loss on derivatives	(32)		(24)		1,381
Net settlement of trading derivatives	—		698		(1,076)
Equity in (earnings) loss of unconsolidated entity	252		217		199
Deferred income tax expense (benefit)	(174)		(956)		764
Changes in operating assets and liabilities, exclusive of the effect of hotel acquisitions:
Accounts receivable and inventories	(11,036)		4,057		(5,788)
Prepaid expenses and other assets	(793)		(1,460)		(2,228)
Accounts payable and accrued expenses	35,976		(10,499)		13,394
Operating lease right-of-use assets	574		541		518
Due to/from related parties, net	(779)		(440)		(775)
Due to/from third-party hotel managers	(15,491)		4,075		(5,484)
Due to/from Ashford Inc.	720		(1,674)		(555)
Operating lease liabilities	(268)		(223)		(194)
Other liabilities	2,214		2,251		(300)
Net cash provided by (used in) operating activities	63,950		(50,287)		66,262
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from property insurance	—		9,037		11,020
Net proceeds from disposition of assets	1,816		—		10,300
Proceeds from sale of investment in Ashford Inc.	—		—		597
Acquisition of hotel properties	(17,615)		—		(111,751)
Investment in unconsolidated entity	(233)		(26)		(332)
Improvements and additions to hotel properties	(25,644)		(25,552)		(136,259)
Net cash provided by (used in) investing activities	(41,676)		(16,541)		(226,425)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on indebtedness	83,231		109,317		329,500
Repayments of indebtedness	(84,224)		(47,822)		(257,086)
Payments of loan costs and exit fees	(1,898)		(6,485)		(4,447)
Payments for derivatives	(200)		(92)		(115)
Purchase of common stock	(376)		(263)		(384)
Payments for dividends and distributions	(9,088)		(16,154)		(33,409)
Proceeds from issuance of preferred stock	36,855		474		645
Proceeds from issuance of common stock	102,461		13,259		—
Contributions from noncontrolling interest in consolidated entities	1,189		—		—
Distributions to noncontrolling interest in consolidated entities	—		(2,639)		(2,654)
Other	—		—		8
Net cash provided by (used in) financing activities	127,950		49,595		32,058
Net change in cash, cash equivalents and restricted cash	150,224		(17,233)		(128,105)
Cash, cash equivalents and restricted cash at beginning of period	113,150		130,383		258,488
Cash, cash equivalents and restricted cash at end of period	$	263,374	$	113,150	$	130,383

117

	Year Ended December 31,
	2021		2020		2019
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid	$	31,635	$	27,900	$	49,645
Income taxes paid (refunded)	(14)		140		(11)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Dividends and distributions declared but not paid	$	2,173	$	2,736	$	9,143
Common stock purchases accrued but not paid	—		28		136
Issuance of common units for hotel acquisition	13,175		—		—
Issuance of warrants in hotel acquisition	1,528		—		—
Assumption of debt in hotel acquisition	49,815		—		—
Capital expenditures accrued but not paid	4,564		8,993		18,572
Distribution of Ashford Inc. common stock	—		—		3,965
Non-cash loan proceeds associated with accrued interest	—		2,229		—
Non-cash loan principal associated with default interest and late charges	—		9,859		—
Non-cash extinguishment of preferred stock	41,523		—		—
Issuance of common stock from preferred stock exchange	46,118		—		—
Accrued common stock offering expense	76		—		—
Unsettled common stock offering proceeds	—		68		—
Unsettled preferred stock offering proceeds	—		—		75
Accrued preferred stock offering expenses	101		—		33
Non-cash preferred stock dividends	39		—		—
SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	$	78,606	$	71,995	$	182,578
Restricted cash at beginning of period	34,544		58,388		75,910
Cash, cash equivalents and restricted cash at beginning of period	$	113,150	$	130,383	$	258,488
Cash and cash equivalents at end of period	$	215,998	$	78,606	$	71,995
Restricted cash at end of period	47,376		34,544		58,388
Cash, cash equivalents and restricted cash at end of period	$	263,374	$	113,150	$	130,383

See Notes to Consolidated Financial Statements.

118

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2021, 2020 and 2019

1. Organization and Description of Business

Braemar Hotels & Resorts Inc., together with its subsidiaries (“Braemar”), is a Maryland corporation that invests primarily in high revenue per available room (“RevPAR”) luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by Smith Travel Research. Braemar has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Braemar conducts its business and owns substantially all of its assets through its operating partnership, Braemar Hospitality Limited Partnership (“Braemar OP”). In this report, the terms “Company,” “we,” “us” or “our” refers to Braemar Hotels & Resorts Inc. and, as the context may require, all entities included in its consolidated financial statements.

We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC” or the “Advisor”) through an advisory agreement. Ashford LLC is a subsidiary of Ashford Inc. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.

We do not operate any of our hotel properties directly; instead we employ hotel management companies to operate them for us under management contracts. Remington Hotels, a subsidiary of Ashford Inc., manages four of our 14 hotel properties. Third-party management companies manage the remaining hotel properties.

Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory services, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and mobile key technology.

The accompanying consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of December 31, 2021, own 14 hotel properties in six states, the District of Columbia and the U.S. Virgin Islands (“USVI”). The portfolio includes 12 wholly-owned hotel properties and two hotel properties that are owned through a partnership in which Braemar OP has a controlling interest. These hotel properties represent 3,875 total rooms, or 3,640 net rooms, excluding those attributable to our partner. As a REIT, Braemar is required to comply with limitations imposed by the Code related to operating hotels. As of December 31, 2021, 13 of our 14 hotel properties were leased by wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes (collectively the TRS entities are referred to as “Braemar TRS”). One hotel property, located in the USVI, is owned by our USVI TRS. Braemar TRS then engages third-party or affiliated hotel management companies to operate the hotel properties under management contracts. Hotel operating results related to the hotel properties are included in the consolidated statements of operations.

As of December 31, 2021, 11 of the 14 hotel properties were leased by Braemar’s wholly-owned TRS, and the two hotel properties majority-owned through a consolidated partnership were leased to a TRS wholly-owned by such consolidated partnership. Each leased hotel is leased under a percentage lease that provides for each lessee to pay in each calendar month the base rent plus, in each calendar quarter, percentage rent, if any, based on hotel revenues. Lease revenue from Braemar TRS is eliminated in consolidation. The hotel properties are operated under management contracts with Marriott Hotel Services, Inc. (“Marriott”), Hilton Management LLC (“Hilton”), Accor Management US Inc. (“Accor”), Hyatt Corporation (“Hyatt”), Ritz-Carlton (Virgin Islands), Inc. and The Ritz-Carlton Hotel Company, L.L.C., each of which is an affiliate of Marriott (“Ritz-Carlton”) and Remington Hotels, which are eligible independent contractors under the Code.

Liquidity

In December 2019, COVID-19 was identified in Wuhan, China, subsequently spread to other regions of the world, and has resulted in significant travel restrictions and extended shutdown of numerous businesses throughout the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Beginning in late February 2020, we experienced a significant decline in occupancy and RevPAR associated with COVID-19 as we experienced significant reservation cancellations as well as a significant reduction in new reservations. The prolonged presence of the virus has resulted in health and other government authorities imposing widespread restrictions on travel and other businesses.

As of December 31, 2021, the Company maintained unrestricted cash of $216.0 million and restricted cash of $47.4 million. The vast majority of the restricted cash comprises lender and manager held reserves. As of December 31, 2021, there

119

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

was also $27.5 million due to the Company from third-party hotel managers, which is primarily the Company’s cash held by one of its property managers which is also available to fund hotel operating costs. On March 4, 2022, our board of directors declared a quarterly cash dividend of $0.01 per diluted share for the Company’s common stock for the first quarter of 2022.

We cannot predict when hotel operating levels will return to normalized levels after the effects of the pandemic fully subside, whether our hotels will be forced to shut down operations or whether one or more possible recurrences of COVID-19 case surges could result in further reductions in business and personal travel or potentially cause state and local governments to reinstate travel restrictions. Facts and circumstances could change in the future that are outside of management’s control, such as additional government mandates, health official orders, travel restrictions and extended business shutdowns due to COVID-19.

2. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation—The accompanying consolidated financial statements include the accounts of Braemar Hotels & Resorts Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All significant intercompany accounts and transactions between consolidated entities have been eliminated in these consolidated financial statements.

Braemar OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Braemar OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Braemar OP General Partner LLC (formerly Ashford Prime OP General Partner LLC), its general partner. As such, we consolidate Braemar OP.

The following items affect reporting comparability of our historical consolidated financial statements:

•on January 15, 2019, we acquired The Ritz-Carlton Lake Tahoe. The operating results of the hotel property have been included in the results of operations as of its acquisition date; and

•on August 5, 2021, we acquired the Mr. C Beverly Hills Hotel and five adjacent luxury residences. The operating results of the hotel property have been included in the results of operations from its acquisition date.

Use of Estimates—The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents—Cash and cash equivalents include cash on hand or held in banks and short-term investments with an initial maturity of three months or less at the date of purchase.

Restricted Cash—Restricted cash includes reserves for debt service, real estate taxes, and insurance, as well as excess cash flow deposits and reserves for furniture, fixtures, and equipment (“FF&E”) replacements of approximately 4% to 5% of property revenue for certain hotels, as required by certain management or mortgage debt agreement restrictions and provisions.

Accounts Receivable—Accounts receivable consists primarily of meeting and banquet room rental and hotel guest receivables. We generally do not require collateral. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of guests to make required payments for services. The allowance is maintained at a level believed adequate to absorb estimated receivable losses. The estimate is based on past receivable loss experience, known and inherent credit risks, current economic conditions, and other relevant factors, including specific reserves for certain accounts.

Inventories—Inventories, which primarily consist of food, beverages, and gift store merchandise, are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method.

Investments in Hotel Properties, net—Hotel properties are generally stated at cost. For hotel properties owned through our majority-owned entities, the carrying basis attributable to the partners’ minority ownership is recorded at historical cost, net of any impairment charges, while the carrying basis attributable to our majority ownership is recorded based on the allocated purchase price of our ownership interests in the entities. All improvements and additions which extend the useful life of the hotel properties are capitalized.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

For property and equipment acquired in a business combination, we record the sets acquired based on their fair value as of the acquisition date. Replacements and improvements and finance leases are capitalized, while repairs and maintenance are expense as incurred. Property and equipment acquired in an asset acquisition are recorded at cost. The acquisition cost is allocated to land, buildings, improvements, furniture, fixtures and equipment, as well as identifiable intangible and lease assets and liabilities. Acquisition cost is allocated using relative fair values. We evaluate several factors, including weighted market data for similar assets, expected future cash flows discounted at risk adjusted rates, and replacement costs for assets to determine an appropriate exit cost when evaluating the fair values.

Impairment of Investments in Hotel Properties—Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating the impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period and expected useful life. Fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. See note 4.

Assets Held for Sale and Discontinued Operations—We classify assets as held for sale when we have obtained a firm commitment from a buyer, and consummation of the sale is considered probable and expected within one year. The related operations of assets held for sale are reported as discontinued if the disposal is a component of an entity or group of components that represents a strategic shift that has (or will have) a major effect on our operations and cash flows. Depreciation and amortization will cease as of the date assets have met the criteria to be deemed held for sale.

Investment in Unconsolidated Entity—As of December 31, 2021, we held a 7.8% ownership interest in OpenKey, which is accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entities’ net income/loss. We review our investment in unconsolidated entity for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of our investment. Any impairment is recorded in equity in earnings (loss) of unconsolidated entity. No such impairment was recorded for the years ended December 31, 2021, 2020 and 2019. See note 5.

Our investment in unconsolidated entity is considered to be a variable interest in the underlying entity. VIEs, as defined by authoritative accounting guidance, must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Because we do not have the power and financial responsibility to direct the unconsolidated entity’s activities and operations, we are not considered to be the primary beneficiary of this entity on an ongoing basis and therefore such entity should not be consolidated.

Leases—We determine if an arrangement is a lease at the commencement date. Operating leases, as lessee, are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on our consolidated balance sheets. We currently do not have any finance leases.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and initial direct costs incurred and excludes lease incentives. The lease terms used to calculate our right-of-use asset may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Subsequent to the initial recognition, lease liabilities are measured using the effective interest method. The ROU asset is generally reduced utilizing a straight-line method adjusted for the lease liability accretion during the period.

We have lease agreements with lease and non-lease components, which under the elected practical expedients under ASC 842, we are not accounting for separately. For certain equipment leases, such as office equipment, copiers and vehicles, we account for the lease and non-lease components as a single lease component.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of January 1, 2019, we recorded operating lease liabilities as well as a corresponding operating lease ROU asset which includes deferred rent and the reclassified intangible assets and intangible liabilities associated with above/below market-rate leases where we are the lessee.

Intangible Assets, net—Intangible assets, net represents the customer relationships associated with The Ritz-Carlton Sarasota acquisition, which are amortized using the straight-line method over its expected useful life, which approximates amortization based on economic consumption. See note 19.

Derivative Instruments—We use interest rate derivatives to hedge our risks and to capitalize on the historical correlation between changes in LIBOR (London Interbank Offered Rate) and RevPAR. Interest rate derivatives could include swaps, caps, floors and flooridors. We also use credit default swaps to hedge financial and capital market risk. All of our derivatives are subject to master-netting settlement arrangements and the credit default swaps are subject to credit support annexes. For credit default swaps, cash collateral is posted by us as well as our counterparty. We offset the fair value of the derivative and the obligation/right to return/reclaim cash collateral.

All derivatives are recorded at fair value in accordance with the applicable authoritative accounting guidance. None of our derivative instruments are designated as cash flow hedges. Interest rate derivatives, credit default swaps and options on futures contracts are reported as “derivative assets” in our consolidated balance sheets. For interest rate derivatives and credit default swaps changes in fair value and realized gains and losses are recognized in earnings as “unrealized gain (loss) on derivatives” and “other income (expense),” respectively, in our consolidated statements of operations.

Due to/from Related Parties, net—Due to/from related parties, net, represent current receivables and payables resulting from transactions related to hotel management with a related party. Due to/from related parties is generally settled within a period not exceeding one year. See note 15.

Due to/from Ashford Inc.—Due to/from Ashford Inc. represents payables related to the advisory services fee, including reimbursable expenses as well as other hotel products and services. These payables are generally settled within a period not exceeding one year. See note 15.

Due to/from Third-Party Hotel Managers—Due to/from third-party hotel managers primarily consists of amounts due from Marriott related to our cash reserves held at the Marriott corporate level related to our operations, real estate taxes, and other items, as well as current receivables and payables resulting from transactions with other third-party managers related to hotel management. These receivables and payables are generally settled within a period not exceeding one year.

Noncontrolling Interests—The redeemable noncontrolling interests in the operating partnership represent the limited partners’ proportionate share of equity in earnings/losses of the operating partnership, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common unit holdings throughout the period. The redeemable noncontrolling interests in our operating partnership is classified in the mezzanine section of our consolidated balance sheets as these redeemable operating partnership units do not meet the requirements for permanent equity classification prescribed by the authoritative accounting guidance because these redeemable operating partnership units may be redeemed by the holder for cash or registered shares in certain cases outside of the Company’s control. The carrying value of the noncontrolling interests in the operating partnership is based on the greater of the accumulated historical cost or the redemption value.

The noncontrolling interest in consolidated entities represents an ownership interest of 25% in two hotel properties at December 31, 2021 and 2020, and is reported in equity in our consolidated balance sheets.

Net income/loss attributable to redeemable noncontrolling interests in operating partnership and income/loss from consolidated entities attributable to noncontrolling interests in our consolidated entities are reported as deductions/additions from/to net income/loss. Comprehensive income/loss attributable to these noncontrolling interests is reported as reductions/additions from/to comprehensive income/loss.

Revenue Recognition—Rooms revenue represents revenues from the occupancy of our hotel rooms, which is driven by the occupancy and average daily rate. Rooms revenue includes revenue for guest no-shows, day use, and early/late departure fees. The contracts for room stays with customers are generally short in duration and revenues are recognized as services are provided over the course of the hotel stay. Advance deposits are recorded as liabilities when a customer or group of customers provides a deposit for a future stay or banquet event at our hotels. Advance deposits are converted to revenue when the services are provided to the customer or when the customer with a noncancellable reservation fails to arrive for part or all of the reservation. Conversely, advance deposits are generally refundable upon guest cancellation of the related reservation within an

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established period of time prior to the reservation. Our advance deposit balance as of December 31, 2021 and 2020 was $31.8 million and $16.2 million, respectively, and are generally recognized as revenue within a one-year period.

Food & Beverage (“F&B”) revenue consists of revenue from the restaurants and lounges at our hotel properties, in-room dining and mini-bars revenue, and banquet/catering revenue from group and social functions. Other F&B revenue may include revenue from audiovisual equipment/services, rental of function rooms, and other F&B related revenues. Revenue is recognized as the services or products are provided. Our hotel properties may employ third parties to provide certain services at the property, for example, audio visual services. We evaluate each of these contracts to determine if the hotel is the principal or the agent in the transaction, and record the revenues as appropriate (i.e. gross vs. net).

Other revenue consists of ancillary revenue at the property, including attrition and cancellation fees, condo management fees, resort and destination fees, health center fees, spas, golf, telecommunications, parking, entertainment and other guest services, as well as rental revenue primarily from leased retail outlets at our hotel properties, and membership initiation fees and dues, primarily from club memberships. Cancellation fees are recognized from non-cancellable deposits when the customer provides notification of cancellation in accordance with established management policy time frames. Non-refundable membership initiation fees are recognized over the expected life of an active membership.

Taxes specifically collected from customers and submitted to taxing authorities are not recorded in revenue. Interest income is recognized when earned.

Other Hotel Expenses—Other hotel expenses include Internet, telephone charges, guest laundry, valet parking, hotel-level general and administrative, sales and marketing expenses, repairs and maintenance, franchise fees and utility costs. They are expensed as incurred.

Advertising Costs—Advertising costs are charged to expense as incurred. For the years ended December 31, 2021, 2020 and 2019, we incurred advertising costs of $4.0 million, $2.1 million and $4.5 million, respectively. Advertising costs are included in “other” hotel expenses in our consolidated statements of operations.

Equity-Based Compensation—Stock/unit-based compensation for non-employees is measured at the grant date and expensed ratably over the vesting period based on the original measurement as of the grant date. This results in the recording of expense, included in “advisory services fee,” “management fees” and “corporate general and administrative” expense, equal to the ratable amount of the grant date fair value based on the requisite service period satisfied during the period. PSUs and Performance LTIP units granted to certain executive officers vest based on time and market conditions and are measured at the grant date fair value based on a Monte Carlo simulation valuation model.

With respect to the 2019 and 2020 award agreements, the number of PSUs and Performance LTIP units actually earned may range from 0% to 200% of target based on achievement of a specific relative total stockholder return based on the formulas determined by the Company’s compensation committee on the grant date. The performance criteria for the PSUs and Performance LTIP units are based on market conditions under the relevant literatures. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition.

With respect to the 2021 award agreements, the compensation committee shifted to a new performance metric, pursuant to which, the performance awards will be eligible to vest, from 0% to 200% of target, based on achievement of certain performance targets over the three-year performance period commencing on January 1, 2021 and ending on December 31, 2023. The performance criteria for the 2021 performance grants are based on performance conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award. The grant date fair value of the award may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.

Depreciation and Amortization—Hotel properties are depreciated over the estimated useful life of the assets and leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related assets. Presently, hotel properties are depreciated using the straight-line method over lives ranging from 7.5 to 39 years for buildings and improvements and 1.5 to 5 years for FF&E. While we believe our estimates are reasonable, a change in estimated useful lives could affect depreciation expense and net income (loss) as well as resulting gains or losses on potential hotel sales.

Income Taxes—As a REIT, we generally are not subject to federal corporate income tax on the portion of our net income (loss) that does not relate to TRSs. However, Braemar TRS and our USVI TRS are treated as TRSs for U.S. federal income tax

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purposes. In accordance with authoritative accounting guidance, we account for income taxes related to our TRSs using the asset and liability method under which deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, the analysis utilized by us in determining our deferred tax asset valuation allowance involves considerable management judgment and assumptions. See note 18.

The entities that own 13 of our 14 hotel properties are considered partnerships for U.S. federal income tax purposes. Partnerships are not subject to U.S. federal income taxes. The partnerships’ revenues and expenses pass through to and are taxed on the owners. The states and cities where the partnerships operate follow the U.S. federal income tax treatment, with the exception of the District of Columbia and the city of Philadelphia. Accordingly, we provide for income taxes in these jurisdictions for the partnerships. The consolidated entities that operate the 14 hotel properties are considered taxable corporations for U.S. federal, foreign, state, and city income tax purposes and have elected to be TRSs of Braemar.

The “Income Taxes” topic of the FASB’s ASC addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance requires us to determine whether tax positions we have taken or expect to take in a tax return are more likely than not to be sustained upon examination by the appropriate taxing authority based on the technical merits of the positions. Tax positions that do not meet the more likely than not threshold would be recorded as additional tax expense in the current period. We analyze all open tax years, as defined by the statute of limitations for each jurisdiction, which includes the federal jurisdiction and various states. We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and cities. Tax years 2017 through 2021 remain subject to potential examination by certain federal and state taxing authorities.

Income (Loss) Per Share—Basic income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding during the period using the two-class method prescribed by applicable authoritative accounting guidance. Diluted income (loss) per common share is calculated using the two-class method, or the treasury stock method, if more dilutive. Diluted income (loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares, whereby such exercise or conversion would result in lower income per share.

Recently Adopted Accounting Standards—In January 2020, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2020-01, Investments – Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (“ASU 2020-01”), which clarifies the interaction between the accounting for equity securities, equity method investments, and certain derivative instruments. The ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years and should be applied prospectively. Early adoption is permitted. We adopted the standard effective January 1, 2021 and the adoption of this standard did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Standards—In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”) to provide guidance and relief for transitioning to alternative reference rates. ASU 2021-01 is effective immediately for all entities. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU: (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in Accounting Standards Codification (“ASC”) 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s

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own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (“EPS”) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, this ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. We plan to adopt ASU 2020-06 through the modified retrospective method on January 1, 2022. Upon adoption, the Convertible Senior Notes will be recorded as a single debt instrument at amortized cost, instead of being recorded as both a liability and equity. The Company will also cease recording non-cash interest expense associated with amortization of the debt discount associated with the conversion features. The adoption of ASU 2020-06 will result in an adjustment to additional paid-in capital, accumulated deficit, and the carrying value of our Convertible Senior Notes. The impact of adopting ASU 2020-06 will be an increase to “indebtedness, net” and a decrease to stockholders’ equity of approximately $5.6 million. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements, beyond the impact to our Convertible Senior Notes described above.

3. Revenue

The following tables present our revenue disaggregated by geographical areas (in thousands):

	Year Ended December 31, 2021
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Other		Total
California	6	$	91,283	$	27,205	$	12,938	$	—	$	131,426
Colorado	1	17,303		10,936		7,945		—		36,184
Florida	2	65,974		27,148		21,094		—		114,216
Illinois	1	14,422		3,418		1,153		—		18,993
Pennsylvania	1	11,889		1,493		776		—		14,158
Washington	1	15,105		1,632		1,578		—		18,315
Washington, D.C.	1	9,773		3,014		1,142		—		13,929
USVI	1	54,819		15,453		10,049		—		80,321
Total	14	$	280,568	$	90,299	$	56,675	$	—	$	427,542

	Year Ended December 31, 2020
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Other		Total
California	5	$	46,291	$	13,573	$	8,056	$	—	$	67,920
Colorado	1	12,847		6,178		6,529		—		25,554
Florida	2	33,829		17,009		14,446		—		65,284
Illinois	1	5,979		1,293		610		—		7,882
Pennsylvania	1	7,349		1,227		424		—		9,000
Washington	1	5,604		797		620		—		7,021
Washington, D.C.	1	7,595		3,519		1,604		—		12,718
USVI	1	16,771		6,667		8,157		—		31,595
Total	13	$	136,265	$	50,263	$	40,446	$	—	$	226,974

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	Year Ended December 31, 2019
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Other		Total
California	5	$	115,826	$	37,022	$	15,930	$	—	$	168,778
Colorado	1	18,209		12,430		10,049		—		40,688
Florida	2	47,166		26,656		16,758		—		90,580
Illinois	1	25,366		7,839		1,565		—		34,770
Pennsylvania	1	26,016		4,738		1,133		—		31,887
Washington	1	29,235		6,633		1,629		—		37,497
Washington, D.C.	1	38,735		16,710		1,840		—		57,285
USVI	1	3,295		3,057		19,770		—		26,122
Corporate entities	—	—		—		—		7		7
Total	13	$	303,848	$	115,085	$	68,674	$	7	$	487,614

For the years ended December 31, 2020 and 2019, the Company recorded revenue from business interruption losses associated with lost profits from Hurricane Irma of $4.0 million and $19.3 million, respectively. This revenue is included in “other” hotel revenue in our consolidated statement of operations. There was no such revenue recorded for the year ended December 31, 2021 as the insurance claim was fully settled in 2020.

4. Investments in Hotel Properties, net

Investments in hotel properties, net consisted of the following (in thousands):

	December 31, 2021		December 31, 2020
Land	$	480,530	$	455,298
Buildings and improvements	1,215,810		1,190,437
Furniture, fixtures and equipment	123,954		127,692
Construction in progress	12,038		11,422
Residences	12,746		—
Total cost	1,845,078		1,784,849
Accumulated depreciation	(399,481)		(360,259)
Investments in hotel properties, net	$	1,445,597	$	1,424,590

The cost of land and depreciable property, net of accumulated depreciation, for U.S. federal income tax purposes was approximately $1.4 billion and $1.3 billion as of December 31, 2021 and 2020, respectively.

For the years ended December 31, 2021, 2020 and 2019, depreciation expense was $73.0 million, $72.8 million and $69.5 million, respectively.

Impairment Charges and Insurance Recoveries

For the years ended December 31, 2020 and 2019, the Company received proceeds of $14.5 million and $36.6 million, respectively, from our insurance carriers for property damage and business interruption from Hurricane Irma. In September 2020, the Company reached a final settlement with its insurance carriers related to Hurricane Irma. Upon settlement, the Company recorded a gain of $10.1 million as the proceeds received exceeded the carrying value of the hotel property at the time of the loss. Additionally, for the year ended December 31, 2019, the Company recorded a gain of $26.2 million upon settlement of a portion of the insurance claim. For the year ended December 31, 2021, we recognized a gain of $481,000 associated with proceeds received from an insurance claim.

During the years ended December 31, 2021, 2020 and 2019, no impairment charges were recorded.

Mr. C Beverly Hills Hotel

On August 5, 2021, the Company acquired a 100% interest in the 138-room Mr. C Beverly Hills Hotel and five luxury residences adjacent to the hotel. The total consideration consisted of $10.0 million of cash, 2.5 million Braemar OP common units with a fair value of approximately $13.2 million and 500,000 warrants for the purchase of Braemar common stock with a

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$6.00 strike price and a fair value of approximately $1.5 million. Additionally the Company assumed a $50.0 million mortgage loan, with a fair value of approximately $49.8 million. Upon closing, the Company repaid $20.0 million of the assumed mortgage loan. See notes 6, 7 and 11 for further discussion regarding the mortgage loan, common units and warrants.

The acquisition of the Mr. C Beverly Hills Hotel included the hotel and the adjacent luxury residences (the “residences”). We have accounted for the transaction as a business combination under Accounting Standards Codification (“ASC”) 805- Business Combinations. We prepared the purchase price allocation of the assets acquired and liabilities assumed. The final purchase price allocation was completed with the assistance of a third party appraisal firm during the year ended December 31, 2021.

This valuation is considered a Level 3 valuation technique, as noted in the following table (in thousands):

Land	$	25,232
Buildings and improvements	35,689
Furniture, fixtures and equipment	758
Residences	12,746
Investments in hotel properties	74,425
Inventories	94
Mortgage loan	(49,815)
	$	24,704
Net other assets (liabilities)	$	(486)

The results of operations of the hotel property have been included in our results of operations from the acquisition date. The table below summarizes the total revenue and net income (loss) in our consolidated statements of operations for the year ended December 31, 2021:

	Year Ended December 31, 2021
Total revenue	$	6,592
Net income (loss)	(1,630)

Pro Forma Financial Results

The following table reflects the unaudited pro forma results of operations as if the acquisitions had occurred and the applicable indebtedness was incurred on January 1, 2020, and the removal of $563,000 of non-recurring transaction costs directly attributable to the acquisition for the year ended December 31, 2021 (in thousands):

	Year Ended December 31,
	2021		2020
Total revenue	$	433,813	$	235,379
Net income (loss)	$	(32,720)	$	(128,461)
Net income (loss) attributable to common stockholders	$	(38,334)	$	(111,613)
Pro forma income (loss) per share;
Basic	$	(0.72)	$	(3.28)
Diluted	$	(0.72)	$	(3.28)
Weighted average common shares outstanding (in thousands):
Basic	52,684		33,998
Diluted	52,684		33,998

5. Investment in Unconsolidated Entity

OpenKey is a hospitality-focused mobile key platform that provides a universal smart phone app and related hardware and software for keyless entry into hotel guest rooms. In 2018, the Company made an initial investment in OpenKey, which is controlled and consolidated by Ashford Inc., for an initial 8.2% ownership interest. In 2021, the Company made additional investments of $233,000. All investments were recommended by our Related Party Transactions Committee and unanimously approved by the independent members of our board of directors. As of December 31, 2021, the Company has made investments in OpenKey totaling $2.6 million.

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Our investment is recorded as “investment in unconsolidated entity” in our consolidated balance sheets and is accounted for under the equity method of accounting as we have significant influence over the entity under the applicable accounting guidance. We review our investment in OpenKey for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of the investment. Any impairment is recorded in equity in earnings (loss) of unconsolidated entity. No such impairment was recorded for the years ended December 31, 2021, 2020 and 2019.

The following table summarizes our carrying value and ownership interest in OpenKey:

	December 31, 2021			December 31, 2020
Carrying value of the investment in OpenKey (in thousands)	$	1,689		$	1,708
Ownership interest in OpenKey	7.8		%	8.2		%

The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Equity in earnings (loss) of unconsolidated entity	$	(252)	$	(217)	$	(199)

6. Indebtedness, net

Indebtedness, net consisted of the following (dollars in thousands):

Indebtedness	Collateral	Current Maturity	Final Maturity (12)	Interest Rate	December 31, 2021				December 31, 2020
					Debt Balance		Book Value of Collateral		Debt Balance		Book Value of Collateral
Mortgage loan (3)	Park Hyatt Beaver Creek Resort & Spa	April 2022	April 2022	LIBOR (1) +3.00%	$	67,500	$	137,718	$	67,500	$	140,516
Mortgage loan (4)	The Notary Hotel	June 2022	June 2025	LIBOR (1) + 2.16%	435,000		417,109		435,000		439,215
	The Clancy
	Sofitel Chicago Magnificent Mile
	Marriott Seattle Waterfront
Mortgage loan (5)	The Ritz-Carlton St. Thomas	August 2022	August 2024	LIBOR (1) + 3.95%	42,500		124,114		42,500		130,216
Term loan (6)	Equity	October 2022	October 2022	Base Rate (2) + 1.25% to 2.65% or LIBOR (1) + 2.25% to 3.65%	—		—		61,495		—
Mortgage loan (7)	The Ritz-Carlton Sarasota	April 2023	April 2023	LIBOR (1) + 2.65%	99,500		162,621		100,000		163,814
Mortgage loan (7) (8)	Hotel Yountville	May 2023	May 2023	LIBOR (1) + 2.55%	51,000		85,847		51,000		87,795
Mortgage loan (7) (8)	Bardessono Hotel and Spa	August 2023	August 2023	LIBOR (1) + 2.55%	40,000		53,413		40,000		56,645
Mortgage loan (7)	The Ritz-Carlton Lake Tahoe	January 2024	January 2024	LIBOR (1) + 2.10%	54,000		112,713		54,000		113,821
Mortgage loan (9)	Capital Hilton	February 2024	February 2024	LIBOR (1) + 1.70%	195,000		193,194		197,229		203,918
	Hilton La Jolla Torrey Pines
Mortgage loan (10)	Mr. C Beverly Hills Hotel	August 2024	August 2024	LIBOR (1) + 3.60%	30,000		73,587		—		—
Mortgage loan (7)	Pier House Resort & Spa	September 2024	September 2024	LIBOR (1) + 1.85%	80,000		85,281		80,000		88,650
Convertible Senior Notes (11)	Equity	June 2026	June 2026	4.50%	86,250		—		—		—
					1,180,750		1,445,597		1,128,724		1,424,590
Capitalized default interest and late charges					3,904				7,304
Deferred loan costs, net					(3,538)				(5,434)
Discounts, net					(8,438)				—
Indebtedness, net					$	1,172,678	$	1,445,597	$	1,130,594	$	1,424,590

__________________

(1)LIBOR rates were 0.101% and 0.144% at December 31, 2021 and December 31, 2020, respectively.

(2)Base Rate, as defined in the secured term loan agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%.

(3)Effective January 9, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through June 2021. This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the third was exercised in April 2021.

(4)This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions, of which the second was exercised in June 2021.

(5)This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the first was exercised in August 2021. This mortgage loan has a LIBOR floor of 1.00%.

(6)Effective February 22, 2021, we amended this term loan. In conjunction with the amendment, the interest rate spread increased from a rate of Base Rate + 1.25% - 2.50% or LIBOR + 2.25% - 3.50% to a Base Rate + 1.25% - 2.65% or LIBOR + 2.25% - 3.65%, with a LIBOR floor of 0.50%. On May 18, 2021, we repaid this term loan in full.

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(7)Effective December 31, 2020, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through December 2021. This mortgage loan has a LIBOR floor of 0.25%.

(8)On September 23, 2021, we amended this mortgage loan. Terms of the agreement included extending the current and final maturity dates by one year.

(9)Effective March 5, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits waived through July 1, 2021.

(10)This mortgage loan has a LIBOR floor of 1.50%.

(11)On May 18, 2021, we executed a purchase agreement to sell convertible senior notes in a private offering. In conjunction with the private offering, we sold convertible senior notes with an aggregate principal amount of $86.25 million.

(12)The final maturity date assumes all available extensions options will be exercised.

During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by the Pier House Resort & Spa, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Hotel Yountville, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Capital Hilton and Hilton La Jolla Torrey Pines. As of December 31, 2021, no loans are in default. See note 15 for discussion of the loan modification agreement with Lismore Capital LLC (“Lismore”). The Company determined that all of the forbearance and other agreements evaluated were considered troubled debt restructurings due to terms that allowed for deferred interest and the forgiveness of default interest and late charges. No gain or loss was recognized during 2020, as the carrying amount of the original loans was not greater than the undiscounted cash flows of the modified loans.

As a result of the troubled debt restructurings, all accrued default interest and late charges were capitalized into the applicable loan balances and are being amortized over the remaining term of the loans using the effective interest method. The amount of default interest and late charges capitalized into indebtedness for the year ended December 31, 2020 was $9.9 million. The amount of principal amortization for the years ended December 31, 2021 and 2020 was $3.4 million and $2.6 million, respectively.

On August 5, 2021, in connection with the acquisition of the Mr. C Beverly Hills Hotel and the adjacent residences, the Company assumed a $50 million mortgage loan and repaid $20 million upon closing. This mortgage loan provides for an interest rate of LIBOR + 3.60%. The mortgage loan is interest only with a stated maturity in August 2024.

Convertible Senior Notes

In May 2021, the Company issued $86.25 million aggregate principal amount of 4.50% Convertible Senior Notes due June 2026 (the “Convertible Senior Notes”). The net proceeds from this offering of the Convertible Senior Notes were approximately $82.8 million after deducting the underwriting fees and other expenses paid by the Company. A portion of the proceeds were used to fully repay the secured term loan.

The Convertible Senior Notes are governed by an indenture (the “Base Indenture”) between the Company and U.S. Bank National Association, as trustee. The Convertible Senior Notes bear interest at a rate of 4.50% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2021. The Convertible Senior Notes will mature on June 1, 2026. The Company recorded coupon interest expense of $2.4 million for the year ended December 31, 2021.

The Company separated the Convertible Senior Notes into liability and equity components. The initial carrying amount of the liability component was calculated using a discount rate of 7.1%. The discount rate was based on the terms of debt instruments that were similar to the Convertible Senior Notes. The $6.3 million carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the net proceeds of the Convertible Senior Notes. The amount recorded in equity is not subject to remeasurement or amortization. The initial discount of $9.3 million is accreted to interest expense using the effective interest rate method over the contractual term of the Convertible Senior Notes. The Company recorded discount amortization of $974,000 for the year ended December 31, 2021, with the remaining discount balance to be amortized through June 2026.

The Convertible Senior Notes are convertible at any time prior to the close of business on the business day immediately preceding the maturity date for cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the election of the Company, based on an initial conversion rate of 157.7909 shares of the Company’s common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $6.34 per share of common stock), subject to adjustment of the conversion rate under certain circumstances. In addition, following the occurrence of certain corporate events, if the Company provides notice of redemption or if it exercises its option to convert the Convertible Senior Notes, the Company will, in certain circumstances, increase the conversion rate for a holder that converts its Convertible Senior Notes in connection with such corporate event, such notice of redemption, or such issuer conversion option, as the case may be.

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The Company may redeem the Convertible Senior Notes at the Company’s option, in whole or in part, on any business day on or after the date of issuance if the last reported sale price per share of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Senior Notes to be redeemed subject to certain adjustments, plus accrued and unpaid interest to, but excluding, the redemption date.

If we violate covenants in any debt agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of the consolidated group. As of December 31, 2021, we were in compliance with all covenants.

Maturities and scheduled amortization of indebtedness as of December 31, 2021, assuming no extension of existing extension options for each of the following five years and thereafter are as follows (in thousands):

2022	$	546,000
2023	189,500
2024	359,000
2025	—
2026	86,250
Thereafter	—
Total	$	1,180,750

7. Derivative Instruments

Interest Rate Derivatives—We are exposed to risks arising from our business operations, economic conditions and financial markets. To manage these risks, we primarily use interest rate derivatives to hedge our debt and our cash flows. The interest rate derivatives include interest rate caps and interest rate floors, which are subject to master netting settlement arrangements. All derivatives are recorded at fair value.

The following table summarizes the interest rate derivatives we entered into over the applicable periods:

	Year Ended December 31,
Interest rate caps:(1)	2021			2020			2019
Notional amount (in thousands)	$	882,500		$	602,500		$	391,000
Strike rate low end of range	0.75		%	3.00		%	3.00		%
Strike rate high end of range	4.00		%	4.00		%	7.80		%
Effective date range	January 2021- September 2021			March 2020 - June 2020			January 2019 - December 2019
Termination date range	February 2022- August 2024			April 2021 - June 2021			March 2020 -October 2021
Total cost of interest rate caps (in thousands)	$	200		$	92		$	115
Interest rate floors:
Notional amount (in thousands)	$	—		$	—		$	2,000,000
Strike rate low end of range							1.63		%
Strike rate high end of range							1.63		%
Effective date							January 2019
Termination date							March 2020
Total cost of interest rate floors (in thousands)	$	—		$	—		$	75

_______________

(1)    No instruments were designated as cash flow hedges.

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Interest rate derivatives consisted of the following:

Interest rate caps: (1)	December 31, 2021			December 31, 2020
Notional amount (in thousands)	$	882,500		$	779,000
Strike rate low end of range	0.75		%	3.00		%
Strike rate high end of range	4.00		%	4.00		%
Termination date range	February 2022 - August 2024			February 2021 - October 2021
Aggregate principal balance on corresponding mortgage loans (in thousands)	$	857,000		$	779,000

_______________

(1)No instruments were designated as cash flow hedges.

Warrants—On August 5, 2021, as part of the consideration paid to acquire the Mr. C Beverly Hills Hotel and five adjacent luxury residences, the Company issued 500,000 warrants for the purchase of Braemar common stock with a $6.00 strike price on or after August 5, 2021 until August 5, 2024. The holder can choose to exercise the warrant by cash or by net issue exercise, in which event the Company shall issue to the holder a number of warrant shares which reflects the fair market value of the Company’s common stock. As of December 31, 2021, no warrants have been exercised.

The initial fair value of the warrant was calculated using a Black-Scholes option pricing model with the following assumptions: three-year contractual term; 97.93% volatility; 0% dividend rate; and a risk-free interest rate of 0.38%. The estimated fair value of the warrants was approximately $1.5 million on the date of issuance. The warrants are re-valued at each reporting period with the change in fair value recorded through earnings.

In applying the guidance in ASC 815, it was determined that the warrants should be classified as a liability as a result of certain settlement provisions. The warrants are included in derivative liabilities on the consolidated balance sheet and changes in value are reported as a component of unrealized gain (loss) on derivatives on the consolidated statements of operations. This is a Level 2 valuation technique.

8. Fair Value Measurements

Fair Value Hierarchy—Our financial instruments measured at fair value either on a recurring or a non-recurring basis are classified in a hierarchy for disclosure purposes consisting of three levels based on the observability of inputs in the market place as discussed below:

•Level 1: Fair value measurements that are quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets.

•Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

•Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability.

Fair value of interest rate caps is determined using the net present value of expected cash flows of each derivative based on the market-based interest rate curve and adjusted for credit spreads of us and our counterparties. Fair value of credit default swaps is obtained from a third-party who publishes various information including the index composition and price data (Level 2 inputs). The fair value of credit default swaps does not contain credit-risk-related adjustments as the change in fair value is settled net through posting cash collateral or reclaiming cash collateral between us and our counterparty. Fair value of interest rate floors is calculated using a third-party discounted cash flow model based on future cash flows that are expected to be received over the remaining life of the floor. The fair value of warrants is determined by using the Black-Scholes option pricing model.

When a majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. However, when the valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties, which we consider significant (10% or more) to the overall valuation of our derivatives, the derivative valuations in their entirety are classified in Level 3 of the fair value hierarchy. Transfers of inputs between levels are determined at the end of each reporting period. In determining the fair values of our derivatives at December 31, 2021, the LIBOR interest rate forward curve (Level 2 inputs) assumed an uptrend from 0.101% to 1.500% for the remaining term of our

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derivatives. Credit spreads (Level 3 inputs) used in determining the fair values derivatives assumed an uptrend in nonperformance risk for us and all of our counterparties through the maturity dates.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis aggregated by the level within which measurements fall in the fair value hierarchy (in thousands):

	Quoted Market Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2021
Assets
Derivative assets:
Interest rate derivatives - caps	$	—	$	139	$	—	$	139
Total	$	—	$	139	$	—	$	139	(1)
Liabilities
Derivative liabilities:
Warrants	—		(1,435)		$	—	(1,435)		(2)
Net	$	—	$	(1,296)	$	—	$	(1,296)

__________________

(1)Reported as “derivative assets” in our consolidated balance sheet.

(2)Reported as “derivative liabilities” in our consolidated balance sheet.

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Effect of Fair Value Measured Assets and Liabilities on Consolidated Statements of Operations

The following table summarizes the effect of fair value measured assets and liabilities on our consolidated statements of operations (in thousands):

	Gain (Loss) Recognized in Income
	Year Ended December 31,
	2021		2020			2019
Assets
Derivative assets:
Interest rate derivatives - floors	$	—	$	—		$	(152)
Interest rate derivatives - caps	$	(62)	$	(93)		$	(134)
Credit default swaps	—		117		(1)	(1,095)		(1)
Total derivative assets	$	(62)	$	24		$	(1,381)
Non-derivative assets:
Investment in Ashford Inc.	$	—	$	—		$	(5,552)
Total	$	(62)	$	24		$	(6,933)
Liabilities
Derivative liabilities:
Warrants	94		—			—
Net	$	32	$	24		$	(6,933)
Total combined
Interest rate derivatives - floors	$	—	$	3,615		$	126
Interest rate derivatives - caps	(62)		(93)			(134)
Credit default swaps	—		1,437			(1,095)
Warrants	94		—			—
Unrealized gain (loss) on derivatives	32		4,959			(1,103)
Realized gain (loss) on credit default swaps	—		(1,320)			—
Realized gain (loss) on interest rate floors	—		(3,615)		(2)	(278)		(2)
Unrealized gain (loss) on investment in Ashford Inc.	—		—			7,872
Realized gain (loss) on investment in Ashford Inc.	—		—			(13,424)
Net	$	32	$	24		$	(6,933)

_______________

(1)Excludes costs associated with credit default swaps of $191 and $253 for the years ended December 31, 2020 and 2019, respectively, which is included in “other income (expense)” in our consolidated statements of operations.

(2)Included in “other income (expense)” in our consolidated statements of operations.

9. Summary of Fair Value of Financial Instruments

Determining the estimated fair values of certain financial instruments such as indebtedness requires considerable judgment to interpret market data. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold or settled.

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The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):

	December 31, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets and liabilities measured at fair value:
Derivative assets	$	139	$	139	$	—	$	—
Derivative liabilities	1,435		1,435		—		—
Financial assets not measured at fair value:
Cash and cash equivalents	$	215,998	$	215,998	$	78,606	$	78,606
Restricted cash	47,376		47,376		34,544		34,544
Accounts receivable, net	23,701		23,701		13,557		13,557
Due from related parties, net	1,770		1,770		991		991
Due from third-party hotel managers	27,461		27,461		12,271		12,271
Financial liabilities not measured at fair value:
Indebtedness	$	1,172,312	$1,022,408 to $1,130,029		$	1,128,724	$884,325 to $977,411
Accounts payable and accrued expenses	96,316		96,316		61,758		61,758
Dividends and distributions payable	2,173		2,173		2,736		2,736
Due to Ashford Inc.	1,474		1,474		2,772		2,772
Due to third-party hotel managers	610		610		1,393		1,393

Cash, cash equivalents and restricted cash. These financial assets have maturities of less than 90 days and most bear interest at market rates. The carrying value approximates fair value due to their short-term nature. This is considered a Level 1 valuation technique.

Accounts receivable, net, due from related parties, net, accounts payable and accrued expenses, dividends and distributions payable, due to Ashford Inc. and due to/from third-party hotel managers. The carrying values of these financial instruments approximate their fair values due to the short-term nature of these financial instruments. This is considered a Level 1 valuation technique.

Derivative assets and derivative liabilities. See notes 7 and 8 for a complete description of the methodology and assumptions utilized in determining fair values.

Indebtedness, net. Fair value of indebtedness is determined using future cash flows discounted at current replacement rates for these instruments. Cash flows are determined using a forward interest rate yield curve. The current replacement rates are determined by using the U.S. Treasury yield curve or the index to which these financial instruments are tied, and adjusted for the credit spreads. Credit spreads take into consideration general market conditions, maturity and collateral. We estimated the fair value of the total indebtedness to be approximately 87.2% to 96.4% of the carrying value of $1.2 billion at December 31, 2021, and approximately 78.3% to 86.6% of the carrying value of $1.1 billion at December 31, 2020. These fair value estimates are considered a Level 2 valuation technique.

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10. Income (Loss) Per Share

The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):

	Year Ended December 31,
	2021		2020		2019
Net income (loss) attributable to common stockholders - basic and diluted:
Net income (loss) attributable to the Company	$	(26,664)	$	(105,262)	$	371
Less: Dividends on preferred stock	(8,745)		(10,219)		(10,142)
Less: Dividends on common stock	—		—		(24,145)
Less: Loss on extinguishment of preferred stock - Series B	(4,595)		—		—
Less: Dividends on unvested performance stock units	—		—		(261)
Add: Claw back of dividends on cancelled performance stock units	143		202		—
Less: Dividends on unvested restricted shares	—		—		(405)
Undistributed net income (loss) allocated to common stockholders	(39,861)		(115,279)		(34,582)
Add back: Dividends on common stock	—		—		24,145
Distributed and undistributed net income (loss) - basic and diluted	$	(39,861)	$	(115,279)	$	(10,437)
Weighted average common shares outstanding:
Weighted average common shares outstanding – basic and diluted	52,684		33,998		32,289
Income (loss) per share - basic:
Net income (loss) allocated to common stockholders per share	$	(0.76)	$	(3.39)	$	(0.32)
Income (loss) per share - diluted:
Net income (loss) allocated to common stockholders per share	$	(0.76)	$	(3.39)	$	(0.32)

Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):

	Year Ended December 31,
	2021		2020		2019
Net income (loss) allocated to common stockholders is not adjusted for:
Income (loss) allocated to unvested restricted shares	$	—	$	—	$	405
Income (loss) allocated to unvested performance stock units	—		—		261
Income (loss) attributable to redeemable noncontrolling interests in operating partnership	$	(3,597)	$	(12,979)	$	(1,207)
Dividends on preferred stock - Series B	4,747		6,919		6,842
Loss on extinguishment of preferred stock - Series B	4,595		—		—
Interest expense on Convertible Senior Notes	3,378		—		—
Dividends on preferred stock - Series E	683		—		—
Dividends on preferred stock - Series M	15		—		—
Total	$	9,821	$	(6,060)	$	6,301
Weighted average diluted shares are not adjusted for:
Effect of unvested restricted shares	99		22		51
Effect of unvested performance stock units	—		—		193
Effect of assumed conversion of operating partnership units	4,980		3,923		4,219
Effect of assumed conversion of preferred stock - Series B	4,614		6,728		6,581
Effect of assumed conversion of exchanged preferred stock - Series B	364		—		—
Effect of assumed conversion of Convertible Senior Notes	8,450		—		—
Effect of assumed conversion of preferred stock - Series E	1,345		—		—
Effect of assumed conversion of preferred stock - Series M	32		—		—
Total	19,884		10,673		11,044

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11. Redeemable Noncontrolling Interests in Operating Partnership

Redeemable noncontrolling interests in the operating partnership represents the limited partners’ proportionate share of equity and their allocable share of equity in earnings/losses of Braemar OP, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (the “common units”) and units issued under our Long-Term Incentive Plan (the “LTIP” units) that are vested. Each common unit may be redeemed, by the holder, for either cash or, at our sole discretion, up to one share of our REIT common stock, which is either: (i) issued pursuant to an effective registration statement; (ii) included in an effective registration statement providing for the resale of such common stock; or (iii) issued subject to a registration rights agreement.

LTIP units, which are issued to certain executives and employees of Ashford LLC as compensation, generally have vesting periods of three years. Additionally, certain independent members of the board of directors have elected to receive LTIP units as part of their compensation, which are fully vested upon grant. Upon reaching economic parity with common units, each vested LTIP unit can be converted by the holder into one common unit which can then be redeemed for cash or, at our election, settled in our common stock. An LTIP unit will achieve parity with the common units upon the sale or deemed sale of all or substantially all of the assets of our operating partnership at a time when our stock is trading at a level in excess of the price it was trading on the date of the LTIP issuance. More specifically, LTIP units will achieve full economic parity with common units in connection with (i) the actual sale of all or substantially all of the assets of our operating partnership or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for our operating partnership.

The compensation committee of the board of directors of the Company may authorize the issuance of Performance LTIP units to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of Performance LTIP units that will be settled in common units of Braemar OP, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date.

With respect to the 2019 and 2020 award agreements, the number of Performance LTIP units actually earned may range from 0% to 200% of target based on achievement of a specified relative total stockholder return based on the formula determined by the Company’s compensation committee on the grant date. The performance criteria for the Performance LTIP units are based on market conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition.

During the years ended December 31, 2021 and 2020, approximately 60,000 performance-based LTIP units granted in 2019, and 211,000 performance-based LTIP units granted in 2018, were canceled due to the market condition criteria not being met. As a result there was a claw back of the previously declared dividends in the amount of $38,000 and $270,000, respectively.

With respect to the 2021 award agreements, the compensation committee shifted to a new performance metric, pursuant to which, the performance awards will be eligible to vest, from 0% to 200% of target, based on achievement of certain performance targets over the three-year performance period commencing on January 1, 2021 and ending on December 31, 2023. The performance criteria for the 2021 performance grants are based on performance conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award. The grant date fair value of the award may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.

As of December 31, 2021, we have issued a total of approximately 2.4 million LTIP and Performance LTIP units, net of Performance LTIP cancellations. All LTIP and Performance LTIP units, other than approximately 569,000 LTIP units and 840,000 Performance LTIP units issued from March 2015 to May 2021, had reached full economic parity with, and are convertible into, common units.

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The following table presents compensation expense for Performance LTIP units and LTIP units (in thousands):

		Year Ended December 31,
Type	Line Item	2021		2020		2019
Performance LTIP units	Advisory services fee	$	1,765	$	884	$	1,144
LTIP units	Advisory services fee	1,372		1,142		1,354
LTIP units	Corporate, general and administrative	12		—		—
LTIP units - independent directors	Corporate, general and administrative	164		120		103
Total		$	3,313	$	2,146	$	2,601

The unamortized cost of the unvested Performance LTIP units of approximately $4.6 million at December 31, 2021 will be expensed over a period of 2.0 years with a weighted average period of 1.7 years. The unamortized cost of the unvested LTIP units of approximately $2.5 million at December 31, 2021, will be amortized over a period of 2.2 years with a weighted average period of 2.0 years.

On August 5, 2021, we issued 2.5 million common units in our operating partnership in conjunction with the acquisition of the Mr. C Beverly Hills Hotel. See note 4.

A summary of the activity of the units in our operating partnership is as follows (in thousands):

	Year Ended December 31,
	2021	2020	2019
Units outstanding at beginning of year	4,277	4,538	4,833
LTIP units issued	469	129	91
Performance LTIP units issued	840	160	60
Common units issued for hotel acquisition	2,500	—	—
Units redeemed for shares of common stock	(868)	(339)	(165)
Performance LTIP units cancelled	(60)	(211)	(281)
Units outstanding at end of year	7,158	4,277	4,538
Units convertible/redeemable at end of year	5,533	3,823	4,027

The following table presents the redeemable noncontrolling interests in Braemar OP (in thousands) and the corresponding approximate ownership percentage of our operating partnership:

	December 31, 2021			December 31, 2020
Redeemable noncontrolling interests in Braemar OP	$	36,087		$	27,655
Adjustments to redeemable noncontrolling interests (1)	$	275		$	167
Ownership percentage of operating partnership	8.83		%	9.43		%

____________________________________

(1)    Reflects the excess of the redemption value over the accumulated historical cost.

We allocated net (income) loss to the redeemable noncontrolling interests as illustrated in the table below (in thousands):

	Year Ended December 31,
	2021		2020		2019
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	$	3,597	$	12,979	$	1,207
Distributions declared to holders of common units, LTIP units and Performance LTIP units	—		—		3,050
Performance LTIP dividend claw back upon cancellation	(38)		(270)		—

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The following table presents the common units redeemed and the fair value at redemption (in thousands):

	Year Ended December 31,
	2021			2020			2019
Common units converted to common stock	868			339			165
Fair value of common units converted	$	4,122	(2)	$	390	(1)	$	2,201

____________________________________

(1)    The redemption value is the greater of historical cost or fair value. The historical cost of the converted units was $3.5 million.

(2)    The redemption value is the greater of historical cost or fair value. The historical cost of the converted units was $4.6 million.

12. Equity

Common Stock Dividends—The following table summarizes the common stock dividends declared during the period (in thousands):

	Year Ended December 31,
	2021		2020		2019
Common stock dividends declared	$	—	$	—	$	21,302

8.25% Series D Cumulative Preferred Stock—At December 31, 2021 and 2020, there were 1.6 million shares of 8.25% Series D cumulative preferred stock outstanding. The Series D cumulative preferred stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series B cumulative convertible preferred stock) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series D cumulative preferred stock has no maturity date, and we are not required to redeem the shares at any time. Series D cumulative preferred stock is redeemable at our option for cash (on or after November 20, 2023), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series D cumulative preferred stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series D cumulative preferred stock is convertible into a maximum 5.12295 shares of our common stock. The actual number is based on a formula as defined in the Series D cumulative preferred stock agreement (unless the Company exercises its right to redeem the Series D cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series D cumulative preferred stock to common stock have not been met as of period end. Therefore, Series D cumulative preferred stock will not impact our earnings per share. Series D cumulative preferred stock quarterly dividends are set at the rate of 8.25% of the $25.00 liquidation preference (equivalent to an annual dividend rate of $2.0625 per share). In general, Series D cumulative preferred stockholders have no voting rights.

The Series D Preferred Stock dividend for all issued and outstanding shares is set at $2.0625 per annum per share.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series D Cumulative Preferred Stock	$	3,300	$	3,300	$	3,300

Stock Repurchases—On October 27, 2014, our board of directors approved a share repurchase program under which the Company may purchase up to $100 million of the Company’s common stock from time to time. The repurchase program does not have an expiration date. The specific timing, manner, price, amount and other terms of the repurchases is at management’s discretion and depends on market conditions, corporate and regulatory requirements and other factors. The Company is not required to repurchase shares under the repurchase program, and may modify, suspend or terminate the repurchase program at any time for any reason.

On December 5, 2017, our board of directors reapproved the stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share having an aggregate value of up to $50 million. The board of directors’ authorization replaced any previous repurchase authorizations. No shares were repurchased during the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, $50 million remains authorized by the board of directors pursuant to the December 5, 2017 approval.

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We repurchased approximately 50,000, 47,000 and 45,000 shares of our common stock in 2021, 2020 and 2019, respectively, to satisfy employees’ statutory minimum U.S. federal income tax obligations in connection with vesting of equity grants issued under our stock-based compensation plan.

At-the-Market Common Stock Equity Distribution Program—On December 11, 2017, the Company established an “at-the-market” equity distribution program pursuant to which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $50 million.

As of December 31, 2021, the Company has sold approximately 7.4 million shares of common stock and received net proceeds of approximately $30.5 million under this program.

The issuance activity is summarized below (in thousands):

	Year Ended December 31,
	2021		2020		2019
Common shares issued	2,711		4,729		—
Gross proceeds received	$	16,119	$	14,717	$	—
Commissions	202		184		—
Net proceeds	$	15,917	$	14,533	$	—

Standby Equity Distribution Agreement—On February 4, 2021, the Company entered into a Standby Equity Distribution Agreement (the “SEDA”) with YA II PN, Ltd. (“YA”), pursuant to which the Company will be able to sell up to 7,780,786 shares of its common stock (the “Commitment Amount”) at the Company’s request any time during the commitment period commencing on February 4, 2021, and terminating on the earliest of (i) the first day of the month next following the 36-month anniversary of the SEDA or (ii) the date on which YA shall have made payment of Advances (as defined in the SEDA) pursuant to the SEDA for shares of the Company’s common stock equal to the Commitment Amount (the “Commitment Period”). Other than with respect to the Initial Advance (as defined below) the shares sold to YA pursuant to the SEDA would be purchased at 95% of the Market Price (as defined below) and would be subject to certain limitations, including that YA could not purchase any shares that would result in it owning more than 4.99% of the Company’s common stock. “Market Price” shall mean the lowest daily VWAP (as defined below) of the Company’s common stock during the five consecutive trading days commencing on the trading day following the date the Company submits an advance notice to YA. “VWAP” means, for any trading day, the daily volume weighted average price of the Company’s common stock for such date on the principal market as reported by Bloomberg L.P. during regular trading hours.

At any time during the Commitment Period the Company may require YA to purchase shares of the Company’s common stock by delivering a written notice to YA setting forth the Advance Shares (as defined in the SEDA) that the Company desires to issue and sell to YA (the “Advance Notice”). The Company may deliver an Advance Notice for an initial Advance for up to 1,200,000 Advance Shares (the “Initial Advance”). The preliminary purchase price per share for such shares shall be 100% of the average daily VWAP for the five consecutive trading days immediately prior to the date of the Advance Notice.

Pursuant to the SEDA, we currently intend to use the net proceeds from any sale of the shares for working capital purposes, including the repayment of outstanding debt. There are no other restrictions on future financing transactions. The SEDA does not contain any right of first refusal, participation rights, penalties or liquidated damages. We are not required to pay any additional amounts to reimburse or otherwise compensate YA in connection with the transaction except for a $10,000 structuring fee.

The issuance activity under the SEDA is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares sold to YA	1,700
Proceeds received	$	10,000

Common Stock Resale Agreement—On April 21, 2021, the Company entered into a purchase agreement (the “Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company may issue or sell to Lincoln Park up to 8,893,565 shares of the Company’s common stock from time to time during the term of the Lincoln Park Purchase Agreement. The issuance of the shares of common stock pursuant to the Lincoln Park Purchase Agreement has been registered pursuant to the Company’s shelf registration statement on Form S-3 (the “Registration Statement”), and the related base prospectus included in the Registration Statement, as supplemented by a prospectus

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supplement filed with the SEC on April 21, 2021. The Company and Lincoln Park also entered into a registration rights agreement, pursuant to which the Company agreed to maintain the effectiveness of the Registration Statement. Upon entering into the Lincoln Park Purchase Agreement, the Company issued 15,000 shares of the Company’s common stock as consideration for Lincoln Park’s execution and delivery of the Lincoln Park Purchase Agreement.

The issuance activity under the Lincoln Park agreement is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares sold to Lincoln Park	766
Additional commitment shares	15
Total common shares issued to Lincoln Park	781
Proceeds received	$	4,217

At-the-Market Equity Distribution Agreement—On May 25, 2021, the Company entered into an equity distribution agreement (the “Virtu May 2021 EDA”) with Virtu Americas LLC (“Virtu”), to sell from time to time shares of the Company’s common stock having an aggregate offering price of up to $50 million. We will pay Virtu a commission of approximately 1.0% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale.

The issuance activity under the Virtu May 2021 EDA is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares issued	8,339
Gross proceeds received	$	50,000
Commissions	500
Net proceeds	$	49,500

On July 12, 2021, the Company entered into a second equity distribution agreement (the “Virtu July 2021 EDA”) with Virtu to sell from time to time shares of our common stock having an aggregate offering price of up to $100 million. We will pay Virtu a commission of approximately 1.0% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale.

The issuance activity under the Virtu July 2021 EDA is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares issued	4,712
Gross proceeds received	$	24,020
Commissions	240
Net proceeds	$	23,780

Noncontrolling Interest in Consolidated Entities—A partner had noncontrolling ownership interests of 25% in two hotel properties with a total carrying value of $(16.5) million and $(15.1) million at December 31, 2021 and 2020, respectively.

The following table summarizes the (income) loss allocated to noncontrolling interest in consolidated entities (in thousands):

	Year Ended December 31,
	2021		2020		2019
(Income) loss from consolidated entities attributable to noncontrolling interests	$	2,650	$	6,436	$	(2,032)

13. Preferred Stock

5.50% Series B Cumulative Convertible Preferred Stock

Each share of our 5.50% Series B Cumulative Convertible Preferred Stock (the “Series B Convertible Preferred Stock”) is convertible at any time, at the option of the holder, into a number of whole shares of common stock at a conversion price of $18.70 (which represents a conversion rate of 1.3372 shares of our common stock, subject to certain adjustments). The Series B

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Convertible Preferred Stock is also subject to conversion upon certain events constituting a change of control. Holders of the Series B Convertible Preferred Stock have no voting rights, subject to certain exceptions. The Series B Convertible Preferred Stock dividend for all issued and outstanding shares is set at $1.375 per annum per share.

The Company may, at its option, cause the Series B Convertible Preferred Stock to be converted in whole or in part, on a pro-rata basis, into fully paid and nonassessable shares of the Company’s common stock at the conversion price, provided that the “Closing Bid Price” (as defined in the Articles Supplementary) of the Company’s common stock shall have equaled or exceeded 110% of the conversion price for the immediately preceding 45 consecutive trading days ending three days prior to the date of notice of conversion.

Additionally, the Series B Convertible Preferred Stock contains cash redemption features that consist of: 1) an optional redemption in which on or after June 11, 2020, the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends; 2) a special optional redemption, in which on or prior to the occurrence of a Change of Control (as defined in the Articles Supplementary), the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share; and 3) a “REIT Termination Event” and “Listing Event Redemption,” in which at any time (i) a REIT Termination Event (as defined below) occurs or (ii) the Company’s common stock fails to be listed on the NYSE, NYSE American, or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto (each a “National Exchange”), the holder of Series B Convertible Preferred Stock shall have the right to require the Company to redeem any or all shares of Series B Convertible Preferred Stock at 103% of the liquidation preference ($25.00 per share, plus any accumulated, accrued, and unpaid dividends) in cash.

A “REIT Termination Event,” shall mean the earliest of:

(i)    filing of income tax return where the Company does not compute its income as a REIT;

(ii)    stockholders’ approval on ceasing to be qualified as a REIT;

(iii)    board of directors’ approval on ceasing to be qualified as a REIT;

(iv)    board’s determination based on the advice of counsel to cease to be qualified as a REIT; or

(v)    determination within the meaning of Section 1313(a) of the Code to cease to be qualified as a REIT.

On December 4, 2019, we entered into equity distribution agreements with certain sales agents to sell from time to time shares of our Series B Convertible Preferred Stock having an aggregate offering price of up to $40.0 million. Sales of shares of our Series B Convertible Preferred Stock may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on the NYSE, the existing trading market for our Series B Convertible Preferred Stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network. We will pay each of the sales agents a commission, which in each case shall not be more than 2.0% of the gross sales price of the shares of our Series B Convertible Preferred Stock sold through such sales agents. As of December 31, 2021, we have sold approximately 65,000 shares of our Series B Convertible Preferred Stock and received proceeds of approximately $1.2 million under this program.

The issuance activity is summarized below (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series B Convertible Preferred Stock shares issued	—		23		42
Gross proceeds received	$	—	$	439	$	809
Commissions	—		7		12
Net proceeds	$	—	$	432	$	797

Series B Convertible Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside our control. As such, the Series B Convertible Preferred Stock is classified outside of permanent equity.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series B Convertible Preferred Stock	$	4,747	$	6,919	$	6,842

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During 2021, Braemar entered into privately negotiated exchange agreements with certain holders of the Series B Convertible Preferred Stock, in reliance on Section 3(a)(9) of the Securities Act. The table below summarizes the activity (in thousands):

	Year Ended December 31, 2021
	Preferred Shares Tendered	Common Shares Issued
Series B Convertible Preferred Stock	1,953	7,291

Series E Redeemable Preferred Stock

On April 2, 2021, the Company entered into equity distribution agreements with certain sales agents to sell from time-to-time shares of the Series E Redeemable Preferred Stock (the “Series E Preferred Stock”). Pursuant to such equity distribution agreements, the Company is offering a maximum of 20,000,000 shares of Series E Preferred Stock in a primary offering price of $25.00 per share. The Company is also offering a maximum of 8,000,000 shares of the Series E Preferred Stock pursuant to a dividend reinvestment plan (the “DRIP”) at $25.00 per share (the “Stated Value”).

The Series E Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series B Convertible Preferred stock, the Series D Preferred Stock and the Series M Preferred Stock (as defined below)) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.

Holders of the Series E Preferred Stock shall have the right to vote for the election of directors of the Company and on all other matters requiring stockholder action by the holders of the common stock, each share being entitled to vote to the same extent as one share of the Company’s common stock, and all such shares voting together as a single class. If and whenever dividends on any shares of the Series E Preferred Stock shall be in arrears for 18 or more monthly periods, whether or not such quarterly periods are consecutive the number of directors then constituting the board shall be increased by two and the holders of such shares of Series E Preferred Stock shall be entitled to vote for the election of the additional directors of the Company who shall each be elected for one-year terms.

Each share is redeemable at any time, at the option of the holder, at a redemption price of $25.00 per share, plus any accumulated, accrued, and unpaid dividends, less a redemption fee. Starting on the second anniversary, each share is redeemable at any time, at the option of the Company, at a redemption price of $25.00 per share, plus any accumulated, accrued, and unpaid dividends (with no redemption fee). The Series E Preferred Stock is also subject to conversion upon certain events constituting a change of control. Upon such change of control events, holders have the option to convert their shares of Series E Preferred Stock into a maximum of 5.69476 shares of our common stock.

The redemption fee shall be an amount equal to:

•8.0% of the stated value of $25.00 per share (the “Stated Value”) beginning on the Original Issue Date (as defined in the Articles Supplementary) of the shares of the Series E Preferred Stock to be redeemed;

•5.0% of the Stated Value beginning on the second anniversary from the Original Issue Date of the shares of the Series E Preferred Stock to be redeemed; and

•0% of the Stated Value beginning on the third anniversary from the Original Issue Date of the shares of the Series E Preferred Stock to be redeemed.

The Company has the right, in its sole discretion, to redeem the shares in cash, or in an equal of shares of common stock or any combination thereof, calculated based on the closing price per share for the single trading day prior to the date of redemption.

The Series E Preferred Stock cash dividends are as follows:

•8.0% per annum of the Stated Value beginning on the date of the first settlement of the Series E Preferred Stock (the “Date of Initial Closing”);

•7.75% per annum of the Stated Value beginning on the first anniversary from the Date of Initial Closing; and

•7.5% per annum of the Stated Value beginning on the second anniversary from the Date of Initial Closing.

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Dividends will be authorized and declared on a monthly basis and payable in arrears on the 15th of each month to holders of record at the close of business on the last business day of each month immediately preceding the applicable thereafter dividend payment date. Dividends will be computed on the basis of twelve 30-day months and a 360-day year.

The Company has a DRIP that allows for participating holders to have their Series E Preferred Stock dividend distributions automatically reinvested in additional shares of the Series E Preferred Stock at a price of $25.00 per share.

The issuance activity of the Series E Preferred Stock is summarized below (in thousands):

	Year Ended December 31,
	2021
Series E Preferred Stock shares issued (1)	1,709
Net proceeds	$	38,450

__________________

(1)Exclusive of shares issued under the dividend reinvestment plan.

The Series E Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside of the Company’s control. As such, the Series E Preferred Stock is classified outside of permanent equity.

At the date of issuance, the carrying amount of the Series E Preferred Stock was less than the redemption value. As a result of the Company’s determination that redemption is probable the carrying value will be adjusted to the redemption amount each reporting period.

The redemption value adjustment of Series E Preferred Stock is summarized below (in thousands):

	December 31, 2021		December 31, 2020
Series E Preferred Stock	$	39,339	$	—
Adjustments to Series E Preferred Stock (1)	$	3,128	$	—

________

(1)    Reflects the excess of the redemption value over the accumulated carrying value.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021
Series E Preferred Stock	$	683

Series M Redeemable Preferred Stock

On April 2, 2021, the Company entered into equity distribution agreements with certain sales agents to sell from time-to-time shares of the Series M Redeemable Preferred Stock (the “Series M Preferred Stock”). Pursuant to such equity distribution agreements, the Company is offering a maximum of 20,000,000 shares of the Series M Preferred Stock (par value $0.01) in a primary offering price of $25.00 per share (or “Stated Value”). The Company is also offering a maximum of 8,000,000 shares of Series M Preferred Stock pursuant to the DRIP at $25.00 per share.

The Series M Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series B Convertible Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.

Holders of the Series M Preferred Stock shall have the right to vote for the election of directors of the Company and on all other matters requiring stockholder action by the holders of the common stock, each share being entitled to vote to the same extent as one share of the Company’s common stock, and all such shares voting together as a single class. If and whenever dividends on any shares of Series E Preferred Stock shall be in arrears for 18 or more monthly periods, whether or not such quarterly periods are consecutive the number of directors then constituting the board shall be increased by two and the holders of such shares of Series M Preferred Stock shall be entitled to vote for the election of the additional directors of the Company who shall each be elected for one-year terms.

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The redemption fee shall be an amount equal to:

•1.5% of the Stated Value of $25.00 per share beginning on the Series M Original Issue Date (as defined below) of the shares of Series M Preferred Stock to be redeemed; and

•0% of the Stated Value beginning on the first anniversary from the Series M Original Issue Date of the shares of Series M Preferred Stock to be redeemed.

The Company has the right, in its sole discretion, to redeem the shares in cash, or in an equal of shares of common stock or any combination thereof, calculated based on the closing price per share for the single trading day prior to the date of redemption.

Holders of Series M Preferred Stock are entitled to receive cumulative cash dividends at the initial rate of 8.2% per annum of the Stated Value of $25.00 per share (equivalent to an annual dividend rate of $2.05 per share). Beginning one year from the date of original issuance of each share of Series M Preferred Stock (the “Series M Original Issue Date”) and on each one-year anniversary thereafter for such share of Series M Preferred Stock, the dividend rate shall increase by 0.10% per annum; provided, however, that the dividend rate for any share of Series M Preferred Stock shall not exceed 8.7% per annum of the Stated Value.

Dividends will be authorized and declared on a monthly basis and payable in arrears on the 15th of each month to holders of record at the close of business on the last business day of each month immediately preceding the applicable dividend payment date. Dividends will be computed on the basis of twelve 30-day months and a 360-day year.

The Company has a DRIP that allows for participating holders to have their Series M Preferred Stock dividend distributions automatically reinvested in additional shares of the Series M Preferred Stock at a price of $25.00 per share.

The issuance activity of Series M Preferred Stock is summarized below (in thousands):

	Year Ended December 31,
	2021
Series M Preferred Stock shares issued	29
Net proceeds	$	704

The Series M Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside the Company’s control. As such, the Series M Preferred Stock is classified outside of permanent equity.

At the date of issuance, the carrying amount of the Series M Preferred Stock was less than the redemption value. As a result of the Company’s determination that redemption is probable the carrying value will be adjusted to the redemption amount each reporting period.

The redemption value adjustment of Series M Preferred stock is summarized below (in thousands):

	December 31, 2021		December 31, 2020
Series M Preferred Stock	$	715	$	—
Adjustments to Series M Preferred Stock (1)	$	133	$	—

________

(1)    Reflects the excess of the redemption value over the accumulated carrying value.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021
Series M Preferred Stock	$	15

14. Stock-Based Compensation

Under the 2013 Equity Incentive Plan, as amended, we are authorized to grant 3.3 million restricted stock or performance stock units of our common stock as incentive stock awards. At December 31, 2021, approximately 774,000 shares were available for future issuance under the 2013 Equity Incentive Plan.

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Restricted Stock—We incur stock-based compensation expense in connection with restricted stock awarded to certain employees of Ashford LLC and its affiliates. We also issue common stock to certain of our independent directors, which vests immediately upon issuance.

At December 31, 2021, the unamortized cost of unvested shares of restricted stock was $1.8 million, which is expected to be recognized over a period of 2.4 years with a weighted average period of 1.9 years.

The following table summarizes the stock-based compensation expense for restricted stock (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Advisory services fee	$	3,028	$	2,672	$	2,468
Management fees	56		133		155
Corporate general and administrative	111		71		72
Corporate general and administrative - independent directors	322		130		208
	$	3,517	$	3,006	$	2,903

A summary of our restricted stock activity is as follows (shares in thousands):

	Year Ended December 31,
	2021			2020			2019
	Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant
Outstanding at beginning of year	536	$	7.98	497	$	11.89	441	$	10.91
Restricted shares granted	764	7.02		359	4.13		261	12.68
Restricted shares vested	(317)	6.31		(310)	9.81		(198)	10.75
Restricted shares forfeited	(26)	6.94		(10)	7.25		(7)	11.59
Outstanding at end of year	957	$	6.94	536	$	7.98	497	$	11.89

The fair value of restricted stock vested during the years ended December 31, 2021, 2020 and 2019 was approximately $2.1 million, $1.2 million and $2.2 million, respectively.

Performance Stock Units—The compensation committee of the board of directors of the Company may authorize the issuance of grants of performance stock units (“PSUs”) to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of PSUs that will be settled in shares of common stock of the Company, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date.

With respect to the 2019 and 2020 award agreements, the number of PSUs actually earned may range from 0% to 200% of target based on achievement of a specified relative total stockholder return based on the formula determined by the Company’s compensation committee on the grant date. The performance criteria for the PSUs are based on market conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition.

With respect to the 2021 award agreements, the compensation committee shifted to a new performance metric, pursuant to which, the performance awards will be eligible to vest, from 0% to 200% of target, based on achievement of certain performance targets over the three-year performance period commencing on January 1, 2021 and ending on December 31, 2023. The performance criteria for the 2021 performance grants are based on performance conditions under the relevant literature, and the 2021 performance grants were issued to non-employees. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, which may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.

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During the years ended December 31, 2021 and 2020, approximately 223,000 PSUs granted in 2019, and 197,000 PSUs granted in 2018, respectively, were canceled due to the market condition criteria not being met. As a result there was a claw back of the previously declared dividends in the amount of $143,000 and $202,000, respectively.

The following table summarizes the compensation expense for PSUs (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Advisory services fee	$	3,374	$	2,695	2,439

At December 31, 2021, the unamortized cost of unvested shares of PSUs was $5.0 million, which is expected to be recognized over a period of 2.0 years with a weighted average period of 1.7 years.

A summary of our PSU activity is as follows (shares in thousands):

	Year Ended December 31,
	2021			2020			2019
	Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant
Outstanding at beginning of year	448	$	11.71	420	$	16.91	316	$	12.29
PSUs granted	446	7.01		225	3.51		223	19.96
PSUs canceled	(223)	19.96		(197)	13.43		(119)	10.42
Outstanding at end of year	671	$	5.84	448	$	11.71	420	$	16.91

15. Related Party Transactions

Ashford Inc.

Advisory Agreement

Ashford LLC, a subsidiary of Ashford Inc., acts as our advisor. Our chairman, Mr. Monty Bennett, also serves as chairman of the board of directors and chief executive officer of Ashford Inc. Under our advisory agreement, we pay advisory fees to Ashford LLC. We pay a monthly base fee equal to 1/12th of the sum of (i) 0.70% of the total market capitalization of our company for the prior month, plus (ii) the Net Asset Fee Adjustment (as defined in our advisory agreement), if any, on the last day of the prior month during which our advisory agreement was in effect; provided, however in no event shall the base fee for any month be less than the minimum base fee as provided by our advisory agreement. The base fee is payable on the fifth business day of each month.

The minimum base fee for Braemar for each month will be equal to the greater of:

▪90% of the base fee paid for the same month in the prior year; and

▪1/12th of the G&A Ratio (as defined) multiplied by the total market capitalization of Braemar.

We are also required to pay Ashford LLC an incentive fee that is measured annually (or for a stub period if the advisory agreement is terminated at other than year-end). Each year that our annual total stockholder return exceeds the average annual total stockholder return for our peer group we pay Ashford LLC an incentive fee over the following three years, subject to the Fixed Charge Coverage Ratio (“FCCR”) Condition, as defined in the advisory agreement, which relates to the ratio of adjusted EBITDA to fixed charges. We also reimburse Ashford LLC for certain reimbursable overhead and internal audit, risk management advisory and asset management services, as specified in the advisory agreement. We also recorded equity-based compensation expense for equity grants of common stock and LTIP units awarded to officers and employees of Ashford LLC in connection with providing advisory services.

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The following table summarizes the advisory services fees incurred (in thousands):

	Year Ended December 31,
	2021		2020		2019
Advisory services fee
Base advisory fee	$	10,806	$	9,981	$	10,834
Reimbursable expenses (1)	2,297		1,790		2,289
Equity-based compensation (2)	9,538		7,393		7,404
Incentive fee (3)	—		(678)		—
Total	$	22,641	$	18,486	$	20,527

________

(1)Reimbursable expenses include overhead, internal audit, risk management advisory and asset management services.

(2)    Equity-based compensation is associated with equity grants of Braemar’s common stock, PSUs, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.

(3)    The $(678,000) incentive fee in 2020 is a result of not meeting the FCCR threshold required for paying the final installment of the incentive fee incurred in 2018.

Pursuant to the Company's hotel management agreements with each hotel management company, the Company bears the economic burden for casualty insurance coverage. Under the advisory agreement, Ashford Inc. secures casualty insurance policies to cover Braemar, Ashford Trust, their hotel managers, as needed, and Ashford Inc. The total loss estimates included in such policies are based on the collective pool of risk exposures from each party. Ashford Inc.'s risk management department manages the casualty insurance program. At the beginning of each year, Ashford Inc.'s risk management department collects funds from Braemar, Ashford Trust and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis.

Lismore

On March 20, 2020, the Company entered into an agreement with Lismore, a subsidiary of Ashford Inc., to engage Lismore to seek modifications, forbearances or refinancings of the Company’s loans (the “Lismore Agreement”). The Lismore Agreement was terminated effective March 20, 2021.

Upon entering into the agreement with Lismore, the Company made an initial payment of approximately $1.4 million. The Company paid approximately $1.4 million related to periodic installments of which $683,000 was expensed in accordance with the agreement. The remaining $681,000 was set off against the cash payment of the base advisory fee per the agreement upon contract termination in March 2021. Further, the Company paid approximately $1.4 million in success fees in connection with signed forbearance or other agreements. In total, the Company paid approximately $4.1 million under the Lismore Agreement.

For the years ended December 31, 2021 and 2020, the Company recognized expense of $341,000 and $3.1 million, respectively. These expenses are included in “write-off of loan costs and exit fees” in the consolidated statements of operations.

On August 25, 2020, in light of the fact that Lismore negotiated access to the FF&E reserves but no forbearance on debt service for the $435 million mortgage loan secured by the Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, The Notary Hotel and The Clancy, the independent members of the board of directors of Ashford Inc. waived $1.6 million of Lismore success fees associated with items (ii) and (iii) above.

The Company engaged Lismore to negotiate, on the Company’s behalf, one or more modifications to the terms of the mortgage loan assumed in connection with the acquisition of the Mr. C Beverly Hills Hotel. Upon closing of the hotel, the Company paid Lismore a fee of $150,000.

Ashford Securities

On September 25, 2019, Ashford Inc. announced the formation of Ashford Securities LLC (“Ashford Securities”) to raise retail capital in order to grow its existing and future platforms. In conjunction with the formation of Ashford Securities, Braemar has entered into a contribution agreement (the “Initial Contribution Agreement”) with Ashford Inc. pursuant to which Braemar has agreed to contribute, with Ashford Trust, up to $15.0 million to fund the operations of Ashford Securities. Costs for all operating expenses of Ashford Securities that were contributed by Ashford Trust and Braemar will be expensed as incurred. These costs were allocated initially to Ashford Trust and Braemar based on an allocation percentage of 75% to Ashford Trust and 25% Braemar. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings

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raised or June 10, 2023, there will be a true up (the “Initial True-Up Date”) between Ashford Trust and Braemar, whereby the actual capital contributions contributed by each company will be based on the actual amount of capital raised by Ashford Trust and Braemar, respectively. After the Initial True-Up Date, the capital contributions will be allocated between Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities.

On December 31, 2020, an Amended and Restated Contribution Agreement (the “Amended and Restated Contribution Agreement”) was entered into by Ashford Inc., Ashford Trust and Braemar with respect to expenses to be reimbursed by Ashford Securities. The Initial True-Up Date did not occur, and beginning on the effective date of the Amended and Restated Contribution Agreement, costs will be allocated based upon an allocation percentage of 50% to Ashford Inc., 50% to Braemar and 0% to Ashford Trust. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raised, or June 10, 2023, there will be an amended and restated true up (the “Amended and Restated True-Up Date”) among Ashford Inc., Ashford Trust and Braemar whereby the actual expense reimbursement paid by each company will be based on the actual amount of capital raised by Ashford Inc., Ashford Trust and Braemar, respectively, through Ashford Securities. After the Amended and Restated True-Up Date, the expense reimbursements will be allocated among Ashford Inc., Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities. Additionally, Braemar’s aggregate Capital Contributions under the Initial Contribution Agreement and the Amended and Restated Contribution Agreement shall not exceed $3.75 million unless otherwise agreed to in writing by Braemar.

As of December 31, 2021, Braemar has funded approximately $3.5 million. Additionally, as of December 31, 2021, $338,000 of the pre-funded amount was included in “other assets” on our consolidated balance sheets.

The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Corporate, general and administrative	$	1,983	$	658	$	314

Enhanced Return Funding Program

Concurrent with Amendment No. 1 to the Fifth Amended and Restated Advisory Agreement with Ashford Inc. (“Amendment No. 1”), on January 15, 2019, the Company also entered into the Enhanced Return Funding Program Agreement (the “ERFP Agreement”) with Ashford Inc. The “key money investments” concept previously contemplated by our advisory agreement was replaced with the ERFP Agreement. The Fifth Amended and Restated Advisory Agreement was also amended to name Ashford Inc. and its subsidiaries as the Company’s sole and exclusive provider of asset management, design and construction and other services offered by Ashford Inc. or any of its subsidiaries. The independent members of our board of directors and the independent members of the board of directors of Ashford Inc., with the assistance of separate and independent legal counsel, engaged to negotiate the ERFP Agreement on behalf of Ashford Inc. and Braemar, respectively.

The ERFP Agreement generally provides that Ashford LLC will provide funding to facilitate the acquisition of properties by Braemar OP that are recommended by Ashford LLC, in an aggregate amount of up to $50 million (subject to increase to up to $100 million by mutual agreement). Each funding will equal 10% of the property acquisition price and will be made either at the time of the property acquisition or at any time generally within the two-year period following the date of such acquisition, in exchange for FF&E for use at the acquired property or any other property owned by Braemar OP.

The initial term of the ERFP Agreement was two years (the “Initial Term”). At the end of the Initial Term, the ERFP Agreement automatically renewed for one year and shall automatically renew for successive one-year periods (each such period a “Renewal Term”) unless either Ashford Inc. or Braemar provides written notice to the other at least sixty days in advance of the expiration of the Initial Term or Renewal Term, as applicable, that such notifying party intends not to renew the ERFP Agreement.

As a result of The Ritz-Carlton Lake Tahoe acquisition, Braemar was entitled to receive $10.3 million from Ashford LLC in the form of future purchases of FF&E at Braemar hotel properties that will be leased to us by Ashford LLC rent-free. As of December 31, 2021, Ashford LLC has remitted payments of $10.3 million to the Company as further described below.

On June 26, 2019 and July 1, 2019, the Company sold $1.4 million and $8.9 million, respectively, of hotel FF&E from Braemar hotel properties to Ashford LLC which was subsequently leased back to the Company rent-free. In accordance with ASC 842, the Company evaluated the transactions and concluded that the transaction qualified as a sale. As a result, the Company recorded gains of $9,000 and $23,000, respectively, for the year ended December 31, 2019. The gains are recorded in

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“gain (loss) on insurance settlement, disposition of assets and sale of hotel property” in our consolidated statements of operations.

Under the applicable accounting guidance in ASC 842, the Company has not recorded an operating lease right-of-use asset, an operating lease liability or lease expense for rents as the related party lease has no economic substance because the related party lease is provided rent-free.

In 2015, prior to the inception of the ERFP program, $2.0 million of key money consideration was invested in FF&E by Ashford LLC to be used by Braemar, which represented all of the key money consideration for the Bardessono Hotel and Spa. Upon adoption of ASC 842, we evaluated this arrangement, which was accounted for as a lease that expired in 2020. Under the applicable guidance in ASC 842, as the related party lease is provided rent-free, there is no economic substance related to the lease which results in not recording an operating lease right-of-use asset, an operating lease liability or lease expense for rents. Upon expiration of the lease the underlying FF&E was purchased from Ashford Inc. for $200,000.

In 2021, the Company sold approximately $1.6 million of hotel FF&E from Braemar hotel properties to Ashford LLC, which was subsequently leased back to the Company rent-free. In accordance with ASC 842, the Company evaluated the transactions and concluded that the transactions qualified as sales. As a result, the Company recorded an aggregate gain of $197,000 for the year ended December 31, 2021. The gains are recorded in “gain (loss) on insurance settlement, disposition of assets and sale of hotel properties” in our consolidated statements of operations.

Upon expiration of an ERFP lease, the Company purchased the underlying FF&E from Ashford Inc. at fair value for $144,000, which was paid during the third quarter of 2021.

On November 8, 2021, the Company received written notice from the Advisor of its intention not to renew the ERFP program. As a result, the ERFP Agreement terminated in accordance with its terms on January 15, 2022.

Design and Construction Services

In connection with Ashford Inc.’s August 8, 2018 acquisition of Remington Lodging’s design and construction business, we entered into a design and construction services agreement with Ashford Inc.’s subsidiary, Premier Project Management LLC (“Premier”), pursuant to which Premier provides design and construction services to our hotels, including construction management, interior design, architectural services, and the purchasing, freight management, and supervision of installation of FF&E and related services. Pursuant to the design and construction services agreement, we pay Premier: (a) design and construction fees of up to 4% of project costs; and (b) for the following services: (i) architectural (6.5% of total construction costs); (ii) construction management for projects without a general contractor (10% of total construction costs); (iii) interior design (6% of the purchase price of the FF&E designed or selected by Premier); and (iv) FF&E purchasing (8% of the purchase price of FF&E purchased by Premier; provided that if the purchase price exceeds $2.0 million for a single hotel in a calendar year, then the purchasing fee is reduced to 6% of the FF&E purchase price in excess of $2.0 million for such hotel in such calendar year). On March 20, 2020, we amended the design and construction services agreement to provide that Premier’s fees shall be paid by the Company to Premier upon the completion of any work provided by third-party vendors to the Company.

Hotel Management Services

On November 6, 2019, Ashford Inc. completed the acquisition of Remington Lodging’s hotel management business. Following the acquisition, hotel management services are provided by Remington Hotels, a subsidiary of Ashford Inc., under the respective hotel management agreement with each customer, including Ashford Trust and Braemar.

At December 31, 2021, Remington Hotels managed four of our 14 hotel properties.

We pay monthly hotel management fees equal to the greater of approximately $15,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive management fees, if certain operational criteria were met and other general and administrative expense reimbursements primarily related to accounting services.

Pursuant to the terms of the Letter Agreement dated March 13, 2020 (the “Hotel Management Letter Agreement”), in order to allow Remington Hotels to better manage its corporate working capital and to ensure the continued efficient operation of our hotels, we agreed to pay the base fee and to reimburse all expenses on a weekly basis for the preceding week, rather than on a monthly basis. The Hotel Management Letter Agreement went into effect on March 13, 2020 and will continue until terminated by us.

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We also have a mutual exclusivity agreement with Remington Hotels, pursuant to which: (i) we have agreed to engage Remington Hotels to provide management services with respect to any hotel we acquire or invest in, to the extent we have the right and/or control the right to direct the management of such hotel; and (ii) Remington Hotels has agreed to grant us a right of first refusal to purchase any opportunity to develop or construct a hotel that it identifies that meets our initial investment guidelines. We are not, however, obligated to engage Remington Hotels if our independent directors either: (i) unanimously vote to hire a different manager or developer; or (ii) by a majority vote elect not to engage such related party because either special circumstances exist such that it would be in the best interest of our Company not to engage such related party, or, based on related party’s prior performance, it is believed that another manager could perform the management or other duties materially better.

Ashford Trust

As of December 31, 2021, the Company had a $728,000 receivable from Ashford Trust, included in “due from related parties, net.” The receivable relates to a legal settlement between Ashford Trust and the City of San Francisco regarding a transfer tax matter associated with the transfer of The Clancy from Ashford Trust to Braemar upon Braemar’s 2013 spin-off from Ashford Trust. The transfer taxes were initially paid by Braemar at the time of the spin-off. The $728,000 gain is included in “(gain) loss on legal settlements” on the consolidated statements of operations. In January 2022, the City of San Francisco remitted payment to Ashford Trust, which subsequently remitted payment to Braemar.

Remington Lodging (prior to Ashford Inc. acquisition)

Remington Lodging was a hotel and design and construction company, wholly owned by our chairman, Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. who is Ashford Trust’s chairman emeritus. We had master hotel and design and construction services agreements and hotel and design and construction services mutual exclusivity agreements with Remington Lodging.

On November 6, 2019, Ashford Inc. completed the acquisition of Remington Lodging’s hotel management business. As a result of the acquisition, hotel management services that were previously provided by Remington Lodging are now be provided by a subsidiary of Ashford Inc. under the respective hotel management agreement with each customer, including Ashford Trust and Braemar under the Remington Hotels name.

Between January 1, 2019 and November 5, 2019, we paid Remington Lodging monthly hotel management fees equal to the greater of approximately $14,000 (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive hotel management fees, if certain operational criteria were met and other general and administrative expense reimbursements primarily related to accounting services.

The following table presents the fees related to our hotel and design and construction services agreements with Remington Lodging prior to its transactions with Ashford Inc. (in thousands):

	Year Ended December 31,
	2019
Hotel management fees, including incentive hotel management fees	$	1,738
Corporate general and administrative	297
Total	$	2,035

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Summary of Transactions

In accordance with our advisory agreement, our advisor, or entities in which our advisor has an interest, has a right to provide products or services to our hotel properties, provided such transactions are evaluated and approved by our independent directors. The following tables summarize the entities in which our advisor has an interest with which we or our hotel properties contracted for products and services, the amounts recorded by us for those services and the applicable classification on our consolidated financial statements (in thousands):

		Year Ended December 31, 2021
Company	Product or Service	Total		Investments in Hotel Properties, net (1)		Indebtedness, net (2)		Other Assets		Other Hotel Revenue		Other Hotel Expenses		Preferred Stock (3)		Management fees		Property Taxes, Insurance and Other		Advisory Services Fee		Corporate General and Administrative		Write-off of Premiums, Loan Costs and Exit Fees
Ashford LLC	Insurance claims services	$	7	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	7	$	—	$	—	$	—
Ashford Securities	Broker/Dealer	1,983		—		—		—		—		—		—		—		—		—		1,983		—
Ashford Securities	Dealer Manager Fees	410		—		—		—		—		—		410		—		—		—		—		—
INSPIRE	Audio visual services	1,001		—		—		—		1,001		—		—		—		—		—		—		—
Lismore Capital	Debt placement and related services	491		—		150		—		—		—		—		—		—		—		—		341
Lismore Capital	Broker services	3		—		—		—		—		—		—		—		—		—		—		3
OpenKey	Mobile key app	38		—		—		—		—		38		—		—		—		—		—		—
Premier	Design and construction services	3,009		2,653		—		—		—		—		—		—		—		356		—		—
Pure Wellness	Hypoallergenic premium rooms	141		—		—		—		—		141		—		—		—		—		—		—
RED Leisure	Watersports activities and travel/transportation services	321		—		—		—		321		—		—		—		—		—		—		—
Remington Hotels	Hotel management services (4)	3,243		—		—		—		—		934		—		2,309		—		—		—		—

		Year Ended December 31, 2020
Company	Product or Service	Total		Investments in Hotel Properties, net (1)		Other Assets		Other Hotel Revenue		Other Hotel Expenses		Management fees		Property Taxes, Insurance and Other		Advisory Services Fee		Write-off of Premiums, Loan Costs and Exit Fees
Ashford LLC	FF&E purchases	$	1,816	$	1,816	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Ashford LLC	Insurance claims services	108		—		—		—		—		—		108		—		—
INSPIRE	Audio visual services	592		—		—		592		—		—		—		—		—
Lismore Capital	Debt placement and related services	4,093		—		1,022		—		—		—		—		—		3,071
OpenKey	Mobile key app	38		—		—		—		38		—		—		—		—
Premier	Design and construction services	2,849		2,505		—		—		—		—		—		344		—
Pure Wellness	Hypoallergenic premium rooms	52		—		—		—		52		—		—		—		—
RED Leisure	Watersports activities and travel/transportation services	139		—		—		139		—		—		—		—		—
Remington Hotels	Hotel management services (4)	1,446		—		—		—		410		1,036		—		—		—

		Year Ended December 31, 2019
Company	Product or Service	Total		Investments in Hotel Properties, net (1)		Indebtedness, net (2)		Other Hotel Revenue		Other Hotel Expenses		Management fees		Property Taxes, Insurance and Other		Advisory Services Fee		Corporate General and Administrative		Write-off of Premiums, Loan Costs and Exit Fees
Ashford LLC	Insurance claims services	$	135	$	—	$	—	$	—	$	—	$	—	$	135	$	—	$	—	$	—
INSPIRE	Audio visual services	560		—		—		560		—		—		—		—		—		—
Lismore Capital	Debt placement and related services	1,208		—		(995)		—		—		—		—		—		—		213
OpenKey	Mobile key app	34		—		—		—		34		—		—		—		—		—
Premier	Design and construction services	10,123		9,584		—		—		—		—		—		539		—		—
Pure Wellness	Hypoallergenic premium rooms	194		148		—		—		46		—		—		—		—		—
RED Leisure	Watersports activities and travel/transportation services	946		—		—		—		946		—		—		—		—		—
Remington Hotels	Hotel management services (4)	572		—		—		—		323		249		—		—		—		—

________

(1)Recorded in FF&E and depreciated over the estimated useful life.

(2)Recorded as deferred loan costs, which are included in “indebtedness, net” on our consolidated balance sheets and amortized over the initial term of the applicable loan agreement.

(3)Recorded as a reduction of Series E and Series M Redeemable Preferred Stock proceeds.

(4)Other hotel expenses include incentive hotel management fees and other hotel management costs.

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The following table summarizes the components of due to Ashford Inc. (in thousands):

		Due to Ashford Inc.
Company	Product or Service	December 31, 2021		December 31, 2020
Ashford LLC	Advisory services	$	394	$	165
Ashford LLC	FF&E purchases	—		1,816
Ashford LLC	Insurance claims services	1		12
INSPIRE	Audio visual services	418		1
OpenKey	Mobile key app	—		3
Premier	Design and construction services	470		631
RED Leisure	Watersports activities and travel/transportation services	191		144
		$	1,474	$	2,772

As of December 31, 2021 and 2020, due from related parties, net included a net receivable from Remington Hotels of $677,000 and $626,000, respectively, primarily related to advances made by Braemar and accrued base and incentive management fees.

As of December 31, 2021 and 2020, due from related parties, net included a $365,000 security deposit paid to Remington Hotel Corporation, an entity indirectly owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr., for office space allocated to us under our advisory agreement. It will be held as security for the payment of our allocated share of office space rental. If unused it will be returned to us upon lease expiration or earlier termination.

16. Commitments and Contingencies

Restricted Cash—Under certain management and debt agreements for our hotel properties existing at December 31, 2021, escrow payments are required for insurance, real estate taxes and debt service. In addition, for certain properties based on the terms of the underlying debt and management agreements, we escrow 4% to 5% of gross revenues for capital improvements.

Licensing Fees—In conjunction with the Mr. C Beverly Hills Hotel acquisition on August 5, 2021, we entered into an Intellectual Property Sublease Agreement, which allows us to continue to use certain proprietary marks associated with the Mr. C brand name. In return, we pay licensing fees of: (i) 1% of total operating revenue; (ii) 2% of gross food and beverage revenues; and (iii) 25% of food and beverage profits. The agreement expires on August 4, 2022.

The table below summarizes the licensing fees incurred (in thousands):

Line Item	Year Ended December 31, 2021
Other hotel expenses	$	133

Management Fees—Under hotel management agreements for our hotel properties existing at December 31, 2021, we pay a monthly hotel management fee equal to the greater of approximately $15,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues, or in some cases 3.0% to 5.0% of gross revenues, as well as annual incentive management fees, if applicable. These management agreements expire from December 2023 through December 2065, with renewal options. If we terminate a management agreement prior to its expiration, we may be liable for estimated management fees through the remaining term, liquidated damages or, in certain circumstances, we may substitute a new management agreement.

Income Taxes—We and our subsidiaries file income tax returns in the federal jurisdiction and various states. Tax years 2017 through 2021 remain subject to potential examination by certain federal and state taxing authorities.

Litigation—On October 24, 2019, the Company provided notice to Accor of the material breach of Accor’s responsibilities under the Accor management agreement for the Sofitel Chicago Magnificent Mile at 20 East Chestnut Street in Chicago, Illinois. On November 7, 2019, Accor filed a complaint against Ashford TRS Chicago II in the Supreme Court of the State of New York, New York County, seeking a declaratory judgment that no breach under the management agreement has occurred and an injunction to prevent Ashford TRS Chicago II form terminating the management agreement. Accor’s complaint was dismissed on or about February 27, 2020. On January 6, 2020, Ashford TRS Chicago II filed a complaint against Accor in the Supreme Court of the State of New York, New York County, alleging breach of the Accor management agreement and seeking damages and a declaration of its right to terminate the Accor management agreement. On July 20, 2020, Accor filed an Amended Answer and Counterclaims against Ashford TRS Chicago II, in which Accor asserts two causes of action: First, Accor asserts a counterclaim for declaratory judgment that Accor correctly calculated the amount payable to Ashford TRS

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Chicago II under the management agreement to “cure” Accor’s performance test failure (the “Cure Amount”). Second, Accor asserts a counterclaim for breach of contract alleging that Ashford TRS Chicago II breached the management agreement by wrongfully maintaining that the Cure Amount for the 2018 and 2019 Performance Test failure is $1,031,549 instead of $535,120. As of December 31, 2021, no amounts have been accrued. On February 16, 2022, the parties entered into a settlement agreement agreeing to: 1) amend the management agreement; 2) dismiss the lawsuit and counterclaims; 3) stipulate to the failure of the performance tests and cure amounts for 2018 of $867,682 and 2019 of $784,919; and 4) arbitrate whether the performance tests for 2020 and 2021 were valid and/or required equitable adjustment. On February 23, 2022, Ashford TRS Chicago II and Accor filed a stipulation of discontinuance dismissing all claims, counterclaims, and cross-claims in the January 6, 2020 action with prejudice.

One of the Company’s hotel management companies is currently involved in litigation regarding its employment policies and practices at multiple California hotels, including one of the Company’s hotels. On January 28, 2022, the Court approved a settlement of this litigation. The resulting loss to the Company is approximately $448,000; although it is entitled to indemnification in the amount of approximately $291,000, based on the respective periods of ownership of the Company’s hotel. As of December 31, 2021, approximately $500,000 was accrued.

On December 20, 2016, a class action lawsuit was filed against one of the Company’s hotel management companies in the Superior Court of the State of California in and for the County of Contra Costa alleging violations of certain California employment laws, which class action affects two hotels owned by subsidiaries of the Company. The court has entered an order granting class certification with respect to: (1) a statewide class of non-exempt employees of our manager who were allegedly deprived of rest breaks as a result of our manager’s previous written policy requiring its employees to stay on premises during rest breaks; and (2) a derivative class of non-exempt former employees of our manager who were not paid for allegedly missed breaks upon separation from employment. Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class; however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. While we believe it is reasonably possible that we may incur a loss associated with this litigation, because there remains uncertainty under California law with respect to a significant legal issue, discovery relating to class members continues, and the trial judge retains discretion to award lower penalties than set forth in the applicable California employment laws, we do not believe any potential loss to the Company is reasonably estimable at this time. As of December 31, 2021, no amounts have been accrued.

We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated. To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters and matters relating to compliance with applicable law (for example, the ADA and similar state laws). The likelihood of loss from these legal proceedings is based on the definitions within contingency accounting literature. We recognize a loss when we believe the loss is both probable and reasonably estimable. Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations, or cash flow. However, our assessment may change depending upon the development of these legal proceedings, and the final results of these legal proceedings cannot be predicted with certainty. If we do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.

Leases—We lease land under two non-cancelable operating ground leases, which expire in 2067 and 2065, related to our hotel properties in La Jolla, California and Yountville, California, respectively. The lease in La Jolla, California contains one extension option of either 10 or 20 years dependent upon capital investment spend during the lease term. The lease in Yountville, California contains two 25-year extension options. These leases are subject to base rent plus contingent rent based on each hotel property’s financial results and escalation clauses.

Capital Commitments—At December 31, 2021, we had capital commitments of $23.0 million, including commitments that will be satisfied with insurance proceeds, relating to general capital improvements that are expected to be paid in the next twelve months.

17. Leases

On January 1, 2019, we adopted ASC 842 on a modified retrospective basis. We elected the practical expedients which allowed us to apply the new guidance at its effective date on January 1, 2019 without adjusting the comparative prior period financial statements. The package of practical expedients also allowed us to carry forward the historical lease classification.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Additionally, we elected the practical expedients allowing us not to separate lease and non-lease components and not record short-term leases on the balance sheet across all existing asset classes.

The adoption of this standard resulted in the recognition of operating lease ROU assets and lease liabilities primarily related to our ground lease arrangements for which we are the lessee. As of January 1, 2019, we recorded operating lease liabilities of $60.6 million as well as a corresponding operating lease ROU assets of $82.5 million, which includes, among other things, the reclassified intangible assets of $22.3 million. The standard did not have a material impact on our consolidated statements of operations and statements of cash flows.

The majority of our leases are operating ground leases. We also have operating equipment leases, such as copier and vehicle leases, at our hotel properties. Some leases include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years. The exercise of lease renewal options is at our sole discretion. Some leases have variable payments, however, if variable payments are contingent, they are not included in the ROU assets and liabilities. We have no finance leases as of December 31, 2021.

The discount rate used to calculate the lease liability and ROU asset related to our ground leases is based on our incremental borrowing rate (“IBR”), as the rate implicit in each lease is not readily determinable. The IBR is determined at commencement of the lease, or upon modification of the lease, as the interest rate a lessee would have to pay to borrow on a fully collateralized basis over a similar term and at an amount equal to the lease payments in a similar economic environment.

As of December 31, 2021 and 2020, our leased assets and liabilities consisted of the following (in thousands):

	December 31, 2021		December 31, 2020
Assets
Operating lease right-of-use assets	$	80,462	$	81,260
Liabilities
Operating lease liabilities	$	60,937	$	60,917

We incurred the following lease costs related to our operating leases (in thousands):

		Year Ended December 31,
	Classification	2021		2020		2019
Operating lease cost (1)	Hotel operating expenses - other	$	5,349	$	4,373	$	5,834

_______________________________________

(1) For the years ended December 31, 2021, 2020 and 2019, operating lease cost includes approximately $954,000, $(305,000) and $1.4 million, respectively, of variable lease cost associated with the ground leases, with the credit in 2020 primarily caused by the ground lease percentage rent true-up for fiscal year 2019-2020 at Hilton La Jolla Torrey Pines. Additionally, we recorded $512,000, $834,000 and $651,000, respectively, of amortization costs related to the intangible assets that were reclassified to “operating lease right-of-use assets” upon adoption of ASC 842. Short-term lease costs in aggregate are immaterial.

Other information related to leases is as follows:

	Year Ended December 31,
	2021			2020			2019
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)	$	3,302		$	3,261		$	3,223
Weighted Average Remaining Lease Term
Operating leases (1)	45 years			47 years			47 years
Weighted Average Discount Rate
Operating leases (1)	4.98		%	4.98		%	4.98		%

_______________________________________

(1) Calculated using the lease term, excluding extension options, and discount rates of the ground leases.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Future minimum lease payments due under non-cancellable leases as of December 31, 2021 were as follows (in thousands):

	Operating Leases
2022	$	3,338
2023	3,333
2024	3,302
2025	3,294
2026	3,308
Thereafter	143,692
Total future minimum lease payments (1)	160,267
Less: interest	(99,330)
Present value of operating lease liabilities	$	60,937

_______________________________________

(1) Based on payment amounts as of December 31, 2021.

18. Income Taxes

For U.S. federal income tax purposes, we elected to be taxed as a REIT under the Code. To qualify as a REIT, we must meet certain organizational and operational stipulations, including a requirement that we distribute at least 90% of our REIT taxable income, excluding net capital gains, to our stockholders. We currently intend to adhere to these requirements and maintain our REIT status. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not qualify as a REIT for four subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes as well as to federal income and excise taxes on our undistributed taxable income.

At December 31, 2021, 13 of our hotel properties were leased to TRS lessees and The Ritz-Carlton St. Thomas was owned by our USVI TRS. The TRS entities recognized net book income (loss) before income taxes of $12.6 million, $(27.0) million and $31.0 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The following table reconciles the income tax expense at statutory rates to the actual income tax expense recorded (in thousands):

	Year Ended December 31,
	2021		2020		2019
Income tax (expense) benefit at federal statutory income tax rate of 21%	$	(2,652)	$	5,619	$	(6,509)
State income tax (expense) benefit, net of U.S. federal income tax benefit	574		3,136		107
State and local income tax (expense) benefit on pass-through entity subsidiaries	(9)		(5)		(16)
Gross receipts and margin taxes	(26)		(13)		(67)
Benefit of USVI Economic Development Commission credit	3,346		783		5,614
Other	(251)		311		16
Valuation allowance	(2,306)		(5,425)		(909)
Total income tax (expense) benefit	$	(1,324)	$	4,406	$	(1,764)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The components of income tax expense are as follows (in thousands):

	Year Ended December 31,
	2021		2020		2019
Current:
Federal	$	(1,477)	$	3,431	$	(765)
State	(21)		19		(235)
Total current income tax (expense) benefit	(1,498)		3,450		(1,000)
Deferred:
Federal	131		1,262		(357)
State	43		(306)		(407)
Total deferred income tax (expense) benefit	174		956		(764)
Total income tax (expense) benefit	$	(1,324)	$	4,406	$	(1,764)

For the years ended December 31, 2021, 2020 and 2019, income tax expense included interest and penalties paid to taxing authorities of $3,000, $7,000 and $27,000, respectively. At December 31, 2021 and 2020, we determined that there were no amounts to accrue for interest and penalties due to taxing authorities.

At December 31, 2021 and 2020, our net deferred tax asset, included in “other assets,” and net deferred tax liability, included in “accounts payable and accrued expenses,” respectively, on our consolidated balance sheets, consisted of the following (in thousands):

	December 31,
	2021		2020
Deferred tax assets (liabilities):
Tax intangibles basis greater than book basis	$	722	$	718
Allowance for doubtful accounts	28		50
Unearned income	2,147		1,314
Federal and state net operating losses	15,677		14,166
Capital Loss Carryforward	529		523
Other	178		399
Accrued expenses	612		465
Tax property basis greater than book basis	(2,487)		(2,721)
Prepaid expenses	(4)		(91)
Net deferred tax asset	17,402		14,823
Valuation allowance	(17,343)		(14,938)
Net deferred tax asset (liability)	$	59	$	(115)

At December 31, 2021 and 2020, we recorded a valuation allowance of $17.3 million and $14.9 million, respectively, to partially reserve the deferred tax assets of our TRSs. Primarily as a result of the limitation imposed by the Code on the utilization of net operating losses of acquired subsidiaries and the history of losses of our USVI TRS, we believe it is more likely than not that $17.3 million of our deferred tax assets will not be realized, and therefore, have provided a valuation allowance to reserve against the balances.

At December 31, 2021, we had TRSs net operating loss carryforwards for U.S. federal income tax purposes of $61.2 million, of which $52.3 million is subject to expiration and will begin to expire in 2023. The remainder was generated after December 2017 and is not subject to expiration under the Tax Cuts and Jobs Act. $51.6 million of net operating loss carryforwards are attributable to acquired subsidiaries and are subject to substantial limitation on their use. We do not recognize deferred tax assets and a valuation allowance for the REIT since the REIT distributes its taxable income as dividends to stockholders, and in turn, the stockholders incur income taxes on those dividends.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the changes in the valuation allowance (in thousands):

	Year Ended December 31,
	2021		2020		2019
Balance at beginning of year	$	14,938	$	11,581	$	14,483
Additions	2,405		3,357		—
Deductions	—		—		(2,902)
Balance at end of year	$	17,343	$	14,938	$	11,581

The USVI TRS operates under a tax holiday in the U.S. Virgin Islands, which is effective through December 31, 2028, and may be extended if certain additional requirements are satisfied. The tax holiday is conditional upon our meeting certain employment and investment thresholds. The impact of this tax holiday decreased current foreign taxes by $907,000, $0 and $807,000 for the years ended December 31, 2021, 2020 and 2019, respectively. The benefit of the tax holiday on net income (loss) per share was approximately, $0.02, $0.00 and $0.02 for the years ended December 31, 2021, 2020 and 2019, respectively.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law and includes certain income tax provisions relevant to businesses. The Company is required to recognize the effect on the consolidated financial statements in the period the law was enacted. For the year ended December 31, 2020, the CARES Act allowed us to record a tax benefit of $3.4 million for the 2020 net operating loss at our TRS that was carried back to prior tax years.

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law, and extended several COVID-19 tax related measures passed as part of the “CARES Act.” The Company is required to recognize the effect on the consolidated financial statements in the period the law was enacted, which was the period ended December 31, 2020. The Consolidated Appropriations Act, 2021 did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2020.

19. Intangible Assets, net

Intangible assets, net consisted of the following (in thousands):

	December 31,
	2021		2020
Cost	$	5,682	$	5,682
Accumulated amortization	(1,421)		(1,042)
	$	4,261	$	4,640

Intangible assets include the customer relationships associated with The Ritz-Carlton Sarasota acquisition on April 4, 2018. The customer relationships are being amortized over the 15 year expected life.

For the years ended December 31, 2021, 2020 and 2019, amortization related to intangible assets was $379,000, $379,000 and $379,000, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Estimated future amortization expense for intangible assets, net for each of the next five years and thereafter is as follows (in thousands):

	Intangible Assets, net
2022	$	379
2023	379
2024	379
2025	379
2026	379
Thereafter	2,366
Total	$	4,261

20. Concentration of Risk

Our investments are all concentrated within the hotel industry. All of our hotel properties are located within the U.S. and its territories. For the year ended December 31, 2021, three of our hotel properties generated revenues in excess of 10% of total hotel revenue amounting to 48% of total hotel revenue.

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We are exposed to credit risk with respect to cash held at various financial institutions that are in excess of the FDIC insurance limits of $250,000 and amounts due or payable under our derivative contracts. Our counterparties to our derivative contracts are investment grade financial institutions.

21. Segment Reporting

We operate in one business segment within the hotel lodging industry: direct hotel investments. Direct hotel investments refers to owning hotel properties through either acquisition or new development. We report operating results of direct hotel investments on an aggregate basis as substantially all of our hotel investments have similar economic characteristics and exhibit similar long-term financial performance. As of December 31, 2021 and December 31, 2020, all of our hotel properties were in the U.S. and its territories.

22. Subsequent Event

On February 2, 2022, the Company refinanced its mortgage loan secured by the Park Hyatt Beaver Creek Resort & Spa, which had a final maturity date in April 2022. The new, non-recourse mortgage loan totals $70.5 million and has a two-year initial term with three 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 + 2.86%.

158

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, our disclosure controls and procedures are effective to ensure that (i) information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of our internal control over financial reporting. The internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and our expenditures are being made only in accordance with authorizations of management and our directors and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making the assessment of the effectiveness of our internal control over financial reporting, management has utilized the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, (2013 framework) (“COSO”).

Based on management’s assessment of these criteria, we concluded that, as of December 31, 2021, our internal control over financial reporting is effective. The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by BDO USA, LLP, an independent registered public accounting firm, as stated in their report which appears in this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting during our most recent fiscal quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

159

Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors

Braemar Hotels & Resorts Inc.

Dallas, Texas

Opinion on Internal Control over Financial Reporting

We have audited Braemar Hotels & Resorts Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and schedule and our report dated March 10, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ BDO USA, LLP

Dallas, Texas

March 10, 2022

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Item 9B. Other Information

Opinion of the Liquidation Value of our Series E Preferred Stock and Series M Preferred Stock as of December 31, 2021

In order to assist broker-dealers in complying with their obligations under FINRA Rule 2331(c)(1)(B) with respect to customer account statements and our Series E Preferred Stock and our Series M Preferred Stock, we engaged Robert A. Stanger & Co., Inc. (“Stanger”) to provide an opinion of the liquidation value of our Series E Preferred Stock and our Series M Preferred Stock as of December 31, 2021 (the “Valuation Date”). The liquidation value is the amount that a holder of the Series E Preferred Stock or the Series M Preferred Stock would receive per share in the event of our liquidation. Based on certain assumptions and qualifications set forth in its report, Stanger concluded that the estimated liquidation value of the Series E Preferred Stock and the Series M Preferred Stock was $25.00 per share, which equals the per share liquidation preference for each series as set forth in the articles supplementary creating the Series E and the Series M Preferred Stock. In arriving at this conclusion, Stanger used the following valuation approaches:

Market capitalization. Stanger reviewed the public market capitalization of our common stock at its 52-week low, its 52-week high and the closing price as of the Valuation Date. Stanger adjusted the common market capitalization for the liquidation value of the preferred securities to determine an adjusted market capitalization. In all cases, the preferred stock coverage ratio, which is the ratio of the adjusted market capitalization to the total liquidation preference for all of our outstanding preferred securities, was adequate as of the Valuation Date.

Analyst target prices. Stanger reviewed the then most recent (November 2021) target common stock prices published by analysts at investment banks and other financial firms (four in total). Using the lowest target price, the highest target price and the average or “consensus” price Stanger estimated the common market capitalization as of the Valuation Date. Stanger adjusted the common market capitalization for the liquidation value of the preferred securities to determine an adjusted market capitalization. In all cases, the preferred stock coverage ratio, which is the ratio of the adjusted market capitalization to the total liquidation preference for all of our outstanding preferred securities, was adequate as of the Valuation Date.

Direct capitalization analysis. Stanger chose a range of capitalization rates it believed to be appropriate for our asset type and multiplied them with our aggregate “capitalized net operating income” to determine an estimated range of real estate values, deducted our indebtedness, and adjusted for available working capital and for estimated non-controlling interests due to third parties as of the Valuation Date, to derive an estimate of our equity value (before accounting for the preferred securities). To arrive at our stabilized “capitalized net operating income,” Stanger used the higher of the 2019 net operating income (“NOI”) or budgeted 2022 NOI for each property (believing that 2020 and 2021 NOI was not appropriate on account of COVID-19 disruptions). For those properties where 2019 NOI was capitalized, Stanger deducted the loss to lease (the difference between 2022 budget NOI and 2019 NOI) from the capitalized value. Using the highest and lowest capitalization rates in Stanger’s range, our equity value exceeded the total liquidation preference for all of our outstanding preferred securities as of the Valuation Date.

Third-party appraisals. Stanger prepared a range of equity values based upon the most recent appraised values of our assets (on an “as is” and “stabilized” basis), deducted our indebtedness, and adjusted for available working capital and the estimated non-controlling interests due to third parties as of the Valuation Date, to derive an estimate of our equity value (before accounting for the preferred securities). The most recent appraisals available for each property were from February 2018 through January 2022. The age of the “as-is” appraisals averaged 2.8 years. Using the “as is” values and the “stabilized” values, our equity value exceeded the total liquidation preference for all of our outstanding preferred securities.

Stanger is engaged in the business of providing valuation services for real estate assets and consulting services for non-traded REITs and their sponsors as well as for other real estate programs. Stanger has not previously provided services to us. However, Stanger has provided consulting services to Ashford Securities, a subsidiary of Ashford Inc., since 2019 and has received fees in connection with those services. As previously disclosed, we provide funds to Ashford Inc. in connection with the formation, registration and operations of Ashford Securities.

Limited Waiver Under Advisory Agreement

On March 10, 2022, we entered into a Limited Waiver Under Advisory Agreement (the “Limited Waiver”) with Braemar OP, Braemar TRS and our advisor.

As previously disclosed, our advisory agreement (i) allocates responsibility for certain employee costs between us and our advisor and (ii) permits our Board of Directors to issue annual equity awards in the Company or the Operating Partnership to employees and other representatives of our advisor based on achievement by the Company of certain financial or other objectives or otherwise as our Board of Directors sees fit. Pursuant to the Limited Waiver, the Company, Braemar OP, Braemar

161

TRS and our advisor waived the operation of any provision in the advisory agreement that would otherwise limit our ability, in our discretion and at our cost and expense, to award during the first and second fiscal quarters of calendar year 2022 cash incentive compensation to employees and other representatives of our advisor.

The foregoing description of the Limited Waiver does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Limited Waiver, a copy of which is attached hereto as Exhibit 10.39 and is incorporated herein by reference.

The foregoing information is included for the purpose of providing the disclosures required under “Item 1.01 - Entry into a Material Definitive Agreement,” of Current Report on Form 8-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required in response to this Item 10 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

Item 11. Executive Compensation

The information required in response to this Item 11 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required in response to this Item 12 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required in response to this Item 13 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

Item 14. Principal Accountant Fees and Services

The information required in response to this Item 14 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a), (c) Financial Statement Schedules

See “Item 8. Financial Statements and Supplementary Data,” on pages 109 through 158 hereof, for a list of our consolidated financial statements and report of independent registered public accounting firm.

The following financial statement schedule is included herein on page 170 through page 171 hereof.

Schedule III – Real Estate and Accumulated Depreciation

All other financial statement schedules have been omitted because such schedules are not required under the related instructions, such schedules are not significant, or the required information has been disclosed elsewhere in the consolidated financial statements and related notes thereto.

162

(b) Exhibits

Exhibit Number	Exhibit Description
2.1	Separation and Distribution Agreement between Ashford Hospitality Prime, Inc., Ashford Hospitality Trust, Inc. and the other parties thereto (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on November 12, 2013) (File No. 001-35972)
2.2	Separation and Distribution Agreement Correction between Ashford Hospitality Prime, Inc., Ashford Hospitality Trust, Inc. and the other parties thereto (incorporated by reference to Exhibit 2.2 of the Registration Statement on Form S-11 filed on December 19, 2013) (File No. 001-35972)
2.3	Agreement of Purchase and Sale, dated as of May 20, 2016, by and between Washington Real Estate Holdings, LLC and Ashford Seattle Downtown LP (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on July 7, 2016) (File No. 001-35972)
3.1	Articles of Amendment and Restatement of Ashford Hospitality Prime, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 29, 2016) (File No. 001-35972)
3.1.1	Amendment Number One to the Articles of Amendment and Restatement of Ashford Hospitality Prime, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on December 8, 2017) (File No. 001-35972)
3.1.2	Amendment Number Two to Articles of Amendment and Restatement of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 23, 2018) (File No. 001-35972)
3.1.3	Articles of Amendment of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on January 23, 2020 (incorporated by reference to Exhibit 3.13 to Amendment No. 1 to the Registration Statement on Form S-3 (File No. 333-234663) filed with the SEC on January 24, 2020)
3.2	Fourth Amended and Restated Bylaws of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on August 20, 2018) (File No. 001-35972)
3.3	Articles of Amendment of Ashford Hospitality Prime, Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on April 29, 2016) (File No. 001-35972)
3.4	Articles Supplementary of Ashford Hospitality Prime, Inc. (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed on April 29, 2016) (File No. 001-35972)
3.5	Articles Supplementary for 5.50% Series A Cumulative Convertible Preferred Stock of Ashford Hospitality Prime, Inc., as amended by a Certificate of Correction (incorporated by reference to Exhibit 3.4 to the Current Report on Form 8-K filed on April 29, 2016) (File No. 001-35972)
3.6	Articles Supplementary for 5.50% Series B Cumulative Convertible Preferred Stock of Ashford Hospitality Prime, Inc., accepted for record and certified by the Maryland State Department of Assessments and Taxation on December 4, 2015 (incorporated by reference to Exhibit 3.5 to the Current Report on Form 8-K filed on April 29, 2016) (File No. 001-35972)
3.6.1	Articles Supplementary Establishing Additional Shares of the Series B Preferred Stock of Ashford Hospitality Prime, Inc., as filed with the State Department of Assessments and Taxation of Maryland on March 3, 2017 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on March 7, 2017) (File No. 001-35972)
3.6.2	Articles Supplementary Establishing Additional Shares of Series B Preferred Stock of Braemar Hotels & Resorts Inc., accepted for record and certified by the Maryland State Department of Assessments and Taxation on December 4, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on December 4, 2019) (File No. 001-35972)
3.7	Articles Supplementary for the Series C Preferred Stock of Ashford Hospitality Prime, Inc., as filed with the State Department of Assessments and Taxation of Maryland on February 1, 2016 (incorporated by reference to Exhibit 3.6 to the Current Report on Form 8-K filed on April 29, 2016) (File No. 001-35972)
3.8	Articles Supplementary for the Series D Cumulative Preferred Stock, accepted for record and certified by the Maryland State Department of Assessments and Taxation on November 19, 2018 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on November 19, 2018) (File No. 001-35972)
3.9	Articles Supplementary Establishing the Series E Redeemable Preferred Stock of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on April 2, 2021. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 2, 2021) (File No. 001-35972)
3.10	Certificate of Correction of Series E Articles Supplementary of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on November 4, 2021. (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q filed on November 5, 2021) (File No. 001-35972)
3.11	Articles Supplementary Establishing the Series M Redeemable Preferred Stock of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on April 2, 2021. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on April 2, 2021) (File No. 001-35972)

163

3.12	Certificate of Correction of Series M Articles Supplementary of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on November 4, 2021. (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q filed on November 5, 2021) (File No. 001-35972)
4.1	Specimen Common Stock Certificate of Ashford Hospitality Prime, Inc. (incorporated by reference to Exhibit 4.1 to Amendment No. 4 to the Registration Statement on Form 10 filed on October 23, 2013) (File No. 001-35972)
4.2	Preemptive Rights Agreement, dated as of June 9, 2015, by and among Ashford Hospitality Prime, Inc. and certain investors in the Series A Preferred Stock (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed on June 15, 2015) (File No. 001-35972)
4.3	Registration Rights Agreement, dated December 4, 2015, by and among the Company, the Operating Partnership, the Advisor and certain holders of the Series B Preferred Stock (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on December 10, 2015) (File No. 001-35972)
4.4	Preemptive Rights Agreement, dated as of December 4, 2015, by and among the Company and the Series B Investors (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed on December 10, 2015) (File No. 001-35972)
4.5	Indenture, dated as of May 18, 2021, by and among the Company, as issuer, and the Trustee, as trustee, including the Form of Note representing the Company’s 4.50% Convertible Senior Notes due 2026. (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed on May 18, 2021) (File No. 001-35972)
4.6 *	Description of Securities
10.1	Third Amended and Restated Agreement of Limited Partnership of Ashford Hospitality Prime Limited Partnership, dated March 7, 2017 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 7, 2017) (File No. 001-35972)
10.1.1	Amendment No. 2 to the Third Amended and Restated Agreement of Limited Partnership of Braemar Hotels & Resorts Limited Partnership, dated November 20, 2018 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 20, 2018) (File No. 001-35972)
10.1.2	Amendment No. 3 to the Third Amended and Restated Agreement of Limited Partnership of Braemar Hospitality Limited Partnership (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 4, 2019) (File No. 001-35972)
10.1.3	Amendment No. 4 to the Third Amended and Restated Agreement of Limited Partnership of Braemar Hospitality Limited Partnership (incorporated by reference to Exhibit 10.1 of Form 8-K filed on January 24, 2020)
10.1.4	Amendment No. 5 to the Third Amended and Restated Agreement of Limited Partnership of Braemar Hospitality Limited Partnership. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 2, 2021) (File No. 001-35972)
10.1.5	Amendment No. 6 to the Third Amended and Restated Agreement of Limited Partnership of Braemar Hospitality Limited Partnership. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 18, 2021) (File No. 001-35972)
10.2	Fifth Amended and Restated Advisory Agreement, dated as of April 23, 2018, among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Braemar TRS Corporation, Ashford Hospitality Advisors LLC and Ashford Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on April 23, 2018) (File No. 001-35972)
10.2.1	Enhanced Return Funding Program Agreement and Amendment No. 1 to the Fifth Amended and Restated Advisory Agreement, dated January 15, 2019, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Braemar TRS Corporation, Ashford Inc. and Ashford Hospitality Advisors LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on January 18, 2019) (File No. 001-35972)
10.2.2	Amendment No. 2 to the Fifth Amended and Restated Advisory Agreement, dated as of August 16, 2021, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Braemar TRS Corporation, Ashford Inc. and Ashford Hospitality Advisors LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on August 17, 2021) (File No. 001-35972)
10.3	Right of First Offer Agreement between Ashford Hospitality Trust, Inc. and Ashford Hospitality Prime, Inc., dated November 19, 2013 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on November 25, 2013) (File No. 001-35972)
10.4	Amended and Restated Ashford Hospitality Prime, Inc. 2013 Equity Incentive Plan, dated November 5, 2013 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 12, 2013) (File No. 001-35972)
10.5†	Ashford Hospitality Prime, Inc. Advisor Equity Incentive Plan (incorporated by reference to Exhibit 10.5 of the Registration Statement on Form S-11 filed on December 19, 2013) (File No. 001-35972)
10.6	Option Agreement Pier House Resort & Spa by and between Ashford Hospitality Prime Limited Partnership and Ashford Hospitality Limited Partnership with respect to the Properties Entities, and Ashford TRS Corporation and Ashford Prime TRS Corporation with respect to the TRS Entity, dated November 19, 2013 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on November 25, 2013) (File No. 001-35972)

164

10.7	Amended and Restated Braemar Mutual Exclusivity Agreement, dated August 8, 2018, by and among Braemar Hospitality Limited Partnership, Braemar Hotels & Resorts, Inc., Remington Lodging & Hospitality, LLC, as consented to by Monty J. Bennett (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K filed August 14, 2018) (File No. 001-35972)
10.7.1	Braemar Mutual Exclusivity Agreement, dated August 8, 2018, by and among Braemar Hospitality Limited Partnership, Braemar Hotels & Resorts, Inc. and Project Management LLC (incorporated by reference to Exhibit 10.4 of the Current Report on Form 8-K filed August 14, 2018) (File No. 001-35972)
10.8	Amended and Restated Braemar Hotel Master Management Agreement, dated August 8, 2018, by and among Braemar TRS Corporation, CHH III Tenant Parent Corp., RC Hotels (Virgin Islands), Inc. and Remington Lodging & Hospitality, LLC (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed August 14, 2018) (File No. 001-35972)
10.8.1	Braemar Master Project Management Agreement, dated August 8, 2018, by and among Braemar TRS Corporation, CHH III Tenant Parent Corp., RC Hotels (Virgin Islands), Inc., Braemar Hospitality Limited Partnership and Project Management LLC (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed August 14, 2018) (File No. 001-35972)
10.9	Registration Rights Agreement by and between Ashford Hospitality Prime, Inc., Ashford Hospitality Limited Partnership and Ashford Hospitality Advisors LLC, dated November 19, 2013 (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed on November 25, 2013) (File No. 001-35972)
10.10	Registration Rights Agreement between Ashford Hospitality Prime, Inc., for the benefit of the holders of common partnership units in Ashford Hospitality Prime Limited Partnership named therein, dated November 19, 2013 (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed on November 25, 2013) (File No. 001-35972)
10.11	Schedule of Agreements omitted pursuant to Instruction 2 to Item 601 of Regulation S-K (incorporated by reference to Exhibit 10.13a to Amendment No. 3 to the Registration Statement on Form 10 filed on September 24, 2013) (File No. 001-35972)
10.12	Licensing Agreement between Ashford Hospitality Trust, Inc., Ashford Hospitality Prime, Inc. and Ashford Hospitality Prime Limited Partnership, dated November 19, 2013 (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed on November 25, 2013) (File No. 001-35972)
10.13	Loan Agreement, dated as of March 9, 2015, among Ashford Pier House LP, Ashford TRS Pier House LLC, and Credit Agricole Corporate and Investment Bank (incorporated by reference to Exhibit 10.33 to the Annual Report on Form 10-K filed on March 16, 2015) (File No. 001-35972)
10.14	Recourse Liability Agreement, dated as of March 9, 2015, made by Ashford Pier House LP, Ashford TRS Pier House LLC, and Ashford Hospitality Prime Limited Partnership for the benefit of Credit Agricole Corporate and Investment Bank (incorporated by reference to Exhibit 10.34 to the Annual Report on Form 10-K filed on March 16, 2015) (File No. 001-35972)
10.15	Environmental Indemnity, dated as of March 9, 2015, made by Ashford Pier House LP, Ashford TRS Pier House LLC, and Ashford Hospitality Prime Limited Partnership for the benefit of Credit Agricole Corporate and Investment Bank (incorporated by reference to Exhibit 10.35 to the Annual Report on Form 10-K filed on March 16, 2015) (File No. 001-35972)
10.16	Letter Agreement, dated September 17, 2015, by and between Ashford Hospitality Prime, Inc. and Ashford Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 18, 2015) (File No. 001-35972)
10.17	Amendment No. 1 to Second Amended and Restated Agreement of Limited Partnership of Ashford Hospitality Prime Limited Partnership (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 8, 2016) (File No. 001-35972)
10.18†	Second Amended and Restated 2013 Equity Incentive Plan of Ashford Hospitality Prime, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 9, 2016) (File No. 001-35972)
10.18.1†	Amendment Number One to the Second Amended and Restated 2013 Equity Incentive Plan of Ashford Hospitality Prime, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 15, 2017 (File No. 001-35972)
10.19†	Amended and Restated Form of Performance Stock Unit Award Agreement (filed as Exhibit 10.43 to the Annual Report on Form 10-K filed on February 28, 2017) (File No. 001-35972)
10.20†	Amended and Restated Form of Performance LTIP Unit Award Agreement (filed as Exhibit 10.44 to the Annual Report on Form 10-K filed on February 28, 2017 (File No. 001-35972)
10.21†	Form of 2021 Performance LTIP Unit Award Agreement (filed as Exhibit 10.7 to the Quarterly Report on Form 10-Q filed on May 7, 2021) (File No. 001-35972)
10.22†	Form of 2021 Performance Stock Unit Award Agreement (filed as Exhibit 10.6 to the Quarterly Report on Form 10-Q filed on May 7, 2021) (File No. 001-35972)

165

10.23†	Restricted Stock Award Agreement, dated as of November 2, 2016, by and between Ashford Hospitality Prime, Inc. and Richard J. Stockton (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 2, 2016) (File No. 001-35972)
10.24†	Employment Agreement, dated as of November 2, 2016, by and among Ashford Inc., Ashford Hospitality Advisors, LLC and Richard J. Stockton (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on November 2, 2016) (File No. 001-35972)
10.25	Amended and Restated Credit Agreement, dated as of November 10, 2016, by and among Ashford Hospitality Prime Limited Partnership, Ashford Hospitality Prime, Inc., Bank of America, N.A. and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 17, 2016) (File No. 001-35972)
10.25.1	Second Amended and Restated Credit Agreement, dated as of October 25, 2019, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Bank of America, N.A. and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on October 28, 2019) (File No. 001-35972)
10.25.2	First Amendment to Second Amended and Restated Credit Agreement, dated June 8, 2020 (incorporated by reference to Exhibit 10.1 of Form 8-K filed June 11, 2020)
10.25.3	Second Amendment to Second Amended and Restated Credit Agreement, dated February 22, 2021.(incorporated by reference to Exhibit 10.1 of Form 8-K filed February 22, 2021) (File No. 001-35972)
10.26	Form of Indemnification Agreement between Ashford Hospitality Prime, Inc. and each of its executive officers and directors (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 8, 2017) (File No. 001-35972)
10.27	Agreement of Purchase and Sale, dated January 13, 2017 between Ashford Hospitality Prime Limited Partnership, a Delaware limited partnership and Hotel Yountville, LLC a California limited liability company, Hotel Yountville Holdings, LLC, a California limited liability company, Altamura Family, LLC, a California limited liability company, and George Altamura, Jr., LLC, a California limited liability company (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed on May 9, 2017) (File No. 001-35972)
10.27.1	First Amendment of Agreement of Purchase and Sale, dated January 30, 2017, between Hotel Yountville, LLC, a California limited liability company, Hotel Yountville Holdings, LLC, a California limited liability company, Altamura Family, LLC, a California limited liability company, and George Altamura, Jr., LLC, a California limited liability company and Ashford Hospitality Prime Limited Partnership, a Delaware limited partnership (incorporated by reference to Exhibit 10.1.1 of the Quarterly Report on Form 10-Q filed on May 9, 2017) (File No. 001-35972)
10.27.2	Second Amendment of Agreement of Purchase and Sale, dated February 28, 2017, by and among Hotel Yountville, LLC, a California limited liability company, Hotel Yountville Holdings, LLC, a California limited liability company, Altamura Family, LLC, a California limited liability company, and George Altamura, Jr., LLC, a California limited liability company and Ashford Hospitality Prime Limited Partnership, a Delaware limited partnership (incorporated by reference to Exhibit 10.1.2 of the Quarterly Report on Form 10-Q filed on May 9, 2017) (File No. 001-35972)
10.28	Sale and Purchase Agreement, dated March 9, 2017, by and between, WTCC Beaver Creek Investors V, L.L.C., a Delaware limited liability company, and Ashford Hospitality Prime Limited Partnership, a Delaware limited partnership (incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q filed on May 9, 2017) (File No. 001-35972)
10.28.1	First Amendment To Sale and Purchase Agreement, dated March 13, 2017, by and between WTCC Beaver Creek Investors V, L.L.C., a Delaware limited liability company, and Ashford Hospitality Prime Limited Partnership, a Delaware limited partnership (incorporated by reference to Exhibit 10.2.1 of the Quarterly Report on Form 10-Q filed on May 9, 2017) (File No. 001-35972)
10.29	Form of Director Confidentiality Agreement (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on July 7, 2017 (File No. 001-35972)
10.30	Amended and Restated Employment Agreement, dated as of April 30, 2019, by and among Ashford Inc., Ashford Hospitality Advisors, LLC, and Richard J. Stockton (incorporated by reference to Exhibit 10.28 to the Annual Report on Form 10-K/A filed on April 30, 2019) (File No. 001-35972)
10.31	Second Amended and Restated Credit Agreement, dated as of October 25, 2019, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Bank of America, N.A. and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on October 28, 2019) (File No. 001-35972)
10.32	Standby Equity Distribution Agreement, dated as of February 4, 2021, by and between Braemar Hotels & Resorts Inc. and YA II PN. Ltd. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 4, 2021) (File No. 001-35972)

166

10.33	Purchase Agreement, dated as of April 21, 2021, by and between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 21, 2021) (File No. 001-35972)
10.34	Purchase Agreement, dated as of May 13, 2021, by and among the Company, the Operating Partnership, the Advisor and UBS Securities LLC, as the Initial Purchaser. (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed on May 18, 2021) (File No. 001-35972)
10.35	Equity Distribution Agreement, dated as of May 25, 2021, by and between Braemar Hotels & Resorts Inc. and Virtu Americas LLC (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed on May 26, 2021)
10.36	Equity Distribution Agreement, dated as of July 12, 2021, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Ashford Hospitality Advisors LLC and Virtu Americas LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 12, 2021)
10.37	Amendment No. 1 to the Braemar Master Project Management Agreement (filed as Exhibit 10.5 to the Quarterly Report on Form 10-Q filed on August 6, 2021) (File No. 001-35972)
10.38*	Purchase and Sale Agreement, dated as of December 24, 2021, between and among DBR Hotel Owner LLC, as seller, and Braemar Hotels & Resorts Inc. and BHR Dorado LLC, as purchaser
10.39*	Limited Waiver Under Advisory Agreement, dated as of March 10, 2022, by and among Braemar Hotels & Resorts Inc., Braemar Hospitality Limited Partnership, Braemar TRS Corporation, Ashford Inc. and Ashford Hospitality Advisors LLC.
21.1*	List of Subsidiaries of Braemar Hotels & Resorts Inc.
21.2*	List of Special Purpose Entities of Braemar Hotels & Resorts Inc.
23.1*	Consent of BDO USA, LLP
23.2*	Consent of Robert A. Stanger & Co., Inc.
31.1*	Certification of the Chief Executive Officer required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
31.2*	Certification of the Chief Financial Officer required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
32.1**	Certification of the Chief Executive Officer required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (In accordance with SEC Release 33-8212, this exhibit is being furnished, and is not being filed as part of this report or as a separate disclosure document, and is not being incorporated by reference into any Securities Act of 1933 registration statement.)
32.2**	Certification of the Chief Financial Officer required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (In accordance with SEC Release 33-8212, this exhibit is being furnished, and is not being filed as part of this report or as a separate disclosure document, and is not being incorporated by reference into any Securities Act of 1933 registration statement.)
99.1	Consulting and Cooperation Agreement, by and among Ashford Inc., Ashford Hospitality Advisors LLC, and Robert G. Haiman, dated as of June 30, 2021 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed on June 30, 2021).

_________________________

* Filed herewith.

** Furnished herewith

† Management contract or compensatory plan or arrangement.

The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 are formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements Comprehensive Income (Loss); (iv) Consolidated Statements of Equity;(v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements. In accordance with Rule 402 of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

167

101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	Submitted electronically with this report.
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document.	Submitted electronically with this report.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	Submitted electronically with this report.
101.LAB	Inline XBRL Taxonomy Label Linkbase Document.	Submitted electronically with this report.
101.PRE	Inline XBRL Taxonomy Presentation Linkbase Document.	Submitted electronically with this report.
104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

Item 16. Form 10-K Summary

None.

168

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 10, 2022.

BRAEMAR HOTELS & RESORTS INC.
By:	/s/ RICHARD J. STOCKTON
	Richard J. Stockton
	President and Chief Executive Officer

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below on behalf of the Registrant in the capacities and on the dates indicated.

Signature	Title	Date
/s/ MONTY J. BENNETT	Chairman of the Board of Directors	March 10, 2022
Monty J. Bennett
/s/ RICHARD J. STOCKTON	President and Chief Executive Officer (Principal Executive Officer)	March 10, 2022
Richard J. Stockton
/s/ DERIC S. EUBANKS	Chief Financial Officer (Principal Financial Officer)	March 10, 2022
Deric S. Eubanks
/s/ MARK L. NUNNELEY	Chief Accounting Officer (Principal Accounting Officer)	March 10, 2022
Mark L. Nunneley
/s/ STEFANI D. CARTER	Director	March 10, 2022
Stefani D. Carter
/s/ CURTIS B. MCWILLIAMS	Director	March 10, 2022
Curtis B. McWilliams
/s/ MATTHEW D. RINALDI	Director	March 10, 2022
Matthew D. Rinaldi
/s/ KENNETH H. FEARN, JR.	Director	March 10, 2022
Kenneth H. Fearn, Jr.
/s/ ABTEEN VAZIRI	Director	March 10, 2022
Abteen Vaziri
/s/ MARY CANDACE EVANS	Director	March 10, 2022
Mary Candace Evans

169

SCHEDULE III

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2021

(in thousands)

Column A		Column B		Column C				Column D				Column E						Column F		Column G	Column H	Column I
				Initial Cost				Costs Capitalized Since Acquisition				Gross Carrying Amount At Close of Period
Hotel Property	Location	Encumbrances		Land		FF&E, Buildings and improvements		Land		FF&E, Buildings and improvements		Land		FF&E, Buildings and improvements		Total		Accumulated Depreciation		Construction Date	Acquisition Date	Income Statement
Capital Hilton	Washington, D.C.	$	107,000	$	45,721	$	106,245	$	—	$	34,436	$	45,721	$	140,681	$	186,402	$	64,999	—	04/2007	(1),(2),(3)
Hilton La Jolla Torrey Pines	La Jolla, CA	88,000		—		114,614		—		8,224		—		122,838		122,838		51,047		—	04/2007	(1),(2),(3)
Marriott Seattle Waterfront	Seattle, WA	134,700		31,888		112,176		—		12,486		31,888		124,662		156,550		45,547		—	04/2007	(1),(2),(3)
The Notary Hotel	Philadelphia, PA	84,600		9,814		94,029		—		33,320		9,814		127,349		137,163		52,655		—	04/2007	(1),(2),(3)
The Clancy	San Francisco, CA	116,300		22,653		72,731		—		60,666		22,653		133,397		156,050		59,333		—	04/2007	(1),(2),(3)
Sofitel Chicago Magnificent Mile	Chicago, IL	99,400		12,631		140,369		—		11,480		12,631		151,849		164,480		39,599		—	02/2014	(1),(2),(3)
Pier House Resort & Spa	Key West, FL	80,000		59,731		33,011		—		4,428		59,731		37,439		97,170		11,889		—	03/2014	(1),(2),(3)
Bardessono Hotel and Spa	Yountville, CA	40,000		—		64,184		—		2,060		—		66,244		66,244		12,831		—	07/2015	(1),(2),(3)
Hotel Yountville	Yountville, CA	51,000		47,849		48,567		—		273		47,849		48,840		96,689		10,842		—	05/2017	(1),(2),(3)
Park Hyatt Beaver Creek Resort & Spa	Beaver Creek, CO	67,500		89,117		56,383		—		5,649		89,117		62,032		151,149		13,431		—	03/2017	(1),(2),(3)
The Ritz-Carlton Sarasota	Sarasota, FL	99,500		83,630		99,782		—		(8,894)		83,630		90,888		174,518		11,897		—	04/2018	(1),(2),(3)
The Ritz-Carlton St. Thomas	St. Thomas, USVI	42,500		25,533		38,467		—		76,471		25,533		114,938		140,471		16,357		—	12/2015	(1),(2),(3)
The Ritz-Carlton Lake Tahoe	Truckee, CA	54,000		26,731		91,603		—		2,461		26,731		94,064		120,795		8,082		—	01/2019	(1),(2),(3)
Mr. C Beverly Hills Hotel	Beverly Hills, CA	30,000		29,346		45,077		—		136		29,346		45,213		74,559		972		—	08/2021	(1),(2),(3)
Total		$	1,094,500	$	484,644	$	1,117,238	$	—	$	243,196	$	484,644	$	1,360,434	$	1,845,078	$	399,481

__________________

(1)Estimated useful life for buildings is 39 years.

(2)Estimated useful life for building improvements is 7.5 years.

(3)Estimated useful life for furniture and fixtures is 1.5 to 5 years.

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	Year Ended December 31,
	2021		2020		2019
Investment in real estate:
Beginning balance	$	1,784,849	$	1,791,174	$	1,562,806
Additions	95,663		16,067		262,541
Write-offs	(32,677)		(22,392)		(14,445)
Impairment	—		—		(476)
Sales/disposals	(2,757)		—		(19,252)
Ending balance	$	1,845,078	$	1,784,849	$	1,791,174
Accumulated depreciation:
Beginning balance	360,259		309,752		262,905
Depreciation expense	73,054		72,899		69,195
Impairment	—		—		(105)
Write-offs	(32,677)		(22,392)		(14,445)
Sales/disposals	(1,155)		—		(7,798)
Ending balance	$	399,481	$	360,259	$	309,752
Investment in real estate, net	$	1,445,597	$	1,424,590	$	1,481,422

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EX-4.6

EXHIBIT 4.6

DESCRIPTION OF SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

As of December 31, 2021, Braemar Hotels & Resorts Inc. (“we,” “us,” “our” and the “Company”) has three classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): (1) our Common Stock; (2) our Series B Preferred Stock; (3) our Series D Preferred Stock.

The following description of our capital stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our (i) Articles of Amendment and Restatement, (ii) Articles Supplementary for Series B Cumulative Preferred Stock, (iii) Articles Supplementary for Series D Preferred Stock (all of the foregoing collectively referred to as our “charter”), and (iv) Fourth Amended and Restated Bylaws, as amended (the “bylaws”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part. We encourage you to read our charter, our bylaws and the applicable provisions of the Maryland General Corporation Law (“MGCL”) for additional information.

Description of Common Stock

Authorized Capital Shares

Our authorized capital shares consist of 250,000,000 shares of common stock, par value $0.01 per share (“Common Stock”) and 80,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”). All outstanding shares of our Common Stock are fully paid and nonassessable.

Voting Rights

Subject to the provisions of our charter regarding the restrictions on transfer of stock, each outstanding share of our Common Stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as provided with respect to any other class or series of stock, the holders of our common stock possess exclusive voting power. There is no cumulative voting in the election of our board of directors. In an uncontested election, directors are elected by a majority of the votes cast by the holders of the outstanding shares of our common stock, meaning that a director is elected if the candidate received more votes “for” than the votes “against,” without consideration of abstentions, votes withheld and broker non-votes. In a contested election (where there are more candidates for election than seats to be filled), directors are elected by a plurality of the votes cast.

Dividend Rights

Subject to the preferential rights of any other class or series of stock and to the provisions of the charter regarding the restrictions on transfer of stock, holders of shares of our Common Stock are entitled to receive dividends on such stock when, as and if authorized by our board of directors out of funds legally available therefor.

Liquidation Rights

Subject to the preferential rights of any other class or series of stock, holders of shares of our Common Stock are entitled to share ratably in the assets of our Company legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up after payment of or adequate provision for all known debts and liabilities of our Company, including the preferential rights on dissolution of any class or classes of Preferred Stock.

Other Rights and Preferences

Holders of shares of our Common Stock have no preference, conversion, exchange, sinking fund, or redemption and have no preemptive rights to subscribe for any securities of our Company, and generally have no appraisal rights so long as our Common Stock is listed on a national securities exchange and except in very limited circumstances involving a merger where our stock is converted into any consideration other than stock of the successor in the merger and in which our directors, officers, and 5% or greater stockholders receive different consideration than stockholders generally. Subject to the provisions of the charter regarding the restrictions on transfer of stock, shares of our Common Stock will have equal dividend, liquidation and other rights.

Under the MGCL, a Maryland corporation generally cannot dissolve, amend its charter, merge, consolidate, transfer all or substantially all of its assets, engage in a statutory share exchange or engage in similar transactions outside the ordinary course

of business unless declared advisable by the board of directors and approved by the affirmative vote of stockholders holding at least two-thirds of the shares entitled to vote on the matter unless a lesser percentage (but not less than a majority of all of the votes entitled to be cast on the matter) is set forth in the corporation’s charter. Our charter provides for the affirmative vote of stockholders holding at least a majority of the shares entitled to be cast to approve each of these matters, except that two-thirds of all votes are required to amend the provisions of our charter regarding restrictions on the transfer and ownership of our stock. Because operating assets may be held by a corporation’s subsidiaries, as in our situation, a subsidiary of a corporation may be able to merge or transfer all of its assets without a vote of our stockholders.

Our charter authorizes our board of directors to reclassify any unissued shares of our Common Stock into other classes or series of classes of stock and to establish the number of shares in each class or series and to set the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption for each such class or series.

Subject to the provisions of the charter regarding the restrictions on transfer of stock, we are not aware of any limitations on the rights to own our Common Stock, including rights of non-resident or foreign stockholders to hold or exercise voting rights on our Common Stock, imposed by foreign law or by our charter or bylaws.

Listing

The Common Stock is traded on the New York Stock Exchange (the “NYSE”) under the trading symbol “BHR.”

Description of the Series B Preferred Stock

Authorized Capital Shares

Our board of directors has classified and designated 7,100,000 shares of 5.50% Series B Cumulative Convertible Preferred Stock, par value $0.01 per share (“Series B Preferred Stock”). All outstanding shares of our Series B Preferred Stock are fully paid and nonassessable.

Ranking

The Series B Preferred Stock will, with respect to dividend rights and rights upon liquidation, dissolution or winding up of our affairs rank:

•senior in right of payment to our common stock and to each other class or series of our common or preferred equity established after the original issue date of the Series B Preferred Stock that is not expressly made senior to or pari passu in right of payment with the Series B Preferred Stock as to the payment of dividends;

•pari passu in right of payment with any class or series of preferred equity established after the original issue date of the Series B Preferred Stock that is not expressly made senior or subordinated in right of payment to the Series B Preferred Stock as to the payment of dividends, including the Series D Preferred Stock;

•junior in right of payment to all of our existing and future indebtedness (including indebtedness outstanding under our secured revolving credit facility) and other liabilities with respect to assets available to satisfy claims against us;

•junior in right of payment to each other class or series of preferred equity established after the original issue date of the Series B Preferred Stock that is expressly made senior to the Series B Preferred Stock as to the payment of dividends.

The term “equity securities” does not include convertible debt securities.

Our Series B Preferred Stock and Series D Preferred Stock rank on a parity with each other.

Voting Rights

Holders of Series B Preferred Stock generally have no voting rights, except that whenever dividends on any shares of Series B Preferred Stock are in arrears for six or more quarterly dividend periods, whether or not consecutive, our board of directors will be expanded by two seats and the holders of Series B Preferred Stock, voting together as a single class with the holders of all other series of preferred stock that has been granted similar voting rights and is considered parity stock with the Series B Preferred Stock, will be entitled to elect these two directors. In addition, the issuance of senior shares or certain changes to the terms of the Series B Preferred Stock that would be materially adverse to the rights of holders of Series B Preferred Stock cannot be made without the affirmative vote of holders of at least two-thirds of the outstanding Series B Preferred Stock and shares of any class or series of shares ranking on a parity with the Series B Preferred Stock which are entitled to similar voting rights, if any, voting as a single class.

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Dividend Rights

The Series B Preferred Stock accrues a cumulative cash dividend at an annual rate of 5.50% on the $25.00 per share liquidation preference. Whenever dividends on any shares of Series B Preferred Stock are in arrears for six or more quarterly dividend periods, whether or not consecutive, the dividend rate will increase to 7.50% per annum until all accumulated, accrued but unpaid dividends on the Series B Preferred Stock have been paid in full, at which time the dividend rate will revert to 5.50% per annum.

Liquidation Rights

Upon any voluntary or involuntary liquidation, dissolution or winding up of our Company, the holders of Series B Preferred Stock will be entitled to receive a liquidation preference of $25.00 per share, plus an amount equal to all accumulated, accrued and unpaid dividends (whether or not earned or declared) to the date of liquidation, dissolution or winding up of the affairs of our Company, before any payment or distribution will be made to or set apart for the holders of any junior stock.

Redemption Provisions

Optional Redemption. On and after June 11, 2020, we may redeem the Series B Preferred Stock, in whole or from time to time in part, at a cash redemption price equal to 100% of the $25.00 per share liquidation preference plus all accrued and unpaid dividends to the date fixed for redemption.

Special Optional Redemption. Upon the occurrence of a Change of Control (as defined below), we may, at our option, redeem the Series B Preferred Stock, in whole or in part, by paying $25.00 per share, plus any accrued and unpaid dividends to, but not including, the date of redemption. If, prior to the Change of Control conversion date, we exercise any of our redemption rights relating to the Series B Preferred Stock (whether our optional redemption right or our special optional redemption right), the holders of Series B Preferred Stock will not have the conversion right described below.

A “Change of Control” is when, after the original issuance of the Series B Preferred Stock, the following have occurred and are continuing:

•the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of shares of our Company entitling that person to exercise more than 50% of the total voting power of all shares of our Company entitled to vote generally in elections of directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and

•following the closing of any transaction referred to in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American Depository Receipts (“ADRs”) representing such securities) listed on the NYSE, the NYSE American LLC (the “NYSE American”) or the NASDAQ Stock Market (“NASDAQ”), or listed or quoted on an exchange or quotation system that is a successor thereto.

REIT Termination and Listing Event Redemption. At any time (i) a REIT Termination Event (as defined below) occurs or (ii) the Common Stock fails to be listed on the NYSE, NYSE American, or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto, the holder of Series B Cumulative Preferred Stock shall have the right to require the Company to redeem any or all shares of Series B Cumulative Preferred Stock at 103% of the liquidation preference in cash.

A “REIT Termination Event” shall mean the earliest to occur of: (i) the filing of a federal income tax return by our Company for any taxable year on which we do not compute our income as a REIT; (ii) the approval by the stockholders of our Company of a proposal for us to cease to qualify as a REIT; (iii) the approval by our board of directors of a proposal for us to cease to qualify as a REIT; (iv) a determination by our board of directors, based on the advice of counsel, that we have ceased to qualify as a REIT; or (v) a “determination” within the meaning of Section 1313(a) of the Code that our Company has ceased to qualify as a REIT.

The Series B Preferred Stock has no stated maturity and is not subject to any sinking fund or mandatory redemption provisions.

Conversion Rights

General Conversion Right. Each outstanding share of Series B Preferred Stock will be convertible at any time at the option of the holder into that number of whole shares of our Common Stock at the current conversion price of $18.70, subject to adjustment.

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Change of Control Conversion Right. Upon the occurrence of a Change of Control, each holder of Series B Preferred Stock will have the right (unless, prior to the change of control conversion date, we have provided or provide notice of our election to redeem the Series B Preferred Stock) to convert some or all of the Series B Preferred Stock held by such holder on the change of control conversion date into a number of shares of our Common Stock per share of Series B Preferred Stock to be converted equal to the lesser of:

•the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends to, but not including, the Change of Control conversion date (unless the Change of Control conversion date is after a dividend record date for the Series B Preferred Stock and prior to the corresponding Series B Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the Common Stock Price (as defined below); and

•3.2567 (the “Share Cap”), subject to certain adjustments;

subject, in each case, to provisions for the receipt of alternative consideration. The “Common Stock Price” will be (i) the amount of cash consideration per share of Common Stock, if the consideration to be received in the Change of Control by the holders of our Common Stock is solely cash; or (ii) the average of the closing prices for our Common Stock on the NYSE for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control, if the consideration to be received in the Change of Control by the holders of our Common Stock is other than solely cash.

If, prior to the Change of Control conversion date, we have provided or provide a redemption notice, whether pursuant to our special optional redemption right in connection with a Change of Control or our optional redemption right, holders of Series B Preferred Stock will not have any right to convert the Series B Preferred Stock in connection with the Change of Control conversion right and any shares of Series B Preferred Stock selected for redemption that have been tendered for conversion will be redeemed on the related date of redemption instead of converted on the Change of Control conversion date.

Mandatory Conversion. At any time, if the Common Stock equals or exceeds 110% of the applicable conversion price for 45 consecutive trading days, we have the option to mandatorily convert all or part of the Series B Preferred Stock into Common Stock at the then applicable conversion ratio.

Other Rights and Preferences

Holders of shares of our Series B Preferred Stock have no preemptive rights to subscribe for any securities of our Company.

During any period that we are not subject to the reporting requirements of the Exchange Act, and any Series B Preferred Stock is outstanding, holders of the Series B Preferred Stock will become entitled to certain information rights related thereto.

Subject to the provisions of the charter regarding the restrictions on transfer of stock, we are not aware of any limitations on the rights to own our Series B Preferred Stock, including rights of non-resident or foreign stockholders to hold or exercise voting rights on our Series B Preferred Stock, imposed by foreign law or by our charter or bylaws.

Listing

The Series B Preferred Stock is traded on the NYSE under the trading symbol “BHR-PB.”

Description of the Series D Preferred Stock

Authorized Capital Shares

Our board of directors has classified and designated 1,840,000 shares of 8.25% Series D Cumulative Preferred Stock, par value $0.01 per share (“Series D Preferred Stock”). All outstanding shares of our Series D Preferred Stock are fully paid and nonassessable.

Ranking

The Series D Preferred Stock will, with respect to dividend rights and rights upon liquidation, dissolution or winding up of our affairs rank:

•senior to any class or series of our common stock and any other class or series of equity securities, if the holders of Series D Preferred Stock are entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up in preference or priority to the holders of shares of such class or series;

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•on parity with the Series B Preferred Stock, and any other class or series of our equity securities issued in the future if, pursuant to the specific terms of such class or series of equity securities, the holders of such class or series of equity securities and the Series D Preferred Stock are entitled to the receipt of dividends and of amounts distributable upon liquidation, dissolution or winding up in proportion to their respective amounts of accrued and unpaid dividends per share or liquidation preferences, without preference or priority one over the other;

•junior to any class or series of our equity securities if, pursuant to the specific terms of such class or series, the holders of such class or series are entitled to the receipt of dividends or amounts distributable upon liquidation, dissolution or winding up in preference or priority to the holders of the Series D Preferred Stock; and

•junior to all of our existing and future indebtedness.

The term “equity securities” does not include convertible debt securities.

Voting Rights

Holders of Series D Preferred Stock generally have no voting rights, except that if six or more quarterly dividend payments have not been made, our board of directors will be expanded by two seats and the holders of Series D Preferred Stock, voting together as a single class with the holders of all other series of Preferred Stock that has been granted similar voting rights and is considered parity stock with the Series D Preferred Stock, will be entitled to elect these two directors. In addition, the issuance of senior shares or certain changes to the terms of the Series D Preferred Stock that would be materially adverse to the rights of holders of Series D Preferred Stock cannot be made without the affirmative vote of holders of at least 66 2/3% of the outstanding Series D Preferred Stock and shares of any class or series of shares ranking on a parity with the Series D Preferred Stock which are entitled to similar voting rights, if any, voting as a single class.

Dividend Rights

The Series D Preferred Stock accrues a cumulative cash dividend at an annual rate of 8.25% on the $25.00 per share liquidation preference.

Liquidation Rights

Upon any voluntary or involuntary liquidation, dissolution or winding up of our Company, the holders of Series D Preferred Stock will be entitled to receive a liquidation preference of $25.00 per share, plus an amount equal to all accumulated, accrued and unpaid dividends (whether or not earned or declared) to the date of liquidation, dissolution or winding up of the affairs of our Company, before any payment or distribution will be made to or set apart for the holders of any junior stock.

Redemption Provisions

Optional Redemption. On and after November 20, 2023, we may redeem the Series D Preferred Stock, in whole or from time to time in part, at a cash redemption price equal to 100% of the $25.00 per share liquidation preference plus all accrued and unpaid dividends to the date fixed for redemption.

Special Optional Redemption. Upon the occurrence of a Change of Control (as defined below), we may, at our option, redeem the Series D Preferred Stock, in whole or in part, by paying $25.00 per share, plus any accrued and unpaid dividends to, but not including, the date of redemption. If, prior to the Change of Control conversion date, we exercise any of our redemption rights relating to the Series D Preferred Stock (whether our optional redemption right or our special optional redemption right), the holders of Series D Preferred Stock will not have the conversion right described below.

A “Change of Control” is when, after the original issuance of the Series D Preferred Stock, the following have occurred and are continuing:

•the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of shares of our Company entitling that person to exercise more than 50% of the total voting power of all shares of our Company entitled to vote generally in elections of directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and

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•following the closing of any transaction referred to in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or ADRs representing such securities) listed on the NYSE, the NYSE American or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto.

The Series D Preferred Stock has no stated maturity and is not subject to any sinking fund or mandatory redemption provisions.

Conversion Rights

Upon the occurrence of a Change of Control, each holder of Series D Preferred Stock will have the right (unless, prior to the Change of Control conversion date, we have provided or provide notice of our election to redeem the Series D Preferred Stock) to convert some or all of the Series D Preferred Stock held by such holder on the change of control conversion date into a number of shares of our Common Stock per share of Series D Preferred Stock to be converted equal to the lesser of:

•the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends to, but not including, the change of control conversion date (unless the Change of Control conversion date is after a dividend record date for the Series D Preferred Stock and prior to the corresponding Series D Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the Common Stock Price (as defined below); and

•5.12295 (the “Share Cap”), subject to certain adjustments;

subject, in each case, to provisions for the receipt of alternative consideration. The “Common Stock Price” will be (i) the amount of cash consideration per share of Common Stock, if the consideration to be received in the Change of Control by the holders of our Common Stock is solely cash; or (ii) the average of the closing prices for our Common Stock on the NYSE for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control, if the consideration to be received in the Change of Control by the holders of our Common Stock is other than solely cash.

If, prior to the Change of Control conversion date, we have provided or provide a redemption notice, whether pursuant to our special optional redemption right in connection with a Change of Control or our optional redemption right, holders of Series D Preferred Stock will not have any right to convert the Series D Preferred Stock in connection with the Change of Control conversion right and any shares of Series D Preferred Stock selected for redemption that have been tendered for conversion will be redeemed on the related date of redemption instead of converted on the Change of Control conversion date.

Except as provided above in connection with a Change of Control, the Series D Preferred Stock is not convertible into or exchangeable for any other securities or property.

Other Rights and Preferences

Holders of shares of our Series D Preferred Stock have no preemptive rights to subscribe for any securities of our Company.

During any period that we are not subject to the reporting requirements of the Exchange Act, and any Series D Preferred Stock is outstanding, holders of the Series D Preferred Stock will become entitled to certain information rights related thereto.

Subject to the provisions of the charter regarding the restrictions on transfer of stock, we are not aware of any limitations on the rights to own our Series D Preferred Stock, including rights of non-resident or foreign stockholders to hold or exercise voting rights on our Series D Preferred Stock, imposed by foreign law or by our charter or bylaws.

Listing

The Series D Preferred Stock is traded on the NYSE under the trading symbol “BHR-PD.”

Restrictions on Ownership and Transfer

In order for us to qualify as a real estate investment trust (“REIT”) underInternal Revenue Code of 1986, as amended (the “Code”), not more than 50% of the value of the outstanding shares of our stock may be owned, actually or constructively, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made by us). In addition, if we, or one or more owners (actually or constructively) of 10% or more of us, actually or constructively owns 10% or more of a tenant of ours (or a tenant of any partnership in which we are a partner), the rent received by us (either directly or through any such partnership) from such tenant will not be qualifying income for purposes of the REIT gross income tests of the Code. Our stock must also be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year (other than the first year for which an election to be a REIT has been made by us).

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Our charter contains restrictions on the ownership and transfer of our capital stock that are intended to assist us in complying with these requirements and continuing to qualify as a REIT. The relevant sections of our charter provide that, subject to the exceptions described below, no person or persons acting as a group may own, or be deemed to own by virtue of the attribution provisions of the Code, more than (i) 9.8% of the lesser of the number or value of shares of our Common Stock outstanding or (ii) 9.8% of the lesser of the number or value of the issued and outstanding preferred or other shares of any class or series of our stock. We refer to this restriction as the “ownership limit.”

The ownership attribution rules under the Code are complex and may cause stock owned actually or constructively by a group of related individuals and/or entities to be owned constructively by one individual or entity. As a result, the acquisition of less than 9.8% of our Common Stock (or the acquisition of an interest in an entity that owns, actually or constructively, our Common Stock) by an individual or entity, could, nevertheless cause that individual or entity, or another individual or entity, to own constructively in excess of 9.8% of our outstanding Common Stock and thereby subject the Common Stock to the ownership limit.

Our board of directors may, in its sole discretion, waive the ownership limit with respect to one or more stockholders who would not be treated as “individuals” for purposes of the Code if it determines that such ownership will not cause any “individual’s” beneficial ownership of shares of our capital stock to jeopardize our status as a REIT (for example, by causing any tenant of ours to be considered a “related party tenant” for purposes of the REIT qualification rules).

As a condition of our waiver, our board of directors may require an opinion of counsel or Internal Revenue Service ruling satisfactory to our board of directors, and/or representations or undertakings from the applicant with respect to preserving our REIT status.

In connection with the waiver of the ownership limit or at any other time, our board of directors may decrease the ownership limit for all other persons and entities; provided, however, that the decreased ownership limit will not be effective for any person or entity whose percentage ownership in our capital stock is in excess of such decreased ownership limit until such time as such person or entity’s percentage of our capital stock equals or falls below the decreased ownership limit, but any further acquisition of our capital stock in excess of such percentage ownership of our capital stock will be in violation of the ownership limit. Additionally, the new ownership limit may not allow five or fewer “individuals” (as defined for purposes of the REIT ownership restrictions under the Code) to beneficially own more than 49.0% of the value of our outstanding capital stock.

Our charter provisions further prohibit:

•any person from actually or constructively owning shares of our capital stock that would result in us being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to qualify as a REIT;

•any person from transferring shares of our capital stock if such transfer would result in shares of our stock being beneficially owned by fewer than 100 persons (determined without reference to any rules of attribution);

•any person from beneficially or constructively owning our stock to the extent such beneficial or constructive ownership would cause us to constructively own ten percent or more of the ownership interests in a tenant (other than a TRS) of our real property within the meaning of Section 856(d)(2)(B) of the Code; or

•any person from beneficially or constructively owning or transferring our stock if such ownership or transfer would otherwise cause us to fail to qualify as a REIT under the Code, including, but not limited to, as a result of any hotel management companies failing to qualify as “eligible independent contractors” under the REIT rules.

Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of shares of our Common Stock that will or may violate any of the foregoing restrictions on transferability and ownership will be required to give notice immediately to us and provide us with such other information as we may request in order to determine the effect of such transfer on our status as a REIT. The foregoing provisions on transferability and ownership will not apply if our board of directors determines that it is no longer in our best interests to qualify, or to continue to qualify, as a REIT.

Pursuant to our charter, if any purported transfer of our capital stock or any other event would otherwise result in any person violating the ownership limits or the other restrictions in our charter, then any such purported transfer will be void and of no force or effect with respect to the purported transferee or owner (collectively referred to hereinafter as the “purported owner”) as to that number of shares in excess of the ownership limit (rounded up to the nearest whole share). The number of shares in excess of the ownership limit will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable organizations selected by us. The trustee of the trust will be designated by us and must be unaffiliated with us and with any purported owner. The automatic transfer will be effective as of the close of business on the business day prior to the date of the violative transfer or other event that results in a transfer to the trust. Any dividend or otherdistribution paid to the

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purported owner, prior to our discovery that the shares had been automatically transferred to a trust as described above, must be repaid to the trustee upon demand for distribution to the beneficiary of the trust and all dividends and other distributions paid by us with respect to such “excess” shares prior to the sale by the trustee of such shares shall be paid to the trustee for the beneficiary. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable ownership limit, then our charter provides that the transfer of the excess shares will be void. Subject to Maryland law, effective as of the date that such excess shares have been transferred to the trust, the trustee shall have the authority (at the trustee’s sole discretion and subject to applicable law) (i) to rescind as void any vote cast by a purported owner prior to our discovery that such shares have been transferred to the trust and (ii) to recast such vote in accordance with the desires of the trustee acting for the benefit of the beneficiary of the trust, provided that if we have already taken irreversible action, then the trustee shall not have the authority to rescind and recast such vote.

Shares of our capital stock transferred to the trustee are deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (i) the price paid by the purported owner for the shares (or, if the event which resulted in the transfer to the trust did not involve a purchase of such shares of our capital stock at market price, the market price on the day of the event which resulted in the transfer of such shares of our capital stock to the trust) and (ii) the market price on the date we, or our designee, accepts such offer. We have the right to accept such offer until the trustee has sold the shares of our capital stock held in the trust pursuant to the clauses discussed below. Upon a sale to us, the interest of the charitable beneficiary in the shares sold terminates and the trustee must distribute the net proceeds of the sale to the purported owner and any dividends or other distributions held by the trustee with respect to such capital stock will be paid to the charitable beneficiary.

If we do not buy the shares, the trustee must, within 20 days of receiving notice from us of the transfer of shares to the trust, sell the shares to a person or entity designated by the trustee who could own the shares without violating the ownership limits. After that, the trustee must distribute to the purported owner an amount equal to the lesser of (i) the net price paid by the purported owner for the shares (or, if the event which resulted in the transfer to the trust did not involve a purchase of such shares at market price, the market price on the day of the event which resulted in the transfer of such shares of our capital stock to the trust) and (ii) the net sales proceeds received by the trust for the shares. Any proceeds in excess of the amount distributable to the purported owner will be distributed to the beneficiary.

Our charter also provides that “Benefit Plan Investors” (as defined in our charter) may not hold, individually or in the aggregate, 25% or more of the value of any class or series of shares of our capital stock to the extent such class or series does not constitute “Publicly Offered Securities” (as defined in our charter).

All persons who own, directly or by virtue of the attribution provisions of the Code, more than 5% (or such other percentage as provided in the regulations promulgated under the Code) of the lesser of the number or value of the shares of our outstanding capital stock must give written notice to us within 30 days after the end of each calendar year. In addition, each stockholder will, upon demand, be required to disclose to us in writing such information with respect to the direct, indirect and constructive ownership of shares of our stock as our board of directors deems reasonably necessary to comply with the provisions of the Code applicable to a REIT, to comply with the requirements or any taxing authority or governmental agency or to determine any such compliance.

All certificates representing shares of our capital stock bear a legend referring to the restrictions described above.

Certain Provisions of Maryland Law and Our Charter and Bylaws

The Board of Directors

Our bylaws provide that the number of directors of our company may be established by our board of directors but may not be fewer than the minimum number permitted under the MGCL and not more than 15. Our charter provides that a director may be removed only for cause and only upon the affirmative vote of a majority of the votes entitled to be cast in the election of directors. Under our charter, cause means, with respect to any particular director, conviction of a felony or a final judgment of court of competent jurisdiction holding that such director caused demonstrable, material harm to us through bad faith or active deliberate dishonesty.

Pursuant to our charter, members of our board of directors serve one year terms and until their successors are elected and qualified. Holders of shares of our Common Stock have no right to cumulative voting in the election of directors. Consequently, at each annual meeting of stockholders at which our board of directors is elected, all of the members of our board of directors will be elected if the votes cast for such directors exceed the votes cast against such directors (with abstentions and broker non-votes not counted as votes for or against a nominee’s election), provided that a plurality voting standard will be applicable in the case of a contested election. Pursuant to our charter, for so long as Ashford Hospitality Advisors LLC serves as our external advisor, we are required to include two persons designated by Ashford Hospitality Advisors LLC as candidates for election as director at any stockholder meeting at which directors are elected.

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Business Combinations

Maryland law prohibits “business combinations” between a corporation and an interested stockholder or an affiliate of an interested stockholder for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, statutory share exchange, or, in circumstances specified in the statute, certain transfers of assets, certain stock issuances and transfers, liquidation plans and reclassifications involving interested stockholders and their affiliates as asset transfer or issuance or reclassification of equity securities. Maryland law defines an interested stockholder as:

•any person who beneficially owns 10% or more of the voting power of our voting stock; or

•an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding voting stock of the corporation.

A person is not an interested stockholder if the board of directors approves in advance the transaction by which the person otherwise would have become an interested stockholder. However, in approving the transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of directors.

After the five year prohibition, any business combination between a corporation and an interested stockholder generally must be recommended by the board of directors and approved by the affirmative vote of at least:

•80% of the votes entitled to be cast by holders of the then outstanding shares of Common Stock; and

•two-thirds of the votes entitled to be cast by holders of the Common Stock other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or shares held by an affiliate or associate of the interested stockholder.

These super-majority vote requirements do not apply if certain fair price requirements set forth in the MGCL are satisfied.

The statute permits various exemptions from its provisions, including business combinations that are approved by the board of directors before the time that the interested stockholder becomes an interested stockholder.

Our charter includes a provision excluding the corporation from these provisions of the MGCL and, consequently, the five-year prohibition and the super-majority vote requirements will not apply to business combinations between us and any interested stockholder of ours unless we later amend our charter, with stockholder approval, to modify or eliminate this provision.

Control Share Acquisitions

The MGCL provides that “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved at a special meeting by the affirmative vote of two-thirds of the votes entitled to be cast on the matter, excluding shares of stock in a corporation in respect of which any of the following persons is entitled to exercise or direct the exercise of the voting power of shares of stock of the corporation in the election of directors: (i) a person who makes or proposes to make a control share acquisition, (ii) an officer of the corporation or (iii) an employee of the corporation who is also a director of the corporation. “Control shares” are voting shares of stock which, if aggregated with all other such shares of stock previously acquired by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power: (i) one-tenth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more of all voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition, directly or indirectly, by any person of ownership, or the power to direct the exercise of voting power with respect to, issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses), may compel our board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or of any

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meeting of stockholders at which the voting rights of such shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.

The control share acquisition statute does not apply to (i) shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (ii) acquisitions approved or exempted by the charter or bylaws of the corporation at any time prior to the acquisition of the shares.

Our charter contains a provision exempting from the control share acquisition statute any and all acquisitions by any person of our Common Stock and, consequently, the applicability of the control share acquisitions unless we later amend our charter, with stockholder approval, to modify or eliminate this provision.

MGCL Title 3, Subtitle 8

Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, notwithstanding any contrary provision in the charter or bylaws, to any or all of the following five provisions: a classified board; a two-thirds stockholder vote requirement for removal of a director; a requirement that the number of directors be fixed only by vote of the directors; a requirement that a vacancy on the board of directors be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and a requirement that the holders of at least a majority of all votes entitled to be cast request a special meeting of stockholders. Through provisions in our charter and bylaws unrelated to Subtitle 8, we already require that the number of directors be fixed only by our board of directors and require, unless called by the Chairman of our board of directors, our president or chief executive officer or a majority of our board of directors, the written request of stockholders entitled to cast not less than a majority of all votes entitled to be cast at such meeting to call a special meeting. Our board of directors has adopted a resolution that makes an election prohibiting us from making any of the elections permitted by Subtitle 8 unless such election is first approved by a stockholder vote.

Amendment to Our Charter and Bylaws

Our charter may be amended only if declared advisable by the board of directors and approved by the affirmative vote of the holders of at least a majority of all of the votes entitled to be cast on the matter, except that two-thirds of all votes are required to amend the provisions of our charter regarding restrictions on the transfer and ownership of our stock. As permitted by the MGCL, our charter contains a provision permitting our directors, without any action by our stockholders, to amend the charter to increase or decrease the aggregate number of shares of stock of any class or series that we have authority to issue. Our charter provides that our board of directors has the exclusive power to adopt, alter or repeal any provision of our bylaws and make new bylaws.

Dissolution of Our Company

The dissolution of our Company must be declared advisable by the board of directors and approved by the affirmative vote of the holders of not less than a majority of all of the votes entitled to be cast on the matter.

Special Meetings of Stockholders

Special meetings of stockholders may be called only by our board of directors, the chairman of our board of directors, our chief executive officer or, in the case of a stockholder requested special meeting, by our secretary upon the written request of the holders of common stock entitled to cast notless than a majority of all votes entitled to be cast at such meeting. Only matters set forth in the notice of the special meeting may be considered and acted upon at such a meeting.

Advance Notice of Director Nominations and New Business

Our bylaws provide that:

•with respect to an annual meeting of stockholders, the only business to be considered and the only proposals to be acted upon will be those properly brought before the annual meeting:

◦pursuant to our notice of the meeting;

◦by, or at the direction of, a majority of our board of directors; or

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◦by a stockholder who is entitled to vote at the meeting and has complied with the advance notice procedures set forth in our bylaws;

◦with respect to special meetings of stockholders, only the business specified in our Company’s notice of meeting may be brought before the meeting of stockholders unless otherwise provided by law; and

•nominations of persons for election to our board of directors at any annual or special meeting of stockholders may be made only:

◦by, or at the direction of, our board of directors; or

◦by a stockholder who is entitled to vote at the meeting and has complied with the advance notice provisions set forth in our bylaws.

Generally, in accordance with our bylaws, a stockholder seeking to nominate a director or bring other business before our annual meeting of stockholders must deliver a notice to our secretary not less than 90 days nor more than 120 days prior to the first anniversary of the date of mailing of the notice for the prior year’s annual meeting of stockholders. For a stockholder seeking to nominate a candidate for our board of directors, the notice must include all information regarding the nominee that would be required in connection with the solicitation for the election of such nominee, including name, address, occupation and number of shares held. For a stockholder seeking to propose other business, the notice must include a description of the proposed business, the reasons for the proposal and other specified matters.

No Stockholder Rights Plan

We do not have, and we do not intend to adopt, a stockholder rights plan unless our stockholders approve in advance the adoption of a plan. If our board of directors adopts a plan for our company, we will submit the stockholder rights plan to our stockholders for a ratification vote within 12 months of adoption, without which the plan will terminate.

Anti-Takeover Effect of Certain Provisions of Maryland Law and of Our Charter and Bylaws

The provisions restricting ownership and transfer of our stock in our charter, as well as the advance notice provisions of our bylaws could delay, deter or prevent a transaction or a change of control of our company that might involve a premium price for holders of our common stock or that stockholders otherwise believe may be in their best interest. In addition, our board of directors has the power to increase the aggregate number of authorized shares and classify and reclassify any unissued shares of our stock into other classes or series of stock, and to authorize us to issue the newly-classified shares, and could authorize the issuance of shares of common stock or another class or series of stock, including a class or series of preferred stock, that could have the effect of delaying, deterring, or preventing a transaction or a change of control of us. Further, our charter and bylaws also provide that the number of directors may be established only by our board of directors, which prevents our stockholders from increasing the number of our directors and filling any vacancies created by such increase with their own nominees.

If our charter were to be amended to avail the corporation of the business combination provisions of the MGCL or to remove or modify the provision in the charter opting out of the control share acquisition provisions of the MGCL, or if our stockholders approve any election under the provisions of Title 3, Subtitle 8, these provisions of the MGCL could have similar anti-takeover effects.

Indemnification and Limitation of Directors’ and Officers’ Liability

Our charter and the partnership agreement provide for indemnification of our officers and directors against liabilities to the fullest extent permitted by the MGCL, as amended from time to time.

The MGCL permits a corporation to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity. The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made a party by reason of their service in those or other capacities unless it is established that:

•an act or omission of the director or officer was material to the matter giving rise to the proceeding and:

◦was committed in bad faith; or

◦was the result of active and deliberate dishonesty;

•the director or officer actually received an improper personal benefit in money, property or services; or

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•in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

However, under the MGCL, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation (other than for expenses incurred in a successful defense of such an action) or for a judgment of liability on the basis that personal benefit was improperly received. In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of:

•a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation; and

•a written undertaking by the director or on the director’s behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director did not meet the standard of conduct.

The MGCL permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains such a provision which eliminates such liability to the maximum extent permitted by Maryland law.

Our charter and bylaws obligate us, to the fullest extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to:

•any present or former director or officer who is made a party to the proceeding by reason of his or her service in that capacity; or

•any individual who, while a director or officer of our Company and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner or trustee and who is made a party to the proceeding by reason of his or her service in that capacity.

Our bylaws also obligate us to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described in second and third bullet points above and to any employee or agent of our Company or a predecessor of our Company.

The partnership agreement of our operating partnership provides that we, as general partner, and our officers and directors are indemnified to the fullest extent permitted by law. See the section titled “Partnership Agreement-Exculpation and Indemnification of the General Partner” in the Annual Report on Form 10-K of which this Exhibit 4.5 is a part.

Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act of 1933, as amended (the “Securities Act”), we have been informed that in the opinion of the Securities and Exchange Commission, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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EX-10.38

EXHIBIT 10.38

Execution Version

PURCHASE AND SALE AGREEMENT

Between and Among

DBR HOTEL OWNER LLC,

a Puerto Rico limited liability company

(“Seller”)

BRAEMAR HOTELS & RESORTS INC.,

a Maryland corporation

(“Company”)

BHR Dorado LLC

a Puerto Rico limited liability company

(“Purchaser”)

Dorado Beach Hotel

Dorado, Puerto Rico

December 24, 2021

TABLE OF CONTENTS

1.    DEFINITIONS.    1

2.    PURCHASE AND SALE.    16

3.    PURCHASE PRICE.    19

4.    INSPECTIONS.    20

5.    PARCEL FOUR IMPACT WORK.    22

6.    TITLE OBJECTIONS.    22

7.    CLOSING DATE.    23

8.    DELIVERIES ON THE CLOSING DATE.    25

9.    CLOSING COSTS.    28

10.    APPORTIONMENTS.    29

11.    COVENANTS.    35

12.    REPRESENTATIONS.    40

13.    INDEMNIFICATION.    51

14.    AS-IS SALE.    55

15.    BROKERS AND ADVISORS.    55

16.    NOTICES.    56

17.    DEFAULT BY PURCHASER OR SELLER.    57

18.    ENTIRE AGREEMENT.    57

19.    AMENDMENTS.    58

20.    WAIVER.    58

21.    PARTIAL INVALIDITY.    58

22.    SECTION HEADINGS.    58

23.    GOVERNING LAW.    58

24.    PARTIES; ASSIGNMENT.    58

25.    CONFIDENTIALITY.    59

26.    THIRD-PARTY BENEFICIARY.    60

27.    JURISDICTION AND SERVICE OF PROCESS.    60

28.    ARBITRATION.    60

29.    SURVIVAL.    61

30.    CASUALTY.    61

31.    RIGHT OF FIRST OFFER.    62

32.    RESIDENTIAL AND CERROMAR DEVELOPMENT.    63

33.    CONDEMNATION.    65

34.    MISCELLANEOUS.    65

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Schedules:

A    –    Legal Description of Parcel Four and Parcel Five

B    –    Depiction of Parcel Four and Parcel Five and AOTE Facilities

C    –    Contracts

D    –    Encanto Parcel

E    –    Intentionally omitted

F    –    Leases, licenses and occupancy agreements, written or verbal, relating to or affecting the Hotel Parcels

G    –    Additional Permitted Exceptions

H    –    Excluded Leased Assets

I    –    Building 9 Site of Relocated Facilities

J    –    Commitment

K    –    Parties-in-Possession not eliminated from Owner’s Policy and Presently Permitted Exceptions

L    –    Vouchers

M    –    Pending or Threatened Action, Litigation or Proceeding

N    –    Environmental Condition

O    –    Scheduled Permits

P    –    List of all property tax identification numbers

Q    –    Employment Claims

R    –    Cerromar Parcels

Exhibits:

1    –    Bill of Sale

2    –    Deed of Sale

3    –    Guaranty

4    –    Deed of Amendment of Reciprocal Facilities Access and Use Agreement

ii

PURCHASE AND SALE AGREEMENT

PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of the 24th day of December, 2021 (the “Signing Date”), by and among DBR Hotel Owner LLC, a Puerto Rico limited liability company (“Seller”), Braemar Hotels & Resorts Inc., a Maryland corporation (the “Company”), and BHR Dorado LLC, a Puerto Rico limited liability company (“Purchaser”).

WITNESSETH :

WHEREAS, Seller is the sole owner of the Dorado Beach, a Ritz-Carlton Reserve in the municipality of Dorado, Puerto Rico (the “Hotel”) located on certain parcels of land commonly referred to as Parcel Four (“Parcel Four”) and Parcel Five (“Parcel Five”), each as more particularly described on Schedule A attached hereto, and depicted on Schedule B attached hereto; and

WHEREAS, Seller desires to sell, assign and convey the Property (defined below) to Purchaser and Purchaser desires to purchase the Property from Seller in accordance with the terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, promises and undertakings of the parties hereinafter set forth, and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereto covenant and agree as follows:

1.DEFINITIONS.

(a)For purposes of this Agreement, the following terms shall have the following meanings:

(i) “Action” shall mean any claim, demand, action, suit, dispute, cause of action, audit, litigation, arbitration, mediation or inquiry, or proceeding, whether civil or criminal, at law or in equity, by or before any court, Governmental Authority or arbitrator.

(ii) “Act of Bankruptcy” shall mean if a party hereto or any general partner thereof shall (A) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (B) admit in writing its inability to pay its debts as they become due, (C) make a general assignment for the benefit of its creditors, (D) file a voluntary petition or commence a voluntary case or proceeding under the U.S. Bankruptcy Code as now or hereafter in effect (the “Bankruptcy Code”), (E) be adjudicated a bankrupt or insolvent, (F) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, (G) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case or proceeding under the Bankruptcy Code, (H) take any entity action for the purpose of effecting any of the foregoing; or if a proceeding or case shall be commenced, without the application or consent of a party hereto, in any court of competent jurisdiction seeking (1) the liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of debts, of such party, (2) the appointment of a receiver, custodian, trustee or liquidator for such party or all or any substantial part of its assets, or (3) other similar relief under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or (I) have an order (including an order for relief entered in an involuntary case under the Bankruptcy Code), judgment or decree approving or ordering any of the foregoing entered against it and continue unstayed and in effect for a period of sixty (60) consecutive days.

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(iii) “Additional Submission Materials” is defined in Section 4(c).

(iv) “Advance Bookings” means the contracts, bookings or reservations made by Manager in the Ordinary Course of Business prior to the Closing Date for the use of guest rooms, spa, banquet facilities, conference, meeting, convention and other facilities, and restaurants at the Premises for the period from and after the Closing Date, together with all rents, payments and other amounts and/or considerations previously paid to Seller or Manager or owed by customers, guests or others with respect thereto.

(v) “Affiliate” means, with respect to any Person, any other Person which directly or indirectly, through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such Person.

(vi) “Aged Receivables” is defined in Section 10(c)(vii).

(vii) “Allocation” shall have the meaning given to such term in Section 3(b).

(viii) “Anziva Lease” means that certain lease agreement for the installation and operation of telecommunications equipment by and among DBR Dorado Owner, Seller, DBR Dorado FD Parcel One LLC, DBR Dorado FD Parcel Two LLC, DBR Dorado FD Parcel Three LLC and DBR Cerromar Owner LLC, as landlord, and Anziva Technologies LLC, as tenant, dated as of October 23, 2012, as amended on October 5, 2015.

(ix) “Anziva Lease and Sublease Authorization Agreement” means a lease agreement between Seller and Purchaser, in form and substance acceptable to Seller and Purchaser, containing standard commercial lease terms, including full indemnity and insurance requirements, and whereby Purchaser shall lease to DBR Dorado Owner such areas within the Premises that are subject to the Anziva Lease, for DBR Dorado Owner to sub-lease them to Anziva Technologies LLC pursuant to an amendment to the Anziva Lease, and DBR Dorado Owner shall pay to Purchaser an amount proportionate to all antenna sites covered by the Anziva Lease from all rent amounts paid by Anziva Technologies LLC or any successor tenant (such proportionate amount being 3/7th on the Signing Date, based on the antenna sites in place, and such proportionate amount is expected to change to 3/8th with the addition of one more antenna site); provided, however, that such proportionate amount of rent payable to Purchaser shall in no event be less than 3/8th of rent payable by tenant under the Anziva Lease.

(x) “AOTE Facilities” means the Ambassadors of the Environment facilities currently situated in Parcel 1,115 and depicted on Schedule B.

(xi) “AOTE Lease” is defined in Section 2(o).

(xii) “AOTE Segregation Permit” is defined in Section 2(o).

(xiii) “Applicable Laws” shall mean any applicable Environmental Laws, building, zoning, subdivision, health, safety or other governmental laws, statutes, ordinances, resolutions, rules, codes (including labor codes), regulations (including labor codes), orders or determinations of any Governmental Authority or of any insurance boards of underwriters (or other body exercising similar functions), or any restrictive covenants or deed restrictions affecting any portion of the Property or the ownership, operation, use, maintenance or condition thereof and the entity laws of the jurisdiction under which a party is formed.

(xiv) “Applications” means all drawings, blueprints, renderings, applications, filings, descriptive memoranda, studies and reports prepared or caused to be prepared by or on behalf of Seller and in Seller’s possession or in the possession of any of Seller’s Representatives in any

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way relating to the construction, development, expansion, maintenance, redevelopment or repair of the Hotel, including any such items submitted or caused to be submitted by Seller and/or Seller’s Representatives on Seller’s behalf to any Governmental Authority through the Closing in order to obtain, amend, or renew any Permit.

(xv) “Approved Surveyor” is defined in Section 6(a).

(xvi) “Assets” means all assets constituting the Property.

(xvii) “Bankruptcy Code” is defined in Section 1(a)(ii).

(xviii) “Basket” is defined in Section 13(e)(ii).

(xix) “BHR Common Stock” means 6,000,000 shares of the common stock of the Company, par value $0.01 per share.

(xx) “Bill of Sale” means a General Bill and Assignment in substantially the form of Exhibit 1 whereby all Owned Personal Property and all rights of Seller as to any leased or licensed Personal Property are assigned by Seller to Purchaser.

(xxi) “Board of Directors” is defined in Section 12(b)(ii).

(xxii) “Broker” is defined in Section 15(a).

(xxiii) “Bulk Sales Act” is defined in Section 34(i).

(xxiv) “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized or required to close under the laws of the Commonwealth.

(xxv) “Cap” is defined in Section 13(e)(ii).

(xxvi) “Casualty Negotiations” is defined in Section 30(a).

(xxvii) “Cerromar Hotel” is defined in Section 32(a).

(xxviii) “Cerromar Parcels” is defined in Section 32(a).

(xxix) “Claim” is defined in Section 13(c)(i).

(xxx) “Closing” is defined in Section 7(a).

(xxxi) “Closing Date” means February 1, 2022, as such Closing Date may be extended by Seller or Purchaser pursuant to the terms of this Agreement.

(xxxii) “Closing Documents” means all Purchaser Closing Documents and all Seller Closing Documents.

(xxxiii) “Closing Period” means the period between the Signing Date and the Closing Date.

(xxxiv) “Club Facilities” means the facilities forming part of the DB Club and made available for use by the Hotel Authorized Users from time to time.

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(xxxv) “Club Authorized Users” means all Persons, including all Hotel Authorized Users, authorized by the DB Club from time to time to use the Hotel Facilities subject, at all times, to the terms and conditions of the Reciprocal Facilities Access and Use Agreement.

(xxxvi) “Commonwealth” means the Commonwealth of Puerto Rico.

(xxxvii) “Condemnation Proceeding” is defined in Section 33(a).

(xxxviii) “Consents” is defined in Section 11(a)(xx).

(xxxix) “Consumables” means all of Seller’s unused food, liquor and other beverages, all unused engineering, maintenance and housekeeping supplies, including soap, toiletries, cleaning materials, fuel, pool and landscaping chemicals, fertilizers and other materials, all unused stationery, brochures, advertising and promotional materials and other printed items, equipment and supplies and all of Seller’s other unused supplies of all kinds which are held in storage and available for use in connection with the maintenance and/or operation of the Hotel or any other part or portion of the Property.

(xl) “COBRA” is defined in Section 11(a)(v).

(xli) “Contracts” means the access, security, services, maintenance, supply, cost sharing, construction, management, brokerage and other agreements, concessions, purchase orders, and equipment leases relating to the Hotel or any part or portion of the Property, together with all modifications and amendments thereof and supplements relating thereto regardless of the date of execution, including those listed on Schedule C and those entered into after the date hereof by Seller in accordance with the terms of this Agreement.

(xlii) “Control” (and any form thereof, such as “Controlled” or “Controlling”) means the possession by one Person, directly or indirectly (through one or more intermediaries) of the power or ability (A) to vote more than fifty percent (50%) of the voting interests of another Person, or (B) to direct or cause the direction of the management or policies of another Person, whether through the ownership of voting interests, by contract or otherwise.

(xliii) “CP Specified Interest” is defined in Section 32(b).

(xliv) “CRIM” is defined in Section 8(a)(i).

(xlv) “Cut-Off Time” means 12:01 a.m., San Juan, Puerto Rico time, on the Closing Date.

(xlvi) “Damages” means, collectively, any and all claims, actions (including civil or administrative enforcement actions or investigations by Governmental Authority), defense costs, fines, liabilities, judgments, losses, penalties, costs (including investigation costs), damages (of any type, including punitive damages, aesthetical and environmental damages), expenses, fees (including reasonable attorneys’ fees, accounting fees, consultants’ fees and other experts’ fees), court, administrative and arbitration costs and disbursements.

(xlvii) “DB Club” means the Dorado Beach Resort & Club.

(xlviii) “DBGM” means Dorado Beach Golf Management LLC, a Puerto Rico limited liability company, or any successor operator of the DB Club.

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(xlix) “DBR Dorado Owner” means DBR Dorado Owner LLC, a Puerto Rico limited liability company.

(l) “DBR Hotel Member” means DBR Hotel Member, LLC, a Delaware limited liability company and the sole member of Seller.

(li) “Deed of Amendment of Parking Easement” is defined in Section 2(e).

(lii) “Deed of Amendment of Reciprocal Facilities Access and Use Agreement” is defined in Section 2(d).

(liii) “Deed of Equipment Access and Use Agreement” is defined in Section 2(f).

(liv) “Deed of Sale” means that certain deed in substantially the form attached hereto as Exhibit 2 to be executed on the Closing Date before a notary whereby Seller (x) segregates the Encanto Parcel from Parcel Four and (y) transfers the Hotel Parcels to Purchaser.

(lv) “Deposit” is defined in Section 3(a)(i)(A).

(lvi) “Dorado Equipment” means the following equipment owned by DBR Dorado Owner: (1) diesel tank for generators; (2) day tank for exterior equipment; (3) electrical MDP; (4) generator 1; (5) generator 2; (6); generator 3; (7) batteries and battery chargers; (8) paralleling switchgear and battery system; (9) lift for handling switchgear breakers; (10) switching unit SU-3; (11) switching unit SU-1; (12) switching unit SU-2; (13) pad mounted transformer PM-1; (14) generators exhaust and mufflers; and (15) data room.

(lvii) “Employee” means each individual employed by the Manager on a full-time or part-time basis, who performs his or her duties at the Property or the Hotel as of the Closing, including any such employee on vacation, out on medical leave or other leave under Applicable Law or other leave of absence or having a right to recall under Applicable Law.

(lviii) “Encanto Parcel” means the parcel with the legal description set forth on Schedule D where the facilities commonly identified as the “Encanto Pool and Restaurant Facilities” are located in the Hotel and such facilities are to be segregated from Parcel Four by the Deed of Sale.

(lix) “Environmental Condition” means any condition(s) with respect to the air (indoor and ambient), water, soil, surface and subsurface strata, solid waste, Hazardous Materials, worker and community right to know, hazard communication, noise, natural resources protection, subdivision, wetlands, water bodies and watercourses, health protection or other environmental, health, safety, building, zoning and land use, including any Release or threatened Release of Hazardous Materials, either on or off the Premises resulting from any activity, inactivity or operations occurring on the Premises that: (A) by virtue of Environmental Laws requires notification, investigatory, corrective, response or remedial measures; and (B) involves the presence of Hazardous Materials in levels, quantities or concentrations exceeding regulatory clean-up standards or action levels pursuant to Environmental Laws, including those established by the Puerto Rico Department of Natural and Environmental Resources and/or the United States Environmental Protection Agency, Region 2 or other.

(lx) “Environmental Damages” means all Damages, encumbrances, liens, whether or not such is ultimately defeated, and any settlement or judgment, of whatever kind or nature, contingent or otherwise, matured or unmatured, any of which arise as a result of the existence of Hazardous Materials upon, about or beneath the Premises or migrating or threatening to migrate from or to the Premises, or as a result of an Environmental Condition pertaining to the Property.

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(lxi) “Environmental Laws” means any and all present federal, Commonwealth, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, government directives, guidelines, policies or requirements, regulating or imposing standards of liability or of conduct concerning air (indoor and ambient), water, soil, surface and subsurface solid waste, Hazardous Materials, worker and community right to know, hazard communication, noise, natural resources protection, subdivision, wetlands, water bodies and watercourses, health protection or other environmental, health, safety, building, zoning and land use concerns and shall include the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Emergency Planning and Community Right-to-Know Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act and the Toxic Substances Control Act, Hazardous Materials Transportation Act, the Puerto Rico Environmental Public Policy Environmental Act and all other federal and Commonwealth Applicable Laws pertaining to Hazardous Materials, the environment, human health or safety in effect on the date hereof and as hereafter amended.

(lxii) “Escrow Agent” means Thomas Title & Escrow.

(lxiii) “Exchange Act” means the Securities and Exchange Act of 1934, as amended.

(lxiv) “Existing Debt” means the indebtedness owed by Seller to KHRE.

(lxv) “Existing Debt Assignment and Assumption Agreement” means an assignment, assumption and modification agreement, together with such other documents required by KHRE in connection therewith, in which KHRE shall (a) certify that the Existing Debt and the Mortgage are not in default and no event has occurred that, with the giving of notice, the passage of time or both the giving of notice and the passage of time, would constitute a breach or violation of the Existing Debt or the Mortgage, (b) agree to release Seller from all obligations related thereto first arising on or after the Closing Date, (c) ratify its consent regarding the assumption of the Mortgage and the Existing Debt by Purchaser, and (d) modify the terms of the Existing Debt (1) as substantially set forth in the Existing Debt Term Sheet, and (2) as otherwise required by KHRE, which other modifications shall be reasonably acceptable to Purchaser, in order to approve the transactions contemplated by this Agreement, including, without limitation, the Closing Documents.

(lxvi) “Existing Debt Term Sheet” means that certain Assumption Term Sheet dated on or about the Signing Date from KHRE to the Company.

(lxvii) “Existing Lien” means the lien of KHRE securing the repayment of the Existing Debt.

(lxviii) “Existing Tax Concession” means the tax concession issued to Seller in Case No. 18-74-T23 under the TDA.

(lxix) “FD Parcel Two” means that certain parcel of land pending recordation in the Registry at entry 1,456 of volume 269 of the Book of Daily Entries of Dorado.

(lxx) “FD Two” means DBR Dorado FD Parcel Two LLC, a Puerto Rico limited liability company.

(lxxi) “FF&E” means all furniture, fixtures and equipment, including all furnishings, fixtures, rugs, vehicles, mats, carpeting, appliances, devices, engines, telephone and other communications equipment, televisions and other video equipment, plumbing fixtures and other equipment, and all other items of Tangible Personal Property owned by Seller which are now, or may hereafter prior to the Closing Date be, placed in or attached to the Premises and are used in

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connection with the operation of the Hotel (but not including items which are leased by Seller as lessee or owned or leased as lessee by the Manager). For the avoidance of doubt, FF&E does not include the Dorado Equipment.

(lxxii) “Final Closing Statement” is defined in Section 10(d)(ii).

(lxxiii) “Financial Information” is defined in Section 12(c)(xxii).

(lxxiv) “GAAP” is defined in Section 12(b)(vii).

(lxxv) “Golf Side Letter” means an agreement between BHR TRS Dorado, LLC and DBR Dorado Owner whereby DBR Dorado Owner agrees to cause the DB Club to pay BHR TRS Dorado, LLC a commission equal to twenty-five percent (25%) of any fees related to the playing of golf at the DB Club paid by guests of the Hotel.

(lxxvi) “Governmental Authority” means any federal, Commonwealth, county, municipal or other government or any governmental or quasi-governmental agency, body, department, division, subdivision, commission, board, bureau, office or instrumentality, foreign or domestic, or any of them.

(lxxvii) “Guaranty” means a Guaranty in substantially the form of Exhibit 3 executed by DBR Dorado Ventures, LLC, a Puerto Rico limited liability company (“Guarantor”).

(lxxviii) “Hazardous Materials” means (A) those substances included within the definitions of any one or more of the terms “pollutant”, “contaminant”, “hazardous materials”, “extremely hazardous materials”, “solid wastes”, “special wastes”, “hazardous wastes”, “hazardous substances”, “toxic substances”, “industrial wastes” and “toxic pollutants”, as such terms are defined and/or regulated under Environmental Laws; (B) petroleum, natural gas liquids, liquefied natural gas and synthetic gas usable for fuel, and any products or derivates and compounds containing them, including gasoline, diesel fuel and oil; (C) explosives, flammable materials; radioactive materials; polychlorinated biphenyls; and compounds containing them or any fraction thereof; (D) lead and lead-based paint; (E) asbestos and/or any asbestos-containing materials, any materials containing hydrated mineral silicate, including chrysotile, amosite, crocidolite, tremolite, anthophylite and/or actinolite, in any form that is or could become friable; and (F) any other substance with respect to which any Environmental Law requires investigation, monitoring or remediation.

(lxxix) “HDC” means the Hotel Development Corporation, a Puerto Rico corporation and an instrumentality of the Commonwealth.

(lxxx) “HDC Fee” means a fee collected by Manager for Seller and remitted to HDC pursuant to the terms of the HDC Fee Agreement.

(lxxxi) “HDC Fee Agreement” means that certain HDC Fee Agreement, executed on November 12, 2014, among Seller, DBR Hotel Member, HDC and PRTC.

(lxxxii) “HDC Fee Assignment and Assumption Agreement” means an Assignment, Assumption and Release Agreement in form and substance acceptable to Seller and Purchaser, pursuant to which Seller and DBR Hotel Member assign to Purchaser all of the rights under, and Purchaser will assume all of the obligations first arising on or after the Closing Date under, the HDC Fee Agreement, and HDC and PRTC release Seller and DBR Hotel Member from all obligations under the HDC Fee Agreement first arising on or after Closing Date.

(lxxxiii) “Hotel” is defined in the Recitals.

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(lxxxiv) “Hotel Authorized Users” means all Persons authorized by the Hotel from time to time to use the Club Facilities subject, at all times, pursuant to the terms and conditions of the Reciprocal Facilities Access and Use Agreement, as amended by the Deed of Amendment of Reciprocal Facilities Access and Use Agreement.

(lxxxv) “Hotel Facilities” means the facilities forming part of the Hotel and made available by Purchaser for use by the Club Authorized Users from time to time in addition to Hotel Authorized Users.

(lxxxvi) “Hotel Operating Prorations” is defined in Section 10(a)(i).

(lxxxvii) “Hotel Parcels” means, collectively, Parcel Five and the Parcel Four Remnant.

(lxxxviii) “Hotel Management Agreement” means (A) that certain Operating Agreement entered into by and between DBR Dorado Owner, predecessor in interest to Seller, and Manager, dated as of July 30, 2008, as amended, supplemented and/or assigned by: (1) a First Amendment to Operating Agreement, dated as of July 14, 2010, (2) a Second Amendment to Operating Agreement, dated as of November 12, 2014, (3) the Amendment, Assignment and Assumption of Ritz-Carlton Agreements, dated November 12, 2014 by DBR Dorado Owner and Seller, and (4) a Third Amendment to Operating Agreement, dated as of March 20, 2021, (B) that certain License and Royalty Agreement entered into by and between DBR Dorado Owner and The Ritz-Carlton Hotel Company, L.L.C., a Maryland limited liability company (“Ritz-Carlton”), dated as of July 30, 2008, as amended, supplemented and/or assigned by (1) a First Amendment, dated July 14, 2010, and (2) the Amendment, Assignment and Assumption of Ritz-Carlton Agreements, dated November 12, 2014, and (C) that certain International Services Agreement entered into by and between DBR Dorado Owner and Ritz-Carlton, dated as of July 30, 2008, as amended, supplemented and/or assigned by the Amendment, Assignment and Assumption of Ritz-Carlton Agreements, dated November 12, 2014, as the same may be further amended, restated, supplemented or otherwise modified from time to time after the date hereof in accordance with the terms of this Agreement.

(lxxxix) “Hotel Tax Concession” means the Tax Concession issued to Seller after Seller’s request to the PRTC to bifurcate the Existing Tax Concession between a Tax Concession covering the Hotel for Seller, and the Resort Tax Concession for DBR Dorado Owner, such Hotel Tax Concession to be transferred on the Closing Date to Purchaser pursuant to the Instrument of Transfer of Tax Concession.

(xc) “Indemnity Notice” is defined in Section 13(c)(i).

(xci) “Indemnity Termination Date” is defined in Section 13(e)(i).

(xcii) “Intangible Personal Property” means all intangible personal property owned, leased, licensed or possessed by Seller in connection with the ownership, operation, occupancy or maintenance of the Hotel, to the extent the same is assignable, including (A) the Applications and Permits, (B) the Leases, (C) the Contracts, (D) the Advanced Bookings and (E) the Warranties and Guaranties.

(xciii) “Instrument of Transfer of Tax Concession” means an instrument issued by PRTC, transferring the Hotel Tax Concession to Purchaser, in form and substance reasonably satisfactory to Purchaser; provided, however, that Purchaser shall be required to accept the Instrument of Tax Concession if the Hotel Tax Concession contains the same tax concessions, applicable to the Hotel, as the Existing Tax Concession, including as to the 90% property tax abatement rights.

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(xciv) “Investor Rights Agreement” means an agreement between the Company and Seller (A) setting forth the concepts set forth in Section 3(c), (B) providing that Seller and any Affiliate of Seller or Seller Member who is transferred any shares of BHR Common Stock will vote all such shares of BHR Common Stock in accordance with the recommendations of the Company’s management at any annual or special shareholder meeting, (C) providing that the Company has the right and option from time to time to elect to redeem shares of BHR Common Stock in whole or in part at any time at the previous trading day’s closing price (subject to a minimum price per share of $5.00), and (D) prohibiting Seller, any Affiliate transferee of Seller, or any Seller Member from collectively (1) selling, assigning or transferring on any trading day shares of BHR Common Stock in excess of fifteen percent (15%) of that day’s aggregate New York Stock Exchange (“NYSE”) trading volume for the BHR Common Stock, (2) engaging in block sales or block transactions as to the shares of BHR Common Stock or (3) selling, assigning or transferring any shares of the BHR Common Stock to the same purchaser over consecutive trading days; provided, however, that (D)(2) or (D)(3) shall not be deemed breached if sales of the BHR Common Stock are on an exchange and the seller of the shares of the BHR Common Stock does not know the identity of the buyer of such shares or such shares are otherwise sold on a POV (percent of volume) OTD (over the day) basis.

(xcv) “KHRE” means KHRE SMA Funding, LLC.

(xcvi) “Knowledge” when used herein in reference to Seller’s “Knowledge” or derivations thereof means the actual knowledge of any Knowledge Party. Purchaser acknowledges that each Knowledge Party is named solely for the purpose of defining the scope of Seller’s Knowledge and not for the purpose of imposing on any such Knowledge Party any liability or creating any duties running from such individual to Purchaser. Purchaser covenants that it will bring no action of any kind against any Knowledge Party related to or arising out of the representations and warranties of Seller contained herein; provided, however, Seller agrees that Purchaser will have a claim against Seller for any breaches of any of Seller’s representations and warranties resulting from any act, error or omission of any Knowledge Party.

(xcvii) “Knowledge Party” means Federico Stubbe, Orlando Méndez, John E. Johnson and Kenny Blatt.

(xcviii) “Lease Additional Rent” is defined in Section 10(b)(ii).

(xcix) “Leases” means the leases, licenses, concessions, and occupancy agreements, written or verbal, relating to or affecting the Premises, including those listed on Schedule F, and all leases, licenses, concessions, and occupancy agreements, written or verbal, entered into by Seller prior to the Closing in accordance and compliance with this Agreement.

(c) “Legal Enforceability Exceptions” means bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability affecting the enforcement of creditors’ rights and general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).

(ci) Letter of Intent” means that certain Letter of Intent, dated October 11, 2021, between Seller and the Company.

(cii) “Lender” is defined in Section 31(g).

(ciii) “License Agreement” is defined in Section 2(p).

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(civ) “Licensed Marks” means the Dorado Beach trade name and trademark and the Spa Botanico trade name and trademark which shall be licensed on a perpetual and royalty-free basis to Purchaser for use in accordance with the terms and conditions of the License Agreement.

(cv) “Manager” means Luxury Hotels International of Puerto Rico, Inc., a Puerto Rico corporation.

(cvi) “Manager Estoppel Certificate” is defined in Section 11(a)(xviii).

(cvii) “Master Covenants” means Deed Number Six 6 executed on January 25, 2013 before Notary Tatiana Román Orozco, as amended by Deed Number 70 executed on January 12, 2014 before Notary Tatiana Román Orozco.

(cviii) “Mortgage” means the mortgage encumbering the Hotel Parcels in the principal amount of $85,000,000.00 securing a mortgage note payable to the bearer on demand, constituted pursuant to Deed Number 71 executed on November 12, 2014 before Notary Ricardo O. Meléndez Saurí, as supplemented by Deed Number 9 executed on February 25, 2015 before Notary Ricardo O. Meléndez Saurí, both filed and pending recordation in the Registry at entry 1,419 of volume 289 of the Book of Daily Entries of Dorado; as amended, among other things, to reduce the principal amount to $61,000,000.00, pursuant to Deed Number 4 executed on March 4, 2021 before Notary José Antonio Díaz Brugueras, filed and pending recordation in the Registry at entry 2021-025223-BY04 of the Book of Daily Entries of the Karibe System.

(cix) “Municipal Fee Assignment and Assumption Agreement” means that certain assignment, assumption and release agreement, in form and substance acceptable to Seller and Purchaser, to assign to Purchaser all of Seller’s rights and obligations to the extent first arising on or after the Closing Date, in relation to the Agreement entered into on December 1, 2014 among Seller, DBR Plantation Village LLC, a Puerto Rico limited liability company, and the Municipality of Dorado regarding the implementation of Ordinance 45 at the Hotel.

(cx) “Municipality Fee” means a fee collected by Manager for Seller and remitted to the Municipality of Dorado, pursuant to Ordinance 45.

(cxi) “Notices” is defined in Section 16(a).

(cxii) “Offer” is defined in Section 31(a).

(cxiii) “Offer Period” is defined in Section 31(b).

(cxiv) “Offer Price” is defined in Section 31(a).

(cxv) “Ordinance 45” means Municipal Ordinance No. 45, 2013-14 Series, as amended by Ordinance No. 1 2014-2015 Series, Ordinance No. 21 2014-15 Series, of the Municipality of Dorado, and Regulation of November 1, 2014 promulgated by the Municipality of Dorado.

(cxvi) “Ordinary Course of Business” means the ordinary course of business of the Hotel in accordance with, and in compliance with the terms of, the Hotel Management Agreement.

(cxvii) “Owned Personal Property” is defined in Section 12(c)(xiii).

(cxviii) “Owner’s Policy” means a current ALTA owner’s policy of title insurance issued by Fidelity National Financial through the Escrow Agent, pursuant to which Fidelity National Financial insures Purchaser’s fee simple, marketable and recordable ownership title to the Hotel Parcels in the full amount of the Purchase Price allocated between the Hotel Parcels as

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determined by Purchaser with such Owner’s Policy of Title Insurance, subject only to the Permitted Exceptions, and including a non-imputation endorsements, pursuant to which Seller’s knowledge is not imputed to the Purchaser.

(cxix) “Parcel Five” is defined in the Recitals.

(cxx) “Parcel 4A” is defined in Section 5.

(cxxi) “Parcel Four” is defined in the Recitals.

(cxxii) “Parcel Four Impact Work” is defined in Section 5.

(cxxiii) “Parcel Four Remnant” means the remnant of Parcel Four following the segregation of the Encanto Parcel.

(cxxiv) “Parking Easement” means that certain Deed Number 25 executed on November 12, 2014 before Notary Ricardo J. García Negrón, as amended by Deed Number 28 executed on May 25, 2017 before Notary Tatiana Román Orozco providing for use by the Hotel of certain parking areas located on Property 1,115 and FD Parcel Two.

(cxxv) “Pending Ancillary Closing Documents” means collectively, (A) Deed of Amendment of Parking Easement, (B) Deed of Equipment Access and Use Agreement, (C) Sales Office Lease, (D) Anziva Lease and Sublease Authorization Agreement, (E) HDC Fee Assignment and Assumption Agreement, (F) Municipal Fee Assignment and Assumption Agreement, (G) AOTE Lease (if applicable), (H) License Agreement, (I) Mi Casa/Su Casa Rights Agreement, (J) Investor Rights Agreement, and (K) the Golf Side Letter.

(cxxvi) “Permitted Agreements” is defined in Section 11(a)(x).

(cxxvii) “Permitted Exceptions” means (A) the Existing Lien, (B) those exceptions to title to the Premises that are satisfactory to by Purchaser as determined under Section 6(c) and (C) those specific matters identified on Schedule G.

(cxxviii) “Permits” means all permits, licenses, resolutions, authorizations, approvals and endorsements required by any Governmental Authority or duly authorized third-party, or in any way related to the construction, use, redevelopment, maintenance or operation of the Premises, including the Hotel, or any part thereof, or if applicable, required for the Closing of the transactions contemplated hereby.

(cxxix) “Person” shall mean and include any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, entity, party or Governmental Authority (whether national, federal, Commonwealth, county, city, municipal, or otherwise, including any instrumentality, division, agency, body or department thereof).

(cxxx) “Preliminary Closing Statement” is defined in Section 10(d)(i).

(cxxxi) “Premises” shall mean the Hotel Parcels and the improvements, structures, buildings and appurtenances built, erected or installed thereon, including the Hotel (excluding the Encanto Parcel).

(cxxxii) “Property” and “Properties” have the meanings given such terms in Section 2(a).

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(cxxxiii) “Property 1,115” means that certain parcel of land recorded in the Registry at page 35 of volume 30 of Dorado.

(cxxxiv) “PRTC” means the Puerto Rico Tourism Company, an instrumentality of the Commonwealth.

(cxxxv) “Purchase Price” means (A) the issuance by the Company of the BHR Common Stock to Seller and (B) Purchaser’s payment of One Hundred Fifty-Eight Million Dollars ($158,000,000.00) to Seller (with such cash portion of the Purchase Price being subject to credits and prorations as set forth in this Agreement).

(cxxxvi) “Purchaser Closing Documents” means all documents to be entered into by Purchaser pursuant to this Agreement or delivered by Purchaser pursuant to this Agreement.

(cxxxvii) “Purchaser Indemnitees” is defined in Section 13(a).

(cxxxviii) “Purchaser Parties” means Purchaser and the Company.

(cxxxix) “Purchaser’s Objections” is defined in Section 6(c).

(cxl) “Purchaser’s Organizational Documents” means the Certificate of Formation and Limited Liability Company Agreement of Purchaser, true, complete and correct copies of which have been provided by Purchaser to Seller.

(cxli) “Purchaser Successor” means a Person that proposes to acquire or acquired a Specified Interest whether by assignment, sale, conveyance, transfer or otherwise.

(cxlii) “Receivables” is defined in Section 10(c)(vii).

(cxliii) “Reciprocal Facilities Access and Use Agreement” means that certain Deed Number 24 executed on November 12, 2014 before Notary Ricardo J. García Negrón providing for the access and use of Hotel Facilities by DBGM and the Club Authorized Users and the access and use of the Club Facilities by Seller and the Hotel Authorized Users.

(cxliv) “Registration Statement” is defined in Section 11(b).

(cxlv) “Registry” means the Registry of Property of Puerto Rico, Fourth Section of Bayamón.

(cxlvi) “Release” means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material in the indoor or outdoor environment, including the movement of Hazardous Material through or in the air, soil, surface water or ground water.

(cxlvii) “Rents” is defined in Section 10(a)(ii).

(cxlviii) “Representatives” means, with respect to any Person, such Person’s accountants, advisors, Affiliates, agents, attorneys, consultants, contractors, employees, managers, members, officers, and owners.

(cxlix) “Representing Party” is defined in Section 34(f).

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(cl) “Resort” means the Dorado Beach Resort located in Dorado and Vega Alta, Puerto Rico, and all land, developable or not, roads, paths and trails on the land, buildings, structures, machinery and equipment, infrastructure, wells, pipelines, golf courses, clubhouses, pools, tennis courts and other amenities associated therewith or forming a part thereof from time to time in the sole and absolute discretion of the “Declarant” under the Master Covenants.

(cli) “Resort Fees” is defined in Section 2(d).

(clii) “Resort Tax Concession” is defined in Section 2(q).

(cliii) “Retail Merchandise” means all merchandise located at the Hotel and held for sale to guests and customers of the Hotel or ordered for future sale at the Hotel as of the Cut-Off Time, but not including any such merchandise owned by any tenant at (or other licensee or occupant of) the Hotel or by the Manager.

(cliv) “Ritz-Carlton Amendment and Estoppel” means collectively (i) an amendment to the Hotel Management Agreement to clarify that any amounts distributed to unit owners that participate in the rental program shall be included as a “Deduction”, and (ii) the Manager Estoppel Certificate.

(clv) “Ritz-Carlton Assignment and Assumption Agreement” means an assignment, assumption and release agreement, in form and substance acceptable to Seller and Purchaser, to assign to Purchaser all of Seller’s rights under the Hotel Management Agreement and for Purchaser to assume all obligations of Seller under the Hotel Management Agreement first arising on or after the Closing Date, including a written consent of the Manager thereto.

(clvi) “ROFO” is defined in Section 31(b).

(clvii) “RSC” means Resort Services Company, Inc., a Puerto Rico non-profit corporation, which procures and distributes utility services to all of its members including the owner of the Hotel Parcels as per the terms and conditions set forth in the Master Covenants.

(clviii) “Sales Office Lease” is defined in Section 2(h).

(clix) “Sales Tenant” is defined in Section 2(h).

(clx) “Scheduled Permits” is defined in Section 12(c)(x).

(clxi) “SEC” means the Securities and Exchange Commission.

(clxii) “SEC Documents” means the Company’s filings with the SEC.

(clxiii) “Securities Act” means the Securities Act of 1933, as amended.

(clxiv) “Segregation Permit” is defined in Section 2(b).

(clxv) “Seller Closing Documents” means all documents to be entered into by Seller pursuant to this Agreement or delivered by Seller pursuant to this Agreement.

(clxvi) “Seller Indemnitees” is defined in Section 13(b).

(clxvii) "Seller Members” is defined in Section 3(c).

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(clxviii) “Seller’s Organizational Documents” means the Certificate of Formation, as amended, and current Limited Liability Company Agreement of Seller, true, complete and correct copies of which have been provided to Purchaser by Seller.

(clxix) “Serious Crime” means a crime punishable by (i) imprisonment of one (1) year or more, or any crime constituting a felony, or a crime of moral turpitude, or a crime involving, fraud, defalcation, or larceny.

(clxx) “Specially Designated National or Blocked Person” means (i) a Person designated by the U.S. Department of Treasury’s Office of Foreign Assets Control or other governmental entity from time to time as a “specially designated national or blocked person” or similar status, (ii) a Person described in Section 1 of U.S. Executive Order 13224, issued on September 23, 2001, or (iii) a Person otherwise identified by government or legal authority as a Person with whom Operator or its Affiliates are prohibited from transacting business. As of the date hereof, a listing of such designations and the text of the Executive Order are published under the internet website address https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists.

(clxxi) “Specified Interest” is defined in Section 31(a).

(clxxii) “Submission Materials” is defined in Section 4(c).

(clxxiii) “Subsidiary” is defined in Section 12(b)(i).

(clxxiv) “Tangible Personal Property” means all tangible personal property owned, leased, licensed or possessed by Seller on the Closing Date in connection with the ownership, development, maintenance and use of the Property including the FF&E, the chillers, pipelines, pumps, meters, boilers, machinery, vehicles, inventory, Consumables, golf carts, gas tanks and other tangible personal property. For the avoidance of doubt, Tangible Personal Property does not include the Dorado Equipment.

(clxxv) “Tax Concession” means a tax concession for the operation of a tourism facility issued under the TDA.

(clxxvi) “Taxes” shall mean all federal, state, Commonwealth, municipal, local, foreign and other income, net income, gross income, gross receipts, sales, use, ad valorem, transfer, capital stock, franchise, profits, license, lease, service, add on or alternative minimum tax, occupancy, room, withholding, payroll, fringe benefits, employment, employees’ income withholding, unemployment, disability, excise, severance, stamp, value added, goods and services, occupation, premium, property (including real property and personal property taxes and any assessment, special or otherwise), environmental, windfall profits, customs, duties or other taxes, fees, assessments, levies, tariffs or other charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto (and “Tax” means any one of the foregoing Taxes).

(clxxvii) “TDA” means the Tourism Development Act of 2010, as amended.

(clxxviii) “Third Party Claim” is defined in Section 13(c)(i).

(clxxix) “Trade Payables” is defined in Section 10(a)(x).

(clxxx) “Transaction Documents” means, collectively, this Agreement and the schedules and exhibits hereto and the schedules and exhibits thereto, and each of the other agreements, bills of sale, assignments, deeds, documents, certificates and instruments entered

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into or furnished by the parties hereto in connection with the transactions contemplated hereby and thereby.

(clxxxi) “UCC Reports” is defined in Section 6(a).

(clxxxii) “Utilities” is defined in Section 10(c)(i).

(clxxxiii) “Vouchers” is defined in Section 10(c)(xi).

(clxxxiv) “Warranties and Guaranties” means, to the extent assignable, all of Seller’s rights, title and interest, if any, in and to, all guaranties and warranties relating to the Property.

2.PURCHASE AND SALE.

(a)On the Closing Date, Seller shall sell, assign and convey to Purchaser, and Purchaser shall purchase and acquire from Seller, subject to the terms and conditions of this Agreement (i) fee simple (pleno dominio) title to the Premises (subject only to Permitted Exceptions); (ii) all leasehold interests held by Seller (with, in each case, a lessor estoppel and lessor consent), but excluding leases currently in place and identified on Schedule H where Seller is the tenant of properties not managed as part of the Hotel and such properties are managed by DBGM as part of the DB Club; (iii) all personal property of every kind and character owned by Seller for use in connection with the Premises or the Hotel, including all Tangible Personal Property and Intangible Personal Property owned by Seller, including all FF&E, operating supplies, inventories, food and beverage inventories and all other inventories; (iv) all lessee, licensee, tenant, sub-lessee or sub-tenant rights pertaining, directly or indirectly, to the Premises, the Hotel and/or the Hotel’s operation, not excluded in writing by Purchaser prior to the Closing Date (with, in each case, a tenant or licensor estoppel certificate and consent in form and substance reasonably acceptable to Purchaser), including all rights as to leased, licensed or possessed Tangible Personal Property and Intangible Personal Property; (v) rights in and to all maintenance, service and equipment leases and contracts (provided true and complete copies are provided by Seller to Purchaser, and provided that Purchaser will not, in any event, be required to assume any long-term pay per view or free to guest television contracts); (vi) all maps, surveys, plans, drawings, specifications, reports (including environmental reports), site assessments, engineering, scientific and/or technical information in connection with the Premises, the Applications, the Permits and/or Environmental Conditions at the Premises and similar items; (vii) all Permits, deposits, tradenames, logos, telephone numbers, websites and domain names (including full and unlimited access to FTP file content), all Warranties and Guaranties, vehicles, governmental approvals, signage rights and authorizations owned by or in favor of Seller in connection with the Premises and/or the Hotel; and (viii) all other related rights and benefits pertaining, directly or indirectly, to the Premises, the Hotel and/or the Hotel’s operations, other than, in each instance, Excluded Assets. The items described in this Section 2(a) shall be referred to herein collectively as the “Property” or the “Properties”.

(b)Prior to the Closing Date, Seller shall obtain any and all approvals and shall satisfy any conditions imposed as part of any approval required for the segregation of the Encanto Parcel from Parcel Four (the “Segregation Permit”), and on the Closing Date Seller and Purchaser shall execute the Deed of Sale. Following the Closing Date, Seller will use commercially reasonable efforts to obtain as soon as reasonably practicable a separate property tax identification number with respect to the Encanto Parcel and Parcel Four Remnant.

(c)[Intentionally omitted].

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(d)On the Closing Date, Seller and DBR Dorado Owner shall execute an amendment to the Reciprocal Facilities Access and Use Agreement in substantially the form of Exhibit 4 (“Deed of Amendment of Reciprocal Facilities Access and Use Agreement”).

(e)On the Closing Date, Seller, FD Two and DBR Dorado Owner shall execute a deed in the form and substance acceptable to Purchaser (the “Deed of Amendment of Parking Easement”) whereby (x) FD Two conveys FD Parcel Two to DBR Dorado Owner, (y) DBR Dorado Owner aggregates FD Two to Property 1,115, and (z) FD Two, DBR Dorado Owner and Hotel Owner amend the Parking Easement in order to: (i) clarify that Parking Area 3 forms a part of Property 1,115 and not FD Parcel Two; and (ii) provide for future relocation of parking facilities, cost to be allocated proportionately based on usage.

(f)On the Closing Date, Purchaser and DBR Dorado Owner shall execute a Deed of Equipment Access and Use Agreement, in form and substance acceptable to Seller and Purchaser (“Deed of Equipment Access and Use Agreement”), (i) whereby Purchaser constitutes an access and use easement upon Parcel Five, as servient tenement, in favor of DBR Dorado Owner as owner of Property 1,115, or an Affiliate, solely for purposes of entering and using identified portions of Parcel Five for the installation, use, repair, replacement, maintenance and operation of the Dorado Equipment, (ii) Purchaser will be fully indemnified, defended and held harmless by DBR Dorado Owner for any damage caused by any such installation, use, repair, replacement, maintenance and/or operation and DBR Dorado Owner shall provide, at its expense, insurance coverage in an amount to be agreed to prior to the Closing Date; (iii) DBR Dorado Owner will covenant and agree with Purchaser to not increase the rent or any other amount payable, or require additional or new amounts or fees to be payable, by any lessee, licensee or user of the Dorado Equipment unless approved in writing by Purchaser, other than as necessary to cover documented cost increases implemented by third parties not Affiliated with Seller; and (iv) a specific portion of Parcel Five to be identified in the Deed of Equipment Access and Use Agreement for the location of the Dorado Equipment and the Dorado Equipment may not be relocated to any other portion of Parcel Five.

(g)Seller, KHRE and Purchaser shall execute and deliver the Existing Debt Assignment and Assumption Agreement.

(h)On the Closing Date, DBR Dorado Ventures, LLC (“Sales Tenant”) and Purchaser shall execute an unrecorded Sales Office Lease Agreement (the “Sales Office Lease”), in form and substance acceptable to Seller and Purchaser, whereby Purchaser leases to Sales Tenant the existing space currently used as a sales office facing the Encanto Parcel or such other location as mutually agreed to between Sales Tenant and Purchaser, for the operation of a sales office for the residential units within the Resort, such Sales Office Lease to include the following terms and conditions: (i) a ten (10) year initial term, with two five (5) year extensions, with Sales Tenant able to cancel the Sales Office Lease once all residential units are sold; (ii) free of rent payment obligations, and (iii) Purchaser responsible for insurance for the structure covered by the Sales Office Lease and utilities, and Sales Tenant responsible for all cleaning and inside maintenance, liability insurance, and insurance for Sales Tenant’s furniture, fixtures, equipment and buildout.

(i)On the Closing Date, Seller and Purchaser shall execute the Anziva Lease and Sublease Authorization Agreement.

(j)On the Closing Date, Seller, DBR Hotel Member and Purchaser shall execute the HDC Fee Assignment and Assumption Agreement.

(k)On the Closing Date, Seller and Purchaser shall enter into the Municipal Fee Assignment and Assumption Agreement.

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(l)On the Closing Date, Seller and Purchaser, shall enter into the Ritz-Carlton Assignment and Assumption Agreement.

(m)[Intentionally omitted].

(n)[Intentionally omitted].

(o)Seller shall use commercially reasonable efforts to obtain any and all approvals and shall satisfy any conditions imposed as part of any approval required for the segregation of the AOTE Facilities from Parcel 1,115 (the “AOTE Segregation Permit”). If the AOTE Segregation Permit is not completed on or before the Closing Date, Purchaser and DBR Dorado Owner shall execute a recorded lease agreement (the “AOTE Lease”) in form and substance acceptable to Seller and Purchaser, whereby DBR Dorado Owner leases to Purchaser the AOTE Facilities, such AOTE Lease to include the following terms and conditions: (i) ten (10) year initial term, with evergreen five (5) year extensions, while Hotel is a Ritz-Carlton Reserve; (ii) free of rent payment obligations, (iii) net lease with Purchaser responsible for taxes, insurance and maintenance of the AOTE, plus capital expenditures; (iv) an option to purchase the AOTE Facilities for $1.00 at any time following the completion of the AOTE Segregation Permit; and (v) ability of Purchaser to use the AOTE Facilities for meeting space or other ancillary uses other than a food and beverage outlet or, unless otherwise agreed to by Seller following the termination or expiration of the existing water sports contract with Seller at the Resort, water sports rental facilities, and Purchaser shall be responsible for capital expenditures relating to such uses by Purchaser. Seller will use commercially reasonable efforts to obtain in connection with the receipt of the AOTE Segregation Permit, or as soon as reasonably practicable thereafter, a separate property tax identification number with respect to the AOTE Facilities.

(p)On the Closing Date, Purchaser and DBR Dorado Owner shall enter into a perpetual license agreement, in form and substance acceptable to Seller and Purchaser, for the use by Purchaser, free of any charge, payment or royalty, of the Licensed Marks (the “License Agreement”).

(q)Within five (5) Business Days after the date hereof, Seller shall file a request with the PRTC for the bifurcation of the Existing Tax Concession into the Hotel Tax Concession and a Tax Concession for the Resort, other than the Hotel (the “Resort Tax Concession”) and the transfer of the Hotel Tax Concession to Purchaser effective as of the Closing Date. The issuance of the Instrument of Transfer of Tax Concession shall be a condition precedent to Purchaser’s and Seller’s obligation to close the transactions contemplated by this Agreement and Seller shall use all commercially reasonable efforts to cause the Instrument of Transfer of Tax Concession to be issued to Purchaser as promptly as possible. Seller’s counsel shall prepare the applications for Instrument of Transfer of Tax Concession in a form and substance acceptable to Purchaser. Seller and Purchaser shall cooperate with each other in filing for and pursuing the issuance of the Instrument of Transfer of Tax Concession.

(r)At the Closing, the Hotel Management Agreement shall be amended by the Ritz-Carlton Amendment and Estoppel.

3.PURCHASE PRICE.

(a) The Purchase Price payable for the Property is subject to adjustments, credits and prorations as herein provided.

(A)Within two (2) Business Days following the execution and delivery of this Agreement by all parties, Purchaser will deposit, as an earnest money deposit, with the Escrow Agent the sum of Eight Million Dollars ($8,000,000.00) (the “Deposit”). The Deposit shall be

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held and disbursed by the Escrow Agent in accordance with the terms and provisions of this Agreement. The Deposit shall be non-refundable to Purchaser, except as otherwise provided in this Agreement. The Deposit will be held by the Escrow Agent in an interest-bearing account pursuant to the terms of this Agreement. Interest accrued in respect of the Deposit shall become part of the Deposit and belong to the party entitled to the Deposit pursuant to the terms hereof, provided that until Closing all taxes (income or otherwise) accruing in respect of such interest shall be paid by Purchaser. At Closing, the Deposit will be paid by the Escrow Agent to Purchaser. Notwithstanding anything herein to the contrary, a portion of the Deposit in the amount of $100.00 will be non-refundable to Purchaser and will be distributed to Seller upon any termination of this Agreement as full payment and independent consideration for Seller’s execution and delivery of this Agreement and Purchaser’s termination rights hereunder. Accordingly, and notwithstanding anything else herein to the contrary, if this Agreement is terminated pursuant to a right of termination in this Agreement and such provision calls for the Deposit to be returned to Purchaser, such provision shall be deemed to read “the Deposit, less the $100.00 non-refundable portion thereof,” which non-refundable portion shall be released by the Escrow Agent to Seller, and the balance of the Deposit shall be returned to Purchaser.

(B)At Closing, assuming compliance with all conditions to Purchaser’s obligation to close the transactions contemplated by this Agreement, Purchaser will deliver to Seller the Purchase Price minus (aa) the outstanding principal balance owed by Seller to KHRE and (bb) all accrued and unpaid interest and any other outstanding amounts owed to KHRE on the Existing Debt as of the Closing Date. The parties agree that any and all cash reserves (including the interest reserve and the environmental reserve) held by KHRE as to the Existing Debt shall be fully assigned by Seller to Purchaser at Closing without any additional payment or credit to Seller.

(ii)     All monies payable by Purchaser to Seller under this Agreement, unless otherwise specified in this Agreement, shall be paid by wire transfer of immediately available federal funds for credit to such bank account as specified by Seller, which account information Seller shall provide to Purchaser at least two (2) Business Days prior to the day such monies are payable under this Agreement.

(b)Prior to the Closing, Seller and Purchaser shall use good faith efforts to agree on an allocation of the Purchase Price among the components of the Property. If Seller and Purchaser cannot agree on such allocation, Seller and Purchaser shall not be deemed to be in default of their respective obligations hereunder by reason of such failure to agree and this Agreement shall remain in full force and effect unless Seller or Purchaser elects to terminate this Agreement pursuant to rights granted elsewhere in this Agreement and neither party shall have any obligations to the other pursuant to the following provisions of this Section 3(b). If Seller and Purchaser agree on the allocation contemplated in the immediately preceding sentence (the “Allocation”), Seller and Purchaser agree to be bound by the Allocation, report the U.S. federal, state, Commonwealth and local income and other tax consequences of the transactions contemplated herein in the manner agreed to in the Allocation, and neither Seller nor Purchaser will take, and each will cause its Representatives to not take, any position inconsistent with the Allocation in any tax return, in any refund claim or in any financial statement, litigation, investigation or otherwise, unless it shall have received an opinion of its tax counsel to the effect that, as a result of a change in tax law occurring after the date hereof, there is no reasonable basis for taking a position consistent therewith; provided, however, that before taking an inconsistent position, such party will notify the other party and Seller and Purchaser shall agree on how to report the transaction to the maximum possible extent consistent with the earlier agreement and the change in tax law. Any disputes under the immediately preceding sentence shall be resolved by arbitration as provided in Section 28.

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(c)Notwithstanding anything to the contrary in this Agreement, Seller may distribute to any of its direct or indirect members, partners or shareholders (“Seller Members”) any of the shares of BHR Common Stock, subject to: (A) prior notice to the Purchaser and the Company and (B) any Seller Member receiving any shares of BHR Common Stock (x) making to the Company in writing the same representations and warranties made by Seller in Section 12(c)(xxxv) through (xlii) and (y) agreeing with the Company in writing along with the other Seller Members receiving any shares of BHR Common Stock to be bound pro-rata by the trading limitations set forth in the definition of Investor Rights Agreement. The obligations of Seller and any Seller Member in this Section 3(c) and in the definition of Investor Rights Agreement shall survive the Closing and shall be specifically enforceable by Purchaser or the Company.

4.INSPECTIONS.

(a)Prior to the Closing Date, Seller shall, and shall cause its Representatives to, promptly provide Purchaser and its Representatives full and complete access to the Premises for the purpose of inspecting the same, provided that Purchaser and Purchaser’s Representatives shall at all times comply with all laws and regulations of all applicable Governmental Authorities and neither Purchaser nor any of Purchaser’s Representatives shall damage the Premises or any portion thereof.

(i) In conducting any of the inspections permitted hereunder, Purchaser and Purchaser’s Representatives shall at all times comply with, and shall be subject to, all the terms, covenants and conditions of this Agreement. Seller may from time to time establish reasonable rules of conduct for Purchaser and Purchaser’s Representatives in furtherance of the foregoing provisions of this Section 4(a). All of Purchaser’s inspections shall be subject to the rights of the Manager and of the various tenants in possession of the Premises, pursuant to Leases and shall be conducted in such a manner as to minimize, to the greatest extent reasonably practicable, any disruption to their respective business activities. Purchaser shall schedule and coordinate all inspections, including any engineering and environmental tests, with Seller. Seller may have its Representative(s) accompany Purchaser, or Purchaser’s Representatives, during all such inspections and tests.

(ii) No invasive testing or sampling of the Hotel Parcels or of any improvements thereto shall be permitted without Seller’s express prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

(iii) Purchaser shall be responsible, at its sole cost and expense, for the repair any and all damage caused by Purchaser or Purchaser’s Representatives on or about the Premises prior to Closing. Seller shall promptly (within three (3) Business Days after acquiring actual knowledge thereof) notify Purchaser of any damage on or about the Premises that Seller believes was caused by Purchaser or Purchaser’s Representatives. Purchaser agrees to pay to Seller within ten (10) days of Seller’s written demand therefor the costs actually paid by Seller to third parties for repairing and restoring any damage which Purchaser or Purchaser’s Representatives shall cause to the Premises.

(iv) If Purchaser disputes a claim by Seller that Purchaser or Purchaser’s Representatives have caused any damage and the transactions contemplated by this Agreement are not consummated, then such dispute shall be resolved by arbitration pursuant to Section 28.

(v) All inspection fees, engineering fees and other costs and expenses of any kind incurred by Purchaser or Purchaser’s Representatives relating to the inspection of the Premises shall be at the sole expense of Purchaser.

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(b)Prior to conducting any inspection under this Section 4, including any physical inspection or testing at the Premises, including boxing, drilling and sampling of soil, Purchaser shall obtain and maintain and shall cause any Purchaser Representatives to obtain and maintain, at Purchaser’s and/or such contractor’s expense, commercial general liability insurance, including a contractual liability endorsement, and personal injury, property damage and bodily injury liability coverage issued by reputable insurers authorized to do business in the Commonwealth and reasonably acceptable to Seller, naming Seller as additional insured, which insurance policies must have limits (which limits may be met with primary and umbrella coverage) of not less than Two Million Dollars ($2,000,000.00) for any one occurrence. Purchaser shall provide and/or shall cause each of Purchaser’s Representatives to provide Seller with certificates of insurance evidencing the coverages required herein.

(c)Seller has previously provided Purchaser with copies of the documents, reports and information listed on Exhibit A to the Letter of Intent (the “Submission Materials”), and Seller shall promptly provide such other documents, reports and information as Purchaser may request from time to time and which are then in possession or reasonable control of Seller or a Seller’s Representatives (the “Additional Submission Materials”). In the event that the Closing hereunder shall not occur for any reason whatsoever, Purchaser shall (x) promptly destroy all copies of all Submission Materials or Additional Submission Materials delivered by Seller or Seller’s Representatives to Purchaser in connection with or in any way related to the Property and any abstracts thereof and (z) promptly pay the cost of repairing and restoring any damage to the Premises or to any improvements thereon caused by Purchaser or Purchaser’s Representatives (excluding any damage merely discovered by Purchaser or Purchaser’s Representatives in the course of its or their inspections as to the Premises).

5.PARCEL FOUR IMPACT WORK.

(a)Purchaser acknowledges and accepts that Seller entered into a Contract of Purchase and Sale executed as of March 12, 2021 by Seller, as seller, and Mi Casa PR LLC and Su Casa PR LLC, as purchaser (collectively, “Mi Casa/Su Casa”), and related documents (collectively, the “Mi Casa/Su Casa Documents”) pursuant to which (i) Seller conveyed to Mi Casa/Su Casa certain properties that were formerly part of the Hotel property, including a parcel that includes what used to be Buildings 10 and 11 of the Hotel (“Parcel 4A”) and a parcel that includes the Su Casa Building, and (ii)  Mi Casa/Su Casa was granted the right to demolish Buildings 10 and 11 and build in Parcel 4A a structure to be designed and used for single-family occupancy.   Purchaser acknowledges and accepts that Mi Casa/Su Casa will have to (i) relocate the mechanical and electrical infrastructure building serving Hotel Building 9 from Parcel 4A to within the Parcel Four Remnant in the area marked in Schedule I attached hereto, (ii) relocate underground infrastructure that serves Parcel 4A and is currently located under the Parcel Four Remnant and restore any portion of the Premises to its condition immediately prior to the work under clauses (i) and (ii) of this sentence, and (iii) build certain grass or vegetation covered fences between Parcel 4A and Parcel Four Remnant (collectively, the “Parcel Four Impact Work”).  Purchaser consents to the Parcel Four Impact Work, provided such work is conducted at no out of pocket cost to Purchaser, and in such a manner that minimizes impact on the operation of the Hotel. As a condition to the Closing, Seller shall execute a document in form and substance reasonably acceptable to Purchaser (the “Mi Casa/Su Casa Rights Agreement”) whereby Purchaser shall be entitled to enforce against Mi Casa/Su Casa any and all obligations of Mi Casa/Su Casa under the Mi Casa/Su Casa Documents.

6.TITLE OBJECTIONS.

(a)Attached hereto as Schedule J is a written commitment from the Escrow Agent to issue the Owner’s Policy (as hereinafter defined) (such commitment, and any updated commitments that Purchaser may obtain, the “Commitment”). Purchaser acknowledges receipt of a current

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ALTA/ACSM survey of the Premises (the “Surveys”). Purchaser shall, at Purchaser’s expense, obtain reports of searches of the Uniform Commercial Code records of the Commonwealth and other Governmental Authorities in the Commonwealth with respect to title to the Property (collectively, the “UCC Reports”).

(b)Purchaser shall, at Purchaser’s expense, obtain at Closing the Owner’s Policy. Seller shall cooperate with the issuance of the Owner’s Policy, including submitting any Owner’s Affidavit or any other statements customarily required for the issuance of an owner’s title policy in Puerto Rico, including, without limitation the non-imputation endorsement.

(c)Prior to the Signing Date, Purchaser has reviewed the Surveys, the Commitment and the UCC Reports and Purchaser and has not notified Seller of any matters shown on the Surveys, the Commitment or the UCC Reports that Purchaser is unwilling to accept (collectively, “Purchaser’s Objections”). Notwithstanding anything to the contrary contained in this Section 6, any PPP loans, delinquent taxes, mortgages, deeds of trust, security agreements, construction or mechanics’ liens, tax liens or other liens or charges in a fixed sum or capable of computation as a fixed sum, other than Permitted Exceptions, shall be deemed to be included in Purchaser’s Objections and, to that extent, notwithstanding anything herein to the contrary, Seller shall be obligated to pay and discharge (or bond against in a manner sufficient to cause the Title Company to insure over such Purchaser’s Objections) any such Purchaser’s Objections. Seller shall not be obligated to incur any expenses to cure any non-monetary Purchaser’s Objections unless Seller agrees to cure such non-monetary Purchaser’s Objections as hereinafter provided. Seller shall not, after the date of this Agreement, subject the Premises to or permit or suffer to exist any liens, encumbrances, covenants, conditions, restrictions, easements or other title matters or seek any zoning changes or take any other action which may materially affect or modify the status of title to the Premises without Purchaser’s prior written consent (which consent may be granted or withheld in the sole and absolute discretion of Purchaser). All title matters revealed by the Surveys, the Commitment or the UCC Reports and not objected to by Purchaser as provided above (other than delinquent taxes, mortgages, deeds of trust, security agreements and other liens and charges that are to be paid at the Closing as elsewhere provided herein) shall be deemed Permitted Exceptions. Notwithstanding the foregoing, Purchaser shall not be required to take title to the Premises subject to any matters which may arise subsequent to the effective date of the Title Commitment, UCC Reports and Survey examined by Purchaser prior to the Signing Date. Seller shall not be obligated to incur any expenses to cure any non-monetary matters that arise subsequent to the effective date of the Title Commitment, UCC Reports and Survey examined by Purchaser prior to the Signing Date.

7.CLOSING DATE.

(a)Subject to Section 7(c), the closing (the “Closing”) of the transactions contemplated hereby shall occur on the Closing Date. As more particularly described below, at the Closing the parties will (i) execute and/or deliver all of the Closing Documents required by this Agreement, (ii) deliver the same to Escrow Agent, and (iii) take all other action required to be taken under this Agreement with respect of the transactions contemplated hereby. The Closing shall be administered and coordinated by Escrow Agent. At the Closing, Escrow Agent shall return the Deposit (and all interest earned thereon) to Purchaser, update the title to the Property and, provided there has been no change in the status of title as reflected in the Commitment and Survey, Escrow Agent shall record the Deed of Sale, release and date, where appropriate, the Closing Documents in accordance with the instructions of Seller and Purchaser and shall send, by wire transfer, all sums to be delivered by the Escrow Agent to the parties and others as herein provided.

(b) Seller’s obligation to sell the Property as herein provided shall be conditioned upon the fulfillment of the conditions precedent that (A) Purchaser shall have duly performed all of its

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obligations and covenants to be performed under this Agreement on the Closing Date and shall have duly performed all of its material obligations to be performed under this Agreement prior to the Closing Date, (B) the representations and warranties made by Purchaser in this Agreement shall be true, complete and correct in all material respects on the date hereof and on the Closing Date, (C) no Action or investigation by or before any court, administrative agency or other Governmental Authority shall have been instituted to restrain, prohibit or invalidate any of the transactions contemplated by this Agreement, (D) HDC and PRTC shall have executed the HDC Fee Assignment and Assumption Agreement, (E) the Municipality of Dorado shall have executed the Municipal Fee Assignment and Assumption Agreement, (F) Seller shall have obtained the Segregation Permit and (G) Purchaser shall have delivered to Seller all of the documents required by Section 8(b) and Section 8(c) hereof to be delivered by Purchaser. The conditions precedent to closing under this Section 7(b)(i) can be waived, in whole or in part, in writing by Seller. Subject to Section 17(b), if any of the foregoing conditions to Seller’s obligation to sell the Property are not satisfied or waived on or before the Closing Date (as extended, if applicable), Seller may terminate this Agreement on the Closing Date (as extended, if applicable), in which event the Deposit (and any interest earned thereon) shall be promptly released by the Escrow Agent to Purchaser.

(ii)Purchaser’s obligation to purchase the Property as herein provided shall be conditioned upon the fulfillment of the conditions precedent that (A) Seller shall have duly performed all of its obligations and covenants to be performed under this Agreement prior to or on the Closing Date and shall have duly performed all of its material obligations to be performed under this Agreement prior to or on the Closing Date, (B) the representations and warranties made by Seller in this Agreement shall be true, complete and correct on the date hereof and in all material respects on the Closing Date, (C) no Action or investigation by or before any court, administrative agency or other Governmental Authority shall have been instituted to restrain, prohibit or invalidate any of the transactions contemplated by this Agreement or that, if adversely determined, could have a material and adverse effect on the ownership or use of the Premises, the Hotel, the Property or any portion of the Property, (D) there shall not have occurred any material and adverse change in any of the Hotel or in any of the Property, (E) Purchaser shall have obtained an Owner’s Policy in an amount equal to the Purchase Price allocated to the Premises, satisfying the standards for title contained herein and otherwise in a form and with content customary in Puerto Rico for transactions similar to the transactions contemplated hereby, which shall include individual comprehensive, access, same as survey, zoning, same tax lot, environmental protection lien, non-imputation and increase in amount of insurance endorsements, (F) Manager shall have the full, legal right to use and operate under the existing liquor license for the Hotel and the Premises for the continued sale of alcoholic beverages at the Premises and the Hotel after the Closing, (G) Seller shall have furnished to Purchaser, in form and content reasonably satisfactory to Purchaser, with all Consents, (H) Seller shall have furnished to Purchaser, in form and content reasonably satisfactory to Purchaser, estoppel certificates with respect to all Leases and Contracts, and any covenants, conditions and/or restrictions binding, restricting or benefiting the Property which are set forth in the Commitment or the Hotel Management Agreement, (I) the Ritz-Carlton Assignment and Assumption Agreement and the Ritz-Carlton Amendment and Estoppel shall be fully executed and delivered to Purchaser, (J) Seller shall provide Purchaser with evidence satisfactory to Purchaser of the written waiver of any and all rights of first refusal or purchase options related to the Property that have been granted with respect to any of the Property, (K) the Existing Debt shall have been assumed by Purchaser contemporaneously with the Closing pursuant to the Existing Debt Assignment and Assumption Agreement; (L) Seller shall have delivered to Purchaser all of the documents required by Section 8(a) and Section 8(c) hereof and all other documents required of Seller elsewhere in this Agreement, (M) the Hotel Tax Concession and the Instrument of Transfer of Tax Concession shall have been issued, (N) Omitted, (O) Purchaser shall be contractually entitled following the Closing, without any time limitation, to thereafter (x) appoint one-third of the members of the Board of Directors of the entity DBR Dorado Services Operator,

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LLC (the “Utility Company”) that provides utility services to the Hotel Facilities, (y) approve in advance any increases in excess of five percent (5%) per annum of amounts in the annual budget of the Utility Company which are payable to Affiliates of Seller and are not pass-through amounts payable to third-parties, and (z) receive a guarantee from the Utility Company that the Hotel Facilities will continue to have the same utility capacity, including generator capacity, available to the Hotel Facilities in 2019, (P) Seller shall pay to Purchaser all security deposits and other amounts held by Seller or an Affiliate as to all Advance Bookings and as to all Leases whereby Seller or an Affiliate is the landlord or lessor, (Q) HDC and PRTC shall have executed the HDC Fee Assignment and Assumption Agreement, (R) the Municipality of Dorado shall have executed the Municipal Fee Assignment and Assumption Agreement, (S) Seller shall have delivered the Segregation Permit, and (T) the form and substance of the Pending Ancillary Closing Documents shall be reasonably acceptable to Purchaser. The conditions precedent to Closing under this Section 7(b)(ii) can be waived, in whole or in part, in writing by Purchaser. Notwithstanding anything contained in this Agreement to the contrary, if any of the foregoing conditions to Purchaser’s obligation to purchase the Property are not satisfied or waived on or before the Closing Date (as extended, if applicable), Purchaser may terminate this Agreement on the Closing Date (as extended, if applicable), in which event the Deposit (and any interest earned thereon) shall be promptly released by the Escrow Agent to Purchaser.

(c)If any one or more closing conditions of Seller under Section 7(b)(i)(D), Section 7(b)(i)(E) or Section 7(b)(i)(F) or one or more closing conditions of Purchaser under Section 7(b)(ii)(H), Section 7(b)(ii)(I), Section 7(b)(ii)(J), Section 7(b)(ii)(K) or Section 7(b)(ii)(M) is not met (or waived by Purchaser) on or before the Closing Date, then Seller may, on a one-time basis (i.e., only one such extension is available to Seller) extend the Closing Date for up to sixty (60) days by written notice to Purchaser and Seller shall use its commercially reasonable efforts to cause each unperformed closing condition to be performed and met as promptly as possible.

(d)If any one or more closing conditions of Purchaser is not met on or before the Closing Date, then Purchaser may, in its sole and absolute discretion, extend the Closing Date for up to sixty (60) days by written notice to Seller and Seller shall use commercially reasonable efforts to cause each unperformed closing condition of Purchaser to be performed and met as promptly as possible. In addition, if the Registration Statement is not in final form for filing with the SEC on or before the Closing Date, Purchaser may, in its sole and absolute discretion, extend the Closing Date for up to thirty (30) days by written notice to Seller.

8.DELIVERIES ON THE CLOSING DATE.

(a)On the Closing Date, Seller shall deliver or cause to be delivered to Purchaser the following:

(i)     Negative tax certifications from the Center for the Collection of Municipal Revenues (“CRIM”) that all real property taxes assessed by CRIM and owed in respect of the Premises through the Closing Date have been paid in full or evidence that a revision of the real property taxes assessments has been requested and an amount equal to the total real property taxes to be assessed once the revision requested is completed has been delivered in escrow to the Escrow Agent;

(ii)     Evidence of Seller’s formation and good standing;

(iii)     A copy of the Hotel Tax Concession and the Instrument of Transfer of Tax Concession, issued by the PRTC and certified true, complete and correct by an authorized officer of Seller;

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(iv)     All necessary information to complete the Informative Return (Planilla Informativa) to be filed with the Puerto Rico Treasury Department notifying such department as to the sale of the Premises;

(v)     Appropriate evidence of the authority of Seller to sell the Property to Purchaser and perform, carry out the covenants and obligations to be performed by Seller under this Agreement and/or execute and deliver the documents required to be delivered by Seller pursuant to this Section 8(a) and Section 8(c) and elsewhere in this Agreement;

(vi)     Evidence that any and all PPP loans incurred by Seller have been fully forgiven in accordance with Applicable Law or fully repaid.

(vii)     [Intentionally Omitted];

(viii)     Evidence of the execution of the deeds, petitions or instruments resolving any Purchaser Objections that Seller elects or is required to cure, if any, and of delivery of the first certified copy of any such deeds, and/or of the petitions or instruments to the Escrow Agent accompanied by their corresponding recording expenses;

(ix)     All estoppel certificates required to be obtained by Seller pursuant to this Agreement;

(x)     An affidavit of Seller in form and substance adequate to cause the title company issuing the Owner’s Policy to eliminate the exception from the Owner’s Policy for parties-in-possession, other than those disclosed in Schedule K;

(xi)     The Consents;

(xii)     Change of Ownership Notice to be delivered to CRIM notifying and requesting the segregation of the Encanto Parcel from Parcel Four;

(xiii)     The Deed of Amendment of Reciprocal Facilities Access and Use Agreement;

(xiv)     The Deed of Amendment of Parking Easement;

(xv)     The Equipment Access and Use Agreement;

(xvi)     The Guaranty;

(xvii)     Evidence acceptable to Purchaser of termination (without any further obligation of Purchaser) of the existing Asset Management Agreement, dated November 12, 2014, with CPG Asset Management LLC;

(xviii) Mi Casa/Su Casa Rights Agreement;

(xix) Investor Rights Agreement;

(xx) The Golf Side Letter; and

(xxi) All other documents, reports, schedules and information which Seller is required to deliver to Purchaser in accordance with this Agreement or which Purchaser or the title company issuing the Owner’s Policy shall reasonably require to consummate the transactions

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contemplated hereunder, provided the delivery of such documents is customary in Puerto Rico for transactions similar to the transactions contemplated herein.

(b)On the Closing Date, Purchaser shall deliver or cause to be delivered to Seller:

(i)     The Purchase Price;

(ii)     Evidence of Purchaser’s formation, good standing and authority to do business in the Commonwealth;

(iii)     Appropriate evidence of the authority of Purchaser to purchase the Property from Seller and perform and carry out the covenants and obligations to be performed by Purchaser under this Agreement and execute and/or deliver the documents required to be delivered by Purchaser pursuant to Section 8(b) and Section 8(c) and elsewhere in this Agreement;

(iv)     Change of Ownership Notices to be delivered to CRIM notifying CRIM of the change of ownership of the Hotel Parcels;

(v) Evidence of the transfer of the BHR Common Stock in the name of the Seller in the Company’s stock ledger;

(vi) Investor Rights Agreement; and

(vii) All other documents which Purchaser agrees to deliver to Seller in accordance with this Agreement or which the title company issuing the Owner’s Policy shall reasonably require to consummate the transactions contemplated hereby, provided the delivery of such documents is customary in Puerto Rico for transactions similar to the transactions contemplated herein.

(c)Seller, or the applicable Seller Affiliate, and Purchaser shall, on the Closing Date, each execute, acknowledge (as appropriate) and exchange the following documents:

(i)     The Deed of Sale;

(ii)     An assignment and assumption of the Intangible Personal Property;

(iii)     An assignment and assumption of the property described in Section 2(a)(ii), other than the Intangible Personal Property and the Tangible Personal Property;

(iv)     The Bill of Sale;

(v)     The Preliminary Closing Statement;

(vi)     The Sales Office Lease;

(vii)     The Anziva Lease and Sublease Authorization Agreement;

(viii)     The License Agreement;

(ix)     The Ritz-Carlton Assignment and Assumption Agreement;

(x)     The HDC Fee Assignment and Assumption Agreement;

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(xi)     The Municipal Fee Assignment and Assumption Agreement;

(xii)     The AOTE Lease;

(xiii) The Golf Side Letter; and

(xiv)     Any other affidavit, document or instrument required to be delivered by Seller and Purchaser pursuant to the terms of this Agreement.

(d)At or following the Closing, Seller shall, at the request of Purchaser, execute and deliver to Purchaser such further written instruments as may be reasonably required to complete or evidence the transactions contemplated hereby, and Purchaser shall, at the request of Seller, execute and deliver like instruments to Seller.

(e)The provisions of this Section 8 shall survive the Closing.

9.CLOSING COSTS.

(a)The Deed of Sale shall be executed before a Notary from McConnell Valdés. The notarial tariff corresponding to the Deed of Sale, the cost of the internal revenue and legal aid stamps required to be cancelled on the original of the Deed of Sale and on the first certified copy of the Deed of Sale, transfer taxes and/or documentary stamp taxes pertaining to the conveyance of the Property, any sales tax, transfer fees or termination charges relating to personalty or contracts and leases and the recordation costs of any of the foregoing shall be paid by Seller.

(b)The fees of the Escrow Agent shall be paid by Seller and Purchaser in equal proportions.

(c)All costs and expenses, including transfer taxes and/or documentary stamp taxes, related to the cancellation and/or release of record of the liens and encumbrances on any portion of the Property, other than the Permitted Exceptions, shall be paid by Seller.

(d)Seller will pay all costs as to the Survey.

(e)Except as otherwise expressly provided herein, each party shall bear its own costs and expenses in connection with the transaction contemplated hereby, including attorneys’ fees, due diligence expenses, title studies and Commitment fees.

(f)Purchaser shall pay all costs for the UCC Reports.

(g)The Company shall pay the costs, expenses and fees, including any costs, expenses and fees payable to the SEC, the New York Stock Exchange and any applicable state securities authority in connection with the registration of the BHR Common Stock, the listing of the BHR Common Stock, and any applicable blue sky costs, expenses and fees; provided, however, the Company shall not be responsible for any costs, expenses or fees of any counsel, accountant or other expert or professional engaged by Seller.

(h)The provisions of this Section 9 shall survive the Closing.

10.APPORTIONMENTS.

(a)General Allocations. All revenues and expenses with respect to the Property, and applicable to the period of time before and after Closing, determined in accordance with sound accounting principles consistently applied and incurred in the Ordinary Course of Business, shall be allocated between Seller and Purchaser. Seller shall be entitled to all revenues and shall be

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responsible for all expenses for the period of time up to the Cut-Off Time, and Purchaser shall be entitled to all revenue and shall be responsible for all expenses for the period of time from and after the Cut-Off Time. Such adjustments shall be shown on the closing statements (with such supporting documentation as the parties hereto may require being attached as exhibits to the closing statement) and shall increase or decrease (as the case may be) the Purchase Price. Without limiting the generality of the foregoing, the following items of revenue and expense shall be allocated at Closing:

(i) All Hotel operating revenues and expenses (the “Hotel Operating Prorations”) shall be adjusted as of the Cut-Off Time;

(ii) Prepaid rents, fixed rents and additional rents payable pursuant to the Leases (including operating expense escalation payments, real estate tax escalation payments and percentage rent, if any, payable under the Leases) (collectively, “Rents”) to the extent same have been received for periods on or after the Closing Date shall belong to and be the property of Purchaser and Purchases shall receive a credit against the Purchase Price for all such Rents;

(iii) All real estate and personal property taxes and assessments, if any, levied against the Property. If the amount of any such taxes is not ascertainable on the Closing Date, the proration for such taxes shall be based on the most recently available bill, and/or assessed valuations; provided, however, that after the Closing, Seller and Purchaser shall re-prorate the taxes and pay any deficiency in the original proration to the other party promptly upon receipt of the final bill for the relevant taxable period. In the event that the Property or any part thereof shall be or shall have been affected by an assessment or assessments, whether or not the same become payable in annual installments, Seller shall, at the Closing, be responsible for any installments due for any period prior to the Closing Date and Purchaser shall be responsible for any installments due for any period on or after the Closing Date. Notwithstanding anything to the contrary herein, Seller shall be entitled to any and all refunds of real estate and personal property taxes allocable to all periods prior to the Closing Date, net of actual, reasonable out-of-pocket attorneys’ fees and costs incurred by the party obtaining such refund, and regardless of when any such refunds are received, and any refunds of real estate and personal property taxes allocable to the period from and after the Closing Date, net of actual, reasonable out-of-pocket fees and costs incurred by the party obtaining such refund, shall belong to and be the property of Purchaser; provided that, in each case, if and to the extent that such refunds are payable to tenants of the Hotel at the time such refunds are received under the terms of such tenants’ respective Leases, the refundable portion of the amount received, net of actual, reasonable out-of-pocket attorneys’ fees and costs incurred by the party obtaining such refund, shall be paid to such tenants. Notwithstanding anything to the contrary contained herein, the proration and re-proration of real estate taxes shall be calculated based on the assumption that the Hotel Tax Concession will remain in effect after Closing, regardless of whether the Hotel Tax Concession actually remains in effect after Closing. In no event shall Seller be charged with or be responsible for any increase in real estate or personal property taxes resulting from the sale of the Properties contemplated by this Agreement, any change in use of the Properties on or after the Closing Date, or from any improvements made or leases entered into on or after the Closing Date. Seller shall be responsible for any assessments made on the Properties or improvements to the Properties corresponding to any periods prior to the Closing Date. Any real estate taxes or personal property taxes for a period that includes (but does not end on) the Closing Date, shall be apportioned among Seller and Purchaser based on the number of days of the taxable period included in the pre–Closing Date and post-Closing Date tax period. After the Closing Date, Seller and Purchaser shall make available to the other party, and to any Governmental Authority as reasonably requested, all information, records, and documents relating to the real estate and personal property taxes. The re-proration obligation under this Section 10(a)(iii) shall survive the Closing without limitation.

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Until such time as the CRIM issues a separate tax identification number for the Encanto Parcel and while real estate taxes payable under the tax identification number of Parcel Four include the Encanto Parcel, Seller and Purchaser shall allocate such taxes in a proportionate manner between the two parcels, and Seller shall pay Purchaser for such amount estimated between them as attributable to the Encanto Parcel, at the rate applicable assuming Purchaser pays such taxes during the period that affords property owners a ten percent (10%) discount. Once the Encanto Parcel has received a separate tax identification number and the CRIM has assessed the same, Seller and Purchaser shall reconcile any amounts paid by Seller to Purchaser for the Encanto Parcel with the amounts assessed by the CRIM.

Notwithstanding anything to the contrary herein, Seller shall control (at its own expense) the contest of the portions of any audits, disputed, administrative, judicial or other proceedings relating to real estate or personal property taxes for the portion of any period through the end of the Closing Date, and Seller may settle such claim without the consent of the Purchaser; provided, however, Seller may not agree to any property valuation or tax rate binding as to the future as to Purchaser, the Hotel Premises or any Property without Purchaser’s prior written consent and Seller may not agree to terminate, waive or relinquish in any respect any tax benefits, credits, discounts or other items that could reduce, or make unavailable, after the Closing any tax benefits or tax reductions as to the Hotel Premises or any Property. Purchaser shall control (at its own expense) the contest of the portions of any audits, disputed, administrative, judicial or other proceedings relating to real estate or personal property taxes for the portion of any period after the Closing Date, and Purchaser may settle such claim without the consent of the Seller.

(iv) Fuel, if any, as estimated by Seller’s supplier, at current cost, together with any sales or excise taxes payable in connection therewith, if any (a letter from Seller’s fuel supplier shall be conclusive evidence as to the quantity of fuel on hand and the current cost therefore);

(v) Prepaid fees for Intangible Personal Property for periods on or after the Closing Date but only to the extent that the Intangible Personal Property is assigned by Seller to Purchaser;

(vi) Any amounts prepaid for periods on or after the Closing Date by the Seller under any of the Contracts assigned to Purchaser;

(vii) All amounts prepaid by Seller under any licenses and Permits (other than utilities which are separately prorated under Section 10(a)(iv), if any, actually transferred to Purchaser. Seller shall receive a credit for all deposits made by Seller under the licenses and Permits which are transferred to Purchaser or which remain on deposit for the benefit of Purchaser;

(viii) All prepayments made by Seller for services by third parties relating to the Property to be provided after the Closing Date;

(ix) Revenues and expenses under the Contracts for the operation of the Property, including revenues and expenses under the Hotel Management Agreement;

(x) Except to the extent an adjustment or proration is made under another subsection of this Section 10(a), (i) Seller shall be responsible for all amounts payable to vendors, contractors or other suppliers of goods or services to the Hotel (the “Trade Payables”) for periods prior to the Cut-Off Time which are due and payable as of or after the Cut-Off Time for which goods or services have been delivered to the Hotel prior to Cut-Off Time, and (ii) Purchaser shall receive a credit for the amount of such Trade Payables which have accrued, but are not yet due and payable as of the Cut-Off Time, and Purchaser shall pay all such Trade Payables after the Cut-Off Time when such Trade Payables become due and payable but only up to the amount of

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such credit; provided, however, Seller and Purchaser shall re-prorate the amount of the credit to Purchaser for any Trade Payables and pay any deficiency in the original proration to the other party promptly upon receipt of the actual bill for such goods or services. Seller shall receive a credit for all advance payments or deposits made with respect to FF&E, Retail Merchandise, inventories and other property ordered, but not delivered to the Hotel prior to the Cut-Off Time, and Purchaser shall pay the amounts which become due and payable for such FF&E, Retail Merchandise, inventories and other property which were ordered but not delivered prior to the Cut-Off time. If applicable, the Purchase Price shall be adjusted at Closing to reflect the adjustment of any other item which, under the express terms of this Agreement, is to be apportioned at Closing to effectuate the intent that, except as otherwise expressly provided herein, all items of operating revenue and operating expense of the Hotel for any period prior to the Cut-Off Time shall be for account of and paid by Seller and all items of operating revenue and operating expense of the Hotel for any period after the Cut-Off Time shall be for the account of and paid by Purchaser.

(b)Rents. If, at the Cut-Off Time, there are any past due Rents owing to Seller by any tenant under the Leases for any period through the Cut-Off Time, Purchaser shall use its commercially reasonable efforts to collect the same after the Closing Date (provided Purchaser shall not be obligated to institute separate claims against such tenant or member, including legal proceedings against any tenant with regard to the same, but Seller shall retain its right to institute legal proceedings against such tenant but not, with respect to a tenant, an action for summary dispossess, eviction or similar proceedings which affect the possession right of any tenant.) Any Rent received from any such tenant after the Closing Date shall be applied in the following order of priority: (A) first, to Rent arrearages with respect to the month in which the Closing Date shall occur (subject to apportionment pursuant to Section 10(a)(ii) above), (B) second, to Rent arrearages with respect to the period following the month in which the Closing Date shall occur and (C) third, to Rent arrearages with respect to the months preceding the month in which the Closing Date shall occur.

(ii)     If, as of the Closing Date, any Rents other than fixed rents (including operating expense escalations, real estate tax escalations and percentage rent) (collectively, “Lease Additional Rent”) have not been billed or have not been determined in accordance with the provisions of the Leases or, if billed, have not been collected by Seller, Purchaser shall (A) bill the same when billable, (B) cooperate with Seller to determine the correct amount of Lease Additional Rent and (C) diligently pursue and use all commercially reasonable efforts to achieve the collection of the same (provided Purchaser shall not be obligated to institute legal proceedings against any tenant with regard to the same, but Seller shall retain its right to institute separate claims against such tenant, including legal proceedings against such tenant but not an action for summary dispossess, eviction or similar proceedings which affect the possession right of any tenant). If the final determination of Lease Additional Rent in accordance with the Leases shows that a net amount is owed by Seller to Purchaser, the net amount shall be paid by Seller to Purchaser within ten (10) Business Days of such final determination under the Leases. If the final determination of Lease Additional Rent in accordance with the Leases shows that a net amount is owed by Purchaser to Seller, the net amount shall be paid by Purchaser to Seller within ten (10) Business Days of such final determination. Any Rents or portion thereof received by Seller or Purchaser following the Closing Date which are the property of the other, shall be paid to the other within five (5) Business Days following receipt thereof.

(c)Specific Allocations. Notwithstanding anything contained in the foregoing provisions:

(i) Utilities. Charges for all electricity, water, sewer, steam, gas, telephone, internet, cable, satellite and other utility services (collectively, “Utilities”) shall be billed to Seller’s account up to the Cut-Off Time and, from and after the Cut-Off Time, all Utilities shall be billed to Purchaser’s account, which Purchaser shall open prior to the Closing Date. If for any reason

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such changeover in billing is not practicable as of the Closing Date as to any Utility, such Utility shall be apportioned on the basis of an actual current reading made as of the day prior to the Closing Date or, if such readings have not been made, on the basis of the most recent bills that are available. If any apportionment is not based on an actual current reading, then upon the taking of a subsequent actual reading, the parties shall, within ten (10) Business Days following notice of the determination of such actual reading, readjust such apportionment and Seller shall promptly deliver to Purchaser, or Purchaser shall promptly deliver to Seller, as the case may be, the amount determined to be due upon such adjustment. Seller and Purchaser shall cooperate to cause such switchover in Utility services on the Closing Date.

(ii) Advance Bookings. All amounts paid to Seller or Manager and all deposits for Advance Bookings shall be credited to Purchaser and any Advance Bookings that are or were cancelled prior to the Closing Date are for Purchaser’s account and credit.

(iii) Operational Taxes. Seller shall be responsible for all entertainment and/or use taxes, sales taxes, volume or business taxes (patente) and any and all other taxes relating to the operations at the Premises (but excluding real property taxes which are covered in Section 10(a)(iii) above) assessed by any city, municipality or other governmental entity for all periods prior to the Closing Date including the HDC Fee and the Municipality Fee. Seller shall be responsible for any municipal license taxes relating to or resulting from the sale of the Property. Seller shall be responsible for filing for and pursuing reimbursements for prepaid operational taxes, if any, with the applicable tax authorities to the extent such prepaid taxes are not transferable. To the extent that a transfer of any prepayment for operational taxes is allowed or required, the operational taxes for any period that includes (but does not end on) the Closing Date, shall be apportioned between Seller and Purchaser based on the number of days of the taxable period included in the pre-Closing tax period and post-Closing tax period. Seller shall make available to Purchaser and to any Governmental Authority as reasonably requested, all information, records, and documents relating to the transferred prepaid operational taxes, including municipal license tax, if applicable.

(iv) Security Deposits. At the Closing, Purchaser shall be entitled to a credit against the Purchase Price in an amount equal to the security deposits paid to Seller under the Leases, if any.

(v) Restaurant, Bar and Vending Machines. Seller shall receive the income from the restaurant and bar facilities until the Cut-Off Time. All vending machine income, and telephone, washroom and checkroom income, shall be counted as of the Cut-Off Time, and Seller shall receive such income until the Cut-Off Time. Seller shall be solely responsible for the settlement of all commissions, costs and expenses relating to vending machines in the Premises as of the Cut-Off Time. All revenues from restaurants, lounges, and other service operations conducted at the Premises shall be allocated based on whether the same accrued before or after the Cut-Off Time and Seller shall separately record sales occurring at the Premises before and after the Cut-Off Time.

(vi) Deposits. Purchaser shall receive a credit at Closing in an amount equal to one hundred percent (100%) of all deposits that shall have been paid in advance and received by or credited to Seller prior to the Cut-Off Time relating to use or occupancy of the Premises or services to be provided for the period on or after the Closing Date (including all Advance Bookings), net of credit card or other fees. Any such amounts, including down payments and advance deposits, received by Seller after the Cut-Off Time shall be promptly paid by Seller to Purchaser. Purchaser shall honor (and shall cause Purchaser’s manager to honor) all third party reservations made in the Ordinary Course of Business for the Premises, including reservations for conference, banquet or meeting space or for the use of any recreational facilities on the

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Premises made by Seller or Manager in the Ordinary Course of Business prior to the Closing Date for periods on or after the Closing Date.

(vii) Receivables. All accounts receivable due and payable to Seller in respect of the Property up to and including the CutOff Time (“Receivables”) shall be credited to Seller by Purchaser and shall be assigned by Seller to Purchaser pursuant to the Bill of Sale and become the property of Purchaser subsequent to the Closing Date. Notwithstanding the foregoing, Seller shall not receive a credit for Receivables that are more than sixty (60) days past due as of the Cut-Off Time (“Aged Receivables”), which Aged Receivables shall remain the property of Seller and Seller shall have the right to take such action as may be necessary to collect the same, provided, however, that Seller shall not take any action in respect of its collections efforts to terminate any ongoing Contract or dispossess any party under a Lease, without Purchaser’s prior approval, which approval may be granted or withheld in Purchaser’s sole and absolute discretion. To the extent Purchaser receives payment on any Aged Receivable, Purchaser shall promptly pay the same over to Seller less any reasonable costs of collection relating thereto.

(viii) Guest Revenues. Revenues, net of credit card and other fees, from guest rooms occupied on the evening immediately preceding the Closing Date, including any excise taxes, room taxes and other taxes charged to guests in such rooms, all cancellation charges, parking charges, sales from mini-bars, in-room food and beverage, telephone and data communications, in-room movie, laundry, and other service charges allocable to such rooms with respect to the evening immediately preceding the date of Closing shall be divided equally between Seller and Purchaser.

(ix) Banquet and Meeting Room Revenues. Revenues, net of credit card and other fees, from conferences, receptions, meetings, and other functions occurring in any conference, banquet or meeting rooms on the Premises in the Ordinary Course of Business, including usage charges and related taxes, cancellation charges, food and beverage sales, valet parking charges, equipment rentals, and telecommunications charges, shall be allocated between Seller and Purchaser, based on when the function therein commenced, with (a) one-day functions commencing prior to the Cut-Off Time being allocable to Seller, (b) functions commencing after the Cut-Off Time being allocable to Purchaser, and (c) multi-day functions being allocated between Seller and Purchaser according to when the event commences and is scheduled to end, provided that multi-day functions that are charged on a per diem basis shall be apportioned as one-day functions in accordance with (a) and (b) of this paragraph.

(x) Seller shall receive a credit for advertising for the Premises in the Ordinary Course of Business that is prepaid (i.e., advertising that is to run post-Closing) and actually runs post-Closing.

(xi) Gift Certificates. Purchaser shall honor (and shall cause Purchaser’s managers to honor) all valid outstanding gift certificates, coupons, vouchers or other writings issued by Seller and/or Manager that entitles the holder or bearer thereof to a credit (whether in a specified dollar amount or for a specified item, such as room night or meals) to be applied against the usual charge for rooms, meals and/or goods and services at the Premises, which are listed on Schedule L attached hereto (collectively, “Vouchers“). Purchaser shall receive a credit at the Closing in an amount equal to seventy five percent (75%) of the value of the Vouchers as of the date of this Agreement, and one hundred percent (100%) of the value of any new Vouchers issued between the date of this Agreement and the Closing Date.

(xii) Contract Deposits. If any security deposit has been made in respect of Contracts which are being assumed by Purchaser or a deposit in connection with Utilities which deposit is transferred to a new account established by Purchaser, Seller shall receive a credit therefor at Closing.

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(xiii) Reservations. Purchaser shall honor (and shall cause the Purchaser’s managers to honor) all reservations at the Premises, or for conference, banquet, or meeting space or any other recreational facilities made by Seller in the Ordinary Course of Business on or prior to the Closing Date, for periods on or after the Closing Date (and Purchaser shall receive a credit for all amounts paid to Seller in connection with such reservations).

(xiv) Cash Reserves. Seller shall receive a credit at Closing for all cash reserves delivered to Purchaser (and not returned or to be returned to Seller), including working capital, FF&E reserves and other amounts held by Seller or Manager and deposits held by utilities or Governmental Authorities, but excluding any reserves held by KHRE under the Existing Debt which will be retained by KHRE for the benefit of Purchaser for no credit to Seller; provided, however that any net operating income from the operation of the Hotel payable by Manager to Seller for periods up to the Closing Date, shall be paid by Manager to Seller after the Closing Date pursuant to the terms of the Hotel Management Agreement.

(d)Closing Statement. At least three (3) Business Days prior to the Closing Date, Seller shall prepare the initial draft of a preliminary closing statement in form and substance reasonably satisfactory to Seller and Purchaser (the “Preliminary Closing Statement”) setting forth the preliminary determination of the adjustments and prorations provided for in this Section 10 and setting forth any items which are not capable of being determined at such time (and the manner in which such items shall be determined and paid). The prorations and determinations agreed to by Seller and Purchaser in the final version of the Preliminary Closing Statement (which shall be executed by Seller and Purchaser) shall be preliminary and subject to confirmation as part of the preparation of the Final Closing Statement (as defined below).

(ii) Within sixty (60) days following the Closing Date, Purchaser will prepare the initial draft of a final closing statement in form and substance reasonably satisfactory to Seller and Purchaser (the “Final Closing Statement”) setting forth the final determination of the adjustments and prorations provided for in this Section 10 and setting forth any items which are not capable of being determined at such time (and the manner in which each such item shall be determined and paid). The prorations and determinations agreed to by Seller and Purchaser in the Final Closing Statement (which will be executed by Seller and Purchaser) shall be conclusive and binding on the parties hereto except for (A) any items which are not capable of being determined at the time the Final Closing Statement is agreed to by Seller and Purchaser, (B) which are not known is of the time of the Final Closing Statement (C) other than amounts expressly payable hereunder pursuant to provisions of this Agreement which survive the Closing, or (D) manifest error. The items under Section 10(d)(ii)(A) and Section 10(d)(ii)(B) shall be resolved post-Closing by Seller and Purchaser applying the rules set forth in the first sentence of Section 10(a) once the necessary information is available. If Seller and Purchaser cannot reach agreement on the Final Closing Statement, then it shall be submitted to arbitration under Section 28.

(iii) Prior to and following the Closing Date, each party shall provide the other with such information regarding pre-closing periods as the other shall reasonably request (including access to the books, records, files, ledgers, information and data with respect to the Property during normal business hours upon reasonable advance notice) in order to make the adjustments and prorations provided for herein.

(e)The provisions of this Section 10 shall survive the Closing.

11.COVENANTS.

(a)To induce Purchaser Parties to enter into this Agreement and to purchase the Property and to pay the Purchase Price therefor, Seller covenants and agrees to the following:

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(i) Seller shall not release or modify any Warranties and Guaranties, if any, except with the prior written consent of Purchaser.

(ii) Seller shall pay all premiums on, and shall not cancel or voluntarily allow to expire, any of Seller’s insurance policies unless such policy is replaced, without any lapse of coverage, by another policy or policies providing coverage at least as extensive as the policy or policies being replaced.

(iii) Promptly following the execution of this Agreement up to and including the Closing, Seller shall provide, and shall cause the Manager and Seller’s Representatives to provide, to Purchaser’s Representatives access to financial and other information relating to the Property in the possession of or otherwise available to Seller, Seller’s Representatives, and/or the Manager as would be necessary to enable Purchaser and Purchaser’s Representatives, including Purchaser’s independent accounting firm, to prepare audited financial statements for the Hotel for the three (3) calendar years prior to the Closing and during the year in which the Closing occurs in conformity with generally accepted accounting principles and to enable them to prepare such statements, reports or disclosures as Purchaser may deem necessary or advisable. Seller shall also provide and/or shall cause the Manager to provide to Purchaser’s independent accounting firm a signed representation letter which would be sufficient to enable an independent public accountant to render an opinion on the financial statements related to the Property. Seller shall authorize and shall cause the Manager to authorize any attorneys who have represented Seller or the Manager in material litigation pertaining to or affecting the Property to respond, at Purchaser’s request and at Purchaser’s expense, to inquiries from Purchaser and Purchaser’s Representatives, including Purchaser’s independent accounting firm. If and to the extent Seller’s financial statements pertaining to the Property for any periods during the three (3) calendar years prior to the Closing and during the year in which the Closing occurs have been audited, promptly after the execution of this Agreement Seller shall provide Purchaser with copies of such audited financial statements and shall cooperate with Purchaser and Purchaser’s Representatives, including Purchaser’s independent public accountants, to enable them to contact the auditors who prepared such audited financial statements and to obtain, at Purchaser’s expense, a reissuance of such audited financial statements.

(iv)     Seller covenants and agrees with Purchaser that, between the date of this Agreement and the Closing Date:

(A)Subject to the restrictions contained herein, Seller shall operate and shall cause the Manager to operate the Property in the Ordinary Course of Business and in the same manner in which Seller operated the Property prior to the execution of this Agreement, so as to keep the Property in good condition, reasonable wear and tear excepted, so as to maintain consistent inventory levels, so as to maintain the existing caliber of the operations of the Hotel at the Property and so as to maintain the reasonable good will of all tenants of the Property and all Employees, guests and other customers of the Hotel.

(B)Seller shall cause to be paid prior to delinquency all ad valorem, occupancy and sales taxes due and payable with respect to the Property or the operation of the Hotel.

(C)Seller shall not fail to maintain the Improvements and the Tangible Personal Property (including, the mechanical systems, plumbing, electrical, wiring, appliances, fixtures, heating, air conditioning and ventilating equipment, elevators, boilers, equipment, roofs, structural members and furnaces) in the same condition as they are as of the date hereof, reasonable wear and tear excepted.

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(D)Seller shall not remove or cause or permit to be removed any part or portion of the Property, including any Tangible Personal Property, without the express written consent of Purchaser unless the same is replaced, prior to the Closing, with similar items of at least equal suitability, quality and value, free and clear of any liens or security interests.

(E)Seller shall promptly deliver to Purchaser upon Purchaser’s request, such reports showing the revenue and expenses of the Hotel and all departments thereof, together with such periodic information with respect to room reservations and other bookings, as the Manager customarily keeps or as Seller receives internally for its own use.

(F)Seller shall promptly advise Purchaser of any litigation, arbitration or administrative hearing concerning or affecting the Hotel, the Premises or the Property of which Seller obtains Knowledge.

(v)     Payment of all costs and expenses associated with accrued but unpaid salary, earned but unpaid vacation pay, pension and welfare benefits, the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) benefits, employee fringe benefits, employee termination payments, including but not limited to statutory severance pursuant to Puerto Rico Law 80-1976, or any other employee benefits due to Employees up to the Closing Date shall be the sole responsibility and obligation of Seller and Seller shall cause Hotel Manager to pay promptly from Seller’s account. To the extent applicable, Seller shall cause Hotel Manager to provide COBRA continuation coverage under Part 6 of ERISA and under section 4980B of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) to all M&A Qualified Beneficiaries as defined under Treasury Regulation 54.4980B-9 with respect to the transaction contemplated herein.

(vi) Seller shall provide Purchaser with reasonably satisfactory evidence of the written waiver of any and all rights of first refusal or options related to the Premises or any portion thereof that may have been granted to any Person.

(vii) Seller shall, and shall cause the Manager to, promptly take any and all action necessary to cause Manager to maintain the existing liquor license for the Hotel and the Premises to be in full force and effect for Purchaser’s benefit following the Closing.

(viii) [intentionally omitted]

(ix) [intentionally omitted]

(x) Seller shall not, at any time prior to the Closing Date, enter into nor permit any contracts or commitments to third parties to be entered into regarding the Property or any part thereof, except for (A) agreements with public or private entities for the provisions of utility services (i.e., water and sewer) upon terms and conditions approved by Purchaser, such approval not to be unreasonably withheld or delayed (collectively, the “Permitted Agreements”), (B) contracts or commitments in the Ordinary Course of Business which can be terminated without penalty at Purchaser’s election upon notice of thirty (30) days or less, or (C) as otherwise herein expressly provided.

(xi) Seller shall, through the Closing Date, notify Purchaser within five (5) days of receipt by Seller or by any of its agents, of any notice of any violations or monetary violations or of other notices from any Governmental Authority or third parties regarding Contracts, Applications, Permits, title, condemnation, zoning or entitlement issues or of any other event or occurrence material to the Property.

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(xii) Seller shall not, at any time prior to the Closing Date, mortgage, pledge, encumber or constitute any liens, mortgages, easements, encumbrances or security interests or rights in favor of third parties of any kind whatsoever on all or any portion of the Property, except for (A) unrecorded rights granted to third parties in the Ordinary Course of Business, or (B) as otherwise permitted herein.

(xiii) Seller shall not, at any time prior to the Closing Date, negotiate with or grant to third parties any options or rights to lease, use, occupy or acquire all or any portion of the Property.

(xiv) Seller shall cooperate with Purchaser in its efforts before the relevant Governmental Authorities to secure any necessary Permits including transferring all transferable or assignable Permits, filing any necessary notice of notification required before Closing (with copy to Purchaser), filling and submitting any necessary form or application, or providing any necessary reports, documents or information.

(xv) Through the Closing Date, Seller shall comply and cause Seller’s Representatives to comply, in all material respects with the terms of all Contracts (including the Hotel Management Agreement, and the Permitted Agreements), Leases, Permits, Applications or related licenses, approvals, documents and instruments, governmental requirements and insurance requirements regarding the Property. Notwithstanding the foregoing, Seller shall have the right but not the obligation, at its expense, to in good faith contest by appropriate proceedings the interpretation, or validity or application, in whole or in part, or any alleged non-compliance by Seller with any of the foregoing and until final resolution of such contest, whether such resolution occurs prior or after Closing, Seller shall not be obligated to comply with such terms and shall not be considered to be in default of its obligations hereunder. Before commencing any such challenge, Seller shall deliver a guarantee issued by a guarantor (meeting financial standards as to liquidity and net worth acceptable to Purchaser) or a surety bond issued by a surety, in either case in an amount equal to 125% of the dollar amount in controversy or at stake.

(xvi) Seller shall operate, repair and maintain the Property in accordance with Seller’s current practice therefor and as required to comply with any requirements of Applicable Law, Contracts, Leases and other agreements and understandings to which Seller is a party, and shall maintain existing insurance coverage therefor through the Closing Date. Seller shall not remove existing Tangible Personal Property from the Property unless the property being removed is obsolete or is substituted with a similar item.

(xvii) Seller shall not take any action not permitted by this Agreement or which would cause any of Seller’s representations and warranties hereunder to be untrue or incorrect.

(xviii) Seller shall obtain an Estoppel Certificate from Manager regarding matters under the Hotel Management Agreement, in form and substance acceptable to Purchaser and reflecting, among other things, no defaults by any party to such Hotel Management Agreement (the “Manager Estoppel Certificate”).

(xix) Subject to the restrictions contained herein, Seller shall enforce the Hotel Management Agreement and cause Manager to maintain and operate the Hotel in the Ordinary Course of Business.

(xx) Seller shall obtain any consents required to be obtained from any governmental or quasi-governmental authorities or other third parties with respect to the consummation of the transactions contemplated by this Agreement (the “Consents”).

(xxi) Seller shall comply with all of its obligations under the Tax Concession.

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(xxii) Seller shall not amend, modify, terminate or waive any obligations of a third party under, any Applications, Permits, Contract (including the Hotel Management Agreement) or Leases without prior notice to and approval of Purchaser (other than amendments or modifications specifically required to be obtained by Seller prior to the Closing pursuant to this Agreement).

(xxiii) Seller shall not, without the prior approval of Purchaser, execute any new agreement that would constitute a Contract or Lease if executed prior to the date hereof. Upon execution of any Contract or Lease, Seller will promptly provide to Purchaser a fully executed copy of such Contract or Lease.

(xxiv) With respect to any Ritz-Carlton Reserve branded residences be constructed in the future within the Resort, including those to be located in the Cerromar Parcels, Seller will use commercially reasonable efforts to include in any regime declarations or other restrictive covenants binding upon the owners thereof, requirements substantially the same as those currently applicable to short term rentals other than through the Hotel rental program. In addition, with respect to any owned residences north of State Road 693 (but excluding any residences in the Cerromar Parcels that are not Ritz-Carlton Reserve branded residences) now or hereafter within the Resort, Seller will, and will cause its Affiliates to, respond in good faith to any issues raised post-Closing by Purchaser, the Manager, and/or Purchaser’s Affiliates as to short-term rentals outside the Hotel rental program and Seller will, and will cause its Affiliates to, enforce such declarations, restrictive covenants and requirements through, among other measures, restricting access at the guard gate. With respect to any owned residences north of State Road 693 (but excluding any residences in the Cerromar Parcels that are not Ritz-Carlton Reserve branded residences) now or hereafter located within the Resort Seller will, and will cause its Affiliates to, work in good faith with Purchaser, the Manager and Purchaser’s Affiliates to limit any short-term rentals other than through the Hotel rental program.

(b)To induce Seller to enter into this Agreement and to sell the Property for the Purchase Price, the Company covenants and agrees to:

(i) Take such actions as shall be required (i) to cause a registration statement to be filed with the SEC that includes the BHR Common Stock (the “Registration Statement”) within two (2) Business Days following the Closing Date, and (ii) to cause the Registration Statement to be declared effective by the SEC as promptly as reasonably possible following the filing thereof, and to maintain the effectiveness of the Registration Statement until the earlier of (A) the date that Seller has sold all BHR Common Stock or (B) the date that Seller is entitled to sell all remaining unsold shares of BHR Common Stock under Rule 144.

(ii) Once the Registration Statement is declared effective by the SEC or the BHR Common Stock may be sold pursuant to Rule 144 under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Company shall remove the “restricted securities” legend from the BHR Common Stock.

12.REPRESENTATIONS.

(a)To induce Seller to enter into this Agreement and to sell the Property to Purchaser, Purchaser hereby makes the following representations and warranties, upon each of which Purchaser acknowledges and agrees that Seller is entitled to rely and has relied:

(i) Purchaser is a limited liability company validly existing and in good standing under the laws of Delaware and has the requisite power and authority to enter into and to perform the terms of this Agreement and the Purchaser Closing Documents binding on Purchaser. The execution and delivery of this Agreement and Purchaser Closing Documents and the

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consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite action of Purchaser, this Agreement has been duly executed and delivered by Purchaser and this Agreement constitutes and, upon execution and delivery of the same by Purchaser, the Purchaser Closing Documents will, on the Closing Date, constitute the valid and binding obligations of Purchaser enforceable against Purchaser in accordance with their respective terms, except as such enforceability may be limited by the Legal Enforceability Exceptions. Purchaser has full power, in accordance with law, to enter into this Agreement and to consummate the transactions provided for herein. The Person executing this Agreement on behalf of Purchaser has full authority and authorization to do so.

(ii) Neither the entering into of this Agreement by Purchaser, the execution by Purchaser of the Purchaser Closing Documents nor the consummation of the transactions contemplated hereby and thereby will, with the giving of notice, the passage of time or both the giving of notice and the passage of time, conflict with or constitute a violation or breach by Purchaser under (w) Purchaser’s Organizational Documents, (x) any agreement or other instrument to which Purchaser is a party or to which it is subject or by which any of its assets or properties may be affected, (y) any judgment, order, writ, injunction or decree issued against or imposed upon Purchaser, or (z) any Applicable Law, in each case, where such violation or breach will have a material adverse effect on the ability of Purchaser to consummate the transactions contemplated hereby.

(iii) No Act of Bankruptcy has occurred with respect to Purchaser.

(iv) Neither Purchaser, nor any of its Affiliates: (A) is generally known in the community as being of bad moral character, nor has been convicted of a Serious Crime, nor is in control of nor is controlled by persons who have been convicted of a Serious Crime; (B) has an ownership interest (excluding that of a franchisee or a passive investor with a non-controlling interest) in a branded hotel company (i.e., a company that owns, operates or franchises a branded hotel chain, such as Hilton, or a group of hotels that are not affiliated with a brand but that are marketed and operated as a collective group) that operates or licenses full service hotels in competition with Manager or Ritz-Carlton; or (C) is a Specially Designated National or Blocked Person.

(b)To induce Seller to enter into this Agreement and to sell the Property to Purchaser, the Company hereby makes the following representations and warranties, upon each of which the Company acknowledges and agrees that Seller is entitled to rely and has relied:

(i) The Company is a corporation duly incorporated, validly existing, and in good standing under Maryland law.

(ii) The Company has the requisite corporate or other power and authority to enter into and perform its obligations under this Agreement. The execution and delivery of this Agreement, the filing of the Registration Statement and the issuance have been duly authorized by the Board of Directors of the Company (the “Board of Directors”). This Agreement has been duly executed and delivered by the Company, and this Agreement constitutes, the valid and binding obligations of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by the Legal Enforceability Exceptions. Except as set forth in this Agreement and (other than the filing of the Registration Statement, the SEC declaring the Registration Statement effective and any notice filings with the NYSE) no other approvals or consents of any Person are necessary under Applicable Laws and the Company’s organizational documents, to authorize the execution and delivery of this Agreement or the issuance of the BHR Common Stock. The Person executing this Agreement on behalf of the Company has full authority and authorization to do so.

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(iii) The execution and delivery of this Agreement by the Company and the issuance of the BHR Common Stock by the Company will not (i) result in a breach or default under the Company’s organizational documents or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under any material agreement or instrument to which the Company is a party, or result in a violation of any law except in the case of conflicts or defaults which would not reasonably be expected to result in a material adverse effect on the Company.

(iv) Except as disclosed in the SEC Documents, the Company has not, in the twelve (12) months preceding the date hereof, received any written notice from or on behalf of the NYSE to the effect that the Company is not in compliance with the listing or maintenance requirements of the NYSE.

(v) Upon issuance in accordance with this Agreement, the BHR Common Stock will be duly authorized, validly issued, fully paid and non-assessable.

(vi) The Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Exchange Act since December 31, 2019 (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, but not including such materials, exhibits and documents furnished but not filed, being collectively referred to herein as the “SEC Reports”). The SEC Reports (i) as of the time they were filed (or if subsequently amended, when amended, and as of the date hereof), complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and (ii) did not, at the time they were filed (or if subsequently amended or superseded by an amendment or other filing, then, on the date of such subsequent filing), contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein not misleading.

(vii) The financial statements of the Company and all consolidated subsidiaries included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”) and in accordance with Regulation S-X promulgated by the SEC, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. Except as publicly available through the SEC’s Electronic Data Gathering, Analysis, and Retrieval system in connection with a confidential treatment request submitted to the SEC, or in connection with a Rule 3-05 of Regulation S-X waiver request, the Company has received no written notices or correspondence from the SEC for the one year preceding the date hereof. There are no “open” SEC comments. To the Company’s knowledge, the SEC has not commenced any enforcement proceedings against the Company.

(viii) The Company has established and maintain disclosure controls and procedures (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act). Except as disclosed in the SEC Reports, such disclosure controls and procedures are designed to ensure that material information relating to the Company and its Subsidiaries is made known to the Company’s Chief Executive Officer and its Chief Financial Officer by others within those entities, and such disclosure controls and procedures are effective to perform the functions for which they were

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established. The Company has established and maintain internal control over financial reporting (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act). Except as disclosed in the SEC Reports, such internal control over financial reporting is designed to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (E) the interactive data in Extensible Business Reporting Language in the SEC Reports fairly presents the information called for in all material respects and are prepared in accordance with the SEC’s rules and guidelines applicable thereto. The Company’s auditors and the audit committee of the Board of Directors of the Company have been advised of: (i) any significant deficiencies and material weaknesses in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize, and report financial data; and (ii) any fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal controls. Since the date of the most recent evaluation of such disclosure controls and procedures, except as disclosed in the SEC Reports, there have been (A) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (B) no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies.

(c)To induce the Purchaser Parties to enter into this Agreement and to cause Purchaser to purchase the Property, Seller hereby makes the following representations and warranties, upon each of which Seller acknowledges and agrees that the Purchaser Parties are entitled to rely and have relied:

(i) Seller is a limited liability company, validly existing and in good standing under the laws of the Commonwealth and has the requisite power and authority and all Permits to carry on its business as now conducted and to enter into and perform its obligations under this Agreement and the Seller Closing Documents. The execution and delivery of this Agreement and the Seller Closing Documents and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite action of Seller and this Agreement constitutes and, upon execution and delivery of the same by Seller, the Seller Closing Documents will, on the Closing Date, constitute the valid and binding obligations of Seller enforceable in accordance with their respective terms except as such enforceability may be limited by the Legal Enforceability Exceptions. The Person executing this Agreement on behalf of Seller has full authority and authorization to do so.

(ii) Neither the entering into of this Agreement by Seller, the execution by Seller of the Seller Closing Documents nor the consummation of the transactions contemplated hereby or thereby will, with the giving of notice, the passage of time or both the giving of notice and the passage of time, (A) conflict with or constitute a violation or breach by Seller under (w) Seller’s Organizational Documents, (x) any agreement or other instrument to which Seller is a party or in respect of which the Property or any portion thereof is affected or bound or to which Seller is subject or by which any of the Assets (including the Premises or any portion thereof) may be affected, (y) any judgment, order, writ, injunction or decree issued against or imposed upon Seller or in respect of any of the Assets (including the Premises or any portion thereof), or (z) any Applicable Law, or (B) result in the creation of any lien or encumbrance against any Asset (including the Premises or any portion thereof).

(iii) Seller has not received written or oral notice of any pending or, to Seller’s Knowledge, threatened (A) Condemnation Proceedings (as defined in Section 34) or (B) any

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change or proposed change in the route, grade or width of, or otherwise affecting any street, creek or road adjacent to or serving any portion of the Premises.

(iv) Seller is the sole owner of fee simple (pleno dominio) title to the Premises. Except for the right of Manager to purchase the Premises under the Hotel Management Agreement that has been fully and completely waived in writing by the Manager, there are no rights-of-first refusal, right of first offer, similar agreements or other agreements (written or oral) pursuant to which Seller or any Seller Representative has agreed to sell or cause Seller to sell, granted an option to purchase or granted a right of first refusal or right of first offer in connection with the Property or any portion thereof which could in any way interfere with Purchaser’s ability to purchase the Property from Seller hereunder.

(v) There is no Action by any Person pending against Seller, the Property or any portion of the Property, nor has any Person communicated, to Seller’s Knowledge, the threat of any such Action, other than as set forth in Schedule M.

(vi) Seller has not received written or, to Seller’s Knowledge, any oral notice of (A) any pending or threatened rezoning or (B) any challenge to any existing zoning or site approval, of the Premises or any portion thereof.

(vii) Seller has not received written or, to Seller’s Knowledge, oral notice of any Environmental Condition at the Premises or any portion thereof other than as set forth in Schedule N.

(viii) Seller has not received any written or, to Seller’s Knowledge, oral notice from CRIM proposing an increase in real estate taxes with respect to the Premises (either by virtue of an increase in rates or in assessed valuation). Neither Seller nor any Seller Representative has received any written notice, or to Seller’s Knowledge, any oral notice, of any special taxes or assessments relating to the Premises or any portion thereof or any planned public improvements that could result in a special tax or assessment against the Property or any portion thereof.

(ix) All real property Taxes related to the Premises have been paid in full as of the Signing Date.

(x) To Seller’s Knowledge, no claims have been asserted and no proposals or deficiencies for any taxes related to the Premises are being asserted or threatened in writing and to Seller’s Knowledge, there are no liens for Taxes with respect to the Premises other tan liens for taxes that are not yet due and payable and no such liens are pending or have been threatened in writing.

(xi) Schedule C contains a true and correct description of all existing Contracts relating to the Premises, the Property and/or the ownership or use of the Hotel to which Seller is a party as of the date of this Agreement. All such Contracts are valid and enforceable against Seller and to Seller’s Knowledge against each counterparty to each such Contract. To Seller’s Knowledge, all such Contracts will be valid and enforceable in accordance with their respective terms for the periods stated therein and will be valid and enforceable and in full force and effect on the Closing Date. Seller has not received written, or to Seller’s Knowledge oral, notice from any counter-party to any such Contract asserting a claimed default, event of default, or event which with the giving of notice, the passage of time or both the giving of notice and the lapse of time would constitute a breach, default or event of default under any such Contract. Seller has not received written, or to Seller’s Knowledge oral, notice from any counterparty to any Contract of such counter-party’s intention, now or in the future, to cancel or not renew any such Contract. Seller has delivered to Purchaser true and correct copies of each of the Contracts listed on Schedule C.

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(xii) Schedule O is a complete list of all Permits required under Applicable Laws as to Seller’s ownership or use of the Property and/or the operation of the Hotel (the “Scheduled Permits”). Seller, or Manager on behalf of Seller, possesses all required Permits, each of which is valid and in full force and effect, and Seller has received no written, or, to Seller’s Knowledge, oral, notice that any provision, condition or limitation of any of the Scheduled Permits has been breached or violated and each such Scheduled Permit remains outstanding and in full force and effect. To Seller’s Knowledge, Seller has not misrepresented or failed to disclose any relevant fact in obtaining any of the Scheduled Permits, and Seller has no knowledge of any change in the circumstances under which those Scheduled Permits were obtained that could result in their termination, suspension, modification or limitation.

(xiii) Seller has not received written notice or, to Seller’s Knowledge, any oral threat of any revocation, termination or forfeiture of any Permit.

(xiv) Seller is in material compliance with Applicable Laws. Seller has not received written, or to Seller’s knowledge any oral, notice within the past three (3) years, asserting any claimed violation of any Applicable Law as to Seller’s ownership or use of the Property and/or the operation of the Hotel including those of environmental agencies or insurance boards of underwriters with respect to the ownership, operation, use, maintenance or condition of the Premises or any portion thereof, or requiring any repairs or alterations to the Premises other than those that have been made prior to the date hereof. Seller has not received written or, to Seller’s Knowledge, oral notice within the past three (3) years, of any existing or threatened violation of any restrictive covenants or deed restrictions affecting the Premises.

(xv) All Tangible Personal Property and Intangible Personal Property owned by Seller, including any FF&E (collectively, “Owned Personal Property”) is owned free and clear of all liens, security interests, assignments, pledges, options and rights of third parties other than the Existing Lien and Seller has good and merchantable title thereto and the right to convey same to Purchaser in accordance with the terms of this Agreement.

(xvi) Except for the Leases listed on Schedule F and the other rights listed on Schedule K, Seller has no Knowledge of any occupancy rights (written or oral), licenses, leases, subleases or other tenancies presently affecting the Premises or any potion thereof.

(xvii) Schedule F contains a complete list of all Leases affecting the Property or any portion thereof, including all amendments, modifications and supplements thereto. Seller has delivered to Purchaser a true, correct and complete copy of each Lease. Schedule F including a complete list of all security deposits delivered to Seller pursuant to the terms of the Leases, and unless otherwise provided on Schedule F, the security deposits remain on deposit with Seller and have not been applied towards any payment due under the applicable Lease. To Seller’s Knowledge, each of the Leases is in full force and effect and neither Seller nor any counterparty to any Lease is in default in any respect of any of the terms and provisions of such Lease.

(xviii) Seller has delivered to Purchaser a true, correct and complete copy of the Hotel Management Agreement, including all amendments, modifications and supplements thereto. To Seller’s Knowledge, the Hotel Management Agreement is in full force and effect. Seller, and to Seller’s Knowledge, Manager, have performed all of their obligations under the Hotel Management Agreement in all material respects and are not in material default thereunder (and Seller has not received any written, or to Seller’s Knowledge any oral, notice of an event which, with the passage of time, giving of notice or both, would constitute a material default under the Hotel Management Agreement). Seller has received no written, or to Seller’s Knowledge oral, notice from Manager of any intention, now or in the future, to cancel or not renew the Hotel Management Agreement.

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(xix) To Seller’s Knowledge, there has been no event or occurrence that, with the giving of notice, the passage of time or both the giving of notice and the passage of time, could constitute grounds for the revocation of the Existing Tax Concession and the Existing Tax Concession provides a ninety percent (90%) property tax abatement.

(xx) Attached hereto as Schedule P is a list of all property tax identification numbers corresponding to the property tax bills received by Seller which correspond to the Premises.

(xxi) Seller represents to Purchaser that the Knowledge Parties are Persons associated with Seller and are the Persons most familiar with the subject of the representations and warranties of Seller hereunder.

(xxii) Seller does not have any Employees. All the persons and employees that provide services at the Hotel are Employees of the Manager, or the Manager may have used persons or employees employed by temporary staffing services or through services contracts. To Seller’s Knowledge, the Premises have been operated in compliance with all Applicable Laws, including labor and employment laws.

(xxiii) Neither Seller nor, to Seller’s Knowledge, the Manager is a party to any union or other collective bargaining agreement with Employees employed in connection with the operation or maintenance of the Hotel. Neither Seller nor the Manager is in negotiations with any union to enter into any collective bargaining or similar agreement. To Seller’s Knowledge, no strike, slowdown or work stoppage is occurring or has occurred, nor is threatened or has been threatened within the last year with respect to the Employees. To Seller’s Knowledge, there is no representation, claim or petition pending before the U.S. National Labor Relations Board or any similar foreign, state or local labor agency of which Seller has been provided prior written notice, and to Seller’s Knowledge, no question concerning representation has been raised or threatened respecting the Employees. Except for those cases listed in Schedule Q. with respect to each current and former Employee, to Seller’s Knowledge, the Manager has not received written notice (which remains uncured) that Manager: (i) has not withheld, deposited and reported all material amounts required by Applicable Laws or by agreement to be withheld, deposited and reported with respect to wages, salaries and other payments; (ii) has any outstanding material liability, or any potential material liability, for any arrears of wages, severance pay, including statutory severance pursuant to Puerto Rico Law 80-1976, or any penalty relating thereto for failure to comply with any of the foregoing; (iii) has any outstanding liability, or any potential liability, for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Authority, with respect to unemployment compensation benefits, social security or other obligations for Employees; (iv) has received a proposed assessment of the employer shared responsibility tax under Code section 4980H; and (v) has any outstanding material liability or any potential material liability with respect to any misclassification of any person as (x) an independent contractor rather than as an Employee, or with respect to any Employee leased from another employer, or (y) an Employee exempt from state or federal overtime regulations. Except for those cases listed in Schedule Q, since January 1, 2018 through the date hereof, to Seller’s Knowledge, the Manager has not received any written complaint, or notice of any complaint or proceeding, and there is no Action pending or, to Seller’s Knowledge, threatened in writing, against or involving the Manager on the one hand and any Employees on the other hand, including claims that Manager violated any applicable employment standards, labor legislation or employment laws, before any federal, Commonwealth, municipal or other Governmental Authority. To Seller’s Knowledge, the Manager has not received written notice of the intent of any federal, Commonwealth, municipal or other Governmental Authority responsible for the enforcement of labor or employment laws to conduct an investigation of Seller or the Manager, and, to Seller’s Knowledge, no such investigation is in progress. There are no outstanding orders or charges against the Seller, the Manager or the Hotel under any occupational health or safety legislation and, to Seller’s

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Knowledge, none have been threatened. Except for those cases listed in Schedule Q, there are no pending worker compensation claims affecting the Premises. Neither the Seller nor the Manager is in violation of or has received written notice of any violation with respect to any federal or state law, regulation or rule relating to discrimination in the hiring, termination, promotion, employment or pay of employees, nor any applicable federal or state wages and hours law, nor any state law, regulation or rule, the violation of any of which, individually or in the aggregate, would reasonably be expected to have a material adverse effect. There are no existing or, to the knowledge of the Company or the Partnership, threatened labor disputes with the employees of the Company or any of the Subsidiaries that would reasonably be expected to have, individually or in the aggregate, a material adverse effect.

(xxiv) To Seller’s Knowledge, all of Seller’s financial information, including all books and records and financial statements (“Financial Information”) is correct and complete in all material respects and presents accurately the results of the operations of the Hotel for the periods indicated. Since the date of the last financial statement included in Seller’s Financial Information, there has been no material adverse change in the financial condition or in the operations of the Hotel. Neither Purchaser nor Purchaser’s Representatives shall have any liability under any pension, profit sharing or welfare benefit plan that the Manager may have established or contributed to with respect to the Employees accruing prior to the Closing Date. To Seller’s Knowledge, the Submission Matters delivered to Purchaser are true, accurate and complete.

(xxv) No Act of Bankruptcy has occurred with respect to Seller.

(xxvi) To Seller’s Knowledge, except as provided in the Phase I Environmental Site Assessment Dorado Beach, a Ritz Carlton Reserve prepared by Progea for Knighthead Funding, LLC. dated February 1, 2021, (A) the Seller has not engaged in or permitted any operations or activities upon, or any use or occupancy of the Hotel, the Premises or any portion thereof, for the purpose of or in any way involving the handling, manufacture, treatment, storage, use, generation, release, discharge, refining, dumping or disposal of any Hazardous Materials on, under, in or about the Hotel or the Premises in violation of any Environmental Laws; (B) no Hazardous Materials have migrated from or to the Premises upon, about, or beneath other properties in violation of any Environmental Laws; and (C) neither the Premises nor the existing or prior uses of the Premises, including the operation of the Hotel, fail or failed to materially comply with Environmental Laws. Seller has no knowledge of any permits, licenses or other authorizations which are required under any Environmental Laws with regard to the current uses of the Premises which have not been obtained and complied with. To Seller’s Knowledge, except as provided in the Phase I Environmental Site Assessment Dorado Beach, a Ritz Carlton Reserve prepared by Progea for Knighthead Funding, LLC. dated February 1, 2021, (A) neither Seller nor any prior owner, occupant or user of the Premises has received any written notice concerning any alleged violation of Environmental Laws in connection with the Premises or any liability for Environmental Damages in connection with the Premises for which Seller (or Purchaser after Closing) may be liable; (B) no Hazardous Materials have been transported, are constructed, deposited, stored or otherwise located on, under, in or about the Premises in violation of any Environmental Laws; and (C) there exists no writ, injunction, decree, order or judgment outstanding, nor any lawsuit, claim, proceeding, citation, summons or investigation, pending or threatened, relating to any alleged violation of Environmental Laws on the Premises or regarding the operation or uses of the Premises, or from the suspected presence of Hazardous Materials thereon.

(xxvii) All sales, use and occupancy taxes due and owing with respect to the Hotel or the Premises have been paid or will be paid prior to delinquency.

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(xxviii) All ad valorem personal property taxes due and owing with respect to the Hotel or the Premises have been paid or will be paid prior to delinquency.

(xxix) To Seller’s Knowledge, the Advance Bookings are true and correct.

(xxx) There are no property interests, easements, rights of way, covenants, buildings, structures, equipment or other improvements or personal property that are owned by Seller or a Seller Representative or for which Seller or Seller Representative is entitled to, which are necessary for the operation of the Hotel that are not being conveyed to Purchaser pursuant to this Agreement.

(xxxi) Seller has not incurred any unsecured indebtedness pursuant to the Coronavirus Aid, Relief, and Economic Security Act.

(xxxii) Seller has received no written or oral notice of any defaults under the Existing Lien which have not been cured or waived in writing by the holder of the Existing Debt. There are no existing events of default under the Existing Lien and, to Seller’s Knowledge, no event has occurred that, with the giving of notice, the passage of time or both the giving of notice and the passage of time, would constitute a breach, violation or event of default under the Existing Debt or the Existing Lien.

(xxxiii) Seller is not transferring the Property to Purchaser with any intent to hinder, delay, or defraud any entity to which Seller is or will become indebted. Seller is receiving reasonably equivalent value in exchange for the Property. Seller is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which Seller’s assets remaining after the Closing will be an unreasonably small capital. Seller has not incurred, or intended to incur, debts that are beyond Seller’s ability to pay as such debts matured. Seller is not transferring the Property to or for the benefit of an insider. Seller’s assets (at a fair valuation) exceed Seller’s debts on the date hereof and Seller’s assets (at a fair valuation) will exceed Seller’s debts immediately following the Closing.

(xxxiv) Seller represents that Seller has reviewed the information necessary to provide the representations and warranties in Section 12(c) and all the Schedules referred to in Section 12(c) with the Manager and the Manager has not provided any information to Seller that would render incorrect or incomplete any of such representations or warranties or any such Schedules.

(xxxv) Seller is an “accredited investor” within the meaning of Rule 501(a) promulgated under the Securities Act. Seller understands the risks of, and other considerations relating to, the purchase of the BHR Common Stock. Seller, by reason of its business and financial experience, together with the business and financial experience of Seller’s Representatives and those Persons, if any, retained by it to represent or advise it with respect to its investment in the BHR Common Stock, (i) has such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type, (ii) is capable of evaluating the merits and risks of an investment in the Company and of making an informed investment decision, (iii) is capable of protecting its own interest or has engaged one or more Representatives to assist it in protecting its interests and (iv) is capable of bearing the economic risk of such investment.

(xxxvi) Seller acknowledges that as of the Closing Date (i) the BHR Common Stock to be issued to Seller has not been registered under the Securities Act or any state or Commonwealth securities laws by reason of an exemption or exemptions from registration under the Securities Act and applicable state or Commonwealth securities laws, (ii) the Company’s reliance on such exemptions is predicated in part on the accuracy and completeness of the

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representations and warranties of Seller contained herein, and (iii) such BHR Common Stock, therefore, cannot be resold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless registered under the Securities Act and applicable state or Commonwealth securities laws (unless an exemption from registration is available). Seller hereby acknowledges that because of the restrictions on transfer of BHR Common Stock to be issued hereunder, Seller may have to bear the economic risk of the investment commitment evidenced by this Agreement and the BHR Common Stock acquired hereby for an indefinite period of time, although the Company will file the Registration Statement as required pursuant to this Agreement.

(xxxvii) The Seller hereby covenants with the Company not to make any sale of the BHR Common Stock under the Registration Statement without complying with the provisions of this Agreement and without effectively causing the prospectus delivery requirement under the Securities Act to be satisfied (whether physically or through compliance with Rule 172 under the Securities Act or any similar rule), and the Seller acknowledges and agrees that the shares of BHR Common Stock are not transferable on the books of the Company unless the shares of BHR Common Stock have been sold in accordance with the Registration Statement, the Securities Act and any applicable state securities or Blue Sky laws and the prospectus delivery requirement effectively has been satisfied. The Seller acknowledges that there may occasionally be times when the Company, upon the advice of external legal counsel, must suspend the use of the prospectus (the “Prospectus”) forming a part of the Registration Statement (a “Suspension”) until such time as an amendment to the Registration Statement or prospectus supplement, if applicable, has been filed by the Company and declared effective by the SEC, or until such time as the Company has filed an appropriate report with the SEC pursuant to the Exchange Act. Without the Company’s prior written consent, the Seller shall not use any written materials to offer the shares of BHR Common Stock for resale other than the Prospectus, including any “free writing prospectus” as defined in Rule 405 under the Securities Act. The Seller further covenants and agrees to notify the Company promptly of the sale of all of the shares of BHR Common Stock. The Seller covenants that it will not sell any BHR Common Stock pursuant to the Prospectus during the period commencing at the time when Company gives the Seller written notice of the suspension of the use of the Prospectus and ending at the time when the Company gives the Seller written notice that the Seller may thereafter effect sales pursuant to the Prospectus. Notwithstanding the foregoing, the Company agrees that no Suspension shall be for a period of longer than 45 consecutive days, and no Suspensions shall be for longer than 90 days in the aggregate in any 365 day period.

(xxxviii) Prior to the date hereof, the Seller has not taken, and prior to the public announcement of the Closing the Seller shall not take, any action that has caused or will cause the Seller to have, directly or indirectly, sold or agreed to sell any shares of common stock of the Company, effected any short sale, whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act with respect to the common stock of the Company, granted any other right (including any put or call option)) with respect to the common stock of the Company or with respect to any security that includes, relates to or derived any significant part of its value from the common stock of the Company.

(xxxix) The Seller acknowledges that it has had the opportunity to review the Company’s reports, schedules, forms, statements and other documents required to be filed by the Company under the Exchange Act, and has been afforded: (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the BHR Common Stock and the merits and risks of investing in the shares of BHR Common Stock; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire

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without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

(xl) The Seller understands that nothing in the Agreement or any other materials presented to the Seller in connection with the purchase and sale of the BHR Common Stock constitutes legal, tax or investment advice. The Seller has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the BHR Common Stock.

(xli) Seller is purchasing the BHR Common Stock for investment purposes only for the account of the Seller and not with any view toward a distribution thereof or with any intention of selling, distributing or otherwise disposing of the BHR Common Stock in a manner that would violate the registration requirements of the Securities Act.

(xlii) The Seller understands that the shares of BHR Common Stock are “restricted securities” as the term is defined in Rule 144 promulgated under the Securities Act and, until such time as the Registration Statement has been declared effective or the BHR Common Stock may be sold pursuant to Rule 144 under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, the BHR Common Stock will bear a restrictive legend in substantially the following form:

“THE SHARES EVIDENCED HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.” UNDER REVIEW BY SELLERS SECURITIES COUNSEL”

(d)Seller acknowledges and agrees that each of the representations and warranties contained in Section 12(c) are intended for the sole benefit of the Purchaser Parties and may be waived in whole or in part, by the Purchaser Parties, but only by an instrument in writing signed by the Purchaser Parties.

(e)The provisions of this Section 12 shall survive the Closing.

13.INDEMNIFICATION.

(a)Seller shall indemnify, defend and hold harmless Purchaser and its Affiliates and their respective direct and indirect shareholders, officers, directors, partners, principals, members, employees, agents and contractors, and any successors, Affiliates or assigns of the foregoing (collectively, the “Purchaser Indemnitees”) from and against any and all Damages to the extent that such Damages are based on, result from or arise in connection with or by reason of:

(i) the breach of any representation or warranty made by Seller in this Agreement, which first comes to the actual attention of the Purchaser after the Signing Date;

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(ii) the failure of Seller to duly perform, comply with or observe any provision, obligation, covenant or agreement to be performed, complied with or observed by Seller pursuant to this Agreement or any Seller Closing Document;

(iii) acts or omissions of Seller or any Seller Representative prior to the Closing Date in connection with any of the Assets, the Property, the Hotel or any Contracts, Leases, Applications and/or Permits entered into, made or obtained prior to the Closing Date by Seller;

(iv) the ownership, operation and/or use of the Assets, the Property, including the Premises and the Hotel, prior to the Closing Date;

(v) any claim for commissions, fees or other compensation or reimbursement for expenses made by any Broker engaged by or claiming to have dealt with Seller or any Seller Representative in connection with this Agreement or the transactions contemplated hereby;

(vi) any Taxes or recapture of any Tax credits accruing, arising or related to any period prior to the Closing Date under the Existing Tax Concession or the Hotel Tax Concession;

(vii) the failure by Seller or any Seller Representative to pay any and all Taxes on or related to the Property or any Taxes on any operations on or related to the Property (including any Taxes imposed with respect to or measured by the proceeds of the sale of the Property) which accrue, arise out of facts occurring on or before the Closing Date or relate to any period prior to the Closing Date, except for Taxes which will be prorated as of the Closing Date and for which Purchaser expressly assumes responsibility for the period after the Closing Date as provided elsewhere herein; or

(viii) the failure by Seller and Purchaser to comply with the applicable provisions of the Bulk Sales Act; or

(ix) the matters disclosed on Schedule M and/or on Schedule N.

(b)Purchaser shall indemnify, defend and hold harmless Seller and its Affiliates and their respective direct and indirect shareholders, officers, directors, partners, principals, members, employees, agents and contractors, and any successors, Affiliates or assigns of the foregoing (collectively, the “Seller Indemnitees”) from and against any and all Damages to the extent that such Damages are based on, result from or arise in connection with or by reason of:

(i) the breach of any representation or warranty made by Purchaser in this Agreement or in any Purchaser Closing Document, which first comes to the attention of Seller after the Closing Date;

(ii) the failure of Purchaser to duly perform, comply with or observe any provision, obligation, covenant or agreement to be performed, complied with or observed by Purchaser pursuant to this Agreement or in any Purchaser Closing Document, which first comes to the attention of Seller after the Closing Date;

(iii) acts or omissions of Purchaser first occurring on or after the Closing Date in connection with any Contracts, Leases, Applications and/or Permits expressly assigned to and assumed by Purchaser in writing pursuant to this Agreement;

(iv) the ownership, operation and/or use of the Assets, the Property, including the Premises and the Hotel, after the Closing Date;

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(v) any claim for commissions, fees or other compensation or reimbursement for expenses made by any Broker engaged by or claiming to have dealt with Purchaser in connection with this Agreement or the transactions contemplated hereby;

(vi) any Taxes or recapture of any tax credits first accruing or arising as to periods from and after the Closing Date under the Hotel Tax Concession and/or amendments, supplements or substitutions thereof agreed to by Purchaser from and after the Closing Date including any new tax concessions issued to Purchaser; or

(vii) the failure by Purchaser to pay any and all Taxes on or related to the Property for periods on or after the Closing Date or any Taxes on any operations on or related to the Property for periods on or after the Closing Date which will be prorated as of the Closing Date in accordance with this Agreement and for which Purchaser will assume responsibility for the period after the Closing Date as provided herein.

(c) In the event an indemnified party wishes to make a claim for Damages hereunder (a “Claim”), including for Damages arising out of or resulting from a claim by a third party, the applicable indemnified party shall notify the indemnifying party in writing (and in reasonable detail) of the Claim and factual basis for the Claim (any such notification, an “Indemnity Notice”), which Indemnity Notice shall be given, in the case of Claims by third parties (a “Third Party Claim”), within seven (7) Business Days after receipt by such indemnified party of notice of the Third Party Claim, or otherwise becoming aware of the existence or threatened existence of the Third Party Claim. Failure to give such notice shall not constitute a defense, in whole or in part, to any Claim by an indemnified party hereunder except to the extent the rights of the indemnifying party are materially prejudiced by such failure to give notice. The indemnifying party shall notify the indemnified party of its intentions as to any Claim contained in the Indemnity Notice in writing within seven (7) Business Days after receipt of the Indemnity Notice.

(ii) With respect to any Claim, the indemnifying party may assume exclusive control of the defense and settlement (including all decisions relating to litigation, defense and appeal) of any such Claim (so long as it has confirmed its indemnification obligation to such indemnified party under Section 13(d)(i) with respect to a given Claim); provided, however, that the indemnifying party may not settle such Claim in any manner that would require payment by the indemnified party, or would materially conflict with the terms of this Agreement or adversely affect the indemnified party, without first obtaining the indemnified party’s prior written consent therefor which consent shall not be unreasonably withheld.

(iii) With respect to any Claim, the indemnified party shall reasonably cooperate with the indemnifying party in its defense of the Claim (including making documents and records available for review and copying and making Persons within its Control available for pertinent testimony in accordance with the confidentiality provisions of Section 25, and neither party shall be required to divulge privileged material to the other) at the indemnifying party’s expense. With respect to any Claim, if the indemnifying party assumes defense of the Claim, an indemnified party may participate in, but not control, the defense of such Claim using attorneys of its choice and at its sole cost and expense, with such cost and expense not being covered by the indemnifying party. With respect to any Claim, an indemnifying party shall have no obligation or liability under this Section 13 as to any Claim for which settlement or compromise of such Claim or an offer of settlement or compromise of such Claim is made by an indemnified party without the prior written consent of the indemnifying party, which consent shall not be unreasonably withheld. With respect to any Claim, if an indemnifying party notifies the indemnified party in writing that it will not defend the indemnified party against such a Claim asserted against the indemnified party, or if the indemnifying party assumes the defense of the Claim in accordance with Section 13(d)(ii) yet fails to defend or take other reasonable, timely action, in response to

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such Claim asserted against the indemnified party, the indemnified party shall have the right to defend or take other reasonable action to defend its interests in such proceedings, and shall have the right to litigate, settle or otherwise dispose of any such Claim at the sole cost and expense of the indemnifying party; provided, however, that no party shall have the right to settle a Claim in a manner that would adversely affect the rights granted to the other party hereunder, or would materially conflict with this Agreement, or would require a payment by the other party, or adversely affect such other party, without the prior written consent of the other party.

(d)Each of Seller and Purchaser hereby acknowledges that each other has entered into this Agreement in express reliance upon the representations and warranties set forth in Section 12. The indemnification obligations of Seller and Purchaser under this Agreement shall not be affected, eliminated, impacted, limited, reduced or waived, in whole or in part, in any respect by any investigation made (or not made) by or on behalf of any party or the disclosure made by a party or such party’s Representatives, regardless of the results of any such investigation and/or disclosure and regardless of the actual or constructive knowledge of any Purchaser Indemnitee or Seller Indemnitee.

(e) The obligations of Seller and Purchaser under this Section 13 to indemnify each other following the Closing with respect to Claims arising under Section 13(a)(i) and Section 13(b)(i), respectively, shall survive until the date that is fifteen (15) calendar days after the first anniversary of the Closing Date (the “First Indemnity Termination Date”). The obligations of Seller and Purchaser under this Section 13 to indemnify each other with respect to Claims arising under Section 13(a)(ii) through Section 13(iv) and Section 13(ii) through Section 13(b)(iv), respectively, shall survive until the date that is fifteen (15) calendar days after the third anniversary of the Closing Date (the “Second Indemnity Termination Date”). The obligations of Seller and Purchaser under this Section 13 to indemnify each other with respect to Claims arising under Section 13(a)(v), Section 13(a)(vi), Section 13(a)(vii), Section 13(a)(viii), Section 13(a)(ix), Section 13(b)(vi), and Section 13(b)(vii), respectively, shall survive until the date that is fifteen (15) calendar days after the sixth anniversary of the Closing Date (the “Third Indemnity Termination Date”; with the First Indemnity Termination Date, and the Second Indemnity Termination Date, each an “Indemnity Termination Date”). Nevertheless, an Indemnity Termination Date shall not be applicable to the obligations of Seller and Purchaser under Section 13 to indemnify each other with respect to any Claims in respect of which an Indemnity Notice has been delivered in accordance with the terms of this Agreement prior to the otherwise applicable Indemnity Termination Date.

(ii)     The indemnification obligations provided for in Section 13(a)(i) and in Section 13(b)(i) in favor of an indemnified party shall not be effective until the aggregate Damages incurred by such indemnified party under such provisions exceed a cumulative aggregate of Fifty Thousand Dollars($50,000), including payment of any deductibles (the “Basket”), but upon reaching the Basket, all such amounts shall thereafter be payable, including the initial Fifty Thousand Dollars ($50,000.00). In no event, however, shall the aggregate total liability of Seller under Section 13(a)(i) or Purchaser under Section 13(b)(i) exceed an amount equal to Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000) (the “Cap”); provided, however, the parties expressly agree that the Cap does not apply to any (A) matters covered by insurance, (B) any indemnification claim by a Purchaser Indemnitee pursuant to the provisions of Sections 13(a)(ii) through Section 13(a)(ix) or by a Seller Indemnitee pursuant to the provisions of Sections 13(b)(ii) through Section 13(b)(vii).

(iii) Seller may satisfy any of its indemnity obligations under this Section 13 by assigning to the Company any of the BHR Common Stock held by Seller, each share of BHR Common Stock to be valued at five dollars ($5.00) per share.

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(f)The parties acknowledge and agree that their sole and exclusive remedy for any and all Damages for which a claim for indemnification may be asserted under this Section 13 shall be pursuant to the indemnification provisions set forth in this Section 13.

14.AS-IS SALE.

(a)EXCEPT FOR SELLER’S REPRESENTATIONS AND/OR WARRANTIES SET FORTH IN THIS AGREEMENT OR IN ANY SELLER CLOSING DOCUMENT (WHICH SHALL BE FULLY ENFORCEABLE BY PURCHASER) AND THE SPECIFIC INDEMNITY OBLIGATIONS OF SELLER IN SECTION 13, (i) PURCHASER ACKNOWLEDGES THAT NEITHER SELLER NOR ANY REPRESENTATIVE OF SELLER HAS MADE ANY REPRESENTATIONS OR WARRANTIES TO PURCHASER REGARDING THIS AGREEMENT, (ii) THE TRANSFER OF THE PROPERTY TO PURCHASER IS ON AN “AS IS” BASIS, AND (iii) EXCEPT FOR THE STATUTORY WARRANTY OF TITLE (“SANEAMIENTO POR EVICCIÓN”) IMPOSED BY THE CIVIL CODE OF PUERTO RICO UPON SELLERS OF REAL PROPERTY, AS SET FORTH IN ARTICLE 1261 OF THE CIVIL CODE OF PUERTO RICO (31 L.P.R.A. § 9851) THERE ARE NO OTHER WARRANTIES APPLICABLE TO THIS AGREEMENT, INCLUDING NO IMPLIED WARRANTIES AS TO (i) FITNESS FOR ANY PARTICULAR PURPOSE OR (ii) MERCHANTABILITY.

(b)PURCHASER HEREBY KNOWINGLY WAIVES COMPLIANCE BY SELLER WITH THE WARRANTY AGAINST HIDDEN DEFECTS IMPOSED UPON SELLERS OF REAL PROPERTY BY THE CIVIL CODE OF PUERTO RICO; PROVIDED, HOWEVER, THE FOREGOING WAIVER BY PURCHASER DOES NOT MODIFY, ELIMINATE OR REDUCE THE ENFORCEABILITY OR ANY OF THE REPRESENTATIONS AND WARRANTIES OF SELLER IN THIS AGREEMENT OR IN ANY SELLER CLOSING DOCUMENT.

(c)NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THE PROVISIONS OF THIS SECTION 14 SHALL NOT BE MERGED INTO THE CLOSING DOCUMENTS AND SHALL SURVIVE THE CLOSING.

15.BROKERS AND ADVISORS.

(a)Purchaser represents and warrants to Seller that it has not dealt or negotiated with, or engaged on its own behalf or for its benefit, any broker, finder, consultant, advisor, or professional in the capacity of a broker or finder (each a “Broker”) in connection with this Agreement or the transactions contemplated hereby.

(b)Seller represents and warrants to Purchaser that it has not dealt or negotiated with, or engaged on its own behalf or for its benefit, any Broker other than Jones Lang LaSalle Americas, Inc. in connection with this Agreement or the transactions contemplated hereby. Seller shall be responsible for any fees and/or commissions payable to Jones Lang LaSalle Americas, Inc. and shall fully and completely indemnify, defend and hold harmless the Purchaser Parties in connection with any claim by Jones Lang LaSalle Americas, Inc. or its affiliates.

(c)The provisions of this Section 15 shall survive the termination of this Agreement or the Closing.

16.NOTICES.

(a)All notices, demands, requests or other communications (collectively, “Notices”) required to be given or which may be given hereunder shall be in writing and shall be sent by (i) certified mail with return receipt requested and postage prepaid, or (ii) Federal Express or a

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comparable national overnight delivery service, or (iii) hand delivery or (iv) electronic mail, addressed as follows:

If to Seller:    DBR HOTEL OWNER LLC.

120 Carretera 693

Dorado, PR 00646

Attention: Federico Stubbe

Email: fstubbe@prisagroup.com

with a copy to:            McConnell Valdés

PO Box 364225

San Juan, Puerto Rico 00936-4225

Attention: Harry O. Cook, Esq.

Email: hoc@mcvpr.com

and

If to Purchaser Parties:    BHR Dorado LLC
Braemar Hotels & Resorts Inc.
14185 Dallas Parkway, Suite 1100
Dallas, Texas 75254
Attn: Christopher A. Peckham
Email: cpeckham@ashfordinc.com

With a copy to:    Jackson Walker LLP

2323 Ross Avenue, Suite 600

Dallas, Texas 75201

Attn: Cynthia B. Nelson

Email: cbnelson@jw.com

If to Escrow Agent:    Thomas Title and Escrow, LLC
3100 McKinnon Street, Suite 170
Dallas, Texas 75201
Attn: Amanda Johnson

Email: ajohnson@thomastitle.com

(b)Any Notice shall be deemed given: (i) five (5) days after being deposited in the United States mail if sent by certified mail with return receipt requested and postage prepaid, (ii) on the date of receipt if sent by Federal Express or a comparable national overnight delivery service or hand delivery, if said day is a Business Day, otherwise notice will be deemed given on the next Business Day. or (iii) upon confirmation of delivery by electronic mail. A Notice may be given by a party or by such party’s attorneys. Seller or the Purchaser Parties may designate, by not less than five (5) Business Days’ notice given to the other in accordance with the terms of this Section 16, additional or substituted parties to whom Notices should be sent hereunder.

17.DEFAULT BY PURCHASER OR SELLER.

(a)If Seller is not in default under this Agreement and if all of Purchaser’s conditions to Closing under Section 7(b)(ii) shall have occurred and (i) Purchaser shall default in the payment of the Purchase Price at Closing (ii) Purchaser shall default in any material respect in the performance of any of its other obligations to be performed on the Closing Date, or

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(iii) Purchaser shall default in the performance of any of its obligations to be performed prior to the Closing Date and, with respect to any default under clause (iii) only, such default shall continue for five (5) Business Days after Notice from Seller to Purchaser, Seller’s sole and exclusive remedy by reason thereof shall be to terminate this Agreement and cause the Escrow Agent to disburse the Deposit to Seller as liquidated damages and thereafter Purchaser and Seller shall have no further rights or obligations under this Agreement except for those that are expressly provided in this Agreement to survive the termination hereof.

(b)If (i) Seller shall default in any material respect in the performance of any of its obligations to be performed on the Closing Date or (ii) Seller shall default in the performance of any of its obligations to be performed prior to the Closing Date and, with respect to any default under this clause (ii) only, such default shall continue for five (5) Business Days after notice to Seller, Purchaser as its sole remedy by reason thereof shall have the right to (A) terminate this Agreement and the right to recover from Seller all out of pocket costs, expenses and fees, including accounting, due diligence and legal fees, incurred by Purchaser and its Representatives in connection with this Agreement and cause the Escrow Agent to disburse the Deposit to Purchaser and thereafter Purchaser and Seller shall have no further rights or obligations under this Agreement except for those that are expressly provided in this Agreement to survive the termination hereof, including the obligations of Seller to indemnify Purchaser pursuant to Section 13(a), or (B) seek to obtain specific performance of Seller’s obligations hereunder, provided that any action for specific performance shall be commenced within sixty (60) Business Days after the date on which Purchaser obtains actual knowledge of such Seller’s default. If Purchaser fails to commence an action for specific performance within such sixty (60) Business Day period, Purchaser shall only have the remedy provided in clause (A) above.

(c)Seller and Purchaser knowingly, freely and voluntarily waive any rights they may have to rescind this Agreement, it being agreed that the remedies provided in this Agreement are the sole and exclusive remedies available to Seller and Purchaser and that the same are adequate to protect Seller and Purchaser.

(d)The provisions of this Section 17 shall survive the termination hereof.

18.ENTIRE AGREEMENT.

This Agreement contains all of the terms agreed upon by the parties with respect to the subject matter hereof, and all prior discussions, agreements, understandings, representations, negotiations and statements, oral or written, between or among the parties are merged into and superseded by this Agreement. The Letter of Intent is hereby superseded and is of no further force or effect. The provisions of this Section 18 shall survive the Closing or the earlier termination hereof. Nothing in this Section 18 limits or restricts the enforcement, following the Closing, of any Closing Documents.

19.AMENDMENTS.

This Agreement may not be changed, modified or terminated, except by a written instrument executed by the parties. The provisions of this Section 19 shall survive the Closing or the earlier termination hereof.

20.WAIVER.

No waiver by any party of any failure or refusal by another party to comply with its obligations shall be deemed a waiver of any other or subsequent failure or refusal to so comply, and in no event shall any waiver be effective against any party unless the same is in writing and

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signed by such party. The provisions of this Section 20 shall survive the Closing or the earlier termination hereof.

21.PARTIAL INVALIDITY.

If any term or provision of this Agreement or the application thereof to any Person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to other Persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and shall be enforced to the fullest extent permitted by law. The provisions of this Section 21 shall survive the Closing or the earlier termination hereof.

22.SECTION HEADINGS.

The headings of the various Sections of this Agreement have been inserted only for the purposes of convenience and are not part of this Agreement and shall not be deemed in any manner to modify, explain, expand or restrict any of the provisions of this Agreement. The provisions of this Section 22 shall survive the Closing or the earlier termination hereof.

23.GOVERNING LAW.

This Agreement shall be governed by the laws of the Commonwealth without giving effect to conflict of laws principles thereof. The provisions of this Section 23 shall survive the Closing or the earlier termination hereof.

24.PARTIES; ASSIGNMENT.

(a)This Agreement and the various rights and obligations arising hereunder shall inure to the benefit of and be binding upon the parties and their respective successors and permitted assigns; provided that none of the representations or warranties made by Seller hereunder shall inure to the benefit of any Person that may, after the Closing Date, succeed to Purchaser’s interest in the Property except that the parties to this Agreement expressly agree that the Company or any direct or indirect subsidiary of the Company shall be fully entitled to all rights of Purchaser under this Agreement.

(b)Purchaser may not assign or otherwise transfer this Agreement or any of its rights or obligations hereunder, without first obtaining Seller’s consent thereto, which may be granted or withheld in Seller’s sole discretion; provided, however, Purchaser may collaterally assign its rights under this Agreement to any one or more lenders and Purchaser may assign its rights under this Agreement to any Affiliate. In the event of any assignment permitted by this Section 24(b), Purchaser shall remain liable for all of the obligations of Purchaser hereunder, including the obligations of Purchaser that survive the Closing. If Purchaser assigns to an Affiliate prior to the Closing, then Purchaser is released from any further liability.

(c)The provisions of Section 24 shall survive the Closing or the earlier termination hereof.

25.CONFIDENTIALITY.

(a)Purchaser acknowledges and agrees that any and all of the information made available to Purchaser by Seller with respect to the Property or pursuant to this Agreement is proprietary and confidential in nature and has and will be delivered to Purchaser solely to assist Purchaser in connection with Purchaser’s inspection and acquisition of the Property. Prior to the Closing, Purchaser agrees that it shall treat such information as confidential and not disclose to any Person or entity the terms of this Agreement or information regarding the Property which is not

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generally known by the public. Purchaser may discuss such matters with and disclose such matters to its accountants, attorneys, existing or prospective lenders, partners, consultants and other advisors to the extent such parties reasonably need to know such information and have been advised by Purchaser of the confidential nature of the information and are informed that the information is subject to the disclosure restrictions contained in this Section 25 or as otherwise authorized by paragraph (c) below. In the event of a termination of this Agreement, Purchaser shall promptly return all confidential information provided to Purchaser by or on behalf of Seller to Seller.

(b)Prior to Closing, Seller and Purchaser shall not issue any press releases (or other public statements) with respect to the transactions contemplated in this Agreement without the approval of the other party, which such party may withhold in its sole and absolute discretion; provided, however, nothing in this Section 25 limits or restricts any party from making any disclosures required by federal securities laws.

(c)Nothing in this Section 25 limits or restricts Purchaser from disclosing documentation or information as required by law, including in response to a subpoena or as required by any Governmental Authority.

(d)Notwithstanding anything to the contrary in this Agreement, (i) if either Party elects to issue a press release during the Closing Period, it may do so without the other Party’s consent so long as the Party proposing to issue the release has provided to the other Party a draft of such press release at least two (2) Business Days in advance of its issuance and the party receiving the draft press release may comment on such draft press release (and the Party proposing to issue the press release shall consider in good faith the comments of the other party, but shall have no obligation to incorporate any of the comments) and (ii) following the Closing, either Party shall have the right to issue a press release regarding Purchaser’s acquisition of the Property, including the Hotel, without the consent of the other Party.

(e)The provisions of this Section 25 shall survive the Closing.

26.THIRD-PARTY BENEFICIARY.

Except for the provisions in Section 13 benefiting the Seller Indemnitees and the Purchaser Indemnitees, and the provisions in Section 32 benefiting the Affiliates of Seller, this Agreement is an agreement solely for the benefit of Seller and Purchaser (and their permitted successors and/or assigns). Except for the parties mentioned in the immediately preceding sentence, no other Person, party or entity shall have any rights hereunder nor shall any other Person, party or entity be entitled to rely upon the terms, covenants and provisions contained herein. The provisions of this Section 26 shall survive the Closing or the earlier termination hereof.

27.JURISDICTION AND SERVICE OF PROCESS.

To the fullest extent permitted by law, the parties hereby unconditionally and irrevocably waive and release any claim that the law of any other jurisdiction governs this Agreement, and this Agreement shall be governed and construed in accordance with the laws of the Commonwealth as aforesaid pursuant to Section 23. Any suit, action or proceeding against any of the parties hereto arising out of or relating to this Agreement shall be submitted to arbitration as provided in Section 28 of this Agreement. Service of process shall be deemed effective using the notification methods provided in Section 16.

The provisions of this Section 27 shall survive the Closing or the earlier termination hereof.

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28.ARBITRATION.

(a)Except as other set forth in Section 28(d), any suit, action or proceeding against any of the parties hereto arising out of or relating to this Agreement (other than proceedings pursuant to Section 3(b)(iii) above) shall be submitted to arbitration in accordance with the rules of the Commercial Section of the AAA. All arbitration proceedings shall be held in the English language in San Juan, Puerto Rico.

(b)Within fifteen (15) days after receipt of a request to arbitrate a dispute under this Agreement, each party shall appoint one arbitrator, and within fifteen (15) days thereafter the two appointed arbitrators shall select a third arbitrator. If either party shall fail to make such appointment within said fifteen (15) day period, the other party shall appoint the second arbitrator. If the two appointed arbitrators shall fail to select a third arbitrator within said fifteen (15) day period, the parties hereto shall mutually select the third arbitrator. If Seller and Purchaser are unable to agree within ten (10) days, then either party may, upon at least three (3) days prior written notice to the other party, request the AAA to designate an arbitrator. The AAA may thereupon appoint an arbitrator to complete the panel of three arbitrators. All arbitrators shall be impartial and unrelated, directly or indirectly, so far as employment of services is concerned, to Seller or to Purchaser to any Affiliate thereof or to any person directly or indirectly related to any Affiliate of the parties. The arbitrators need not be residents of Puerto Rico.

(c)The three arbitrators shall investigate the facts and shall hold hearings at which Seller and Purchaser may present evidence and arguments, be represented by counsel and conduct cross examination. The three arbitrators shall render a written decision upon the matter presented to them by a majority vote within ninety (90) days after the date upon which the last arbitrator is appointed, and that decision shall be final and binding on Seller and Purchaser. Judgment upon the decision rendered in such arbitration may be entered by any court having jurisdiction thereof. Neither party shall be considered in default hereunder in connection with the dispute being arbitrated during the pendency of arbitration proceedings. If the three arbitrators shall fail to render a decision within said ninety (90) day period, then the fees payable to the arbitrators will be reduced by one-half and each party shall appoint a new arbitrator pursuant to Section 28(b) and the third arbitrator will be appointed as provided in Section 28(b) and the three arbitrators shall act in accordance with this Section 28(c). The arbitrators shall determine in what proportion the parties shall bear the fees and expenses of the arbitrators and each party shall bear the fees and expenses of its own counsel and other consultants. In determining any question, matter or dispute before them, the arbitrators shall apply the applicable provisions of this Agreement without varying therefrom in any respect. The arbitrators shall not have the power to add to, modify or change any of the provisions of the aforesaid documents.

(d)This Section 28 shall not apply to any action for specific performance by Purchaser under Section 17(b).

(e)The provisions of this Section 28 shall survive the Closing or the earlier termination hereof.

29.SURVIVAL.

All of the covenants and agreements of the parties made in, or pursuant to, this Agreement (including any covenants and agreements in any Closing Documents) shall survive the Closing and shall not merge into any Deed or any other document or instrument executed in connection herewith.

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30.CASUALTY.

(a)In the event that less than a material part of the Hotel is damaged, destroyed or rendered untenantable by fire or other casualty, this Agreement shall remain in full force and effect and all insurance proceeds and rights to proceeds arising out of such casualty shall be assigned by Seller without recourse to Purchaser at Closing and Purchaser shall accept title to the Hotel in such condition and Seller shall promptly file claims with all relevant insurance companies and diligently pursue all relevant insurance companies for all damages. Purchaser shall conduct and control all proceedings, negotiations and settlements with the applicable insurance companies (“Casualty Negotiations”) and shall keep Seller informed of the status thereof. Purchaser may not enter into any settlement with the insurance companies without Seller’s prior written approval, which approval shall not be unreasonably withheld. Seller and Purchaser shall cooperate with each other with respect to the Casualty Negotiations.

(b)In the event that, prior to Closing, a material part of the Hotel is damaged, destroyed or rendered untenantable by fire or other casualty, Purchaser may elect to terminate this Agreement by written notice to Seller delivered no later than thirty (30) days after Purchaser’s receipt of notice from Seller regarding the occurrence of the casualty event in question, whereupon this Agreement shall terminate, the Deposit shall be promptly returned to Purchaser and Seller and Purchaser shall have no liability to each other except for the provisions that expressly survive the termination hereof. If Purchaser does not terminate this Agreement as provided above in this Section 30(b), the parties shall proceed pursuant to the provisions of Section 30(a) above as if less than a material part of the Hotel was damaged, destroyed or rendered untenantable by fire or other casualty.

(c)For purposes of this Section 30, a “material part of the Hotel is damaged” means damage or destruction to the Hotel that requires the repair, renovation or restoration of at least twenty percent (20%) of the guest rooms located therein or would require the demolition of all or any part of the Hotel.

(d)The provisions of this Section 30 shall survive the closing of the transactions contemplated herein.

31.RIGHT OF FIRST OFFER.

(a)Purchaser or a Purchaser Successor shall not assign, sell, convey, or transfer all or at least fifty percent (50%) of the Premises, whether as an asset transfer or through the transfer of a majority of the equity of Purchaser (all or such portion, a “Specified Interest”), to any Person that is not an Affiliate of the Company, unless Purchaser shall have first delivered a Notice (“Offer”) to Seller of Purchaser’s desire to assign, sell, convey or transfer the Specified Interest along with the total price therefor (the “Offer Price”), and the other material terms and conditions of such proposed assignment, sale, conveyance or transfer, which Offer shall constitute an offer by Purchaser to sell the Specified Interest to Seller at the Offer Price and on the same material terms and conditions.

(b)After receiving an Offer from Purchaser, Seller shall have, for thirty (30) days (the “Offer Period”), the right but not the obligation (the “ROFO”), to deliver Notice to Purchaser accepting such Offer as to all (and not less than all) of the Specified Interest, with such Notice to be delivered to Purchaser prior to the expiration of such Offer Period.

(c)If Seller timely accepts the Offer, then Seller must consummate the Offer and pay, by wire transfer (of immediately available funds), the full amount of the Offer Price for the Specified Interest within sixty (60) days after the date on which the Notice accepting such Offer is delivered to Purchaser; provided that, if the assignment, sale, conveyance or transfer of such

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Specified Interest is subject to any prior and mandatory regulatory approval by any Governmental Authority, the time period during which such Offer may be consummated shall extend for seven (7) days after all such approvals shall have been received and Seller and Purchaser shall each exercise reasonable commercial efforts to obtain such approvals as soon as possible.

(d)If Seller does not timely exercise the Offer or if Seller accepts the Offer but fails to timely consummate the Offer transaction in accordance with this Section 31, then Purchaser may enter into a binding agreement to assign, sell, convey or transfer the Specified Interest within three hundred and sixty-five (365) days thereafter to a third party or parties at a sale price in an amount at least ninety-five percent (95%) of the Offer Price and on such other material terms and conditions that are no less favorable to Purchaser than as set forth in the Offer.

(e)The grant of any lien, claim, encumbrance or security interest on the Premises or on the equity of Purchaser to any one or more lenders to Purchaser shall not trigger Seller’s rights under this Section 31 and any foreclosure by any such a lender or lenders as to Purchaser’s rights to the Premises and/or as to the equity of Purchaser shall automatically extinguish any rights under this Section 31 as to the portion of the Premises and/or the equity of Purchaser pursuant to such foreclosure and all rights of Seller shall be subordinate and inferior to rights of such lender or lenders.

(f)Seller may assign its rights under this Section 31 to any Affiliate.

(g)Seller’s ROFO right under this Section 31 shall be included in the Deed of Sale and the Seller or its permitted successors and assigns shall execute any deed of subordination that any lender to the Purchaser that is not an affiliate of Purchaser (“Lender”) may require from time to time, pursuant to which the ROFO will be subordinated to any mortgage or fixture filing constituted by Purchaser over the Premises or any part thereof in favor of any such Lender; provided, however, that Seller or its permitted successors and assigns shall not be obligated to execute any such subordination unless Purchaser  agrees to promptly notify Seller of the occurrence of an event of default and send Seller a copy of any notice of default received from Lender. Purchaser shall exercise commercially reasonable efforts to cause Lender to agree to provide Seller in writing an opportunity to cure of at least fifteen (15) days more than that afforded by Lender to Purchaser.  

32.RESIDENTIAL AND CERROMAR DEVELOPMENT.

(a)Purchaser acknowledges and agrees that Affiliates of Seller, including PG (collectively, the “CH Hotel Affiliates”) are developing and planning to develop additional Ritz-Carlton Reserve branded residences within the Resort, some of which may be locatedin the parcels identified in Schedule R (the “Cerromar Parcels”), and such Affiliates may develop a hotel concept, which could be a Ritz-Carlton Reserve, within the Cerromar Parcels (the “Cerromar Hotel”).  Purchaser agrees that all owners of such Ritz-Carlton Reserve branded residences within the Resort, including those to be located in the Cerromar Parcels, shall be fully entitled to enter into the Hotel rental program under the same terms and conditions as other existing Ritz-Carlton Reserve branded residences.

(b)If the CH Hotel Affiliates elect to develop the Cerromar Hotel and elect to seek any outside equity financing in connection with the Cerromar Hotel (the “CH Equity”), then Seller shall, and shall cause the CH Hotel Affiliates to, provide written notice (the “CH Equity Raise Notice”) to Purchaser and the Company and include with the CH Equity Raise Notice all material information regarding the proposed Cerromar Hotel (and the name of sole entity formed or to be formed to own all of the equity interest in the Cerromar Hotel) and the proposed

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financial and other terms regarding such CH Equity. After receiving the CH Equity Raise Notice, the Company shall have, for thirty (30) days from receipt of the CH Equity Raise Notice (the “CH Equity Offer Period”), the right but not the obligation, to deliver Notice (the “CH Equity Notice”) to Seller of the Company’s interest in and intent to negotiate the terms of the CH Equity. If the Company timely submits the CH Equity Notice, then the Company will have the exclusive right for the balance of the CH Equity Offer Period and an additional thirty (30) days from end of the CH Equity Offer Period to negotiate the terms of the CH Equity. The CH Equity available to the Company shall consist of at least fifty percent (50%) of the equity of the entity owning the Cerromar Hotel on then-market terms for equity participation in Puerto Rico. If the Company invests in the entity that owns or will own the Cerromar Hotel, then the Company agrees that PG will be retained as the Development Manager for the Cerromar Hotel on then-market terms substantially similar to PG’s other projects in Puerto Rico, including the Dorado Beach Resort. If, for any reason, the Company and the CH Hotel Affiliates do not reach agreement on the terms for the CH Equity by the Company, then the CH Hotel Affiliates will not negotiate with, or agree to issue equity to, any other investor for CH Equity on terms materially more favorable than those offered to the Company as to the CH Equity in the CH Equity Raise Notice. The Company may assign its rights under this Section 32 to any Affiliate of the Company.

(c)If the CH Hotel Affiliates have developed the Cerromar Hotel, alone or with one or more other equity investors and neither the Company nor an Affiliate of the Company obtains CH Equity pursuant to the terms set forth in Section 32(b), then Seller agrees to cause the owner(s) of the Cerromar Hotel (whether one or more, the “CP Owner”) to not assign, sell, convey, or transfer (in one or a series of transactions) all or at least fifty percent (50%) of the Cerromar Hotel (not including any for-sale residential component, whether or not branded), whether as an asset transfer or through the transfer of a majority of the equity of the CP Owner (all or such portion, a “CP Specified Interest”) to any Person, unless the CP Owner shall have first delivered a Notice (“CP Offer”) to Purchaser of CP Owner’s desire to assign, sell, convey or transfer the CP Specified Interest along with the total price therefor (the “CP Offer Price”), and the other material terms and conditions of such proposed assignment, sale, conveyance or transfer, which CP Offer shall constitute an offer by CP Owner to sell the CP Specified Interest to Purchaser at the CP Offer Price and on the same material terms and conditions. A CP Offer requirement would not be triggered solely by any equity participations in the CP Owner by the Seller Members and their Affiliates).

(d)After receiving a CP Offer from CP Owner, Purchaser shall have, for thirty (30) days (the “CP Offer Period”), the exclusive right but not the obligation, to deliver Notice to the CP Owner accepting such CP Offer as to all (and not less than all) of the CP Specified Interest with such Notice to be delivered to CP Owner prior to the expiration of such CP Offer Period.

(e)If Purchaser timely accepts the CP Offer, then Purchaser must consummate the CP Offer and pay, by wire transfer (of immediately available funds), the full amount of the CP Offer Price for the CP Specified Interest within sixty (60) days after the date on which the Notice accepting such CP Offer is delivered to CP Owner; provided that, if the assignment, sale, conveyance or transfer of such CP Specified Interest is subject to any prior and mandatory regulatory approval by any Governmental Authority, the time period during which such CP Offer may be consummated shall extend for seven (7) days after all such approvals shall have been received and CP Owner and Purchaser shall each exercise reasonable commercial efforts to obtain such approvals as soon as possible.

(f)If Purchaser declines, or fails to timely respond to, the CP Offer, then the CP Owner may enter into a binding agreement to assign, sell, convey or transfer the CP Specified Interest within three hundred sixty-five (365) days thereafter to a third party or parties at a sale price in an amount at least ninety-five percent (95%) of the CP Offer Price and on such other material terms

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and conditions that are no less favorable to CP Owner that as set forth in the CO Offer. Purchaser acknowledges and accepts that CP Owner may nonetheless develop the Cerromar Hotel as a Ritz-Carlton Reserve or other Ritz-Carlton hotel.  Nothing herein contained shall require Seller to develop any such parcels of land or, if developed, to brand the same as Ritz-Carlton Reserve or any other particular brand.

(g)If the Cerromar Hotel is developed as a Ritz-Carlton Reserve or other Marriott product, CP Owner and Purchaser shall work in good faith to enter into a mutually beneficial cost sharing agreement managed by Marriott in order to allocate certain costs between the Cerromar Hotel and the Hotel, under customary terms and conditions

(h)The provisions of this Section 32 shall be binding on Purchaser and Seller and their respective successors and assigns, Purchaser may assign its rights under this Section 32 to any Affiliate of Purchaser, and the Company may assign its rights under this Section 32 to any Affiliate of the Company.

(i)The rights of Purchaser under this Section 32 shall be included in any Deed of Sale to the CH Hotel Affiliates, including CP Owner.

33.CONDEMNATION.

(a)In the event of any actual or threatened taking, pursuant to the power of condemnation, eminent domain or any similar or successor right of any Governmental Authority, of all or any portion of the Premises or any access thereto, or any proposed sale in lieu thereof (collectively, a “Condemnation Proceeding”), Seller shall give written notice of such Condemnation Proceeding to Purchaser promptly after Seller learns or receives notice thereof. If all or any material part of the Premises is, or is to be, so condemned or sold in the Condemnation Proceeding, Purchaser shall have the right to terminate this Agreement by giving Seller written notice prior to the Closing and the Deposit shall be promptly returned to Purchaser by the Escrow Agent and all rights and obligations of Seller and the Purchaser Parties hereunder (except those set forth herein which expressly survive a termination of this Agreement) shall terminate immediately.

(b)If Purchaser receives notice of a Condemnation Proceeding and Purchaser does not elect to terminate this Agreement, then Seller shall not take any action to settle or compromise any such Condemnation Proceeding without Purchaser’s prior written consent and all proceeds, awards and other payments arising out of such Condemnation Proceeding shall, without reduction for any reason, promptly be paid or assigned, as applicable, to Purchaser at the Closing.

(c) As used in this Section 33, the term “material” shall mean any portion of the Hotel, any parking garage and/or any outdoor parking area located on the Premises, or any access to the Premises.

34.MISCELLANEOUS.

(a)This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

(b)Any consent or approval to be given hereunder (whether by Seller or Purchaser) shall not be effective unless the same shall be given in advance of the taking of the action for which

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consent or approval is requested and shall be in writing. Except as otherwise expressly provided herein, any consent or approval requested of Seller or Purchaser may be withheld by Seller or Purchaser in its sole and absolute discretion.

(c)The signatory for each Purchaser Party and Seller is executing this Agreement in his or her capacity as representative of a Purchaser Party or Seller, as the case may be, and not individually and, therefore, shall have no personal or individual liability of any kind in connection with this Agreement and the transactions contemplated hereby.

(d)All amounts payable under this Agreement if not timely paid, shall be paid with interest thereon from the fifth (5th) Business Day (unless a different time period is provided for elsewhere in this Agreement) following the date on which any such payment was due until paid at a rate equal to the prime rate of interest announced by Citibank, N.A. from time to time plus four percentage points. The parties hereto shall have the right to institute and undertake any available remedy at law or in equity in the enforcement and collection of any amounts due under this Agreement.

(e)Each party hereto and its counsel have reviewed and revised (or requested revisions of) this Agreement and have participated in the preparation of this Agreement, and therefore this Agreement shall be interpreted without regard to any presumption or rule requiring construction against the party causing this Agreement to be drafted.

(f)Each party (the “Representing Party”) hereby represents and warrants to each other party that the Representing Party has agreed to the terms of this Agreement in the exercise of the Representing Party’s own free will, with full knowledge of, and legal advice regarding, the legal consequences of the terms of this Agreement in the context of an arms-length negotiation among parties with equal bargaining power in which each party was at all times able to terminate such negotiations and not execute this Agreement.

(g)The parties each covenant and agree to promptly execute and deliver, or cause to be executed and delivered, any and all other deeds, instruments and documents and do any and all other acts and things as may be reasonably necessary or expedient to more fully effectuate this Agreement and consummate the transactions contemplated hereby.

(h)It is distinctly understood and agreed by the parties hereto that time, wherever specified in this Agreement, is made and declared to be of the essence hereof.

(i)The parties hereby waive compliance with the applicable provisions of the Bulk Sales Act, Act No. 60 of April 27, 1931, 10 L.P.R.A. Secs. 61 et seq. (the “Bulk Sales Act”)

(j)The provisions of this Section 34 shall survive the Closing or the earlier termination hereof.

(k)The following rules shall apply to the construction and interpretation of this Agreement:

(i) Singular words shall connote the plural number as well as the singular and vice versa, and the masculine shall include the feminine and the neuter.

(ii) All references herein to particular articles, sections, subsections, clauses or exhibits are references to articles, sections, subsections, clauses or exhibits of this Agreement.

(iii) The table of contents and headings contained herein are solely for convenience of reference and shall not constitute a part of this Agreement nor shall they affect its meaning, construction or effect.

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(iv) Whenever the terms “including,” “include” or “includes” are used in this Agreement, they shall automatically be deemed followed by the words “without limitation.”

[This space intentionally blank; Signature Pages follow.]

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IN WITNESS WHEREOF, Seller, Purchaser Parties and Escrow Agent have caused this Agreement to be executed the day and year first above written.

Seller:

DBR HOTEL OWNER LLC

By: /s/ Federico Stubbe González

Name: Federico Stubbe González

Title: President

Signature Page – Seller    

Purchaser:

BHR Dorado LLC, a Puerto Rico limited liability company

By: /s/ Richard Stockton

Name: Richard Stockton

Title: President

    Date of Execution: December 24, 2021

Company:

BRAEMAR HOTELS & RESORTS INC., a Maryland corporation

By: /s/ Richard Stockton

Name: Richard Stockton

Title: CEO and President

Date of Execution: December 24, 2021

Signature Page – Purchaser Parties    

Escrow Agent:

THOMAS TITLE AND ESCROW, LLC (Escrow Agent hereby acknowledges receipt of a fully executed Agreement from Seller and Purchaser Parties for purposes of Sections 3 and 7 hereof.)

By: /s/ Stephanie Schenke

Name: Stephanie Schenke

Title: Escrow Officer

Date:    December 24, 2021

Signature Page – Escrow Agent    

EX-10.39

EXHIBIT 10.39

LIMITED WAIVER UNDER ADVISORY AGREEMENT

This LIMITED WAIVER UNDER ADVISORY AGREEMENT (this “Waiver”) is entered into as of March 10, 2022, by and among BRAEMAR HOTELS & RESORTS INC. (the “Company”), BRAEMAR HOSPITALITY LIMITED PARTNERSHIP (the “Operating Partnership”), BRAEMAR TRS CORPORATION (“TRS”), ASHFORD INC. (“AINC”), and ASHFORD HOSPITALITY ADVISORS LLC (“Ashford LLC” and, together with AINC, the “Advisor”).

RECITALS:

A.    The parties hereto are parties to that certain Fifth Amended and Restated Advisory Agreement, dated as of April 23, 2018, as amended by that certain Enhanced Return Funding Program Agreement and Amendment No. 1 to the Fifth Amended and Restated Advisory Agreement, dated January 15, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Advisory Agreement”).

B.    Section 5.2 of the Advisory Agreement allocates responsibility for certain employee costs between the Company and the Advisor.

C.    Section 6.3 of the Advisory Agreement provides that, subject to the limitations set forth therein, the Board of Directors of the Company shall issue annual equity awards in the Company or the Operating Partnership to employees, officers, consultants, non-employee directors, Affiliates or representatives of the Advisor, based on achievement by the Company of certain financial or other objectives or otherwise as the Board of Directors of the Company sees fit.

D.    The Company has determined that it is in the best interests of the Company to award cash compensation to employees, officers, consultants, non-employee directors, Affiliates or representatives of the Advisor, and, as more fully set forth herein, the parties hereto desire to provide for a waiver of the operation of provisions under the Advisory Agreement, if any, that might otherwise limit the Company’s ability to make such awards.

AGREEMENT:

In consideration of the premises and mutual covenants herein and for other valuable consideration, the parties hereto agree as follows:

Section 1.Definitions. Capitalized terms used in this Waiver but not defined have the meaning provided in the Advisory Agreement. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Advisory Agreement shall refer to the Advisory Agreement after giving effect to this Waiver.

Section 2.Waiver.

1.1The Company, the Operating Partnership, TRS and the Advisor hereby waive the operation of any provision in the Advisory Agreement that would otherwise limit the ability of the Company in its discretion, at the Company’s cost and expense, to award during the first and second fiscal quarters of calendar year 2022 cash incentive compensation to employees, officers, consultants, non-employee directors, Affiliates or representatives of the Advisor, in each case on a current, deferred and/or contingent basis and subject to such other terms and conditions as the Board of Directors of the Company or its delegates may establish in their discretion.

1.2The waiver contained in this Waiver shall be effective only in this instance and for the specific purpose for which it was intended and shall not be deemed to be a consent to any other transaction or matter or waiver of compliance in the future, or a waiver of any preceding or succeeding breach of the same or any other covenant or provision of the Advisory Agreement.

Section 3.

Section 3.Miscellaneous.

1.1Advisory Agreement Unaffected. Each reference to the Advisory Agreement shall hereafter be construed as a reference to the Advisory Agreement after giving effect to this Waiver. Except as herein otherwise specifically provided, all provisions of the Advisory Agreement (after giving effect to this Waiver) shall remain in full force and effect and be unaffected hereby.

1.2Headings. Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

1.3Counterparts. This Waiver may be executed in any number of counterparts, by different parties hereto in separate counterparts and by facsimile signature or other electronic transmissions, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

1.4Governing Law; Consent to Jurisdiction. The provisions of Section 23 of the Advisory Agreement shall be set forth herein mutatis mutandis.

[Signature pages follow.]

2

IN WITNESS WHEREOF, this Waiver has been duly executed and delivered as of the date first above written.

BRAEMAR HOTELS & RESORTS INC.

By: /s/ Richard Stockton______________________

Name:    Richard Stockton

Title:    Chief Executive Officer

BRAEMAR HOSPITALITY LIMITED PARTNERSHIP

By:    Braemar OP General Partner LLC, its general partner

By: /s/ Alex Rose___________________________

Name:    Alex Rose

Title:    Executive Vice President, General     Counsel and Secretary

BRAEMAR TRS CORPORATION

By: /s/ Deric S. Eubanks______________________

Name: Deric S. Eubanks

Title:    President and Secretary

ASHFORD HOSPITALITY ADVISORS LLC

By: /s/ Jeremy Welter________________________

Name: Jeremy Welter

Title: President and Chief Operating Officer

ASHFORD INC.

By: /s/ Jeremy Welter________________________

Name: Jeremy Welter

Title: President and Chief Operating Officer

[Signature Page to Waiver]

EX-21.1

EXHIBIT 21.1

Braemar Hotels & Resorts Inc.

Subsidiaries Listing as of December 31, 2021

All the subsidiaries listed below are incorporated or organized in Delaware except that (i) Braemar Hotels & Resorts Inc. is incorporated in Maryland, (ii) BHR Dorado LLC and BHR TRS Dorado LLC are organized in Puerto Rico and (iii) RC Hotels (Virgin Islands), Inc. is incorporated in the U.S. Virgin Islands.

Braemar Hotels & Resorts Inc.

Ashford BC GP LLC

Ashford BC LP

Ashford Chicago GP LLC

Ashford Chicago Junior Mezz LLC

Ashford Chicago LP

Ashford Chicago Senior Mezz LLC

Ashford HHC III LLC

Ashford HHC Partners III LP

Ashford Philadelphia Annex GP LLC

Ashford Philadelphia Annex LP

Ashford Pier House GP LLC

Ashford Pier House LP

Ashford Pier House Mezz A LLC

Ashford Pier House Mezz B LLC

Ashford San Francisco II LP

Ashford Sarasota GP LLC

Ashford Sarasota Holding Company LLC

Ashford Sarasota LP

Ashford Seattle Waterfront GP LLC

Ashford Seattle Waterfront LP

Ashford SF GP LLC

Ashford Thomas LLC

Ashford TRS BC LLC

Ashford TRS Chicago II LLC

Ashford TRS Chicago Junior Mezz LLC

Ashford TRS Chicago Senior Mezz LLC

Ashford TRS Philadelphia Annex LLC

Ashford TRS Pier House LLC

Ashford TRS Pier House Mezz A LLC

Ashford TRS Pier House Mezz B LLC

Ashford TRS Sarasota Holding Company LLC

Ashford TRS Sarasota LLC

Ashford TRS Sarasota Residence LLC

Ashford TRS Seattle Waterfront LLC

Ashford TRS SF LLC

Ashford TRS Yountville Holding Company LLC

Ashford TRS Yountville II LLC

Ashford TRS Yountville LLC

Ashford Yountville GP LLC

Ashford Yountville Holding Company LLC

Ashford Yountville II GP LLC

Ashford Yountville II LP

Ashford Yountville LP

BHR Beverly Hills GP LLC

BHR Beverly Hills LP

BHR SMA GP, LLC

BHR SMA, LP

BHR Tahoe GP LLC

BHR Tahoe LP

BHR TRS Tahoe East LLC

BHR TRS Beverly Hills LLC

BHR TRS Tahoe LLC

Braemar Hospitality Limited Partnership

Braemar OP General Partner LLC

Braemar OP Limited Partner LLC

Braemar TRS Corporation

CHH Capital Hotel GP LLC

CHH Capital Hotel Partners LP

CHH Capital Tenant Corp.

CHH III Tenant Parent Corp.

CHH Torrey Pines Hotel GP LLC

CHH Torrey Pines Hotel Partners LP

CHH Torrey Pines Tenant Corp.

RC Hotels (Virgin Islands), Inc.

BHR Dorado LLC

BHR Dorado Holding LLC

BHR TRS Dorado LLC

BHR TRS Dorado Holding LLC

EX-21.2

EXHIBIT 21.2

Braemar Hotels & Resorts, Inc.

Special Purpose Entities Listing as of December 31, 2021

Ashford Philadelphia Annex GP LLC

Ashford Philadelphia Annex LP

Ashford San Francisco II LP

Ashford Seattle Waterfront LP

CHH Capital Hotel Partners LP

CHH Torrey Pines Hotel Partners LP

Ashford TRS Philadelphia Annex LLC

CHH Capital Tenant Corp.

CHH Torrey Pines Tenant Corp.

CHH Capital Hotel GP LLC

CHH Torrey Pines Hotel GP LLC

Ashford Chicago LP

Ashford Chicago GP LLC

Ashford TRS Chicago II LLC

Ashford Pier House LP

Ashford Pier House GP LLC

Ashford TRS Pier House LLC

Ashford Pier House Mezz B LLC

Ashford Pier House Mezz A LLC

Ashford TRS Pier House Mezz B LLC

Ashford TRS Pier House Mezz A LLC

Ashford Yountville LP

Ashford Yountville GP LLC

Ashford TRS Yountville LLC

Ashford Thomas LLC

RC Hotels (Virgin Islands), Inc.

Ashford SF GP LLC

Ashford TRS SF LLC

Ashford BC LP

Ashford BC GP LLC

Ashford TRS BC LLC

Ashford Yountville Holding Company LLC

Ashford Yountville II GP LLC

Ashford Yountville II LP

Ashford TRS Yountville Holding Company LLC

Ashford TRS Yountville II LLC

Ashford Sarasota Holding Company LLC

Ashford Sarasota GP LLC

Ashford Sarasota LP

Ashford TRS Sarasota Holding Company LLC

Ashford TRS Sarasota LLC

Ashford TRS Sarasota Residence LLC

Ashford Seattle Waterfront GP LLC

Ashford TRS Seattle Waterfront LLC

Ashford Chicago Senior Mezz LLC

Ashford Chicago Junior Mezz LLC

Ashford TRS Chicago Senior Mezz LLC

Ashford TRS Chicago Junior Mezz LLC

BHR Tahoe LP

BHR Tahoe GP LLC

BHR TRS Tahoe LLC

BHR TRS Tahoe East LLC

BHR Beverly Hills GP LLC

BHR TRS Beverly Hills LLC

BHR Beverly Hills LP

BHR Dorado LLC

BHR Dorado Holding LLC

BHR TRS Dorado LLC

BHR TRS Dorado Holding LLC

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

Braemar Hotels & Resorts Inc.

Dallas, Texas

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-25488, 333-234663, 333-223799, 333-209389, 333-200718 and 333-200420) and Form S-8 (Nos. 333-256002, 333-218888, 333-204705 and 333-194968) of Braemar Hotels & Resorts Inc., of our reports dated March 10, 2022, relating to the consolidated financial statements and financial statement schedule, and the effectiveness of Braemar Hotels & Resorts Inc.’s internal control over financial reporting, which appear in this Form 10-K.

/s/ BDO USA, LLP

Dallas, Texas

March 10, 2022

EX-23.2

EXHIBIT 23.2

CONSENT OF ROBERT A. STANGER & CO., INC.

We consent to the references to our name and the valuation conclusions and methodologies of our report, dated March 4, 2022, prepared by us with respect to the estimated liquidation value per share of Series E Redeemable Preferred Stock and Series M Redeemable Preferred Stock of Braemar Hotels & Resorts Inc. (the “Company”), which is contained in this Annual Report on Form 10-K and incorporated by reference in the Company’s Registration Statements on Form S-3 (SEC File Nos. 333-25488, 333-234663, 333-223799, 333-209389, 333-200718 and 333-200420) and the Company’s Registration Statements on Form S-8 (SEC File Nos. 333-256002, 333-218888, 333-204705 and 333-194968) . In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended.

Sincerely,

Robert A. Stanger & Co., Inc.

By: /s/ Robert A. Stanger & Co., Inc.

Date: March 10, 2022

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Richard J. Stockton, certify that:

1.I have reviewed this Annual Report on Form 10-K of Braemar Hotels & Resorts Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2022

/s/ RICHARD J. STOCKTON

Richard J. Stockton

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Deric S. Eubanks, certify that:

1.I have reviewed this Annual Report on Form 10-K of Braemar Hotels & Resorts Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2022

/s/ DERIC S. EUBANKS

Deric S. Eubanks

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Braemar Hotels & Resorts Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard J. Stockton, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 10, 2022

/s/ RICHARD J. STOCKTON

Richard J. Stockton

President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Braemar Hotels & Resorts Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Deric S. Eubanks, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 10, 2022

/s/ DERIC S. EUBANKS

Deric S. Eubanks

Chief Financial Officer

XML

Cover Page - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Mar. 08, 2022	Jun. 30, 2021
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2021
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-35972
Entity Registrant Name	BRAEMAR HOTELS & RESORTS INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	46-2488594
Entity Address, Address Line One	14185 Dallas Parkway
Entity Address, Address Line Two	Suite 1200
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75254
City Area Code	972
Local Phone Number	490-9600
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 347,153
Entity Common Stock, Shares Outstanding		65,348,848
Documents Incorporated by Reference	Portions of the registrant’s definitive Proxy Statement pertaining to the 2022 Annual Meeting of Stockholders are incorporated herein by reference into Part III of this Form 10-K.
Entity Central Index Key	0001574085
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock
Trading Symbol	BHR
Security Exchange Name	NYSE
Preferred Stock, Series B
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock, Series B
Trading Symbol	BHR-PB
Security Exchange Name	NYSE
Preferred Stock, Series D
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock, Series D
Trading Symbol	BHR-PD
Security Exchange Name	NYSE

XML

Audit Information	12 Months Ended
	Dec. 31, 2021
Audit Information [Abstract]
Auditor Name	BDO USA, LLP
Auditor Location	Dallas, Texas
Auditor Firm ID	243

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
ASSETS
Investments in hotel properties, gross	$ 1,845,078	$ 1,784,849
Accumulated depreciation	(399,481)	(360,259)
Investments in hotel properties, net	1,445,597	1,424,590
Cash and cash equivalents	215,998	78,606
Restricted cash	47,376	34,544
Accounts receivable, net of allowance of $126 and $227, respectively	23,701	13,557
Inventories	3,128	2,551
Prepaid expenses	4,352	4,405
Investment in unconsolidated entity	1,689	1,708
Derivative assets	139	0
Operating lease right-of-use assets	80,462	81,260
Other assets	23,588	14,898
Intangible assets, net	4,261	4,640
Due from related parties, net	1,770	991
Due from third-party hotel managers	27,461	12,271
Total assets	1,879,522	1,674,021
Liabilities:
Indebtedness, net	1,172,678	1,130,594
Accounts payable and accrued expenses	96,316	61,758
Dividends and distributions payable	2,173	2,736
Due to Ashford Inc.	1,474	2,772
Due to third-party hotel managers	610	1,393
Operating lease liabilities	60,937	60,917
Other liabilities	20,034	18,077
Derivative liabilities	1,435	0
Total liabilities	1,355,657	1,278,247
Commitments and contingencies (note 16)
Redeemable noncontrolling interests in operating partnership	36,087	27,655
Preferred stock, $0.01 value, 80,000,000 shares authorized:
8.25% Series D cumulative preferred stock, 1,600,000 shares issued and outstanding at December 31, 2021 and December 31, 2020	16	16
Common stock, $0.01 par value, 250,000,000 shares authorized, 65,365,470 and 38,274,770 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively	653	382
Additional paid-in capital	707,418	541,870
Accumulated deficit	(309,240)	(266,010)
Total stockholders’ equity of the Company	398,847	276,258
Noncontrolling interest in consolidated entities	(16,549)	(15,088)
Total equity	382,298	261,170
Total liabilities and equity	1,879,522	1,674,021
Series B Preferred Stock
Liabilities:
5.50% Series B cumulative convertible preferred stock, $0.01 par value, 3,078,017 and 5,031,473 shares issued and outstanding at December 31, 2021 and December 31, 2020	65,426	106,949
Series E Preferred Stock
Liabilities:
5.50% Series B cumulative convertible preferred stock, $0.01 par value, 3,078,017 and 5,031,473 shares issued and outstanding at December 31, 2021 and December 31, 2020	39,339	0
Series M Preferred Stock
Liabilities:
5.50% Series B cumulative convertible preferred stock, $0.01 par value, 3,078,017 and 5,031,473 shares issued and outstanding at December 31, 2021 and December 31, 2020	$ 715	$ 0

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
ASSETS
Allowance for doubtful notes receivable	$ 126	$ 227
Liabilities [Abstract]
Series B preferred stock, shares outstanding (in shares)	7,158,000	4,277,000
Preferred stock, $0.01 value, 80,000,000 shares authorized:
Preferred stock par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	80,000,000	80,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	65,365,470	38,274,770
Common stock, shares outstanding (in shares)	65,365,470	38,274,770
Series B Preferred Stock
Liabilities [Abstract]
Temporary equity, dividend rate (as a percent)	5.50%	5.50%
Series preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Series B preferred stock, shares issued (in shares)	3,078,017	5,031,473
Series B preferred stock, shares outstanding (in shares)	3,078,017	5,031,473
Series E Preferred Stock
Liabilities [Abstract]
Series preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Series B preferred stock, shares issued (in shares)	1,710,399	0
Series B preferred stock, shares outstanding (in shares)	1,710,399	0
Series M Preferred Stock
Liabilities [Abstract]
Preferred stock dividend rate (in dollars per share)	0.00082%
Series preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Series B preferred stock, shares issued (in shares)	29,044	0
Series B preferred stock, shares outstanding (in shares)	29,044	0
Series D Preferred Stock
Liabilities [Abstract]
Preferred stock dividend rate (in dollars per share)	8.25%	8.25%
Preferred stock, $0.01 value, 80,000,000 shares authorized:
Preferred stock, shares issued (in shares)	1,600,000	1,600,000
Preferred stock, shares outstanding (in shares)	1,600,000	1,600,000

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
REVENUE
Total revenue	$ 427,542	$ 226,974	$ 487,614
Hotel operating expenses:
Total hotel operating expenses	287,026	189,977	323,612
Property taxes, insurance and other	34,997	28,483	27,985
Depreciation and amortization	73,762	73,371	70,112
Advisory services fee	22,641	18,486	20,527
(Gain) loss on legal settlements	(917)	0	0
Transaction costs	563	0	704
Corporate general and administrative	8,717	6,657	5,435
Total expenses	426,789	316,974	448,375
Gain (loss) on insurance settlement and disposition of assets	696	10,149	25,165
OPERATING INCOME (LOSS)	1,449	(79,851)	64,404
Equity in earnings (loss) of unconsolidated entity	(252)	(217)	(199)
Interest income	48	176	1,087
Other income (expense)	0	(5,126)	(13,947)
Interest expense and amortization of discounts and loan costs	(30,901)	(45,104)	(54,507)
Write-off of loan costs and exit fees	(1,963)	(3,920)	(647)
Unrealized gain (loss) on investment in Ashford Inc.	0	0	7,872
Unrealized gain (loss) on derivatives	32	4,959	(1,103)
INCOME (LOSS) BEFORE INCOME TAXES	(31,587)	(129,083)	2,960
Income tax (expense) benefit	(1,324)	4,406	(1,764)
NET INCOME (LOSS)	(32,911)	(124,677)	1,196
(Income) loss from consolidated entities attributable to noncontrolling interests	2,650	6,436	(2,032)
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	3,597	12,979	1,207
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	(26,664)	(105,262)	371
Preferred dividends	(8,745)	(10,219)	(10,142)
Gain (loss) on extinguishment of preferred stock	(4,595)	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (40,004)	$ (115,481)	$ (9,771)
INCOME (LOSS) PER SHARE - BASIC:
Net income (loss) attributable to common stockholders (in dollars per share)	$ (0.76)	$ (3.39)	$ (0.32)
Weighted average common shares outstanding – basic (in shares)	52,684	33,998	32,289
INCOME (LOSS) PER SHARE - DILUTED:
Net income (loss) attributable to common stockholders (in dollars per share)	$ (0.76)	$ (3.39)	$ (0.32)
Weighted average common shares outstanding – diluted (in shares)	52,684	33,998	32,289
Total hotel revenue
REVENUE
Total revenue	$ 427,542	$ 226,974	$ 487,607
Rooms
REVENUE
Total revenue	280,568	136,265	303,848
Hotel operating expenses:
Total hotel operating expenses	59,818	38,054	70,297
Food and beverage
REVENUE
Total revenue	90,299	50,263	115,085
Hotel operating expenses:
Total hotel operating expenses	75,177	46,246	85,679
Other hotel
REVENUE
Total revenue	56,675	40,446	68,674
Hotel operating expenses:
Total hotel operating expenses	138,914	98,467	151,063
Management fees
Hotel operating expenses:
Total hotel operating expenses	13,117	7,210	16,573
Other
REVENUE
Total revenue	$ 0	$ 0	$ 7

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
NET INCOME (LOSS)	$ (32,911)	$ (124,677)	$ 1,196
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Total other comprehensive income (loss)	0	0	0
TOTAL COMPREHENSIVE INCOME (LOSS)	(32,911)	(124,677)	1,196
Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities	2,650	6,436	(2,032)
Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership	3,597	12,979	1,207
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	$ (26,664)	$ (105,262)	$ 371

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CONSOLIDATED STATEMENTS OF EQUITY - USD ($)	Total	Series D Preferred Stock	Series B Preferred Stock	Series E Preferred Stock	Series M Preferred Stock	Preferred Stock	Preferred Stock Series D Preferred Stock	Preferred Stock Series B Preferred Stock	Preferred Stock Series E Preferred Stock	Preferred Stock Series M Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Deficit Series D Preferred Stock	Accumulated Deficit Series B Preferred Stock	Accumulated Deficit Series E Preferred Stock	Accumulated Deficit Series M Preferred Stock	Noncontrolling Interest in Consolidated Entities	Redeemable Noncontrolling Interests in Operating Partnership	Ashford Inc.	Ashford Inc. Accumulated Deficit	Ashford Inc. Redeemable Noncontrolling Interests in Operating Partnership	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjustment Accumulated Deficit
Increase (Decrease) in Temporary Equity [Roll Forward]
Units outstanding at beginning of year	4,833,000							4,966,000	0	0
Beginning balance (in shares) at Dec. 31, 2018							1,600,000				32,512,000
Beginning balance at Dec. 31, 2018	$ 392,085,000						$ 16,000				$ 325,000	$ 512,545,000	$ (115,410,000)					$ (5,391,000)	$ 44,885,000				$ (103,000)	$ (103,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchase of common stock (in shares)											(45,000)
Purchase of common stock	(520,000)											(520,000)
Equity-based compensation	5,342,000											5,342,000							2,601,000
Issuance of restricted shares/units (in shares)											260,000
Issuance of restricted shares/units	0										$ 2,000	(2,000)							8,000
Forfeiture of restricted common shares (in shares)											(7,000)
Forfeiture of restricted common shares	0
Preferred shares issuance costs						$ (13,000)						(13,000)
Dividends declared – common stock ($0.64/share)	(21,302,000)												(21,302,000)
Dividends declared – preferred stock		$ (3,300,000)	$ (6,842,000)											$ (3,300,000)	$ (6,842,000)
Distributions to noncontrolling interests	(2,654,000)																	(2,654,000)	(2,594,000)	$ (3,509,000)	$ (3,509,000)	$ (456,000)
Redemption/conversion of operating partnership units (in shares)											165,000
Redemption/conversion of operating partnership units	2,201,000										$ 2,000	2,199,000							(2,201,000)
Net income (loss)	2,403,000												371,000					2,032,000	(1,207,000)
Redemption value adjustment	(534,000)												(534,000)						534,000
Ending balance (in shares) at Dec. 31, 2019							1,600,000				32,885,000
Ending balance at Dec. 31, 2019	$ 363,254,000						$ 16,000				$ 329,000	519,551,000	(150,629,000)					(6,013,000)	41,570,000
Beginning balance, temporary equity at Dec. 31, 2018								$ 106,123,000	$ 0	$ 0
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of preferred stock (in shares)								42,000
Issuance of preferred stock								$ 797,000
Units outstanding at end of year (in shares) at Dec. 31, 2019	4,538,000							5,008,000	0	0
Ending balance, temporary equity at Dec. 31, 2019								$ 106,920,000	$ 0	$ 0
Increase (Decrease) in Temporary Equity [Roll Forward]
Units outstanding at beginning of year	4,538,000							5,008,000	0	0
Purchase of common stock (in shares)											(47,000)
Purchase of common stock	$ (155,000)											(155,000)
Equity-based compensation	5,746,000											5,746,000							2,146,000
Issuance of restricted shares/units (in shares)											379,000
Issuance of restricted shares/units	0										$ 3,000	(3,000)
Forfeiture of restricted common shares (in shares)											(10,000)
Forfeiture of restricted common shares	0
Issuance of common stock (in shares)											4,729,000
Issuance of common stock	13,327,000										$ 47,000	13,280,000
Add: Claw back of dividends on cancelled performance stock units	202,000												202,000						270,000
Dividends declared – preferred stock		(3,300,000)	$ (6,919,000)											(3,300,000)	(6,919,000)
Distributions to noncontrolling interests	(2,639,000)																	(2,639,000)
Redemption/conversion of operating partnership units (in shares)											339,000
Redemption/conversion of operating partnership units	3,454,000										$ 3,000	3,451,000							(3,454,000)
Net income (loss)	(111,698,000)												(105,262,000)					(6,436,000)	(12,979,000)
Redemption value adjustment	(102,000)												(102,000)						102,000
Ending balance (in shares) at Dec. 31, 2020							1,600,000				38,275,000
Ending balance at Dec. 31, 2020	$ 261,170,000						$ 16,000				$ 382,000	541,870,000	(266,010,000)					(15,088,000)	27,655,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of preferred stock (in shares)								23,000
Issuance of preferred stock								$ 29,000
Units outstanding at end of year (in shares) at Dec. 31, 2020	4,277,000		5,031,473	0	0			5,031,000	0	0
Ending balance, temporary equity at Dec. 31, 2020			$ 106,949,000	$ 0	$ 0			$ 106,949,000	$ 0	$ 0
Increase (Decrease) in Temporary Equity [Roll Forward]
Units outstanding at beginning of year	4,277,000		5,031,473	0	0			5,031,000	0	0
Purchase of common stock (in shares)											(50,000)
Purchase of common stock	$ (348,000)											(348,000)
Equity-based compensation	6,891,000											6,891,000							3,292,000
Issuance of restricted shares/units (in shares)											764,000
Issuance of restricted shares/units	0										$ 8,000	(8,000)
Forfeiture of restricted common shares (in shares)											(26,000)
Forfeiture of restricted common shares	0
Issuance of common stock (in shares)											18,243,000
Issuance of common stock	102,317,000										$ 183,000	102,134,000
Issuance of common units for hotel acquisition	0																		13,175,000
Add: Claw back of dividends on cancelled performance stock units	143,000												143,000						38,000
Dividends declared – preferred stock		$ (3,300,000)	$ (4,747,000)	$ (683,000)	$ (15,000)									$ (3,300,000)	$ (4,747,000)	$ (683,000)	$ (15,000)
Contributions from noncontrolling interests	1,189,000																	1,189,000
Redemption/conversion of operating partnership units (in shares)											868,000
Redemption/conversion of operating partnership units	4,584,000										$ 9,000	4,575,000							(4,584,000)
Net income (loss)	(29,314,000)												(26,664,000)					(2,650,000)	(3,597,000)
Extinguishment of preferred stock (in shares)											7,291,000
Extinguishment of preferred stock	41,523,000										$ 71,000	46,047,000	(4,595,000)
Equity component of Convertible Senior Notes	6,257,000											6,257,000
Redemption value adjustment - preferred stock	(3,261,000)												(3,261,000)
Redemption value adjustment	(108,000)												(108,000)						108,000
Ending balance (in shares) at Dec. 31, 2021							1,600,000				65,365,000
Ending balance at Dec. 31, 2021	$ 382,298,000						$ 16,000				$ 653,000	$ 707,418,000	$ (309,240,000)					$ (16,549,000)	$ 36,087,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of preferred stock (in shares)				1,709,000	29,000				1,710,000	29,000
Issuance of preferred stock									$ 36,211,000	$ 582,000
Extinguishment of preferred stock (in shares)								(1,953,000)
Extinguishment of preferred stock								$ (41,523,000)
Redemption value adjustment - preferred stock									$ 3,128,000	$ 133,000
Units outstanding at end of year (in shares) at Dec. 31, 2021	7,158,000		3,078,017	1,710,399	29,044			3,078,000	1,710,000	29,000
Ending balance, temporary equity at Dec. 31, 2021			$ 65,426,000	$ 39,339,000	$ 715,000			$ 65,426,000	$ 39,339,000	$ 715,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Units outstanding at beginning of year	7,158,000		3,078,017	1,710,399	29,044			3,078,000	1,710,000	29,000

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CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Common Stock
Dividends declared per common share (in dollars per share)			$ 0.64
Series D Preferred Stock
Preferred stock dividend rate (in dollars per share)	8.25%	8.25%	8.25%
Series D Preferred Stock | Preferred Stock
Dividends declared per preferred share (in dollars per share)	$ 2.0625	$ 2.0625	$ 2.0625
Series B Preferred Stock
Temporary equity, dividend rate (as a percent)	5.50%	5.50%	5.50%
Series B Preferred Stock | Preferred Stock
Dividends declared per preferred share (in dollars per share)	$ 1.3750	$ 1.3750	$ 1.3750
Series E Preferred Stock | Preferred Stock
Dividends declared per preferred share (in dollars per share)	$ 1.00
Series M Preferred Stock
Preferred stock dividend rate (in dollars per share)	0.00082%
Series M Preferred Stock | Preferred Stock
Dividends declared per preferred share (in dollars per share)	$ 0.85

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (32,911)	$ (124,677)	$ 1,196
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:
Depreciation and amortization	73,762	73,371	70,112
Equity-based compensation	10,183	7,892	7,943
Bad debt expense	436	727	444
Amortization of loan costs, discounts and capitalized default interest	(205)	854	4,343
Write-off of loan costs and exit fees	1,963	3,920	647
Amortization of intangibles	512	834	651
Amortization of non-refundable membership initiation fees	(1,029)	(440)	(181)
Interest expense accretion on refundable membership club deposits	772	818	864
(Gain) loss on insurance settlement and disposition of assets	(696)	(10,149)	(25,165)
Realized and unrealized (gain) loss on investment in Ashford Inc.	0	0	5,552
Realized and unrealized (gain) loss on derivatives	(32)	(24)	1,381
Net settlement of trading derivatives	0	698	(1,076)
Equity in (earnings) loss of unconsolidated entity	252	217	199
Deferred income tax expense (benefit)	(174)	(956)	764
Changes in operating assets and liabilities, exclusive of the effect of hotel acquisitions:
Accounts receivable and inventories	(11,036)	4,057	(5,788)
Prepaid expenses and other assets	(793)	(1,460)	(2,228)
Accounts payable and accrued expenses	35,976	(10,499)	13,394
Operating lease right-of-use assets	574	541	518
Due to/from related parties, net	(779)	(440)	(775)
Due to/from third-party hotel managers	(15,491)	4,075	(5,484)
Due to/from Ashford Inc.	720	(1,674)	(555)
Operating lease liabilities	(268)	(223)	(194)
Other liabilities	2,214	2,251	(300)
Net cash provided by (used in) operating activities	63,950	(50,287)	66,262
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from property insurance	0	9,037	11,020
Net proceeds from disposition of assets	1,816	0	10,300
Proceeds from sale of investment in Ashford Inc.	0	0	597
Acquisition of hotel properties	(17,615)	0	(111,751)
Investment in unconsolidated entity	(233)	(26)	(332)
Improvements and additions to hotel properties	(25,644)	(25,552)	(136,259)
Net cash provided by (used in) investing activities	(41,676)	(16,541)	(226,425)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on indebtedness	83,231	109,317	329,500
Repayments of indebtedness	(84,224)	(47,822)	(257,086)
Payments of loan costs and exit fees	(1,898)	(6,485)	(4,447)
Payments for derivatives	(200)	(92)	(115)
Purchase of common stock	(376)	(263)	(384)
Payments for dividends and distributions	(9,088)	(16,154)	(33,409)
Proceeds from issuance of preferred stock	36,855	474	645
Proceeds from issuance of common stock	102,461	13,259	0
Contributions from noncontrolling interest in consolidated entities	1,189	0	0
Distributions to noncontrolling interest in consolidated entities	0	(2,639)	(2,654)
Other	0	0	8
Net cash provided by (used in) financing activities	127,950	49,595	32,058
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total	150,224	(17,233)	(128,105)
Cash, cash equivalents and restricted cash at beginning of period	113,150	130,383	258,488
Cash, cash equivalents and restricted cash at end of period	263,374	113,150	130,383
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid	31,635	27,900	49,645
Income taxes paid (refunded)	(14)	140	(11)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Dividends and distributions declared but not paid	2,173	2,736	9,143
Common stock purchases accrued but not paid	0	28	136
Issuance of common units for hotel acquisition	13,175	0	0
Issuance of warrants in hotel acquisition	1,528	0	0
Assumption of debt in hotel acquisition	49,815	0	0
Capital expenditures accrued but not paid	4,564	8,993	18,572
Distribution of Ashford Inc. common stock	0	0	3,965
Non-cash loan proceeds associated with accrued interest	0	2,229	0
Non-cash loan principal associated with default interest and late charges	0	9,859	0
Non-cash extinguishment of preferred stock	41,523	0	0
Issuance of common stock from preferred stock exchange	46,118	0	0
Accrued common stock offering expense	76	0	0
Unsettled common stock offering proceeds	0	68	0
Unsettled preferred stock offering proceeds	0	0	75
Accrued preferred stock offering expenses	101	0	33
Non-cash preferred stock dividends	39	0	0
SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents	215,998	78,606	71,995
Restricted cash	47,376	34,544	58,388
Cash, cash equivalents and restricted cash	$ 263,374	$ 113,150	$ 130,383

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Organization and Description of Business

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

Organization and Description of Business

Braemar Hotels & Resorts Inc., together with its subsidiaries (“Braemar”), is a Maryland corporation that invests primarily in high revenue per available room (“RevPAR”) luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by Smith Travel Research. Braemar has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Braemar conducts its business and owns substantially all of its assets through its operating partnership, Braemar Hospitality Limited Partnership (“Braemar OP”). In this report, the terms “Company,” “we,” “us” or “our” refers to Braemar Hotels & Resorts Inc. and, as the context may require, all entities included in its consolidated financial statements.

We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC” or the “Advisor”) through an advisory agreement. Ashford LLC is a subsidiary of Ashford Inc. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.

We do not operate any of our hotel properties directly; instead we employ hotel management companies to operate them for us under management contracts. Remington Hotels, a subsidiary of Ashford Inc., manages four of our 14 hotel properties. Third-party management companies manage the remaining hotel properties.

Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory services, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and mobile key technology.

The accompanying consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of December 31, 2021, own 14 hotel properties in six states, the District of Columbia and the U.S. Virgin Islands (“USVI”). The portfolio includes 12 wholly-owned hotel properties and two hotel properties that are owned through a partnership in which Braemar OP has a controlling interest. These hotel properties represent 3,875 total rooms, or 3,640 net rooms, excluding those attributable to our partner. As a REIT, Braemar is required to comply with limitations imposed by the Code related to operating hotels. As of December 31, 2021, 13 of our 14 hotel properties were leased by wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes (collectively the TRS entities are referred to as “Braemar TRS”). One hotel property, located in the USVI, is owned by our USVI TRS. Braemar TRS then engages third-party or affiliated hotel management companies to operate the hotel properties under management contracts. Hotel operating results related to the hotel properties are included in the consolidated statements of operations.

As of December 31, 2021, 11 of the 14 hotel properties were leased by Braemar’s wholly-owned TRS, and the two hotel properties majority-owned through a consolidated partnership were leased to a TRS wholly-owned by such consolidated partnership. Each leased hotel is leased under a percentage lease that provides for each lessee to pay in each calendar month the base rent plus, in each calendar quarter, percentage rent, if any, based on hotel revenues. Lease revenue from Braemar TRS is eliminated in consolidation. The hotel properties are operated under management contracts with Marriott Hotel Services, Inc. (“Marriott”), Hilton Management LLC (“Hilton”), Accor Management US Inc. (“Accor”), Hyatt Corporation (“Hyatt”), Ritz-Carlton (Virgin Islands), Inc. and The Ritz-Carlton Hotel Company, L.L.C., each of which is an affiliate of Marriott (“Ritz-Carlton”) and Remington Hotels, which are eligible independent contractors under the Code.

Liquidity

In December 2019, COVID-19 was identified in Wuhan, China, subsequently spread to other regions of the world, and has resulted in significant travel restrictions and extended shutdown of numerous businesses throughout the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Beginning in late February 2020, we experienced a significant decline in occupancy and RevPAR associated with COVID-19 as we experienced significant reservation cancellations as well as a significant reduction in new reservations. The prolonged presence of the virus has resulted in health and other government authorities imposing widespread restrictions on travel and other businesses.

As of December 31, 2021, the Company maintained unrestricted cash of $216.0 million and restricted cash of $47.4 million. The vast majority of the restricted cash comprises lender and manager held reserves. As of December 31, 2021, there

was also $27.5 million due to the Company from third-party hotel managers, which is primarily the Company’s cash held by one of its property managers which is also available to fund hotel operating costs. On March 4, 2022, our board of directors declared a quarterly cash dividend of $0.01 per diluted share for the Company’s common stock for the first quarter of 2022.

We cannot predict when hotel operating levels will return to normalized levels after the effects of the pandemic fully subside, whether our hotels will be forced to shut down operations or whether one or more possible recurrences of COVID-19 case surges could result in further reductions in business and personal travel or potentially cause state and local governments to reinstate travel restrictions. Facts and circumstances could change in the future that are outside of management’s control, such as additional government mandates, health official orders, travel restrictions and extended business shutdowns due to COVID-19.

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Basis of Presentation and Principles of Consolidation—The accompanying consolidated financial statements include the accounts of Braemar Hotels & Resorts Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All significant intercompany accounts and transactions between consolidated entities have been eliminated in these consolidated financial statements.

Braemar OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Braemar OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Braemar OP General Partner LLC (formerly Ashford Prime OP General Partner LLC), its general partner. As such, we consolidate Braemar OP.

The following items affect reporting comparability of our historical consolidated financial statements:

•on January 15, 2019, we acquired The Ritz-Carlton Lake Tahoe. The operating results of the hotel property have been included in the results of operations as of its acquisition date; and

•on August 5, 2021, we acquired the Mr. C Beverly Hills Hotel and five adjacent luxury residences. The operating results of the hotel property have been included in the results of operations from its acquisition date.

Use of Estimates—The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents—Cash and cash equivalents include cash on hand or held in banks and short-term investments with an initial maturity of three months or less at the date of purchase.

Restricted Cash—Restricted cash includes reserves for debt service, real estate taxes, and insurance, as well as excess cash flow deposits and reserves for furniture, fixtures, and equipment (“FF&E”) replacements of approximately 4% to 5% of property revenue for certain hotels, as required by certain management or mortgage debt agreement restrictions and provisions.

Accounts Receivable—Accounts receivable consists primarily of meeting and banquet room rental and hotel guest receivables. We generally do not require collateral. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of guests to make required payments for services. The allowance is maintained at a level believed adequate to absorb estimated receivable losses. The estimate is based on past receivable loss experience, known and inherent credit risks, current economic conditions, and other relevant factors, including specific reserves for certain accounts.

Inventories—Inventories, which primarily consist of food, beverages, and gift store merchandise, are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method.

Investments in Hotel Properties, net—Hotel properties are generally stated at cost. For hotel properties owned through our majority-owned entities, the carrying basis attributable to the partners’ minority ownership is recorded at historical cost, net of any impairment charges, while the carrying basis attributable to our majority ownership is recorded based on the allocated purchase price of our ownership interests in the entities. All improvements and additions which extend the useful life of the hotel properties are capitalized.

For property and equipment acquired in a business combination, we record the sets acquired based on their fair value as of the acquisition date. Replacements and improvements and finance leases are capitalized, while repairs and maintenance are expense as incurred. Property and equipment acquired in an asset acquisition are recorded at cost. The acquisition cost is allocated to land, buildings, improvements, furniture, fixtures and equipment, as well as identifiable intangible and lease assets and liabilities. Acquisition cost is allocated using relative fair values. We evaluate several factors, including weighted market data for similar assets, expected future cash flows discounted at risk adjusted rates, and replacement costs for assets to determine an appropriate exit cost when evaluating the fair values.

Impairment of Investments in Hotel Properties—Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating the impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period and expected useful life. Fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. See note 4.

Assets Held for Sale and Discontinued Operations—We classify assets as held for sale when we have obtained a firm commitment from a buyer, and consummation of the sale is considered probable and expected within one year. The related operations of assets held for sale are reported as discontinued if the disposal is a component of an entity or group of components that represents a strategic shift that has (or will have) a major effect on our operations and cash flows. Depreciation and amortization will cease as of the date assets have met the criteria to be deemed held for sale.

Investment in Unconsolidated Entity—As of December 31, 2021, we held a 7.8% ownership interest in OpenKey, which is accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entities’ net income/loss. We review our investment in unconsolidated entity for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of our investment. Any impairment is recorded in equity in earnings (loss) of unconsolidated entity. No such impairment was recorded for the years ended December 31, 2021, 2020 and 2019. See note 5.

Our investment in unconsolidated entity is considered to be a variable interest in the underlying entity. VIEs, as defined by authoritative accounting guidance, must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Because we do not have the power and financial responsibility to direct the unconsolidated entity’s activities and operations, we are not considered to be the primary beneficiary of this entity on an ongoing basis and therefore such entity should not be consolidated.

Leases—We determine if an arrangement is a lease at the commencement date. Operating leases, as lessee, are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on our consolidated balance sheets. We currently do not have any finance leases.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and initial direct costs incurred and excludes lease incentives. The lease terms used to calculate our right-of-use asset may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Subsequent to the initial recognition, lease liabilities are measured using the effective interest method. The ROU asset is generally reduced utilizing a straight-line method adjusted for the lease liability accretion during the period.

We have lease agreements with lease and non-lease components, which under the elected practical expedients under ASC 842, we are not accounting for separately. For certain equipment leases, such as office equipment, copiers and vehicles, we account for the lease and non-lease components as a single lease component.

As of January 1, 2019, we recorded operating lease liabilities as well as a corresponding operating lease ROU asset which includes deferred rent and the reclassified intangible assets and intangible liabilities associated with above/below market-rate leases where we are the lessee.

Intangible Assets, net—Intangible assets, net represents the customer relationships associated with The Ritz-Carlton Sarasota acquisition, which are amortized using the straight-line method over its expected useful life, which approximates amortization based on economic consumption. See note 19.

Derivative Instruments—We use interest rate derivatives to hedge our risks and to capitalize on the historical correlation between changes in LIBOR (London Interbank Offered Rate) and RevPAR. Interest rate derivatives could include swaps, caps, floors and flooridors. We also use credit default swaps to hedge financial and capital market risk. All of our derivatives are subject to master-netting settlement arrangements and the credit default swaps are subject to credit support annexes. For credit default swaps, cash collateral is posted by us as well as our counterparty. We offset the fair value of the derivative and the obligation/right to return/reclaim cash collateral.

All derivatives are recorded at fair value in accordance with the applicable authoritative accounting guidance. None of our derivative instruments are designated as cash flow hedges. Interest rate derivatives, credit default swaps and options on futures contracts are reported as “derivative assets” in our consolidated balance sheets. For interest rate derivatives and credit default swaps changes in fair value and realized gains and losses are recognized in earnings as “unrealized gain (loss) on derivatives” and “other income (expense),” respectively, in our consolidated statements of operations.

Due to/from Related Parties, net—Due to/from related parties, net, represent current receivables and payables resulting from transactions related to hotel management with a related party. Due to/from related parties is generally settled within a period not exceeding one year. See note 15.

Due to/from Ashford Inc.—Due to/from Ashford Inc. represents payables related to the advisory services fee, including reimbursable expenses as well as other hotel products and services. These payables are generally settled within a period not exceeding one year. See note 15.

Due to/from Third-Party Hotel Managers—Due to/from third-party hotel managers primarily consists of amounts due from Marriott related to our cash reserves held at the Marriott corporate level related to our operations, real estate taxes, and other items, as well as current receivables and payables resulting from transactions with other third-party managers related to hotel management. These receivables and payables are generally settled within a period not exceeding one year.

Noncontrolling Interests—The redeemable noncontrolling interests in the operating partnership represent the limited partners’ proportionate share of equity in earnings/losses of the operating partnership, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common unit holdings throughout the period. The redeemable noncontrolling interests in our operating partnership is classified in the mezzanine section of our consolidated balance sheets as these redeemable operating partnership units do not meet the requirements for permanent equity classification prescribed by the authoritative accounting guidance because these redeemable operating partnership units may be redeemed by the holder for cash or registered shares in certain cases outside of the Company’s control. The carrying value of the noncontrolling interests in the operating partnership is based on the greater of the accumulated historical cost or the redemption value.

The noncontrolling interest in consolidated entities represents an ownership interest of 25% in two hotel properties at December 31, 2021 and 2020, and is reported in equity in our consolidated balance sheets.

Net income/loss attributable to redeemable noncontrolling interests in operating partnership and income/loss from consolidated entities attributable to noncontrolling interests in our consolidated entities are reported as deductions/additions from/to net income/loss. Comprehensive income/loss attributable to these noncontrolling interests is reported as reductions/additions from/to comprehensive income/loss.

Revenue Recognition—Rooms revenue represents revenues from the occupancy of our hotel rooms, which is driven by the occupancy and average daily rate. Rooms revenue includes revenue for guest no-shows, day use, and early/late departure fees. The contracts for room stays with customers are generally short in duration and revenues are recognized as services are provided over the course of the hotel stay. Advance deposits are recorded as liabilities when a customer or group of customers provides a deposit for a future stay or banquet event at our hotels. Advance deposits are converted to revenue when the services are provided to the customer or when the customer with a noncancellable reservation fails to arrive for part or all of the reservation. Conversely, advance deposits are generally refundable upon guest cancellation of the related reservation within an

established period of time prior to the reservation. Our advance deposit balance as of December 31, 2021 and 2020 was $31.8 million and $16.2 million, respectively, and are generally recognized as revenue within a one-year period.

Food & Beverage (“F&B”) revenue consists of revenue from the restaurants and lounges at our hotel properties, in-room dining and mini-bars revenue, and banquet/catering revenue from group and social functions. Other F&B revenue may include revenue from audiovisual equipment/services, rental of function rooms, and other F&B related revenues. Revenue is recognized as the services or products are provided. Our hotel properties may employ third parties to provide certain services at the property, for example, audio visual services. We evaluate each of these contracts to determine if the hotel is the principal or the agent in the transaction, and record the revenues as appropriate (i.e. gross vs. net).

Other revenue consists of ancillary revenue at the property, including attrition and cancellation fees, condo management fees, resort and destination fees, health center fees, spas, golf, telecommunications, parking, entertainment and other guest services, as well as rental revenue primarily from leased retail outlets at our hotel properties, and membership initiation fees and dues, primarily from club memberships. Cancellation fees are recognized from non-cancellable deposits when the customer provides notification of cancellation in accordance with established management policy time frames. Non-refundable membership initiation fees are recognized over the expected life of an active membership.

Taxes specifically collected from customers and submitted to taxing authorities are not recorded in revenue. Interest income is recognized when earned.

Other Hotel Expenses—Other hotel expenses include Internet, telephone charges, guest laundry, valet parking, hotel-level general and administrative, sales and marketing expenses, repairs and maintenance, franchise fees and utility costs. They are expensed as incurred.

Advertising Costs—Advertising costs are charged to expense as incurred. For the years ended December 31, 2021, 2020 and 2019, we incurred advertising costs of $4.0 million, $2.1 million and $4.5 million, respectively. Advertising costs are included in “other” hotel expenses in our consolidated statements of operations.

Equity-Based Compensation—Stock/unit-based compensation for non-employees is measured at the grant date and expensed ratably over the vesting period based on the original measurement as of the grant date. This results in the recording of expense, included in “advisory services fee,” “management fees” and “corporate general and administrative” expense, equal to the ratable amount of the grant date fair value based on the requisite service period satisfied during the period. PSUs and Performance LTIP units granted to certain executive officers vest based on time and market conditions and are measured at the grant date fair value based on a Monte Carlo simulation valuation model.

With respect to the 2019 and 2020 award agreements, the number of PSUs and Performance LTIP units actually earned may range from 0% to 200% of target based on achievement of a specific relative total stockholder return based on the formulas determined by the Company’s compensation committee on the grant date. The performance criteria for the PSUs and Performance LTIP units are based on market conditions under the relevant literatures. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition.

With respect to the 2021 award agreements, the compensation committee shifted to a new performance metric, pursuant to which, the performance awards will be eligible to vest, from 0% to 200% of target, based on achievement of certain performance targets over the three-year performance period commencing on January 1, 2021 and ending on December 31, 2023. The performance criteria for the 2021 performance grants are based on performance conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award. The grant date fair value of the award may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.

Depreciation and Amortization—Hotel properties are depreciated over the estimated useful life of the assets and leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related assets. Presently, hotel properties are depreciated using the straight-line method over lives ranging from 7.5 to 39 years for buildings and improvements and 1.5 to 5 years for FF&E. While we believe our estimates are reasonable, a change in estimated useful lives could affect depreciation expense and net income (loss) as well as resulting gains or losses on potential hotel sales.

Income Taxes—As a REIT, we generally are not subject to federal corporate income tax on the portion of our net income (loss) that does not relate to TRSs. However, Braemar TRS and our USVI TRS are treated as TRSs for U.S. federal income tax

purposes. In accordance with authoritative accounting guidance, we account for income taxes related to our TRSs using the asset and liability method under which deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, the analysis utilized by us in determining our deferred tax asset valuation allowance involves considerable management judgment and assumptions. See note 18.

The entities that own 13 of our 14 hotel properties are considered partnerships for U.S. federal income tax purposes. Partnerships are not subject to U.S. federal income taxes. The partnerships’ revenues and expenses pass through to and are taxed on the owners. The states and cities where the partnerships operate follow the U.S. federal income tax treatment, with the exception of the District of Columbia and the city of Philadelphia. Accordingly, we provide for income taxes in these jurisdictions for the partnerships. The consolidated entities that operate the 14 hotel properties are considered taxable corporations for U.S. federal, foreign, state, and city income tax purposes and have elected to be TRSs of Braemar.

The “Income Taxes” topic of the FASB’s ASC addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance requires us to determine whether tax positions we have taken or expect to take in a tax return are more likely than not to be sustained upon examination by the appropriate taxing authority based on the technical merits of the positions. Tax positions that do not meet the more likely than not threshold would be recorded as additional tax expense in the current period. We analyze all open tax years, as defined by the statute of limitations for each jurisdiction, which includes the federal jurisdiction and various states. We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and cities. Tax years 2017 through 2021 remain subject to potential examination by certain federal and state taxing authorities.

Income (Loss) Per Share—Basic income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding during the period using the two-class method prescribed by applicable authoritative accounting guidance. Diluted income (loss) per common share is calculated using the two-class method, or the treasury stock method, if more dilutive. Diluted income (loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares, whereby such exercise or conversion would result in lower income per share.

Recently Adopted Accounting Standards—In January 2020, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2020-01, Investments – Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (“ASU 2020-01”), which clarifies the interaction between the accounting for equity securities, equity method investments, and certain derivative instruments. The ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years and should be applied prospectively. Early adoption is permitted. We adopted the standard effective January 1, 2021 and the adoption of this standard did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Standards—In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”) to provide guidance and relief for transitioning to alternative reference rates. ASU 2021-01 is effective immediately for all entities. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU: (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in Accounting Standards Codification (“ASC”) 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s

own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (“EPS”) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, this ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. We plan to adopt ASU 2020-06 through the modified retrospective method on January 1, 2022. Upon adoption, the Convertible Senior Notes will be recorded as a single debt instrument at amortized cost, instead of being recorded as both a liability and equity. The Company will also cease recording non-cash interest expense associated with amortization of the debt discount associated with the conversion features. The adoption of ASU 2020-06 will result in an adjustment to additional paid-in capital, accumulated deficit, and the carrying value of our Convertible Senior Notes. The impact of adopting ASU 2020-06 will be an increase to “indebtedness, net” and a decrease to stockholders’ equity of approximately $5.6 million. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements, beyond the impact to our Convertible Senior Notes described above.

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Revenue

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue

RevenueThe following tables present our revenue disaggregated by geographical areas (in thousands):

	Year Ended December 31, 2021
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Other		Total
California	6	$	91,283	$	27,205	$	12,938	$	—	$	131,426
Colorado	1	17,303		10,936		7,945		—		36,184
Florida	2	65,974		27,148		21,094		—		114,216
Illinois	1	14,422		3,418		1,153		—		18,993
Pennsylvania	1	11,889		1,493		776		—		14,158
Washington	1	15,105		1,632		1,578		—		18,315
Washington, D.C.	1	9,773		3,014		1,142		—		13,929
USVI	1	54,819		15,453		10,049		—		80,321
Total	14	$	280,568	$	90,299	$	56,675	$	—	$	427,542

	Year Ended December 31, 2020
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Other		Total
California	5	$	46,291	$	13,573	$	8,056	$	—	$	67,920
Colorado	1	12,847		6,178		6,529		—		25,554
Florida	2	33,829		17,009		14,446		—		65,284
Illinois	1	5,979		1,293		610		—		7,882
Pennsylvania	1	7,349		1,227		424		—		9,000
Washington	1	5,604		797		620		—		7,021
Washington, D.C.	1	7,595		3,519		1,604		—		12,718
USVI	1	16,771		6,667		8,157		—		31,595
Total	13	$	136,265	$	50,263	$	40,446	$	—	$	226,974

	Year Ended December 31, 2019
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Other		Total
California	5	$	115,826	$	37,022	$	15,930	$	—	$	168,778
Colorado	1	18,209		12,430		10,049		—		40,688
Florida	2	47,166		26,656		16,758		—		90,580
Illinois	1	25,366		7,839		1,565		—		34,770
Pennsylvania	1	26,016		4,738		1,133		—		31,887
Washington	1	29,235		6,633		1,629		—		37,497
Washington, D.C.	1	38,735		16,710		1,840		—		57,285
USVI	1	3,295		3,057		19,770		—		26,122
Corporate entities	—	—		—		—		7		7
Total	13	$	303,848	$	115,085	$	68,674	$	7	$	487,614

For the years ended December 31, 2020 and 2019, the Company recorded revenue from business interruption losses associated with lost profits from Hurricane Irma of $4.0 million and $19.3 million, respectively. This revenue is included in “other” hotel revenue in our consolidated statement of operations. There was no such revenue recorded for the year ended December 31, 2021 as the insurance claim was fully settled in 2020.

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Investments in Hotel Properties, net

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Investments in Hotel Properties, net

Investments in Hotel Properties, net

Investments in hotel properties, net consisted of the following (in thousands):

	December 31, 2021		December 31, 2020
Land	$	480,530	$	455,298
Buildings and improvements	1,215,810		1,190,437
Furniture, fixtures and equipment	123,954		127,692
Construction in progress	12,038		11,422
Residences	12,746		—
Total cost	1,845,078		1,784,849
Accumulated depreciation	(399,481)		(360,259)
Investments in hotel properties, net	$	1,445,597	$	1,424,590

The cost of land and depreciable property, net of accumulated depreciation, for U.S. federal income tax purposes was approximately $1.4 billion and $1.3 billion as of December 31, 2021 and 2020, respectively.

For the years ended December 31, 2021, 2020 and 2019, depreciation expense was $73.0 million, $72.8 million and $69.5 million, respectively.

Impairment Charges and Insurance Recoveries

For the years ended December 31, 2020 and 2019, the Company received proceeds of $14.5 million and $36.6 million, respectively, from our insurance carriers for property damage and business interruption from Hurricane Irma. In September 2020, the Company reached a final settlement with its insurance carriers related to Hurricane Irma. Upon settlement, the Company recorded a gain of $10.1 million as the proceeds received exceeded the carrying value of the hotel property at the time of the loss. Additionally, for the year ended December 31, 2019, the Company recorded a gain of $26.2 million upon settlement of a portion of the insurance claim. For the year ended December 31, 2021, we recognized a gain of $481,000 associated with proceeds received from an insurance claim.

During the years ended December 31, 2021, 2020 and 2019, no impairment charges were recorded.

Mr. C Beverly Hills Hotel

On August 5, 2021, the Company acquired a 100% interest in the 138-room Mr. C Beverly Hills Hotel and five luxury residences adjacent to the hotel. The total consideration consisted of $10.0 million of cash, 2.5 million Braemar OP common units with a fair value of approximately $13.2 million and 500,000 warrants for the purchase of Braemar common stock with a

$6.00 strike price and a fair value of approximately $1.5 million. Additionally the Company assumed a $50.0 million mortgage loan, with a fair value of approximately $49.8 million. Upon closing, the Company repaid $20.0 million of the assumed mortgage loan. See notes 6, 7 and 11 for further discussion regarding the mortgage loan, common units and warrants.

The acquisition of the Mr. C Beverly Hills Hotel included the hotel and the adjacent luxury residences (the “residences”). We have accounted for the transaction as a business combination under Accounting Standards Codification (“ASC”) 805- Business Combinations. We prepared the purchase price allocation of the assets acquired and liabilities assumed. The final purchase price allocation was completed with the assistance of a third party appraisal firm during the year ended December 31, 2021.

This valuation is considered a Level 3 valuation technique, as noted in the following table (in thousands):

Land	$	25,232
Buildings and improvements	35,689
Furniture, fixtures and equipment	758
Residences	12,746
Investments in hotel properties	74,425
Inventories	94
Mortgage loan	(49,815)
	$	24,704
Net other assets (liabilities)	$	(486)

The results of operations of the hotel property have been included in our results of operations from the acquisition date. The table below summarizes the total revenue and net income (loss) in our consolidated statements of operations for the year ended December 31, 2021:

	Year Ended December 31, 2021
Total revenue	$	6,592
Net income (loss)	(1,630)

Pro Forma Financial Results

The following table reflects the unaudited pro forma results of operations as if the acquisitions had occurred and the applicable indebtedness was incurred on January 1, 2020, and the removal of $563,000 of non-recurring transaction costs directly attributable to the acquisition for the year ended December 31, 2021 (in thousands):

	Year Ended December 31,
	2021		2020
Total revenue	$	433,813	$	235,379
Net income (loss)	$	(32,720)	$	(128,461)
Net income (loss) attributable to common stockholders	$	(38,334)	$	(111,613)
Pro forma income (loss) per share;
Basic	$	(0.72)	$	(3.28)
Diluted	$	(0.72)	$	(3.28)
Weighted average common shares outstanding (in thousands):
Basic	52,684		33,998
Diluted	52,684		33,998

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Investment in Unconsolidated Entity

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Investment in Unconsolidated Entity

Investment in Unconsolidated EntityOpenKey is a hospitality-focused mobile key platform that provides a universal smart phone app and related hardware and software for keyless entry into hotel guest rooms. In 2018, the Company made an initial investment in OpenKey, which is controlled and consolidated by Ashford Inc., for an initial 8.2% ownership interest. In 2021, the Company made additional investments of $233,000. All investments were recommended by our Related Party Transactions Committee and unanimously approved by the independent members of our board of directors. As of December 31, 2021, the Company has made investments in OpenKey totaling $2.6 million.

Our investment is recorded as “investment in unconsolidated entity” in our consolidated balance sheets and is accounted for under the equity method of accounting as we have significant influence over the entity under the applicable accounting guidance. We review our investment in OpenKey for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of the investment. Any impairment is recorded in equity in earnings (loss) of unconsolidated entity. No such impairment was recorded for the years ended December 31, 2021, 2020 and 2019.

The following table summarizes our carrying value and ownership interest in OpenKey:

	December 31, 2021			December 31, 2020
Carrying value of the investment in OpenKey (in thousands)	$	1,689		$	1,708
Ownership interest in OpenKey	7.8		%	8.2		%

The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Equity in earnings (loss) of unconsolidated entity	$	(252)	$	(217)	$	(199)

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Indebtedness, net

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Indebtedness, net

Indebtedness, net

Indebtedness, net consisted of the following (dollars in thousands):

Indebtedness	Collateral	Current Maturity	Final Maturity (12)	Interest Rate	December 31, 2021				December 31, 2020
					Debt Balance		Book Value of Collateral		Debt Balance		Book Value of Collateral
Mortgage loan (3)	Park Hyatt Beaver Creek Resort & Spa	April 2022	April 2022	LIBOR (1) +3.00%	$	67,500	$	137,718	$	67,500	$	140,516
Mortgage loan (4)	The Notary Hotel	June 2022	June 2025	LIBOR (1) + 2.16%	435,000		417,109		435,000		439,215
	The Clancy
	Sofitel Chicago Magnificent Mile
	Marriott Seattle Waterfront
Mortgage loan (5)	The Ritz-Carlton St. Thomas	August 2022	August 2024	LIBOR (1) + 3.95%	42,500		124,114		42,500		130,216
Term loan (6)	Equity	October 2022	October 2022	Base Rate (2) + 1.25% to 2.65% or LIBOR (1) + 2.25% to 3.65%	—		—		61,495		—
Mortgage loan (7)	The Ritz-Carlton Sarasota	April 2023	April 2023	LIBOR (1) + 2.65%	99,500		162,621		100,000		163,814
Mortgage loan (7) (8)	Hotel Yountville	May 2023	May 2023	LIBOR (1) + 2.55%	51,000		85,847		51,000		87,795
Mortgage loan (7) (8)	Bardessono Hotel and Spa	August 2023	August 2023	LIBOR (1) + 2.55%	40,000		53,413		40,000		56,645
Mortgage loan (7)	The Ritz-Carlton Lake Tahoe	January 2024	January 2024	LIBOR (1) + 2.10%	54,000		112,713		54,000		113,821
Mortgage loan (9)	Capital Hilton	February 2024	February 2024	LIBOR (1) + 1.70%	195,000		193,194		197,229		203,918
	Hilton La Jolla Torrey Pines
Mortgage loan (10)	Mr. C Beverly Hills Hotel	August 2024	August 2024	LIBOR (1) + 3.60%	30,000		73,587		—		—
Mortgage loan (7)	Pier House Resort & Spa	September 2024	September 2024	LIBOR (1) + 1.85%	80,000		85,281		80,000		88,650
Convertible Senior Notes (11)	Equity	June 2026	June 2026	4.50%	86,250		—		—		—
					1,180,750		1,445,597		1,128,724		1,424,590
Capitalized default interest and late charges					3,904				7,304
Deferred loan costs, net					(3,538)				(5,434)
Discounts, net					(8,438)				—
Indebtedness, net					$	1,172,678	$	1,445,597	$	1,130,594	$	1,424,590

__________________

(1)LIBOR rates were 0.101% and 0.144% at December 31, 2021 and December 31, 2020, respectively.

(2)Base Rate, as defined in the secured term loan agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%.

(3)Effective January 9, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through June 2021. This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the third was exercised in April 2021.

(4)This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions, of which the second was exercised in June 2021.

(5)This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the first was exercised in August 2021. This mortgage loan has a LIBOR floor of 1.00%.

(6)Effective February 22, 2021, we amended this term loan. In conjunction with the amendment, the interest rate spread increased from a rate of Base Rate + 1.25% - 2.50% or LIBOR + 2.25% - 3.50% to a Base Rate + 1.25% - 2.65% or LIBOR + 2.25% - 3.65%, with a LIBOR floor of 0.50%. On May 18, 2021, we repaid this term loan in full.

(7)Effective December 31, 2020, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through December 2021. This mortgage loan has a LIBOR floor of 0.25%.

(8)On September 23, 2021, we amended this mortgage loan. Terms of the agreement included extending the current and final maturity dates by one year.

(9)Effective March 5, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits waived through July 1, 2021.

(10)This mortgage loan has a LIBOR floor of 1.50%.

(11)On May 18, 2021, we executed a purchase agreement to sell convertible senior notes in a private offering. In conjunction with the private offering, we sold convertible senior notes with an aggregate principal amount of $86.25 million.

(12)The final maturity date assumes all available extensions options will be exercised.

During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by the Pier House Resort & Spa, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Hotel Yountville, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Capital Hilton and Hilton La Jolla Torrey Pines. As of December 31, 2021, no loans are in default. See note 15 for discussion of the loan modification agreement with Lismore Capital LLC (“Lismore”). The Company determined that all of the forbearance and other agreements evaluated were considered troubled debt restructurings due to terms that allowed for deferred interest and the forgiveness of default interest and late charges. No gain or loss was recognized during 2020, as the carrying amount of the original loans was not greater than the undiscounted cash flows of the modified loans.

As a result of the troubled debt restructurings, all accrued default interest and late charges were capitalized into the applicable loan balances and are being amortized over the remaining term of the loans using the effective interest method. The amount of default interest and late charges capitalized into indebtedness for the year ended December 31, 2020 was $9.9 million. The amount of principal amortization for the years ended December 31, 2021 and 2020 was $3.4 million and $2.6 million, respectively.

On August 5, 2021, in connection with the acquisition of the Mr. C Beverly Hills Hotel and the adjacent residences, the Company assumed a $50 million mortgage loan and repaid $20 million upon closing. This mortgage loan provides for an interest rate of LIBOR + 3.60%. The mortgage loan is interest only with a stated maturity in August 2024.

Convertible Senior Notes

In May 2021, the Company issued $86.25 million aggregate principal amount of 4.50% Convertible Senior Notes due June 2026 (the “Convertible Senior Notes”). The net proceeds from this offering of the Convertible Senior Notes were approximately $82.8 million after deducting the underwriting fees and other expenses paid by the Company. A portion of the proceeds were used to fully repay the secured term loan.

The Convertible Senior Notes are governed by an indenture (the “Base Indenture”) between the Company and U.S. Bank National Association, as trustee. The Convertible Senior Notes bear interest at a rate of 4.50% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2021. The Convertible Senior Notes will mature on June 1, 2026. The Company recorded coupon interest expense of $2.4 million for the year ended December 31, 2021.

The Company separated the Convertible Senior Notes into liability and equity components. The initial carrying amount of the liability component was calculated using a discount rate of 7.1%. The discount rate was based on the terms of debt instruments that were similar to the Convertible Senior Notes. The $6.3 million carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the net proceeds of the Convertible Senior Notes. The amount recorded in equity is not subject to remeasurement or amortization. The initial discount of $9.3 million is accreted to interest expense using the effective interest rate method over the contractual term of the Convertible Senior Notes. The Company recorded discount amortization of $974,000 for the year ended December 31, 2021, with the remaining discount balance to be amortized through June 2026.

The Convertible Senior Notes are convertible at any time prior to the close of business on the business day immediately preceding the maturity date for cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the election of the Company, based on an initial conversion rate of 157.7909 shares of the Company’s common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $6.34 per share of common stock), subject to adjustment of the conversion rate under certain circumstances. In addition, following the occurrence of certain corporate events, if the Company provides notice of redemption or if it exercises its option to convert the Convertible Senior Notes, the Company will, in certain circumstances, increase the conversion rate for a holder that converts its Convertible Senior Notes in connection with such corporate event, such notice of redemption, or such issuer conversion option, as the case may be.

The Company may redeem the Convertible Senior Notes at the Company’s option, in whole or in part, on any business day on or after the date of issuance if the last reported sale price per share of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Senior Notes to be redeemed subject to certain adjustments, plus accrued and unpaid interest to, but excluding, the redemption date.

If we violate covenants in any debt agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of the consolidated group. As of December 31, 2021, we were in compliance with all covenants.

Maturities and scheduled amortization of indebtedness as of December 31, 2021, assuming no extension of existing extension options for each of the following five years and thereafter are as follows (in thousands):

2022	$	546,000
2023	189,500
2024	359,000
2025	—
2026	86,250
Thereafter	—
Total	$	1,180,750

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Derivative Instruments

12 Months Ended

Dec. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Interest Rate Derivatives—We are exposed to risks arising from our business operations, economic conditions and financial markets. To manage these risks, we primarily use interest rate derivatives to hedge our debt and our cash flows. The interest rate derivatives include interest rate caps and interest rate floors, which are subject to master netting settlement arrangements. All derivatives are recorded at fair value.

The following table summarizes the interest rate derivatives we entered into over the applicable periods:

	Year Ended December 31,
Interest rate caps:(1)	2021			2020			2019
Notional amount (in thousands)	$	882,500		$	602,500		$	391,000
Strike rate low end of range	0.75		%	3.00		%	3.00		%
Strike rate high end of range	4.00		%	4.00		%	7.80		%
Effective date range	January 2021- September 2021			March 2020 - June 2020			January 2019 - December 2019
Termination date range	February 2022- August 2024			April 2021 - June 2021			March 2020 -October 2021
Total cost of interest rate caps (in thousands)	$	200		$	92		$	115
Interest rate floors:
Notional amount (in thousands)	$	—		$	—		$	2,000,000
Strike rate low end of range							1.63		%
Strike rate high end of range							1.63		%
Effective date							January 2019
Termination date							March 2020
Total cost of interest rate floors (in thousands)	$	—		$	—		$	75

_______________

(1)    No instruments were designated as cash flow hedges.

Interest rate derivatives consisted of the following:

Interest rate caps: (1)	December 31, 2021			December 31, 2020
Notional amount (in thousands)	$	882,500		$	779,000
Strike rate low end of range	0.75		%	3.00		%
Strike rate high end of range	4.00		%	4.00		%
Termination date range	February 2022 - August 2024			February 2021 - October 2021
Aggregate principal balance on corresponding mortgage loans (in thousands)	$	857,000		$	779,000

_______________

(1)No instruments were designated as cash flow hedges.

Warrants—On August 5, 2021, as part of the consideration paid to acquire the Mr. C Beverly Hills Hotel and five adjacent luxury residences, the Company issued 500,000 warrants for the purchase of Braemar common stock with a $6.00 strike price on or after August 5, 2021 until August 5, 2024. The holder can choose to exercise the warrant by cash or by net issue exercise, in which event the Company shall issue to the holder a number of warrant shares which reflects the fair market value of the Company’s common stock. As of December 31, 2021, no warrants have been exercised.

The initial fair value of the warrant was calculated using a Black-Scholes option pricing model with the following assumptions: three-year contractual term; 97.93% volatility; 0% dividend rate; and a risk-free interest rate of 0.38%. The estimated fair value of the warrants was approximately $1.5 million on the date of issuance. The warrants are re-valued at each reporting period with the change in fair value recorded through earnings.

In applying the guidance in ASC 815, it was determined that the warrants should be classified as a liability as a result of certain settlement provisions. The warrants are included in derivative liabilities on the consolidated balance sheet and changes in value are reported as a component of unrealized gain (loss) on derivatives on the consolidated statements of operations. This is a Level 2 valuation technique.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair Value Hierarchy—Our financial instruments measured at fair value either on a recurring or a non-recurring basis are classified in a hierarchy for disclosure purposes consisting of three levels based on the observability of inputs in the market place as discussed below:

•Level 1: Fair value measurements that are quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets.

•Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

•Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability.

Fair value of interest rate caps is determined using the net present value of expected cash flows of each derivative based on the market-based interest rate curve and adjusted for credit spreads of us and our counterparties. Fair value of credit default swaps is obtained from a third-party who publishes various information including the index composition and price data (Level 2 inputs). The fair value of credit default swaps does not contain credit-risk-related adjustments as the change in fair value is settled net through posting cash collateral or reclaiming cash collateral between us and our counterparty. Fair value of interest rate floors is calculated using a third-party discounted cash flow model based on future cash flows that are expected to be received over the remaining life of the floor. The fair value of warrants is determined by using the Black-Scholes option pricing model.

When a majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. However, when the valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties, which we consider significant (10% or more) to the overall valuation of our derivatives, the derivative valuations in their entirety are classified in Level 3 of the fair value hierarchy. Transfers of inputs between levels are determined at the end of each reporting period. In determining the fair values of our derivatives at December 31, 2021, the LIBOR interest rate forward curve (Level 2 inputs) assumed an uptrend from 0.101% to 1.500% for the remaining term of our

derivatives. Credit spreads (Level 3 inputs) used in determining the fair values derivatives assumed an uptrend in nonperformance risk for us and all of our counterparties through the maturity dates.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis aggregated by the level within which measurements fall in the fair value hierarchy (in thousands):

	Quoted Market Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2021
Assets
Derivative assets:
Interest rate derivatives - caps	$	—	$	139	$	—	$	139
Total	$	—	$	139	$	—	$	139	(1)
Liabilities
Derivative liabilities:
Warrants	—		(1,435)		$	—	(1,435)		(2)
Net	$	—	$	(1,296)	$	—	$	(1,296)

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(1)Reported as “derivative assets” in our consolidated balance sheet.

(2)Reported as “derivative liabilities” in our consolidated balance sheet.

Effect of Fair Value Measured Assets and Liabilities on Consolidated Statements of Operations

The following table summarizes the effect of fair value measured assets and liabilities on our consolidated statements of operations (in thousands):

	Gain (Loss) Recognized in Income
	Year Ended December 31,
	2021		2020			2019
Assets
Derivative assets:
Interest rate derivatives - floors	$	—	$	—		$	(152)
Interest rate derivatives - caps	$	(62)	$	(93)		$	(134)
Credit default swaps	—		117		(1)	(1,095)		(1)
Total derivative assets	$	(62)	$	24		$	(1,381)
Non-derivative assets:
Investment in Ashford Inc.	$	—	$	—		$	(5,552)
Total	$	(62)	$	24		$	(6,933)
Liabilities
Derivative liabilities:
Warrants	94		—			—
Net	$	32	$	24		$	(6,933)
Total combined
Interest rate derivatives - floors	$	—	$	3,615		$	126
Interest rate derivatives - caps	(62)		(93)			(134)
Credit default swaps	—		1,437			(1,095)
Warrants	94		—			—
Unrealized gain (loss) on derivatives	32		4,959			(1,103)
Realized gain (loss) on credit default swaps	—		(1,320)			—
Realized gain (loss) on interest rate floors	—		(3,615)		(2)	(278)		(2)
Unrealized gain (loss) on investment in Ashford Inc.	—		—			7,872
Realized gain (loss) on investment in Ashford Inc.	—		—			(13,424)
Net	$	32	$	24		$	(6,933)

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(1)Excludes costs associated with credit default swaps of $191 and $253 for the years ended December 31, 2020 and 2019, respectively, which is included in “other income (expense)” in our consolidated statements of operations.

(2)Included in “other income (expense)” in our consolidated statements of operations.

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Summary of Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2021

Investments, All Other Investments [Abstract]

Summary of Fair Value of Financial Instruments

Summary of Fair Value of Financial InstrumentsDetermining the estimated fair values of certain financial instruments such as indebtedness requires considerable judgment to interpret market data. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold or settled.

The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):

	December 31, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets and liabilities measured at fair value:
Derivative assets	$	139	$	139	$	—	$	—
Derivative liabilities	1,435		1,435		—		—
Financial assets not measured at fair value:
Cash and cash equivalents	$	215,998	$	215,998	$	78,606	$	78,606
Restricted cash	47,376		47,376		34,544		34,544
Accounts receivable, net	23,701		23,701		13,557		13,557
Due from related parties, net	1,770		1,770		991		991
Due from third-party hotel managers	27,461		27,461		12,271		12,271
Financial liabilities not measured at fair value:
Indebtedness	$	1,172,312	$1,022,408 to $1,130,029		$	1,128,724	$884,325 to $977,411
Accounts payable and accrued expenses	96,316		96,316		61,758		61,758
Dividends and distributions payable	2,173		2,173		2,736		2,736
Due to Ashford Inc.	1,474		1,474		2,772		2,772
Due to third-party hotel managers	610		610		1,393		1,393

Cash, cash equivalents and restricted cash. These financial assets have maturities of less than 90 days and most bear interest at market rates. The carrying value approximates fair value due to their short-term nature. This is considered a Level 1 valuation technique.

Accounts receivable, net, due from related parties, net, accounts payable and accrued expenses, dividends and distributions payable, due to Ashford Inc. and due to/from third-party hotel managers. The carrying values of these financial instruments approximate their fair values due to the short-term nature of these financial instruments. This is considered a Level 1 valuation technique.

Derivative assets and derivative liabilities. See notes 7 and 8 for a complete description of the methodology and assumptions utilized in determining fair values.

Indebtedness, net. Fair value of indebtedness is determined using future cash flows discounted at current replacement rates for these instruments. Cash flows are determined using a forward interest rate yield curve. The current replacement rates are determined by using the U.S. Treasury yield curve or the index to which these financial instruments are tied, and adjusted for the credit spreads. Credit spreads take into consideration general market conditions, maturity and collateral. We estimated the fair value of the total indebtedness to be approximately 87.2% to 96.4% of the carrying value of $1.2 billion at December 31, 2021, and approximately 78.3% to 86.6% of the carrying value of $1.1 billion at December 31, 2020. These fair value estimates are considered a Level 2 valuation technique.

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Income (Loss) Per Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Income (Loss) Per Share

Income (Loss) Per Share

The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):

	Year Ended December 31,
	2021		2020		2019
Net income (loss) attributable to common stockholders - basic and diluted:
Net income (loss) attributable to the Company	$	(26,664)	$	(105,262)	$	371
Less: Dividends on preferred stock	(8,745)		(10,219)		(10,142)
Less: Dividends on common stock	—		—		(24,145)
Less: Loss on extinguishment of preferred stock - Series B	(4,595)		—		—
Less: Dividends on unvested performance stock units	—		—		(261)
Add: Claw back of dividends on cancelled performance stock units	143		202		—
Less: Dividends on unvested restricted shares	—		—		(405)
Undistributed net income (loss) allocated to common stockholders	(39,861)		(115,279)		(34,582)
Add back: Dividends on common stock	—		—		24,145
Distributed and undistributed net income (loss) - basic and diluted	$	(39,861)	$	(115,279)	$	(10,437)
Weighted average common shares outstanding:
Weighted average common shares outstanding – basic and diluted	52,684		33,998		32,289
Income (loss) per share - basic:
Net income (loss) allocated to common stockholders per share	$	(0.76)	$	(3.39)	$	(0.32)
Income (loss) per share - diluted:
Net income (loss) allocated to common stockholders per share	$	(0.76)	$	(3.39)	$	(0.32)

Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):

	Year Ended December 31,
	2021		2020		2019
Net income (loss) allocated to common stockholders is not adjusted for:
Income (loss) allocated to unvested restricted shares	$	—	$	—	$	405
Income (loss) allocated to unvested performance stock units	—		—		261
Income (loss) attributable to redeemable noncontrolling interests in operating partnership	$	(3,597)	$	(12,979)	$	(1,207)
Dividends on preferred stock - Series B	4,747		6,919		6,842
Loss on extinguishment of preferred stock - Series B	4,595		—		—
Interest expense on Convertible Senior Notes	3,378		—		—
Dividends on preferred stock - Series E	683		—		—
Dividends on preferred stock - Series M	15		—		—
Total	$	9,821	$	(6,060)	$	6,301
Weighted average diluted shares are not adjusted for:
Effect of unvested restricted shares	99		22		51
Effect of unvested performance stock units	—		—		193
Effect of assumed conversion of operating partnership units	4,980		3,923		4,219
Effect of assumed conversion of preferred stock - Series B	4,614		6,728		6,581
Effect of assumed conversion of exchanged preferred stock - Series B	364		—		—
Effect of assumed conversion of Convertible Senior Notes	8,450		—		—
Effect of assumed conversion of preferred stock - Series E	1,345		—		—
Effect of assumed conversion of preferred stock - Series M	32		—		—
Total	19,884		10,673		11,044

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Redeemable Noncontrolling Interests in Operating Partnership

12 Months Ended

Dec. 31, 2021

Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interests in Operating Partnership

Redeemable Noncontrolling Interests in Operating Partnership

Redeemable noncontrolling interests in the operating partnership represents the limited partners’ proportionate share of equity and their allocable share of equity in earnings/losses of Braemar OP, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (the “common units”) and units issued under our Long-Term Incentive Plan (the “LTIP” units) that are vested. Each common unit may be redeemed, by the holder, for either cash or, at our sole discretion, up to one share of our REIT common stock, which is either: (i) issued pursuant to an effective registration statement; (ii) included in an effective registration statement providing for the resale of such common stock; or (iii) issued subject to a registration rights agreement.

LTIP units, which are issued to certain executives and employees of Ashford LLC as compensation, generally have vesting periods of three years. Additionally, certain independent members of the board of directors have elected to receive LTIP units as part of their compensation, which are fully vested upon grant. Upon reaching economic parity with common units, each vested LTIP unit can be converted by the holder into one common unit which can then be redeemed for cash or, at our election, settled in our common stock. An LTIP unit will achieve parity with the common units upon the sale or deemed sale of all or substantially all of the assets of our operating partnership at a time when our stock is trading at a level in excess of the price it was trading on the date of the LTIP issuance. More specifically, LTIP units will achieve full economic parity with common units in connection with (i) the actual sale of all or substantially all of the assets of our operating partnership or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for our operating partnership.

The compensation committee of the board of directors of the Company may authorize the issuance of Performance LTIP units to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of Performance LTIP units that will be settled in common units of Braemar OP, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date.

With respect to the 2019 and 2020 award agreements, the number of Performance LTIP units actually earned may range from 0% to 200% of target based on achievement of a specified relative total stockholder return based on the formula determined by the Company’s compensation committee on the grant date. The performance criteria for the Performance LTIP units are based on market conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition.

During the years ended December 31, 2021 and 2020, approximately 60,000 performance-based LTIP units granted in 2019, and 211,000 performance-based LTIP units granted in 2018, were canceled due to the market condition criteria not being met. As a result there was a claw back of the previously declared dividends in the amount of $38,000 and $270,000, respectively.

With respect to the 2021 award agreements, the compensation committee shifted to a new performance metric, pursuant to which, the performance awards will be eligible to vest, from 0% to 200% of target, based on achievement of certain performance targets over the three-year performance period commencing on January 1, 2021 and ending on December 31, 2023. The performance criteria for the 2021 performance grants are based on performance conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award. The grant date fair value of the award may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.

As of December 31, 2021, we have issued a total of approximately 2.4 million LTIP and Performance LTIP units, net of Performance LTIP cancellations. All LTIP and Performance LTIP units, other than approximately 569,000 LTIP units and 840,000 Performance LTIP units issued from March 2015 to May 2021, had reached full economic parity with, and are convertible into, common units.

The following table presents compensation expense for Performance LTIP units and LTIP units (in thousands):

		Year Ended December 31,
Type	Line Item	2021		2020		2019
Performance LTIP units	Advisory services fee	$	1,765	$	884	$	1,144
LTIP units	Advisory services fee	1,372		1,142		1,354
LTIP units	Corporate, general and administrative	12		—		—
LTIP units - independent directors	Corporate, general and administrative	164		120		103
Total		$	3,313	$	2,146	$	2,601

The unamortized cost of the unvested Performance LTIP units of approximately $4.6 million at December 31, 2021 will be expensed over a period of 2.0 years with a weighted average period of 1.7 years. The unamortized cost of the unvested LTIP units of approximately $2.5 million at December 31, 2021, will be amortized over a period of 2.2 years with a weighted average period of 2.0 years.

On August 5, 2021, we issued 2.5 million common units in our operating partnership in conjunction with the acquisition of the Mr. C Beverly Hills Hotel. See note 4.

A summary of the activity of the units in our operating partnership is as follows (in thousands):

	Year Ended December 31,
	2021	2020	2019
Units outstanding at beginning of year	4,277	4,538	4,833
LTIP units issued	469	129	91
Performance LTIP units issued	840	160	60
Common units issued for hotel acquisition	2,500	—	—
Units redeemed for shares of common stock	(868)	(339)	(165)
Performance LTIP units cancelled	(60)	(211)	(281)
Units outstanding at end of year	7,158	4,277	4,538
Units convertible/redeemable at end of year	5,533	3,823	4,027

The following table presents the redeemable noncontrolling interests in Braemar OP (in thousands) and the corresponding approximate ownership percentage of our operating partnership:

	December 31, 2021			December 31, 2020
Redeemable noncontrolling interests in Braemar OP	$	36,087		$	27,655
Adjustments to redeemable noncontrolling interests (1)	$	275		$	167
Ownership percentage of operating partnership	8.83		%	9.43		%

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(1)    Reflects the excess of the redemption value over the accumulated historical cost.

We allocated net (income) loss to the redeemable noncontrolling interests as illustrated in the table below (in thousands):

	Year Ended December 31,
	2021		2020		2019
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	$	3,597	$	12,979	$	1,207
Distributions declared to holders of common units, LTIP units and Performance LTIP units	—		—		3,050
Performance LTIP dividend claw back upon cancellation	(38)		(270)		—

The following table presents the common units redeemed and the fair value at redemption (in thousands):

	Year Ended December 31,
	2021			2020			2019
Common units converted to common stock	868			339			165
Fair value of common units converted	$	4,122	(2)	$	390	(1)	$	2,201

____________________________________

(1)    The redemption value is the greater of historical cost or fair value. The historical cost of the converted units was $3.5 million.

(2)    The redemption value is the greater of historical cost or fair value. The historical cost of the converted units was $4.6 million.

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Equity

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Equity

Equity

Common Stock Dividends—The following table summarizes the common stock dividends declared during the period (in thousands):

	Year Ended December 31,
	2021		2020		2019
Common stock dividends declared	$	—	$	—	$	21,302

8.25% Series D Cumulative Preferred Stock—At December 31, 2021 and 2020, there were 1.6 million shares of 8.25% Series D cumulative preferred stock outstanding. The Series D cumulative preferred stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series B cumulative convertible preferred stock) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series D cumulative preferred stock has no maturity date, and we are not required to redeem the shares at any time. Series D cumulative preferred stock is redeemable at our option for cash (on or after November 20, 2023), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series D cumulative preferred stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series D cumulative preferred stock is convertible into a maximum 5.12295 shares of our common stock. The actual number is based on a formula as defined in the Series D cumulative preferred stock agreement (unless the Company exercises its right to redeem the Series D cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series D cumulative preferred stock to common stock have not been met as of period end. Therefore, Series D cumulative preferred stock will not impact our earnings per share. Series D cumulative preferred stock quarterly dividends are set at the rate of 8.25% of the $25.00 liquidation preference (equivalent to an annual dividend rate of $2.0625 per share). In general, Series D cumulative preferred stockholders have no voting rights.

The Series D Preferred Stock dividend for all issued and outstanding shares is set at $2.0625 per annum per share.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series D Cumulative Preferred Stock	$	3,300	$	3,300	$	3,300

Stock Repurchases—On October 27, 2014, our board of directors approved a share repurchase program under which the Company may purchase up to $100 million of the Company’s common stock from time to time. The repurchase program does not have an expiration date. The specific timing, manner, price, amount and other terms of the repurchases is at management’s discretion and depends on market conditions, corporate and regulatory requirements and other factors. The Company is not required to repurchase shares under the repurchase program, and may modify, suspend or terminate the repurchase program at any time for any reason.

On December 5, 2017, our board of directors reapproved the stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share having an aggregate value of up to $50 million. The board of directors’ authorization replaced any previous repurchase authorizations. No shares were repurchased during the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, $50 million remains authorized by the board of directors pursuant to the December 5, 2017 approval.

We repurchased approximately 50,000, 47,000 and 45,000 shares of our common stock in 2021, 2020 and 2019, respectively, to satisfy employees’ statutory minimum U.S. federal income tax obligations in connection with vesting of equity grants issued under our stock-based compensation plan.

At-the-Market Common Stock Equity Distribution Program—On December 11, 2017, the Company established an “at-the-market” equity distribution program pursuant to which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $50 million.

As of December 31, 2021, the Company has sold approximately 7.4 million shares of common stock and received net proceeds of approximately $30.5 million under this program.

The issuance activity is summarized below (in thousands):

	Year Ended December 31,
	2021		2020		2019
Common shares issued	2,711		4,729		—
Gross proceeds received	$	16,119	$	14,717	$	—
Commissions	202		184		—
Net proceeds	$	15,917	$	14,533	$	—

Standby Equity Distribution Agreement—On February 4, 2021, the Company entered into a Standby Equity Distribution Agreement (the “SEDA”) with YA II PN, Ltd. (“YA”), pursuant to which the Company will be able to sell up to 7,780,786 shares of its common stock (the “Commitment Amount”) at the Company’s request any time during the commitment period commencing on February 4, 2021, and terminating on the earliest of (i) the first day of the month next following the 36-month anniversary of the SEDA or (ii) the date on which YA shall have made payment of Advances (as defined in the SEDA) pursuant to the SEDA for shares of the Company’s common stock equal to the Commitment Amount (the “Commitment Period”). Other than with respect to the Initial Advance (as defined below) the shares sold to YA pursuant to the SEDA would be purchased at 95% of the Market Price (as defined below) and would be subject to certain limitations, including that YA could not purchase any shares that would result in it owning more than 4.99% of the Company’s common stock. “Market Price” shall mean the lowest daily VWAP (as defined below) of the Company’s common stock during the five consecutive trading days commencing on the trading day following the date the Company submits an advance notice to YA. “VWAP” means, for any trading day, the daily volume weighted average price of the Company’s common stock for such date on the principal market as reported by Bloomberg L.P. during regular trading hours.

At any time during the Commitment Period the Company may require YA to purchase shares of the Company’s common stock by delivering a written notice to YA setting forth the Advance Shares (as defined in the SEDA) that the Company desires to issue and sell to YA (the “Advance Notice”). The Company may deliver an Advance Notice for an initial Advance for up to 1,200,000 Advance Shares (the “Initial Advance”). The preliminary purchase price per share for such shares shall be 100% of the average daily VWAP for the five consecutive trading days immediately prior to the date of the Advance Notice.

Pursuant to the SEDA, we currently intend to use the net proceeds from any sale of the shares for working capital purposes, including the repayment of outstanding debt. There are no other restrictions on future financing transactions. The SEDA does not contain any right of first refusal, participation rights, penalties or liquidated damages. We are not required to pay any additional amounts to reimburse or otherwise compensate YA in connection with the transaction except for a $10,000 structuring fee.

The issuance activity under the SEDA is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares sold to YA	1,700
Proceeds received	$	10,000

Common Stock Resale Agreement—On April 21, 2021, the Company entered into a purchase agreement (the “Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company may issue or sell to Lincoln Park up to 8,893,565 shares of the Company’s common stock from time to time during the term of the Lincoln Park Purchase Agreement. The issuance of the shares of common stock pursuant to the Lincoln Park Purchase Agreement has been registered pursuant to the Company’s shelf registration statement on Form S-3 (the “Registration Statement”), and the related base prospectus included in the Registration Statement, as supplemented by a prospectus

supplement filed with the SEC on April 21, 2021. The Company and Lincoln Park also entered into a registration rights agreement, pursuant to which the Company agreed to maintain the effectiveness of the Registration Statement. Upon entering into the Lincoln Park Purchase Agreement, the Company issued 15,000 shares of the Company’s common stock as consideration for Lincoln Park’s execution and delivery of the Lincoln Park Purchase Agreement.

The issuance activity under the Lincoln Park agreement is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares sold to Lincoln Park	766
Additional commitment shares	15
Total common shares issued to Lincoln Park	781
Proceeds received	$	4,217

At-the-Market Equity Distribution Agreement—On May 25, 2021, the Company entered into an equity distribution agreement (the “Virtu May 2021 EDA”) with Virtu Americas LLC (“Virtu”), to sell from time to time shares of the Company’s common stock having an aggregate offering price of up to $50 million. We will pay Virtu a commission of approximately 1.0% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale.

The issuance activity under the Virtu May 2021 EDA is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares issued	8,339
Gross proceeds received	$	50,000
Commissions	500
Net proceeds	$	49,500

On July 12, 2021, the Company entered into a second equity distribution agreement (the “Virtu July 2021 EDA”) with Virtu to sell from time to time shares of our common stock having an aggregate offering price of up to $100 million. We will pay Virtu a commission of approximately 1.0% of the gross sales price of the shares of our common stock sold. The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale.

The issuance activity under the Virtu July 2021 EDA is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares issued	4,712
Gross proceeds received	$	24,020
Commissions	240
Net proceeds	$	23,780

Noncontrolling Interest in Consolidated Entities—A partner had noncontrolling ownership interests of 25% in two hotel properties with a total carrying value of $(16.5) million and $(15.1) million at December 31, 2021 and 2020, respectively.

The following table summarizes the (income) loss allocated to noncontrolling interest in consolidated entities (in thousands):

	Year Ended December 31,
	2021		2020		2019
(Income) loss from consolidated entities attributable to noncontrolling interests	$	2,650	$	6,436	$	(2,032)

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Preferred Stock

12 Months Ended

Dec. 31, 2021

Temporary Equity Disclosure [Abstract]

Preferred Stock

Preferred Stock

5.50% Series B Cumulative Convertible Preferred Stock

Each share of our 5.50% Series B Cumulative Convertible Preferred Stock (the “Series B Convertible Preferred Stock”) is convertible at any time, at the option of the holder, into a number of whole shares of common stock at a conversion price of $18.70 (which represents a conversion rate of 1.3372 shares of our common stock, subject to certain adjustments). The Series B

Convertible Preferred Stock is also subject to conversion upon certain events constituting a change of control. Holders of the Series B Convertible Preferred Stock have no voting rights, subject to certain exceptions. The Series B Convertible Preferred Stock dividend for all issued and outstanding shares is set at $1.375 per annum per share.

The Company may, at its option, cause the Series B Convertible Preferred Stock to be converted in whole or in part, on a pro-rata basis, into fully paid and nonassessable shares of the Company’s common stock at the conversion price, provided that the “Closing Bid Price” (as defined in the Articles Supplementary) of the Company’s common stock shall have equaled or exceeded 110% of the conversion price for the immediately preceding 45 consecutive trading days ending three days prior to the date of notice of conversion.

Additionally, the Series B Convertible Preferred Stock contains cash redemption features that consist of: 1) an optional redemption in which on or after June 11, 2020, the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends; 2) a special optional redemption, in which on or prior to the occurrence of a Change of Control (as defined in the Articles Supplementary), the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share; and 3) a “REIT Termination Event” and “Listing Event Redemption,” in which at any time (i) a REIT Termination Event (as defined below) occurs or (ii) the Company’s common stock fails to be listed on the NYSE, NYSE American, or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto (each a “National Exchange”), the holder of Series B Convertible Preferred Stock shall have the right to require the Company to redeem any or all shares of Series B Convertible Preferred Stock at 103% of the liquidation preference ($25.00 per share, plus any accumulated, accrued, and unpaid dividends) in cash.

A “REIT Termination Event,” shall mean the earliest of:

(i)    filing of income tax return where the Company does not compute its income as a REIT;

(ii)    stockholders’ approval on ceasing to be qualified as a REIT;

(iii)    board of directors’ approval on ceasing to be qualified as a REIT;

(iv)    board’s determination based on the advice of counsel to cease to be qualified as a REIT; or

(v)    determination within the meaning of Section 1313(a) of the Code to cease to be qualified as a REIT.

On December 4, 2019, we entered into equity distribution agreements with certain sales agents to sell from time to time shares of our Series B Convertible Preferred Stock having an aggregate offering price of up to $40.0 million. Sales of shares of our Series B Convertible Preferred Stock may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on the NYSE, the existing trading market for our Series B Convertible Preferred Stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network. We will pay each of the sales agents a commission, which in each case shall not be more than 2.0% of the gross sales price of the shares of our Series B Convertible Preferred Stock sold through such sales agents. As of December 31, 2021, we have sold approximately 65,000 shares of our Series B Convertible Preferred Stock and received proceeds of approximately $1.2 million under this program.

The issuance activity is summarized below (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series B Convertible Preferred Stock shares issued	—		23		42
Gross proceeds received	$	—	$	439	$	809
Commissions	—		7		12
Net proceeds	$	—	$	432	$	797

Series B Convertible Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside our control. As such, the Series B Convertible Preferred Stock is classified outside of permanent equity.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series B Convertible Preferred Stock	$	4,747	$	6,919	$	6,842

During 2021, Braemar entered into privately negotiated exchange agreements with certain holders of the Series B Convertible Preferred Stock, in reliance on Section 3(a)(9) of the Securities Act. The table below summarizes the activity (in thousands):

	Year Ended December 31, 2021
	Preferred Shares Tendered	Common Shares Issued
Series B Convertible Preferred Stock	1,953	7,291

Series E Redeemable Preferred Stock

On April 2, 2021, the Company entered into equity distribution agreements with certain sales agents to sell from time-to-time shares of the Series E Redeemable Preferred Stock (the “Series E Preferred Stock”). Pursuant to such equity distribution agreements, the Company is offering a maximum of 20,000,000 shares of Series E Preferred Stock in a primary offering price of $25.00 per share. The Company is also offering a maximum of 8,000,000 shares of the Series E Preferred Stock pursuant to a dividend reinvestment plan (the “DRIP”) at $25.00 per share (the “Stated Value”).

The Series E Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series B Convertible Preferred stock, the Series D Preferred Stock and the Series M Preferred Stock (as defined below)) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.

Holders of the Series E Preferred Stock shall have the right to vote for the election of directors of the Company and on all other matters requiring stockholder action by the holders of the common stock, each share being entitled to vote to the same extent as one share of the Company’s common stock, and all such shares voting together as a single class. If and whenever dividends on any shares of the Series E Preferred Stock shall be in arrears for 18 or more monthly periods, whether or not such quarterly periods are consecutive the number of directors then constituting the board shall be increased by two and the holders of such shares of Series E Preferred Stock shall be entitled to vote for the election of the additional directors of the Company who shall each be elected for one-year terms.

Each share is redeemable at any time, at the option of the holder, at a redemption price of $25.00 per share, plus any accumulated, accrued, and unpaid dividends, less a redemption fee. Starting on the second anniversary, each share is redeemable at any time, at the option of the Company, at a redemption price of $25.00 per share, plus any accumulated, accrued, and unpaid dividends (with no redemption fee). The Series E Preferred Stock is also subject to conversion upon certain events constituting a change of control. Upon such change of control events, holders have the option to convert their shares of Series E Preferred Stock into a maximum of 5.69476 shares of our common stock.

The redemption fee shall be an amount equal to:

•8.0% of the stated value of $25.00 per share (the “Stated Value”) beginning on the Original Issue Date (as defined in the Articles Supplementary) of the shares of the Series E Preferred Stock to be redeemed;

•5.0% of the Stated Value beginning on the second anniversary from the Original Issue Date of the shares of the Series E Preferred Stock to be redeemed; and

•0% of the Stated Value beginning on the third anniversary from the Original Issue Date of the shares of the Series E Preferred Stock to be redeemed.

The Company has the right, in its sole discretion, to redeem the shares in cash, or in an equal of shares of common stock or any combination thereof, calculated based on the closing price per share for the single trading day prior to the date of redemption.

The Series E Preferred Stock cash dividends are as follows:

•8.0% per annum of the Stated Value beginning on the date of the first settlement of the Series E Preferred Stock (the “Date of Initial Closing”);

•7.75% per annum of the Stated Value beginning on the first anniversary from the Date of Initial Closing; and

•7.5% per annum of the Stated Value beginning on the second anniversary from the Date of Initial Closing.

Dividends will be authorized and declared on a monthly basis and payable in arrears on the 15th of each month to holders of record at the close of business on the last business day of each month immediately preceding the applicable thereafter dividend payment date. Dividends will be computed on the basis of twelve 30-day months and a 360-day year.

The Company has a DRIP that allows for participating holders to have their Series E Preferred Stock dividend distributions automatically reinvested in additional shares of the Series E Preferred Stock at a price of $25.00 per share.

The issuance activity of the Series E Preferred Stock is summarized below (in thousands):

	Year Ended December 31,
	2021
Series E Preferred Stock shares issued (1)	1,709
Net proceeds	$	38,450

__________________

(1)Exclusive of shares issued under the dividend reinvestment plan.

The Series E Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside of the Company’s control. As such, the Series E Preferred Stock is classified outside of permanent equity.

At the date of issuance, the carrying amount of the Series E Preferred Stock was less than the redemption value. As a result of the Company’s determination that redemption is probable the carrying value will be adjusted to the redemption amount each reporting period.

The redemption value adjustment of Series E Preferred Stock is summarized below (in thousands):

	December 31, 2021		December 31, 2020
Series E Preferred Stock	$	39,339	$	—
Adjustments to Series E Preferred Stock (1)	$	3,128	$	—

________

(1)    Reflects the excess of the redemption value over the accumulated carrying value.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021
Series E Preferred Stock	$	683

Series M Redeemable Preferred Stock

On April 2, 2021, the Company entered into equity distribution agreements with certain sales agents to sell from time-to-time shares of the Series M Redeemable Preferred Stock (the “Series M Preferred Stock”). Pursuant to such equity distribution agreements, the Company is offering a maximum of 20,000,000 shares of the Series M Preferred Stock (par value $0.01) in a primary offering price of $25.00 per share (or “Stated Value”). The Company is also offering a maximum of 8,000,000 shares of Series M Preferred Stock pursuant to the DRIP at $25.00 per share.

The Series M Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series B Convertible Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.

Holders of the Series M Preferred Stock shall have the right to vote for the election of directors of the Company and on all other matters requiring stockholder action by the holders of the common stock, each share being entitled to vote to the same extent as one share of the Company’s common stock, and all such shares voting together as a single class. If and whenever dividends on any shares of Series E Preferred Stock shall be in arrears for 18 or more monthly periods, whether or not such quarterly periods are consecutive the number of directors then constituting the board shall be increased by two and the holders of such shares of Series M Preferred Stock shall be entitled to vote for the election of the additional directors of the Company who shall each be elected for one-year terms.

The redemption fee shall be an amount equal to:

•1.5% of the Stated Value of $25.00 per share beginning on the Series M Original Issue Date (as defined below) of the shares of Series M Preferred Stock to be redeemed; and

•0% of the Stated Value beginning on the first anniversary from the Series M Original Issue Date of the shares of Series M Preferred Stock to be redeemed.

The Company has the right, in its sole discretion, to redeem the shares in cash, or in an equal of shares of common stock or any combination thereof, calculated based on the closing price per share for the single trading day prior to the date of redemption.

Holders of Series M Preferred Stock are entitled to receive cumulative cash dividends at the initial rate of 8.2% per annum of the Stated Value of $25.00 per share (equivalent to an annual dividend rate of $2.05 per share). Beginning one year from the date of original issuance of each share of Series M Preferred Stock (the “Series M Original Issue Date”) and on each one-year anniversary thereafter for such share of Series M Preferred Stock, the dividend rate shall increase by 0.10% per annum; provided, however, that the dividend rate for any share of Series M Preferred Stock shall not exceed 8.7% per annum of the Stated Value.

Dividends will be authorized and declared on a monthly basis and payable in arrears on the 15th of each month to holders of record at the close of business on the last business day of each month immediately preceding the applicable dividend payment date. Dividends will be computed on the basis of twelve 30-day months and a 360-day year.

The Company has a DRIP that allows for participating holders to have their Series M Preferred Stock dividend distributions automatically reinvested in additional shares of the Series M Preferred Stock at a price of $25.00 per share.

The issuance activity of Series M Preferred Stock is summarized below (in thousands):

	Year Ended December 31,
	2021
Series M Preferred Stock shares issued	29
Net proceeds	$	704

The Series M Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside the Company’s control. As such, the Series M Preferred Stock is classified outside of permanent equity.

At the date of issuance, the carrying amount of the Series M Preferred Stock was less than the redemption value. As a result of the Company’s determination that redemption is probable the carrying value will be adjusted to the redemption amount each reporting period.

The redemption value adjustment of Series M Preferred stock is summarized below (in thousands):

	December 31, 2021		December 31, 2020
Series M Preferred Stock	$	715	$	—
Adjustments to Series M Preferred Stock (1)	$	133	$	—

________

(1)    Reflects the excess of the redemption value over the accumulated carrying value.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021
Series M Preferred Stock	$	15

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based CompensationUnder the 2013 Equity Incentive Plan, as amended, we are authorized to grant 3.3 million restricted stock or performance stock units of our common stock as incentive stock awards. At December 31, 2021, approximately 774,000 shares were available for future issuance under the 2013 Equity Incentive Plan.Restricted Stock—We incur stock-based compensation expense in connection with restricted stock awarded to certain employees of Ashford LLC and its affiliates. We also issue common stock to certain of our independent directors, which vests immediately upon issuance.

At December 31, 2021, the unamortized cost of unvested shares of restricted stock was $1.8 million, which is expected to be recognized over a period of 2.4 years with a weighted average period of 1.9 years.

The following table summarizes the stock-based compensation expense for restricted stock (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Advisory services fee	$	3,028	$	2,672	$	2,468
Management fees	56		133		155
Corporate general and administrative	111		71		72
Corporate general and administrative - independent directors	322		130		208
	$	3,517	$	3,006	$	2,903

A summary of our restricted stock activity is as follows (shares in thousands):

	Year Ended December 31,
	2021			2020			2019
	Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant
Outstanding at beginning of year	536	$	7.98	497	$	11.89	441	$	10.91
Restricted shares granted	764	7.02		359	4.13		261	12.68
Restricted shares vested	(317)	6.31		(310)	9.81		(198)	10.75
Restricted shares forfeited	(26)	6.94		(10)	7.25		(7)	11.59
Outstanding at end of year	957	$	6.94	536	$	7.98	497	$	11.89

The fair value of restricted stock vested during the years ended December 31, 2021, 2020 and 2019 was approximately $2.1 million, $1.2 million and $2.2 million, respectively.

Performance Stock Units—The compensation committee of the board of directors of the Company may authorize the issuance of grants of performance stock units (“PSUs”) to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of PSUs that will be settled in shares of common stock of the Company, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date.

With respect to the 2019 and 2020 award agreements, the number of PSUs actually earned may range from 0% to 200% of target based on achievement of a specified relative total stockholder return based on the formula determined by the Company’s compensation committee on the grant date. The performance criteria for the PSUs are based on market conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition.

With respect to the 2021 award agreements, the compensation committee shifted to a new performance metric, pursuant to which, the performance awards will be eligible to vest, from 0% to 200% of target, based on achievement of certain performance targets over the three-year performance period commencing on January 1, 2021 and ending on December 31, 2023. The performance criteria for the 2021 performance grants are based on performance conditions under the relevant literature, and the 2021 performance grants were issued to non-employees. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, which may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.

During the years ended December 31, 2021 and 2020, approximately 223,000 PSUs granted in 2019, and 197,000 PSUs granted in 2018, respectively, were canceled due to the market condition criteria not being met. As a result there was a claw back of the previously declared dividends in the amount of $143,000 and $202,000, respectively.

The following table summarizes the compensation expense for PSUs (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Advisory services fee	$	3,374	$	2,695	2,439

At December 31, 2021, the unamortized cost of unvested shares of PSUs was $5.0 million, which is expected to be recognized over a period of 2.0 years with a weighted average period of 1.7 years.

A summary of our PSU activity is as follows (shares in thousands):

	Year Ended December 31,
	2021			2020			2019
	Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant
Outstanding at beginning of year	448	$	11.71	420	$	16.91	316	$	12.29
PSUs granted	446	7.01		225	3.51		223	19.96
PSUs canceled	(223)	19.96		(197)	13.43		(119)	10.42
Outstanding at end of year	671	$	5.84	448	$	11.71	420	$	16.91

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Related Party Transactions

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Ashford Inc.

Advisory Agreement

Ashford LLC, a subsidiary of Ashford Inc., acts as our advisor. Our chairman, Mr. Monty Bennett, also serves as chairman of the board of directors and chief executive officer of Ashford Inc. Under our advisory agreement, we pay advisory fees to Ashford LLC. We pay a monthly base fee equal to 1/12th of the sum of (i) 0.70% of the total market capitalization of our company for the prior month, plus (ii) the Net Asset Fee Adjustment (as defined in our advisory agreement), if any, on the last day of the prior month during which our advisory agreement was in effect; provided, however in no event shall the base fee for any month be less than the minimum base fee as provided by our advisory agreement. The base fee is payable on the fifth business day of each month.

The minimum base fee for Braemar for each month will be equal to the greater of:

▪90% of the base fee paid for the same month in the prior year; and

▪1/12th of the G&A Ratio (as defined) multiplied by the total market capitalization of Braemar.

We are also required to pay Ashford LLC an incentive fee that is measured annually (or for a stub period if the advisory agreement is terminated at other than year-end). Each year that our annual total stockholder return exceeds the average annual total stockholder return for our peer group we pay Ashford LLC an incentive fee over the following three years, subject to the Fixed Charge Coverage Ratio (“FCCR”) Condition, as defined in the advisory agreement, which relates to the ratio of adjusted EBITDA to fixed charges. We also reimburse Ashford LLC for certain reimbursable overhead and internal audit, risk management advisory and asset management services, as specified in the advisory agreement. We also recorded equity-based compensation expense for equity grants of common stock and LTIP units awarded to officers and employees of Ashford LLC in connection with providing advisory services.

The following table summarizes the advisory services fees incurred (in thousands):

	Year Ended December 31,
	2021		2020		2019
Advisory services fee
Base advisory fee	$	10,806	$	9,981	$	10,834
Reimbursable expenses (1)	2,297		1,790		2,289
Equity-based compensation (2)	9,538		7,393		7,404
Incentive fee (3)	—		(678)		—
Total	$	22,641	$	18,486	$	20,527

________

(1)Reimbursable expenses include overhead, internal audit, risk management advisory and asset management services.

(2)    Equity-based compensation is associated with equity grants of Braemar’s common stock, PSUs, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.

(3)    The $(678,000) incentive fee in 2020 is a result of not meeting the FCCR threshold required for paying the final installment of the incentive fee incurred in 2018.

Pursuant to the Company's hotel management agreements with each hotel management company, the Company bears the economic burden for casualty insurance coverage. Under the advisory agreement, Ashford Inc. secures casualty insurance policies to cover Braemar, Ashford Trust, their hotel managers, as needed, and Ashford Inc. The total loss estimates included in such policies are based on the collective pool of risk exposures from each party. Ashford Inc.'s risk management department manages the casualty insurance program. At the beginning of each year, Ashford Inc.'s risk management department collects funds from Braemar, Ashford Trust and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis.

Lismore

On March 20, 2020, the Company entered into an agreement with Lismore, a subsidiary of Ashford Inc., to engage Lismore to seek modifications, forbearances or refinancings of the Company’s loans (the “Lismore Agreement”). The Lismore Agreement was terminated effective March 20, 2021.

Upon entering into the agreement with Lismore, the Company made an initial payment of approximately $1.4 million. The Company paid approximately $1.4 million related to periodic installments of which $683,000 was expensed in accordance with the agreement. The remaining $681,000 was set off against the cash payment of the base advisory fee per the agreement upon contract termination in March 2021. Further, the Company paid approximately $1.4 million in success fees in connection with signed forbearance or other agreements. In total, the Company paid approximately $4.1 million under the Lismore Agreement.

For the years ended December 31, 2021 and 2020, the Company recognized expense of $341,000 and $3.1 million, respectively. These expenses are included in “write-off of loan costs and exit fees” in the consolidated statements of operations.

On August 25, 2020, in light of the fact that Lismore negotiated access to the FF&E reserves but no forbearance on debt service for the $435 million mortgage loan secured by the Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, The Notary Hotel and The Clancy, the independent members of the board of directors of Ashford Inc. waived $1.6 million of Lismore success fees associated with items (ii) and (iii) above.

The Company engaged Lismore to negotiate, on the Company’s behalf, one or more modifications to the terms of the mortgage loan assumed in connection with the acquisition of the Mr. C Beverly Hills Hotel. Upon closing of the hotel, the Company paid Lismore a fee of $150,000.

Ashford Securities

On September 25, 2019, Ashford Inc. announced the formation of Ashford Securities LLC (“Ashford Securities”) to raise retail capital in order to grow its existing and future platforms. In conjunction with the formation of Ashford Securities, Braemar has entered into a contribution agreement (the “Initial Contribution Agreement”) with Ashford Inc. pursuant to which Braemar has agreed to contribute, with Ashford Trust, up to $15.0 million to fund the operations of Ashford Securities. Costs for all operating expenses of Ashford Securities that were contributed by Ashford Trust and Braemar will be expensed as incurred. These costs were allocated initially to Ashford Trust and Braemar based on an allocation percentage of 75% to Ashford Trust and 25% Braemar. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings

raised or June 10, 2023, there will be a true up (the “Initial True-Up Date”) between Ashford Trust and Braemar, whereby the actual capital contributions contributed by each company will be based on the actual amount of capital raised by Ashford Trust and Braemar, respectively. After the Initial True-Up Date, the capital contributions will be allocated between Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities.

On December 31, 2020, an Amended and Restated Contribution Agreement (the “Amended and Restated Contribution Agreement”) was entered into by Ashford Inc., Ashford Trust and Braemar with respect to expenses to be reimbursed by Ashford Securities. The Initial True-Up Date did not occur, and beginning on the effective date of the Amended and Restated Contribution Agreement, costs will be allocated based upon an allocation percentage of 50% to Ashford Inc., 50% to Braemar and 0% to Ashford Trust. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raised, or June 10, 2023, there will be an amended and restated true up (the “Amended and Restated True-Up Date”) among Ashford Inc., Ashford Trust and Braemar whereby the actual expense reimbursement paid by each company will be based on the actual amount of capital raised by Ashford Inc., Ashford Trust and Braemar, respectively, through Ashford Securities. After the Amended and Restated True-Up Date, the expense reimbursements will be allocated among Ashford Inc., Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities. Additionally, Braemar’s aggregate Capital Contributions under the Initial Contribution Agreement and the Amended and Restated Contribution Agreement shall not exceed $3.75 million unless otherwise agreed to in writing by Braemar.

As of December 31, 2021, Braemar has funded approximately $3.5 million. Additionally, as of December 31, 2021, $338,000 of the pre-funded amount was included in “other assets” on our consolidated balance sheets.

The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Corporate, general and administrative	$	1,983	$	658	$	314

Enhanced Return Funding Program

Concurrent with Amendment No. 1 to the Fifth Amended and Restated Advisory Agreement with Ashford Inc. (“Amendment No. 1”), on January 15, 2019, the Company also entered into the Enhanced Return Funding Program Agreement (the “ERFP Agreement”) with Ashford Inc. The “key money investments” concept previously contemplated by our advisory agreement was replaced with the ERFP Agreement. The Fifth Amended and Restated Advisory Agreement was also amended to name Ashford Inc. and its subsidiaries as the Company’s sole and exclusive provider of asset management, design and construction and other services offered by Ashford Inc. or any of its subsidiaries. The independent members of our board of directors and the independent members of the board of directors of Ashford Inc., with the assistance of separate and independent legal counsel, engaged to negotiate the ERFP Agreement on behalf of Ashford Inc. and Braemar, respectively.

The ERFP Agreement generally provides that Ashford LLC will provide funding to facilitate the acquisition of properties by Braemar OP that are recommended by Ashford LLC, in an aggregate amount of up to $50 million (subject to increase to up to $100 million by mutual agreement). Each funding will equal 10% of the property acquisition price and will be made either at the time of the property acquisition or at any time generally within the two-year period following the date of such acquisition, in exchange for FF&E for use at the acquired property or any other property owned by Braemar OP.

The initial term of the ERFP Agreement was two years (the “Initial Term”). At the end of the Initial Term, the ERFP Agreement automatically renewed for one year and shall automatically renew for successive one-year periods (each such period a “Renewal Term”) unless either Ashford Inc. or Braemar provides written notice to the other at least sixty days in advance of the expiration of the Initial Term or Renewal Term, as applicable, that such notifying party intends not to renew the ERFP Agreement.

As a result of The Ritz-Carlton Lake Tahoe acquisition, Braemar was entitled to receive $10.3 million from Ashford LLC in the form of future purchases of FF&E at Braemar hotel properties that will be leased to us by Ashford LLC rent-free. As of December 31, 2021, Ashford LLC has remitted payments of $10.3 million to the Company as further described below.

On June 26, 2019 and July 1, 2019, the Company sold $1.4 million and $8.9 million, respectively, of hotel FF&E from Braemar hotel properties to Ashford LLC which was subsequently leased back to the Company rent-free. In accordance with ASC 842, the Company evaluated the transactions and concluded that the transaction qualified as a sale. As a result, the Company recorded gains of $9,000 and $23,000, respectively, for the year ended December 31, 2019. The gains are recorded in

“gain (loss) on insurance settlement, disposition of assets and sale of hotel property” in our consolidated statements of operations.

Under the applicable accounting guidance in ASC 842, the Company has not recorded an operating lease right-of-use asset, an operating lease liability or lease expense for rents as the related party lease has no economic substance because the related party lease is provided rent-free.

In 2015, prior to the inception of the ERFP program, $2.0 million of key money consideration was invested in FF&E by Ashford LLC to be used by Braemar, which represented all of the key money consideration for the Bardessono Hotel and Spa. Upon adoption of ASC 842, we evaluated this arrangement, which was accounted for as a lease that expired in 2020. Under the applicable guidance in ASC 842, as the related party lease is provided rent-free, there is no economic substance related to the lease which results in not recording an operating lease right-of-use asset, an operating lease liability or lease expense for rents. Upon expiration of the lease the underlying FF&E was purchased from Ashford Inc. for $200,000.

In 2021, the Company sold approximately $1.6 million of hotel FF&E from Braemar hotel properties to Ashford LLC, which was subsequently leased back to the Company rent-free. In accordance with ASC 842, the Company evaluated the transactions and concluded that the transactions qualified as sales. As a result, the Company recorded an aggregate gain of $197,000 for the year ended December 31, 2021. The gains are recorded in “gain (loss) on insurance settlement, disposition of assets and sale of hotel properties” in our consolidated statements of operations.

Upon expiration of an ERFP lease, the Company purchased the underlying FF&E from Ashford Inc. at fair value for $144,000, which was paid during the third quarter of 2021.

On November 8, 2021, the Company received written notice from the Advisor of its intention not to renew the ERFP program. As a result, the ERFP Agreement terminated in accordance with its terms on January 15, 2022.

Design and Construction Services

In connection with Ashford Inc.’s August 8, 2018 acquisition of Remington Lodging’s design and construction business, we entered into a design and construction services agreement with Ashford Inc.’s subsidiary, Premier Project Management LLC (“Premier”), pursuant to which Premier provides design and construction services to our hotels, including construction management, interior design, architectural services, and the purchasing, freight management, and supervision of installation of FF&E and related services. Pursuant to the design and construction services agreement, we pay Premier: (a) design and construction fees of up to 4% of project costs; and (b) for the following services: (i) architectural (6.5% of total construction costs); (ii) construction management for projects without a general contractor (10% of total construction costs); (iii) interior design (6% of the purchase price of the FF&E designed or selected by Premier); and (iv) FF&E purchasing (8% of the purchase price of FF&E purchased by Premier; provided that if the purchase price exceeds $2.0 million for a single hotel in a calendar year, then the purchasing fee is reduced to 6% of the FF&E purchase price in excess of $2.0 million for such hotel in such calendar year). On March 20, 2020, we amended the design and construction services agreement to provide that Premier’s fees shall be paid by the Company to Premier upon the completion of any work provided by third-party vendors to the Company.

Hotel Management Services

On November 6, 2019, Ashford Inc. completed the acquisition of Remington Lodging’s hotel management business. Following the acquisition, hotel management services are provided by Remington Hotels, a subsidiary of Ashford Inc., under the respective hotel management agreement with each customer, including Ashford Trust and Braemar.

At December 31, 2021, Remington Hotels managed four of our 14 hotel properties.

We pay monthly hotel management fees equal to the greater of approximately $15,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive management fees, if certain operational criteria were met and other general and administrative expense reimbursements primarily related to accounting services.

Pursuant to the terms of the Letter Agreement dated March 13, 2020 (the “Hotel Management Letter Agreement”), in order to allow Remington Hotels to better manage its corporate working capital and to ensure the continued efficient operation of our hotels, we agreed to pay the base fee and to reimburse all expenses on a weekly basis for the preceding week, rather than on a monthly basis. The Hotel Management Letter Agreement went into effect on March 13, 2020 and will continue until terminated by us.

We also have a mutual exclusivity agreement with Remington Hotels, pursuant to which: (i) we have agreed to engage Remington Hotels to provide management services with respect to any hotel we acquire or invest in, to the extent we have the right and/or control the right to direct the management of such hotel; and (ii) Remington Hotels has agreed to grant us a right of first refusal to purchase any opportunity to develop or construct a hotel that it identifies that meets our initial investment guidelines. We are not, however, obligated to engage Remington Hotels if our independent directors either: (i) unanimously vote to hire a different manager or developer; or (ii) by a majority vote elect not to engage such related party because either special circumstances exist such that it would be in the best interest of our Company not to engage such related party, or, based on related party’s prior performance, it is believed that another manager could perform the management or other duties materially better.Ashford TrustAs of December 31, 2021, the Company had a $728,000 receivable from Ashford Trust, included in “due from related parties, net.” The receivable relates to a legal settlement between Ashford Trust and the City of San Francisco regarding a transfer tax matter associated with the transfer of The Clancy from Ashford Trust to Braemar upon Braemar’s 2013 spin-off from Ashford Trust. The transfer taxes were initially paid by Braemar at the time of the spin-off. The $728,000 gain is included in “(gain) loss on legal settlements” on the consolidated statements of operations.

Remington Lodging (prior to Ashford Inc. acquisition)

Remington Lodging was a hotel and design and construction company, wholly owned by our chairman, Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. who is Ashford Trust’s chairman emeritus. We had master hotel and design and construction services agreements and hotel and design and construction services mutual exclusivity agreements with Remington Lodging.

On November 6, 2019, Ashford Inc. completed the acquisition of Remington Lodging’s hotel management business. As a result of the acquisition, hotel management services that were previously provided by Remington Lodging are now be provided by a subsidiary of Ashford Inc. under the respective hotel management agreement with each customer, including Ashford Trust and Braemar under the Remington Hotels name.

Between January 1, 2019 and November 5, 2019, we paid Remington Lodging monthly hotel management fees equal to the greater of approximately $14,000 (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive hotel management fees, if certain operational criteria were met and other general and administrative expense reimbursements primarily related to accounting services.

The following table presents the fees related to our hotel and design and construction services agreements with Remington Lodging prior to its transactions with Ashford Inc. (in thousands):

	Year Ended December 31,
	2019
Hotel management fees, including incentive hotel management fees	$	1,738
Corporate general and administrative	297
Total	$	2,035

Summary of Transactions

In accordance with our advisory agreement, our advisor, or entities in which our advisor has an interest, has a right to provide products or services to our hotel properties, provided such transactions are evaluated and approved by our independent directors. The following tables summarize the entities in which our advisor has an interest with which we or our hotel properties contracted for products and services, the amounts recorded by us for those services and the applicable classification on our consolidated financial statements (in thousands):

		Year Ended December 31, 2021
Company	Product or Service	Total		Investments in Hotel Properties, net (1)		Indebtedness, net (2)		Other Assets		Other Hotel Revenue		Other Hotel Expenses		Preferred Stock (3)		Management fees		Property Taxes, Insurance and Other		Advisory Services Fee		Corporate General and Administrative		Write-off of Premiums, Loan Costs and Exit Fees
Ashford LLC	Insurance claims services	$	7	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	7	$	—	$	—	$	—
Ashford Securities	Broker/Dealer	1,983		—		—		—		—		—		—		—		—		—		1,983		—
Ashford Securities	Dealer Manager Fees	410		—		—		—		—		—		410		—		—		—		—		—
INSPIRE	Audio visual services	1,001		—		—		—		1,001		—		—		—		—		—		—		—
Lismore Capital	Debt placement and related services	491		—		150		—		—		—		—		—		—		—		—		341
Lismore Capital	Broker services	3		—		—		—		—		—		—		—		—		—		—		3
OpenKey	Mobile key app	38		—		—		—		—		38		—		—		—		—		—		—
Premier	Design and construction services	3,009		2,653		—		—		—		—		—		—		—		356		—		—
Pure Wellness	Hypoallergenic premium rooms	141		—		—		—		—		141		—		—		—		—		—		—
RED Leisure	Watersports activities and travel/transportation services	321		—		—		—		321		—		—		—		—		—		—		—
Remington Hotels	Hotel management services (4)	3,243		—		—		—		—		934		—		2,309		—		—		—		—

		Year Ended December 31, 2020
Company	Product or Service	Total		Investments in Hotel Properties, net (1)		Other Assets		Other Hotel Revenue		Other Hotel Expenses		Management fees		Property Taxes, Insurance and Other		Advisory Services Fee		Write-off of Premiums, Loan Costs and Exit Fees
Ashford LLC	FF&E purchases	$	1,816	$	1,816	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Ashford LLC	Insurance claims services	108		—		—		—		—		—		108		—		—
INSPIRE	Audio visual services	592		—		—		592		—		—		—		—		—
Lismore Capital	Debt placement and related services	4,093		—		1,022		—		—		—		—		—		3,071
OpenKey	Mobile key app	38		—		—		—		38		—		—		—		—
Premier	Design and construction services	2,849		2,505		—		—		—		—		—		344		—
Pure Wellness	Hypoallergenic premium rooms	52		—		—		—		52		—		—		—		—
RED Leisure	Watersports activities and travel/transportation services	139		—		—		139		—		—		—		—		—
Remington Hotels	Hotel management services (4)	1,446		—		—		—		410		1,036		—		—		—

		Year Ended December 31, 2019
Company	Product or Service	Total		Investments in Hotel Properties, net (1)		Indebtedness, net (2)		Other Hotel Revenue		Other Hotel Expenses		Management fees		Property Taxes, Insurance and Other		Advisory Services Fee		Corporate General and Administrative		Write-off of Premiums, Loan Costs and Exit Fees
Ashford LLC	Insurance claims services	$	135	$	—	$	—	$	—	$	—	$	—	$	135	$	—	$	—	$	—
INSPIRE	Audio visual services	560		—		—		560		—		—		—		—		—		—
Lismore Capital	Debt placement and related services	1,208		—		(995)		—		—		—		—		—		—		213
OpenKey	Mobile key app	34		—		—		—		34		—		—		—		—		—
Premier	Design and construction services	10,123		9,584		—		—		—		—		—		539		—		—
Pure Wellness	Hypoallergenic premium rooms	194		148		—		—		46		—		—		—		—		—
RED Leisure	Watersports activities and travel/transportation services	946		—		—		—		946		—		—		—		—		—
Remington Hotels	Hotel management services (4)	572		—		—		—		323		249		—		—		—		—

________

(1)Recorded in FF&E and depreciated over the estimated useful life.

(2)Recorded as deferred loan costs, which are included in “indebtedness, net” on our consolidated balance sheets and amortized over the initial term of the applicable loan agreement.

(3)Recorded as a reduction of Series E and Series M Redeemable Preferred Stock proceeds.

(4)Other hotel expenses include incentive hotel management fees and other hotel management costs.

The following table summarizes the components of due to Ashford Inc. (in thousands):

		Due to Ashford Inc.
Company	Product or Service	December 31, 2021		December 31, 2020
Ashford LLC	Advisory services	$	394	$	165
Ashford LLC	FF&E purchases	—		1,816
Ashford LLC	Insurance claims services	1		12
INSPIRE	Audio visual services	418		1
OpenKey	Mobile key app	—		3
Premier	Design and construction services	470		631
RED Leisure	Watersports activities and travel/transportation services	191		144
		$	1,474	$	2,772

As of December 31, 2021 and 2020, due from related parties, net included a net receivable from Remington Hotels of $677,000 and $626,000, respectively, primarily related to advances made by Braemar and accrued base and incentive management fees.

As of December 31, 2021 and 2020, due from related parties, net included a $365,000 security deposit paid to Remington Hotel Corporation, an entity indirectly owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr., for office space allocated to us under our advisory agreement. It will be held as security for the payment of our allocated share of office space rental. If unused it will be returned to us upon lease expiration or earlier termination.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Restricted Cash—Under certain management and debt agreements for our hotel properties existing at December 31, 2021, escrow payments are required for insurance, real estate taxes and debt service. In addition, for certain properties based on the terms of the underlying debt and management agreements, we escrow 4% to 5% of gross revenues for capital improvements.

Licensing Fees—In conjunction with the Mr. C Beverly Hills Hotel acquisition on August 5, 2021, we entered into an Intellectual Property Sublease Agreement, which allows us to continue to use certain proprietary marks associated with the Mr. C brand name. In return, we pay licensing fees of: (i) 1% of total operating revenue; (ii) 2% of gross food and beverage revenues; and (iii) 25% of food and beverage profits. The agreement expires on August 4, 2022.

The table below summarizes the licensing fees incurred (in thousands):

Line Item	Year Ended December 31, 2021
Other hotel expenses	$	133

Management Fees—Under hotel management agreements for our hotel properties existing at December 31, 2021, we pay a monthly hotel management fee equal to the greater of approximately $15,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues, or in some cases 3.0% to 5.0% of gross revenues, as well as annual incentive management fees, if applicable. These management agreements expire from December 2023 through December 2065, with renewal options. If we terminate a management agreement prior to its expiration, we may be liable for estimated management fees through the remaining term, liquidated damages or, in certain circumstances, we may substitute a new management agreement.

Income Taxes—We and our subsidiaries file income tax returns in the federal jurisdiction and various states. Tax years 2017 through 2021 remain subject to potential examination by certain federal and state taxing authorities.

Litigation—On October 24, 2019, the Company provided notice to Accor of the material breach of Accor’s responsibilities under the Accor management agreement for the Sofitel Chicago Magnificent Mile at 20 East Chestnut Street in Chicago, Illinois. On November 7, 2019, Accor filed a complaint against Ashford TRS Chicago II in the Supreme Court of the State of New York, New York County, seeking a declaratory judgment that no breach under the management agreement has occurred and an injunction to prevent Ashford TRS Chicago II form terminating the management agreement. Accor’s complaint was dismissed on or about February 27, 2020. On January 6, 2020, Ashford TRS Chicago II filed a complaint against Accor in the Supreme Court of the State of New York, New York County, alleging breach of the Accor management agreement and seeking damages and a declaration of its right to terminate the Accor management agreement. On July 20, 2020, Accor filed an Amended Answer and Counterclaims against Ashford TRS Chicago II, in which Accor asserts two causes of action: First, Accor asserts a counterclaim for declaratory judgment that Accor correctly calculated the amount payable to Ashford TRS

Chicago II under the management agreement to “cure” Accor’s performance test failure (the “Cure Amount”). Second, Accor asserts a counterclaim for breach of contract alleging that Ashford TRS Chicago II breached the management agreement by wrongfully maintaining that the Cure Amount for the 2018 and 2019 Performance Test failure is $1,031,549 instead of $535,120. As of December 31, 2021, no amounts have been accrued. On February 16, 2022, the parties entered into a settlement agreement agreeing to: 1) amend the management agreement; 2) dismiss the lawsuit and counterclaims; 3) stipulate to the failure of the performance tests and cure amounts for 2018 of $867,682 and 2019 of $784,919; and 4) arbitrate whether the performance tests for 2020 and 2021 were valid and/or required equitable adjustment. On February 23, 2022, Ashford TRS Chicago II and Accor filed a stipulation of discontinuance dismissing all claims, counterclaims, and cross-claims in the January 6, 2020 action with prejudice.

One of the Company’s hotel management companies is currently involved in litigation regarding its employment policies and practices at multiple California hotels, including one of the Company’s hotels. On January 28, 2022, the Court approved a settlement of this litigation. The resulting loss to the Company is approximately $448,000; although it is entitled to indemnification in the amount of approximately $291,000, based on the respective periods of ownership of the Company’s hotel. As of December 31, 2021, approximately $500,000 was accrued.

On December 20, 2016, a class action lawsuit was filed against one of the Company’s hotel management companies in the Superior Court of the State of California in and for the County of Contra Costa alleging violations of certain California employment laws, which class action affects two hotels owned by subsidiaries of the Company. The court has entered an order granting class certification with respect to: (1) a statewide class of non-exempt employees of our manager who were allegedly deprived of rest breaks as a result of our manager’s previous written policy requiring its employees to stay on premises during rest breaks; and (2) a derivative class of non-exempt former employees of our manager who were not paid for allegedly missed breaks upon separation from employment. Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class; however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. While we believe it is reasonably possible that we may incur a loss associated with this litigation, because there remains uncertainty under California law with respect to a significant legal issue, discovery relating to class members continues, and the trial judge retains discretion to award lower penalties than set forth in the applicable California employment laws, we do not believe any potential loss to the Company is reasonably estimable at this time. As of December 31, 2021, no amounts have been accrued.

We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated. To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters and matters relating to compliance with applicable law (for example, the ADA and similar state laws). The likelihood of loss from these legal proceedings is based on the definitions within contingency accounting literature. We recognize a loss when we believe the loss is both probable and reasonably estimable. Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations, or cash flow. However, our assessment may change depending upon the development of these legal proceedings, and the final results of these legal proceedings cannot be predicted with certainty. If we do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.

Leases—We lease land under two non-cancelable operating ground leases, which expire in 2067 and 2065, related to our hotel properties in La Jolla, California and Yountville, California, respectively. The lease in La Jolla, California contains one extension option of either 10 or 20 years dependent upon capital investment spend during the lease term. The lease in Yountville, California contains two 25-year extension options. These leases are subject to base rent plus contingent rent based on each hotel property’s financial results and escalation clauses.

Capital Commitments—At December 31, 2021, we had capital commitments of $23.0 million, including commitments that will be satisfied with insurance proceeds, relating to general capital improvements that are expected to be paid in the next twelve months.

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Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

LeasesOn January 1, 2019, we adopted ASC 842 on a modified retrospective basis. We elected the practical expedients which allowed us to apply the new guidance at its effective date on January 1, 2019 without adjusting the comparative prior period financial statements. The package of practical expedients also allowed us to carry forward the historical lease classification.

Additionally, we elected the practical expedients allowing us not to separate lease and non-lease components and not record short-term leases on the balance sheet across all existing asset classes.

The adoption of this standard resulted in the recognition of operating lease ROU assets and lease liabilities primarily related to our ground lease arrangements for which we are the lessee. As of January 1, 2019, we recorded operating lease liabilities of $60.6 million as well as a corresponding operating lease ROU assets of $82.5 million, which includes, among other things, the reclassified intangible assets of $22.3 million. The standard did not have a material impact on our consolidated statements of operations and statements of cash flows.

The majority of our leases are operating ground leases. We also have operating equipment leases, such as copier and vehicle leases, at our hotel properties. Some leases include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years. The exercise of lease renewal options is at our sole discretion. Some leases have variable payments, however, if variable payments are contingent, they are not included in the ROU assets and liabilities. We have no finance leases as of December 31, 2021.

The discount rate used to calculate the lease liability and ROU asset related to our ground leases is based on our incremental borrowing rate (“IBR”), as the rate implicit in each lease is not readily determinable. The IBR is determined at commencement of the lease, or upon modification of the lease, as the interest rate a lessee would have to pay to borrow on a fully collateralized basis over a similar term and at an amount equal to the lease payments in a similar economic environment.

As of December 31, 2021 and 2020, our leased assets and liabilities consisted of the following (in thousands):

	December 31, 2021		December 31, 2020
Assets
Operating lease right-of-use assets	$	80,462	$	81,260
Liabilities
Operating lease liabilities	$	60,937	$	60,917

We incurred the following lease costs related to our operating leases (in thousands):

		Year Ended December 31,
	Classification	2021		2020		2019
Operating lease cost (1)	Hotel operating expenses - other	$	5,349	$	4,373	$	5,834

_______________________________________

(1) For the years ended December 31, 2021, 2020 and 2019, operating lease cost includes approximately $954,000, $(305,000) and $1.4 million, respectively, of variable lease cost associated with the ground leases, with the credit in 2020 primarily caused by the ground lease percentage rent true-up for fiscal year 2019-2020 at Hilton La Jolla Torrey Pines. Additionally, we recorded $512,000, $834,000 and $651,000, respectively, of amortization costs related to the intangible assets that were reclassified to “operating lease right-of-use assets” upon adoption of ASC 842. Short-term lease costs in aggregate are immaterial.

Other information related to leases is as follows:

	Year Ended December 31,
	2021			2020			2019
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)	$	3,302		$	3,261		$	3,223
Weighted Average Remaining Lease Term
Operating leases (1)	45 years			47 years			47 years
Weighted Average Discount Rate
Operating leases (1)	4.98		%	4.98		%	4.98		%

_______________________________________

(1) Calculated using the lease term, excluding extension options, and discount rates of the ground leases.

Future minimum lease payments due under non-cancellable leases as of December 31, 2021 were as follows (in thousands):

	Operating Leases
2022	$	3,338
2023	3,333
2024	3,302
2025	3,294
2026	3,308
Thereafter	143,692
Total future minimum lease payments (1)	160,267
Less: interest	(99,330)
Present value of operating lease liabilities	$	60,937

_______________________________________

(1) Based on payment amounts as of December 31, 2021.

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Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For U.S. federal income tax purposes, we elected to be taxed as a REIT under the Code. To qualify as a REIT, we must meet certain organizational and operational stipulations, including a requirement that we distribute at least 90% of our REIT taxable income, excluding net capital gains, to our stockholders. We currently intend to adhere to these requirements and maintain our REIT status. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not qualify as a REIT for four subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes as well as to federal income and excise taxes on our undistributed taxable income.

At December 31, 2021, 13 of our hotel properties were leased to TRS lessees and The Ritz-Carlton St. Thomas was owned by our USVI TRS. The TRS entities recognized net book income (loss) before income taxes of $12.6 million, $(27.0) million and $31.0 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The following table reconciles the income tax expense at statutory rates to the actual income tax expense recorded (in thousands):

	Year Ended December 31,
	2021		2020		2019
Income tax (expense) benefit at federal statutory income tax rate of 21%	$	(2,652)	$	5,619	$	(6,509)
State income tax (expense) benefit, net of U.S. federal income tax benefit	574		3,136		107
State and local income tax (expense) benefit on pass-through entity subsidiaries	(9)		(5)		(16)
Gross receipts and margin taxes	(26)		(13)		(67)
Benefit of USVI Economic Development Commission credit	3,346		783		5,614
Other	(251)		311		16
Valuation allowance	(2,306)		(5,425)		(909)
Total income tax (expense) benefit	$	(1,324)	$	4,406	$	(1,764)

The components of income tax expense are as follows (in thousands):

	Year Ended December 31,
	2021		2020		2019
Current:
Federal	$	(1,477)	$	3,431	$	(765)
State	(21)		19		(235)
Total current income tax (expense) benefit	(1,498)		3,450		(1,000)
Deferred:
Federal	131		1,262		(357)
State	43		(306)		(407)
Total deferred income tax (expense) benefit	174		956		(764)
Total income tax (expense) benefit	$	(1,324)	$	4,406	$	(1,764)

For the years ended December 31, 2021, 2020 and 2019, income tax expense included interest and penalties paid to taxing authorities of $3,000, $7,000 and $27,000, respectively. At December 31, 2021 and 2020, we determined that there were no amounts to accrue for interest and penalties due to taxing authorities.

At December 31, 2021 and 2020, our net deferred tax asset, included in “other assets,” and net deferred tax liability, included in “accounts payable and accrued expenses,” respectively, on our consolidated balance sheets, consisted of the following (in thousands):

	December 31,
	2021		2020
Deferred tax assets (liabilities):
Tax intangibles basis greater than book basis	$	722	$	718
Allowance for doubtful accounts	28		50
Unearned income	2,147		1,314
Federal and state net operating losses	15,677		14,166
Capital Loss Carryforward	529		523
Other	178		399
Accrued expenses	612		465
Tax property basis greater than book basis	(2,487)		(2,721)
Prepaid expenses	(4)		(91)
Net deferred tax asset	17,402		14,823
Valuation allowance	(17,343)		(14,938)
Net deferred tax asset (liability)	$	59	$	(115)

At December 31, 2021 and 2020, we recorded a valuation allowance of $17.3 million and $14.9 million, respectively, to partially reserve the deferred tax assets of our TRSs. Primarily as a result of the limitation imposed by the Code on the utilization of net operating losses of acquired subsidiaries and the history of losses of our USVI TRS, we believe it is more likely than not that $17.3 million of our deferred tax assets will not be realized, and therefore, have provided a valuation allowance to reserve against the balances.

At December 31, 2021, we had TRSs net operating loss carryforwards for U.S. federal income tax purposes of $61.2 million, of which $52.3 million is subject to expiration and will begin to expire in 2023. The remainder was generated after December 2017 and is not subject to expiration under the Tax Cuts and Jobs Act. $51.6 million of net operating loss carryforwards are attributable to acquired subsidiaries and are subject to substantial limitation on their use. We do not recognize deferred tax assets and a valuation allowance for the REIT since the REIT distributes its taxable income as dividends to stockholders, and in turn, the stockholders incur income taxes on those dividends.

The following table summarizes the changes in the valuation allowance (in thousands):

	Year Ended December 31,
	2021		2020		2019
Balance at beginning of year	$	14,938	$	11,581	$	14,483
Additions	2,405		3,357		—
Deductions	—		—		(2,902)
Balance at end of year	$	17,343	$	14,938	$	11,581

The USVI TRS operates under a tax holiday in the U.S. Virgin Islands, which is effective through December 31, 2028, and may be extended if certain additional requirements are satisfied. The tax holiday is conditional upon our meeting certain employment and investment thresholds. The impact of this tax holiday decreased current foreign taxes by $907,000, $0 and $807,000 for the years ended December 31, 2021, 2020 and 2019, respectively. The benefit of the tax holiday on net income (loss) per share was approximately, $0.02, $0.00 and $0.02 for the years ended December 31, 2021, 2020 and 2019, respectively.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law and includes certain income tax provisions relevant to businesses. The Company is required to recognize the effect on the consolidated financial statements in the period the law was enacted. For the year ended December 31, 2020, the CARES Act allowed us to record a tax benefit of $3.4 million for the 2020 net operating loss at our TRS that was carried back to prior tax years.

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law, and extended several COVID-19 tax related measures passed as part of the “CARES Act.” The Company is required to recognize the effect on the consolidated financial statements in the period the law was enacted, which was the period ended December 31, 2020. The Consolidated Appropriations Act, 2021 did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2020.

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Intangible Assets, net

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, net

Intangible Assets, net

Intangible assets, net consisted of the following (in thousands):

	December 31,
	2021		2020
Cost	$	5,682	$	5,682
Accumulated amortization	(1,421)		(1,042)
	$	4,261	$	4,640

Intangible assets include the customer relationships associated with The Ritz-Carlton Sarasota acquisition on April 4, 2018. The customer relationships are being amortized over the 15 year expected life.

For the years ended December 31, 2021, 2020 and 2019, amortization related to intangible assets was $379,000, $379,000 and $379,000, respectively.

Estimated future amortization expense for intangible assets, net for each of the next five years and thereafter is as follows (in thousands):

	Intangible Assets, net
2022	$	379
2023	379
2024	379
2025	379
2026	379
Thereafter	2,366
Total	$	4,261

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Concentration of Risk

12 Months Ended

Dec. 31, 2021

Risks and Uncertainties [Abstract]

Concentration of Risk

Concentration of Risk

Our investments are all concentrated within the hotel industry. All of our hotel properties are located within the U.S. and its territories. For the year ended December 31, 2021, three of our hotel properties generated revenues in excess of 10% of total hotel revenue amounting to 48% of total hotel revenue.

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We are exposed to credit risk with respect to cash held at various financial institutions that are in excess of the FDIC insurance limits of $250,000 and amounts due or payable under our derivative contracts. Our counterparties to our derivative contracts are investment grade financial institutions.

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Segment Reporting	12 Months Ended
	Dec. 31, 2021
Segment Reporting [Abstract]
Segment Reporting	Segment ReportingWe operate in one business segment within the hotel lodging industry: direct hotel investments. Direct hotel investments refers to owning hotel properties through either acquisition or new development. We report operating results of direct hotel investments on an aggregate basis as substantially all of our hotel investments have similar economic characteristics and exhibit similar long-term financial performance. As of December 31, 2021 and December 31, 2020, all of our hotel properties were in the U.S. and its territories.

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Subsequent Event	12 Months Ended
	Dec. 31, 2021
Subsequent Events [Abstract]
Subsequent Event	Subsequent EventOn February 2, 2022, the Company refinanced its mortgage loan secured by the Park Hyatt Beaver Creek Resort & Spa, which had a final maturity date in April 2022. The new, non-recourse mortgage loan totals $70.5 million and has a two-year initial term with three 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 + 2.86%.

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Schedule III - Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2021

SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract]

Schedule III - Real Estate and Accumulated Depreciation

SCHEDULE III

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2021

(in thousands)

Column A		Column B		Column C				Column D				Column E						Column F		Column G	Column H	Column I
				Initial Cost				Costs Capitalized Since Acquisition				Gross Carrying Amount At Close of Period
Hotel Property	Location	Encumbrances		Land		FF&E, Buildings and improvements		Land		FF&E, Buildings and improvements		Land		FF&E, Buildings and improvements		Total		Accumulated Depreciation		Construction Date	Acquisition Date	Income Statement
Capital Hilton	Washington, D.C.	$	107,000	$	45,721	$	106,245	$	—	$	34,436	$	45,721	$	140,681	$	186,402	$	64,999	—	04/2007	(1),(2),(3)
Hilton La Jolla Torrey Pines	La Jolla, CA	88,000		—		114,614		—		8,224		—		122,838		122,838		51,047		—	04/2007	(1),(2),(3)
Marriott Seattle Waterfront	Seattle, WA	134,700		31,888		112,176		—		12,486		31,888		124,662		156,550		45,547		—	04/2007	(1),(2),(3)
The Notary Hotel	Philadelphia, PA	84,600		9,814		94,029		—		33,320		9,814		127,349		137,163		52,655		—	04/2007	(1),(2),(3)
The Clancy	San Francisco, CA	116,300		22,653		72,731		—		60,666		22,653		133,397		156,050		59,333		—	04/2007	(1),(2),(3)
Sofitel Chicago Magnificent Mile	Chicago, IL	99,400		12,631		140,369		—		11,480		12,631		151,849		164,480		39,599		—	02/2014	(1),(2),(3)
Pier House Resort & Spa	Key West, FL	80,000		59,731		33,011		—		4,428		59,731		37,439		97,170		11,889		—	03/2014	(1),(2),(3)
Bardessono Hotel and Spa	Yountville, CA	40,000		—		64,184		—		2,060		—		66,244		66,244		12,831		—	07/2015	(1),(2),(3)
Hotel Yountville	Yountville, CA	51,000		47,849		48,567		—		273		47,849		48,840		96,689		10,842		—	05/2017	(1),(2),(3)
Park Hyatt Beaver Creek Resort & Spa	Beaver Creek, CO	67,500		89,117		56,383		—		5,649		89,117		62,032		151,149		13,431		—	03/2017	(1),(2),(3)
The Ritz-Carlton Sarasota	Sarasota, FL	99,500		83,630		99,782		—		(8,894)		83,630		90,888		174,518		11,897		—	04/2018	(1),(2),(3)
The Ritz-Carlton St. Thomas	St. Thomas, USVI	42,500		25,533		38,467		—		76,471		25,533		114,938		140,471		16,357		—	12/2015	(1),(2),(3)
The Ritz-Carlton Lake Tahoe	Truckee, CA	54,000		26,731		91,603		—		2,461		26,731		94,064		120,795		8,082		—	01/2019	(1),(2),(3)
Mr. C Beverly Hills Hotel	Beverly Hills, CA	30,000		29,346		45,077		—		136		29,346		45,213		74,559		972		—	08/2021	(1),(2),(3)
Total		$	1,094,500	$	484,644	$	1,117,238	$	—	$	243,196	$	484,644	$	1,360,434	$	1,845,078	$	399,481

__________________

(1)Estimated useful life for buildings is 39 years.

(2)Estimated useful life for building improvements is 7.5 years.

(3)Estimated useful life for furniture and fixtures is 1.5 to 5 years.

	Year Ended December 31,
	2021		2020		2019
Investment in real estate:
Beginning balance	$	1,784,849	$	1,791,174	$	1,562,806
Additions	95,663		16,067		262,541
Write-offs	(32,677)		(22,392)		(14,445)
Impairment	—		—		(476)
Sales/disposals	(2,757)		—		(19,252)
Ending balance	$	1,845,078	$	1,784,849	$	1,791,174
Accumulated depreciation:
Beginning balance	360,259		309,752		262,905
Depreciation expense	73,054		72,899		69,195
Impairment	—		—		(105)
Write-offs	(32,677)		(22,392)		(14,445)
Sales/disposals	(1,155)		—		(7,798)
Ending balance	$	399,481	$	360,259	$	309,752
Investment in real estate, net	$	1,445,597	$	1,424,590	$	1,481,422

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation—The accompanying consolidated financial statements include the accounts of Braemar Hotels & Resorts Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All significant intercompany accounts and transactions between consolidated entities have been eliminated in these consolidated financial statements.

Braemar OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Braemar OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Braemar OP General Partner LLC (formerly Ashford Prime OP General Partner LLC), its general partner. As such, we consolidate Braemar OP.

Use of Estimates

Use of Estimates—The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents—Cash and cash equivalents include cash on hand or held in banks and short-term investments with an initial maturity of three months or less at the date of purchase.

Restricted Cash

Restricted Cash—Restricted cash includes reserves for debt service, real estate taxes, and insurance, as well as excess cash flow deposits and reserves for furniture, fixtures, and equipment (“FF&E”) replacements of approximately 4% to 5% of property revenue for certain hotels, as required by certain management or mortgage debt agreement restrictions and provisions.

Accounts Receivable

Accounts Receivable—Accounts receivable consists primarily of meeting and banquet room rental and hotel guest receivables. We generally do not require collateral. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of guests to make required payments for services. The allowance is maintained at a level believed adequate to absorb estimated receivable losses. The estimate is based on past receivable loss experience, known and inherent credit risks, current economic conditions, and other relevant factors, including specific reserves for certain accounts.

Inventories

Inventories—Inventories, which primarily consist of food, beverages, and gift store merchandise, are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method.

Investments in Hotel Properties, net

Investments in Hotel Properties, net—Hotel properties are generally stated at cost. For hotel properties owned through our majority-owned entities, the carrying basis attributable to the partners’ minority ownership is recorded at historical cost, net of any impairment charges, while the carrying basis attributable to our majority ownership is recorded based on the allocated purchase price of our ownership interests in the entities. All improvements and additions which extend the useful life of the hotel properties are capitalized.For property and equipment acquired in a business combination, we record the sets acquired based on their fair value as of the acquisition date. Replacements and improvements and finance leases are capitalized, while repairs and maintenance are expense as incurred. Property and equipment acquired in an asset acquisition are recorded at cost. The acquisition cost is allocated to land, buildings, improvements, furniture, fixtures and equipment, as well as identifiable intangible and lease assets and liabilities. Acquisition cost is allocated using relative fair values. We evaluate several factors, including weighted market data for similar assets, expected future cash flows discounted at risk adjusted rates, and replacement costs for assets to determine an appropriate exit cost when evaluating the fair values.

Impairment of Investments in Hotel Properties

Impairment of Investments in Hotel Properties—Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating the impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period and expected useful life. Fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. See note 4.

Assets Held for Sale and Discontinued Operations

Assets Held for Sale and Discontinued Operations—We classify assets as held for sale when we have obtained a firm commitment from a buyer, and consummation of the sale is considered probable and expected within one year. The related operations of assets held for sale are reported as discontinued if the disposal is a component of an entity or group of components that represents a strategic shift that has (or will have) a major effect on our operations and cash flows. Depreciation and amortization will cease as of the date assets have met the criteria to be deemed held for sale.

Investment in Unconsolidated Entity

Investment in Unconsolidated Entity—As of December 31, 2021, we held a 7.8% ownership interest in OpenKey, which is accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entities’ net income/loss. We review our investment in unconsolidated entity for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of our investment. Any impairment is recorded in equity in earnings (loss) of unconsolidated entity. No such impairment was recorded for the years ended December 31, 2021, 2020 and 2019. See note 5.Our investment in unconsolidated entity is considered to be a variable interest in the underlying entity. VIEs, as defined by authoritative accounting guidance, must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Because we do not have the power and financial responsibility to direct the unconsolidated entity’s activities and operations, we are not considered to be the primary beneficiary of this entity on an ongoing basis and therefore such entity should not be consolidated.

Leases

Leases—We determine if an arrangement is a lease at the commencement date. Operating leases, as lessee, are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on our consolidated balance sheets. We currently do not have any finance leases.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and initial direct costs incurred and excludes lease incentives. The lease terms used to calculate our right-of-use asset may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Subsequent to the initial recognition, lease liabilities are measured using the effective interest method. The ROU asset is generally reduced utilizing a straight-line method adjusted for the lease liability accretion during the period.

We have lease agreements with lease and non-lease components, which under the elected practical expedients under ASC 842, we are not accounting for separately. For certain equipment leases, such as office equipment, copiers and vehicles, we account for the lease and non-lease components as a single lease component.

As of January 1, 2019, we recorded operating lease liabilities as well as a corresponding operating lease ROU asset which includes deferred rent and the reclassified intangible assets and intangible liabilities associated with above/below market-rate leases where we are the lessee.

Intangible Assets, net

Intangible Assets, net—Intangible assets, net represents the customer relationships associated with The Ritz-Carlton Sarasota acquisition, which are amortized using the straight-line method over its expected useful life, which approximates amortization based on economic consumption.

Derivative Instruments

Derivative Instruments—We use interest rate derivatives to hedge our risks and to capitalize on the historical correlation between changes in LIBOR (London Interbank Offered Rate) and RevPAR. Interest rate derivatives could include swaps, caps, floors and flooridors. We also use credit default swaps to hedge financial and capital market risk. All of our derivatives are subject to master-netting settlement arrangements and the credit default swaps are subject to credit support annexes. For credit default swaps, cash collateral is posted by us as well as our counterparty. We offset the fair value of the derivative and the obligation/right to return/reclaim cash collateral.

All derivatives are recorded at fair value in accordance with the applicable authoritative accounting guidance. None of our derivative instruments are designated as cash flow hedges. Interest rate derivatives, credit default swaps and options on futures contracts are reported as “derivative assets” in our consolidated balance sheets. For interest rate derivatives and credit default swaps changes in fair value and realized gains and losses are recognized in earnings as “unrealized gain (loss) on derivatives” and “other income (expense),” respectively, in our consolidated statements of operations.

Due to/from Related Parties, net

Due to/from Related Parties, net—Due to/from related parties, net, represent current receivables and payables resulting from transactions related to hotel management with a related party. Due to/from related parties is generally settled within a period not exceeding one year.

Due to/from Ashford Inc.

Due to/from Ashford Inc.—Due to/from Ashford Inc. represents payables related to the advisory services fee, including reimbursable expenses as well as other hotel products and services. These payables are generally settled within a period not exceeding one year.

Due to/from Third-Party Hotel Managers

Due to/from Third-Party Hotel Managers—Due to/from third-party hotel managers primarily consists of amounts due from Marriott related to our cash reserves held at the Marriott corporate level related to our operations, real estate taxes, and other items, as well as current receivables and payables resulting from transactions with other third-party managers related to hotel management. These receivables and payables are generally settled within a period not exceeding one year.

Noncontrolling Interests

Noncontrolling Interests—The redeemable noncontrolling interests in the operating partnership represent the limited partners’ proportionate share of equity in earnings/losses of the operating partnership, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common unit holdings throughout the period. The redeemable noncontrolling interests in our operating partnership is classified in the mezzanine section of our consolidated balance sheets as these redeemable operating partnership units do not meet the requirements for permanent equity classification prescribed by the authoritative accounting guidance because these redeemable operating partnership units may be redeemed by the holder for cash or registered shares in certain cases outside of the Company’s control. The carrying value of the noncontrolling interests in the operating partnership is based on the greater of the accumulated historical cost or the redemption value.

The noncontrolling interest in consolidated entities represents an ownership interest of 25% in two hotel properties at December 31, 2021 and 2020, and is reported in equity in our consolidated balance sheets.

Net income/loss attributable to redeemable noncontrolling interests in operating partnership and income/loss from consolidated entities attributable to noncontrolling interests in our consolidated entities are reported as deductions/additions from/to net income/loss. Comprehensive income/loss attributable to these noncontrolling interests is reported as reductions/additions from/to comprehensive income/loss.

Revenue Recognition

Revenue Recognition—Rooms revenue represents revenues from the occupancy of our hotel rooms, which is driven by the occupancy and average daily rate. Rooms revenue includes revenue for guest no-shows, day use, and early/late departure fees. The contracts for room stays with customers are generally short in duration and revenues are recognized as services are provided over the course of the hotel stay. Advance deposits are recorded as liabilities when a customer or group of customers provides a deposit for a future stay or banquet event at our hotels. Advance deposits are converted to revenue when the services are provided to the customer or when the customer with a noncancellable reservation fails to arrive for part or all of the reservation. Conversely, advance deposits are generally refundable upon guest cancellation of the related reservation within an

established period of time prior to the reservation. Our advance deposit balance as of December 31, 2021 and 2020 was $31.8 million and $16.2 million, respectively, and are generally recognized as revenue within a one-year period.

Food & Beverage (“F&B”) revenue consists of revenue from the restaurants and lounges at our hotel properties, in-room dining and mini-bars revenue, and banquet/catering revenue from group and social functions. Other F&B revenue may include revenue from audiovisual equipment/services, rental of function rooms, and other F&B related revenues. Revenue is recognized as the services or products are provided. Our hotel properties may employ third parties to provide certain services at the property, for example, audio visual services. We evaluate each of these contracts to determine if the hotel is the principal or the agent in the transaction, and record the revenues as appropriate (i.e. gross vs. net).

Other revenue consists of ancillary revenue at the property, including attrition and cancellation fees, condo management fees, resort and destination fees, health center fees, spas, golf, telecommunications, parking, entertainment and other guest services, as well as rental revenue primarily from leased retail outlets at our hotel properties, and membership initiation fees and dues, primarily from club memberships. Cancellation fees are recognized from non-cancellable deposits when the customer provides notification of cancellation in accordance with established management policy time frames. Non-refundable membership initiation fees are recognized over the expected life of an active membership.

Taxes specifically collected from customers and submitted to taxing authorities are not recorded in revenue. Interest income is recognized when earned.

Other Hotel Expenses

Other Hotel Expenses—Other hotel expenses include Internet, telephone charges, guest laundry, valet parking, hotel-level general and administrative, sales and marketing expenses, repairs and maintenance, franchise fees and utility costs. They are expensed as incurred.

Advertising Costs

Advertising Costs—Advertising costs are charged to expense as incurred. For the years ended December 31, 2021, 2020 and 2019, we incurred advertising costs of $4.0 million, $2.1 million and $4.5 million, respectively. Advertising costs are included in “other” hotel expenses in our consolidated statements of operations.

Equity-Based Compensation

Equity-Based Compensation—Stock/unit-based compensation for non-employees is measured at the grant date and expensed ratably over the vesting period based on the original measurement as of the grant date. This results in the recording of expense, included in “advisory services fee,” “management fees” and “corporate general and administrative” expense, equal to the ratable amount of the grant date fair value based on the requisite service period satisfied during the period. PSUs and Performance LTIP units granted to certain executive officers vest based on time and market conditions and are measured at the grant date fair value based on a Monte Carlo simulation valuation model.

With respect to the 2019 and 2020 award agreements, the number of PSUs and Performance LTIP units actually earned may range from 0% to 200% of target based on achievement of a specific relative total stockholder return based on the formulas determined by the Company’s compensation committee on the grant date. The performance criteria for the PSUs and Performance LTIP units are based on market conditions under the relevant literatures. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition.

With respect to the 2021 award agreements, the compensation committee shifted to a new performance metric, pursuant to which, the performance awards will be eligible to vest, from 0% to 200% of target, based on achievement of certain performance targets over the three-year performance period commencing on January 1, 2021 and ending on December 31, 2023. The performance criteria for the 2021 performance grants are based on performance conditions under the relevant literature. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award. The grant date fair value of the award may vary from period to period, as the number of performance grants earned may vary since the estimated probable achievement of certain performance targets may vary from period to period.

Depreciation and Amortization

Depreciation and Amortization—Hotel properties are depreciated over the estimated useful life of the assets and leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related assets. Presently, hotel properties are depreciated using the straight-line method over lives ranging from 7.5 to 39 years for buildings and improvements and 1.5 to 5 years for FF&E. While we believe our estimates are reasonable, a change in estimated useful lives could affect depreciation expense and net income (loss) as well as resulting gains or losses on potential hotel sales.

Income Taxes

Income Taxes—As a REIT, we generally are not subject to federal corporate income tax on the portion of our net income (loss) that does not relate to TRSs. However, Braemar TRS and our USVI TRS are treated as TRSs for U.S. federal income tax

purposes. In accordance with authoritative accounting guidance, we account for income taxes related to our TRSs using the asset and liability method under which deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, the analysis utilized by us in determining our deferred tax asset valuation allowance involves considerable management judgment and assumptions. See note 18.

The entities that own 13 of our 14 hotel properties are considered partnerships for U.S. federal income tax purposes. Partnerships are not subject to U.S. federal income taxes. The partnerships’ revenues and expenses pass through to and are taxed on the owners. The states and cities where the partnerships operate follow the U.S. federal income tax treatment, with the exception of the District of Columbia and the city of Philadelphia. Accordingly, we provide for income taxes in these jurisdictions for the partnerships. The consolidated entities that operate the 14 hotel properties are considered taxable corporations for U.S. federal, foreign, state, and city income tax purposes and have elected to be TRSs of Braemar.

The “Income Taxes” topic of the FASB’s ASC addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance requires us to determine whether tax positions we have taken or expect to take in a tax return are more likely than not to be sustained upon examination by the appropriate taxing authority based on the technical merits of the positions. Tax positions that do not meet the more likely than not threshold would be recorded as additional tax expense in the current period. We analyze all open tax years, as defined by the statute of limitations for each jurisdiction, which includes the federal jurisdiction and various states. We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and cities. Tax years 2017 through 2021 remain subject to potential examination by certain federal and state taxing authorities.

Income (Loss) Per Share

Income (Loss) Per Share—Basic income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding during the period using the two-class method prescribed by applicable authoritative accounting guidance. Diluted income (loss) per common share is calculated using the two-class method, or the treasury stock method, if more dilutive. Diluted income (loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares, whereby such exercise or conversion would result in lower income per share.

Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards—In January 2020, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2020-01, Investments – Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (“ASU 2020-01”), which clarifies the interaction between the accounting for equity securities, equity method investments, and certain derivative instruments. The ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years and should be applied prospectively. Early adoption is permitted. We adopted the standard effective January 1, 2021 and the adoption of this standard did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Standards—In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”) to provide guidance and relief for transitioning to alternative reference rates. ASU 2021-01 is effective immediately for all entities. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU: (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in Accounting Standards Codification (“ASC”) 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s

own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (“EPS”) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, this ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. We plan to adopt ASU 2020-06 through the modified retrospective method on January 1, 2022. Upon adoption, the Convertible Senior Notes will be recorded as a single debt instrument at amortized cost, instead of being recorded as both a liability and equity. The Company will also cease recording non-cash interest expense associated with amortization of the debt discount associated with the conversion features. The adoption of ASU 2020-06 will result in an adjustment to additional paid-in capital, accumulated deficit, and the carrying value of our Convertible Senior Notes. The impact of adopting ASU 2020-06 will be an increase to “indebtedness, net” and a decrease to stockholders’ equity of approximately $5.6 million. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements, beyond the impact to our Convertible Senior Notes described above.

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Revenue (Tables)

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables present our revenue disaggregated by geographical areas (in thousands):

	Year Ended December 31, 2021
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Other		Total
California	6	$	91,283	$	27,205	$	12,938	$	—	$	131,426
Colorado	1	17,303		10,936		7,945		—		36,184
Florida	2	65,974		27,148		21,094		—		114,216
Illinois	1	14,422		3,418		1,153		—		18,993
Pennsylvania	1	11,889		1,493		776		—		14,158
Washington	1	15,105		1,632		1,578		—		18,315
Washington, D.C.	1	9,773		3,014		1,142		—		13,929
USVI	1	54,819		15,453		10,049		—		80,321
Total	14	$	280,568	$	90,299	$	56,675	$	—	$	427,542

	Year Ended December 31, 2020
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Other		Total
California	5	$	46,291	$	13,573	$	8,056	$	—	$	67,920
Colorado	1	12,847		6,178		6,529		—		25,554
Florida	2	33,829		17,009		14,446		—		65,284
Illinois	1	5,979		1,293		610		—		7,882
Pennsylvania	1	7,349		1,227		424		—		9,000
Washington	1	5,604		797		620		—		7,021
Washington, D.C.	1	7,595		3,519		1,604		—		12,718
USVI	1	16,771		6,667		8,157		—		31,595
Total	13	$	136,265	$	50,263	$	40,446	$	—	$	226,974

	Year Ended December 31, 2019
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Other		Total
California	5	$	115,826	$	37,022	$	15,930	$	—	$	168,778
Colorado	1	18,209		12,430		10,049		—		40,688
Florida	2	47,166		26,656		16,758		—		90,580
Illinois	1	25,366		7,839		1,565		—		34,770
Pennsylvania	1	26,016		4,738		1,133		—		31,887
Washington	1	29,235		6,633		1,629		—		37,497
Washington, D.C.	1	38,735		16,710		1,840		—		57,285
USVI	1	3,295		3,057		19,770		—		26,122
Corporate entities	—	—		—		—		7		7
Total	13	$	303,848	$	115,085	$	68,674	$	7	$	487,614

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Investments in Hotel Properties, net (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Investment in Hotel Properties

Investments in hotel properties, net consisted of the following (in thousands):

	December 31, 2021		December 31, 2020
Land	$	480,530	$	455,298
Buildings and improvements	1,215,810		1,190,437
Furniture, fixtures and equipment	123,954		127,692
Construction in progress	12,038		11,422
Residences	12,746		—
Total cost	1,845,078		1,784,849
Accumulated depreciation	(399,481)		(360,259)
Investments in hotel properties, net	$	1,445,597	$	1,424,590

Schedule of Preliminary Estimated Fair Value of the Assets Acquired and Liabilities Assumed in the Acquisition

This valuation is considered a Level 3 valuation technique, as noted in the following table (in thousands):

Land	$	25,232
Buildings and improvements	35,689
Furniture, fixtures and equipment	758
Residences	12,746
Investments in hotel properties	74,425
Inventories	94
Mortgage loan	(49,815)
	$	24,704
Net other assets (liabilities)	$	(486)

Schedule of Pro Forma Information

The table below summarizes the total revenue and net income (loss) in our consolidated statements of operations for the year ended December 31, 2021:

	Year Ended December 31, 2021
Total revenue	$	6,592
Net income (loss)	(1,630)

The following table reflects the unaudited pro forma results of operations as if the acquisitions had occurred and the applicable indebtedness was incurred on January 1, 2020, and the removal of $563,000 of non-recurring transaction costs directly attributable to the acquisition for the year ended December 31, 2021 (in thousands):

	Year Ended December 31,
	2021		2020
Total revenue	$	433,813	$	235,379
Net income (loss)	$	(32,720)	$	(128,461)
Net income (loss) attributable to common stockholders	$	(38,334)	$	(111,613)
Pro forma income (loss) per share;
Basic	$	(0.72)	$	(3.28)
Diluted	$	(0.72)	$	(3.28)
Weighted average common shares outstanding (in thousands):
Basic	52,684		33,998
Diluted	52,684		33,998

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Investment in Unconsolidated Entity (Tables)

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Summarized Financial Information

The following table summarizes our carrying value and ownership interest in OpenKey:

	December 31, 2021			December 31, 2020
Carrying value of the investment in OpenKey (in thousands)	$	1,689		$	1,708
Ownership interest in OpenKey	7.8		%	8.2		%

The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Equity in earnings (loss) of unconsolidated entity	$	(252)	$	(217)	$	(199)

The following table summarizes the (income) loss allocated to noncontrolling interest in consolidated entities (in thousands):

	Year Ended December 31,
	2021		2020		2019
(Income) loss from consolidated entities attributable to noncontrolling interests	$	2,650	$	6,436	$	(2,032)

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Indebtedness, net (Tables)

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Schedule of Indebtedness, net

Indebtedness, net consisted of the following (dollars in thousands):

Indebtedness	Collateral	Current Maturity	Final Maturity (12)	Interest Rate	December 31, 2021				December 31, 2020
					Debt Balance		Book Value of Collateral		Debt Balance		Book Value of Collateral
Mortgage loan (3)	Park Hyatt Beaver Creek Resort & Spa	April 2022	April 2022	LIBOR (1) +3.00%	$	67,500	$	137,718	$	67,500	$	140,516
Mortgage loan (4)	The Notary Hotel	June 2022	June 2025	LIBOR (1) + 2.16%	435,000		417,109		435,000		439,215
	The Clancy
	Sofitel Chicago Magnificent Mile
	Marriott Seattle Waterfront
Mortgage loan (5)	The Ritz-Carlton St. Thomas	August 2022	August 2024	LIBOR (1) + 3.95%	42,500		124,114		42,500		130,216
Term loan (6)	Equity	October 2022	October 2022	Base Rate (2) + 1.25% to 2.65% or LIBOR (1) + 2.25% to 3.65%	—		—		61,495		—
Mortgage loan (7)	The Ritz-Carlton Sarasota	April 2023	April 2023	LIBOR (1) + 2.65%	99,500		162,621		100,000		163,814
Mortgage loan (7) (8)	Hotel Yountville	May 2023	May 2023	LIBOR (1) + 2.55%	51,000		85,847		51,000		87,795
Mortgage loan (7) (8)	Bardessono Hotel and Spa	August 2023	August 2023	LIBOR (1) + 2.55%	40,000		53,413		40,000		56,645
Mortgage loan (7)	The Ritz-Carlton Lake Tahoe	January 2024	January 2024	LIBOR (1) + 2.10%	54,000		112,713		54,000		113,821
Mortgage loan (9)	Capital Hilton	February 2024	February 2024	LIBOR (1) + 1.70%	195,000		193,194		197,229		203,918
	Hilton La Jolla Torrey Pines
Mortgage loan (10)	Mr. C Beverly Hills Hotel	August 2024	August 2024	LIBOR (1) + 3.60%	30,000		73,587		—		—
Mortgage loan (7)	Pier House Resort & Spa	September 2024	September 2024	LIBOR (1) + 1.85%	80,000		85,281		80,000		88,650
Convertible Senior Notes (11)	Equity	June 2026	June 2026	4.50%	86,250		—		—		—
					1,180,750		1,445,597		1,128,724		1,424,590
Capitalized default interest and late charges					3,904				7,304
Deferred loan costs, net					(3,538)				(5,434)
Discounts, net					(8,438)				—
Indebtedness, net					$	1,172,678	$	1,445,597	$	1,130,594	$	1,424,590

__________________

(1)LIBOR rates were 0.101% and 0.144% at December 31, 2021 and December 31, 2020, respectively.

(2)Base Rate, as defined in the secured term loan agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%.

(3)Effective January 9, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through June 2021. This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the third was exercised in April 2021.

(4)This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions, of which the second was exercised in June 2021.

(5)This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the first was exercised in August 2021. This mortgage loan has a LIBOR floor of 1.00%.

(6)Effective February 22, 2021, we amended this term loan. In conjunction with the amendment, the interest rate spread increased from a rate of Base Rate + 1.25% - 2.50% or LIBOR + 2.25% - 3.50% to a Base Rate + 1.25% - 2.65% or LIBOR + 2.25% - 3.65%, with a LIBOR floor of 0.50%. On May 18, 2021, we repaid this term loan in full.

(7)Effective December 31, 2020, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through December 2021. This mortgage loan has a LIBOR floor of 0.25%.

(8)On September 23, 2021, we amended this mortgage loan. Terms of the agreement included extending the current and final maturity dates by one year.

(9)Effective March 5, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits waived through July 1, 2021.

(10)This mortgage loan has a LIBOR floor of 1.50%.

(11)On May 18, 2021, we executed a purchase agreement to sell convertible senior notes in a private offering. In conjunction with the private offering, we sold convertible senior notes with an aggregate principal amount of $86.25 million.

(12)The final maturity date assumes all available extensions options will be exercised.

Schedule of Maturities of Long-term Debt

Maturities and scheduled amortization of indebtedness as of December 31, 2021, assuming no extension of existing extension options for each of the following five years and thereafter are as follows (in thousands):

2022	$	546,000
2023	189,500
2024	359,000
2025	—
2026	86,250
Thereafter	—
Total	$	1,180,750

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Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table summarizes the interest rate derivatives we entered into over the applicable periods:

	Year Ended December 31,
Interest rate caps:(1)	2021			2020			2019
Notional amount (in thousands)	$	882,500		$	602,500		$	391,000
Strike rate low end of range	0.75		%	3.00		%	3.00		%
Strike rate high end of range	4.00		%	4.00		%	7.80		%
Effective date range	January 2021- September 2021			March 2020 - June 2020			January 2019 - December 2019
Termination date range	February 2022- August 2024			April 2021 - June 2021			March 2020 -October 2021
Total cost of interest rate caps (in thousands)	$	200		$	92		$	115
Interest rate floors:
Notional amount (in thousands)	$	—		$	—		$	2,000,000
Strike rate low end of range							1.63		%
Strike rate high end of range							1.63		%
Effective date							January 2019
Termination date							March 2020
Total cost of interest rate floors (in thousands)	$	—		$	—		$	75

_______________

(1)    No instruments were designated as cash flow hedges.

Interest rate derivatives consisted of the following:

Interest rate caps: (1)	December 31, 2021			December 31, 2020
Notional amount (in thousands)	$	882,500		$	779,000
Strike rate low end of range	0.75		%	3.00		%
Strike rate high end of range	4.00		%	4.00		%
Termination date range	February 2022 - August 2024			February 2021 - October 2021
Aggregate principal balance on corresponding mortgage loans (in thousands)	$	857,000		$	779,000

_______________

(1)No instruments were designated as cash flow hedges.

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis aggregated by the level within which measurements fall in the fair value hierarchy (in thousands):

	Quoted Market Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2021
Assets
Derivative assets:
Interest rate derivatives - caps	$	—	$	139	$	—	$	139
Total	$	—	$	139	$	—	$	139	(1)
Liabilities
Derivative liabilities:
Warrants	—		(1,435)		$	—	(1,435)		(2)
Net	$	—	$	(1,296)	$	—	$	(1,296)

__________________

(1)Reported as “derivative assets” in our consolidated balance sheet.

(2)Reported as “derivative liabilities” in our consolidated balance sheet.

Effect of Fair Value Measured Assets and Liabilities on Consolidated Statements of Operations

The following table summarizes the effect of fair value measured assets and liabilities on our consolidated statements of operations (in thousands):

	Gain (Loss) Recognized in Income
	Year Ended December 31,
	2021		2020			2019
Assets
Derivative assets:
Interest rate derivatives - floors	$	—	$	—		$	(152)
Interest rate derivatives - caps	$	(62)	$	(93)		$	(134)
Credit default swaps	—		117		(1)	(1,095)		(1)
Total derivative assets	$	(62)	$	24		$	(1,381)
Non-derivative assets:
Investment in Ashford Inc.	$	—	$	—		$	(5,552)
Total	$	(62)	$	24		$	(6,933)
Liabilities
Derivative liabilities:
Warrants	94		—			—
Net	$	32	$	24		$	(6,933)
Total combined
Interest rate derivatives - floors	$	—	$	3,615		$	126
Interest rate derivatives - caps	(62)		(93)			(134)
Credit default swaps	—		1,437			(1,095)
Warrants	94		—			—
Unrealized gain (loss) on derivatives	32		4,959			(1,103)
Realized gain (loss) on credit default swaps	—		(1,320)			—
Realized gain (loss) on interest rate floors	—		(3,615)		(2)	(278)		(2)
Unrealized gain (loss) on investment in Ashford Inc.	—		—			7,872
Realized gain (loss) on investment in Ashford Inc.	—		—			(13,424)
Net	$	32	$	24		$	(6,933)

_______________

(1)Excludes costs associated with credit default swaps of $191 and $253 for the years ended December 31, 2020 and 2019, respectively, which is included in “other income (expense)” in our consolidated statements of operations.

(2)Included in “other income (expense)” in our consolidated statements of operations

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Summary of Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

Investments, All Other Investments [Abstract]

Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):

	December 31, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets and liabilities measured at fair value:
Derivative assets	$	139	$	139	$	—	$	—
Derivative liabilities	1,435		1,435		—		—
Financial assets not measured at fair value:
Cash and cash equivalents	$	215,998	$	215,998	$	78,606	$	78,606
Restricted cash	47,376		47,376		34,544		34,544
Accounts receivable, net	23,701		23,701		13,557		13,557
Due from related parties, net	1,770		1,770		991		991
Due from third-party hotel managers	27,461		27,461		12,271		12,271
Financial liabilities not measured at fair value:
Indebtedness	$	1,172,312	$1,022,408 to $1,130,029		$	1,128,724	$884,325 to $977,411
Accounts payable and accrued expenses	96,316		96,316		61,758		61,758
Dividends and distributions payable	2,173		2,173		2,736		2,736
Due to Ashford Inc.	1,474		1,474		2,772		2,772
Due to third-party hotel managers	610		610		1,393		1,393

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Income (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Summary of Amounts Used in Calculating Basic and Diluted Earnings (Loss) Per Share

The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):

	Year Ended December 31,
	2021		2020		2019
Net income (loss) attributable to common stockholders - basic and diluted:
Net income (loss) attributable to the Company	$	(26,664)	$	(105,262)	$	371
Less: Dividends on preferred stock	(8,745)		(10,219)		(10,142)
Less: Dividends on common stock	—		—		(24,145)
Less: Loss on extinguishment of preferred stock - Series B	(4,595)		—		—
Less: Dividends on unvested performance stock units	—		—		(261)
Add: Claw back of dividends on cancelled performance stock units	143		202		—
Less: Dividends on unvested restricted shares	—		—		(405)
Undistributed net income (loss) allocated to common stockholders	(39,861)		(115,279)		(34,582)
Add back: Dividends on common stock	—		—		24,145
Distributed and undistributed net income (loss) - basic and diluted	$	(39,861)	$	(115,279)	$	(10,437)
Weighted average common shares outstanding:
Weighted average common shares outstanding – basic and diluted	52,684		33,998		32,289
Income (loss) per share - basic:
Net income (loss) allocated to common stockholders per share	$	(0.76)	$	(3.39)	$	(0.32)
Income (loss) per share - diluted:
Net income (loss) allocated to common stockholders per share	$	(0.76)	$	(3.39)	$	(0.32)

Summary of Computation of Diluted Income Per Share

Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):

	Year Ended December 31,
	2021		2020		2019
Net income (loss) allocated to common stockholders is not adjusted for:
Income (loss) allocated to unvested restricted shares	$	—	$	—	$	405
Income (loss) allocated to unvested performance stock units	—		—		261
Income (loss) attributable to redeemable noncontrolling interests in operating partnership	$	(3,597)	$	(12,979)	$	(1,207)
Dividends on preferred stock - Series B	4,747		6,919		6,842
Loss on extinguishment of preferred stock - Series B	4,595		—		—
Interest expense on Convertible Senior Notes	3,378		—		—
Dividends on preferred stock - Series E	683		—		—
Dividends on preferred stock - Series M	15		—		—
Total	$	9,821	$	(6,060)	$	6,301
Weighted average diluted shares are not adjusted for:
Effect of unvested restricted shares	99		22		51
Effect of unvested performance stock units	—		—		193
Effect of assumed conversion of operating partnership units	4,980		3,923		4,219
Effect of assumed conversion of preferred stock - Series B	4,614		6,728		6,581
Effect of assumed conversion of exchanged preferred stock - Series B	364		—		—
Effect of assumed conversion of Convertible Senior Notes	8,450		—		—
Effect of assumed conversion of preferred stock - Series E	1,345		—		—
Effect of assumed conversion of preferred stock - Series M	32		—		—
Total	19,884		10,673		11,044

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Redeemable Noncontrolling Interests in Operating Partnership (Tables)

12 Months Ended

Dec. 31, 2021

Noncontrolling Interest [Abstract]

Compensation Expense

The following table presents compensation expense for Performance LTIP units and LTIP units (in thousands):

		Year Ended December 31,
Type	Line Item	2021		2020		2019
Performance LTIP units	Advisory services fee	$	1,765	$	884	$	1,144
LTIP units	Advisory services fee	1,372		1,142		1,354
LTIP units	Corporate, general and administrative	12		—		—
LTIP units - independent directors	Corporate, general and administrative	164		120		103
Total		$	3,313	$	2,146	$	2,601

Summary of the Activity of Temporary Equity

A summary of the activity of the units in our operating partnership is as follows (in thousands):

	Year Ended December 31,
	2021	2020	2019
Units outstanding at beginning of year	4,277	4,538	4,833
LTIP units issued	469	129	91
Performance LTIP units issued	840	160	60
Common units issued for hotel acquisition	2,500	—	—
Units redeemed for shares of common stock	(868)	(339)	(165)
Performance LTIP units cancelled	(60)	(211)	(281)
Units outstanding at end of year	7,158	4,277	4,538
Units convertible/redeemable at end of year	5,533	3,823	4,027

The issuance activity is summarized below (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series B Convertible Preferred Stock shares issued	—		23		42
Gross proceeds received	$	—	$	439	$	809
Commissions	—		7		12
Net proceeds	$	—	$	432	$	797

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series B Convertible Preferred Stock	$	4,747	$	6,919	$	6,842

The issuance activity of the Series E Preferred Stock is summarized below (in thousands):

	Year Ended December 31,
	2021
Series E Preferred Stock shares issued (1)	1,709
Net proceeds	$	38,450

__________________

(1)Exclusive of shares issued under the dividend reinvestment plan.

The redemption value adjustment of Series E Preferred Stock is summarized below (in thousands):

	December 31, 2021		December 31, 2020
Series E Preferred Stock	$	39,339	$	—
Adjustments to Series E Preferred Stock (1)	$	3,128	$	—

________

(1)    Reflects the excess of the redemption value over the accumulated carrying value.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021
Series E Preferred Stock	$	683

The issuance activity of Series M Preferred Stock is summarized below (in thousands):

	Year Ended December 31,
	2021
Series M Preferred Stock shares issued	29
Net proceeds	$	704

The redemption value adjustment of Series M Preferred stock is summarized below (in thousands):

	December 31, 2021		December 31, 2020
Series M Preferred Stock	$	715	$	—
Adjustments to Series M Preferred Stock (1)	$	133	$	—

________

(1)    Reflects the excess of the redemption value over the accumulated carrying value.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021
Series M Preferred Stock	$	15

Redeemable Noncontrolling Interest

The following table presents the redeemable noncontrolling interests in Braemar OP (in thousands) and the corresponding approximate ownership percentage of our operating partnership:

	December 31, 2021			December 31, 2020
Redeemable noncontrolling interests in Braemar OP	$	36,087		$	27,655
Adjustments to redeemable noncontrolling interests (1)	$	275		$	167
Ownership percentage of operating partnership	8.83		%	9.43		%

____________________________________

(1)    Reflects the excess of the redemption value over the accumulated historical cost.

We allocated net (income) loss to the redeemable noncontrolling interests as illustrated in the table below (in thousands):

	Year Ended December 31,
	2021		2020		2019
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	$	3,597	$	12,979	$	1,207
Distributions declared to holders of common units, LTIP units and Performance LTIP units	—		—		3,050
Performance LTIP dividend claw back upon cancellation	(38)		(270)		—

The following table presents the common units redeemed and the fair value at redemption (in thousands):

	Year Ended December 31,
	2021			2020			2019
Common units converted to common stock	868			339			165
Fair value of common units converted	$	4,122	(2)	$	390	(1)	$	2,201

____________________________________

(1)    The redemption value is the greater of historical cost or fair value. The historical cost of the converted units was $3.5 million.

(2)    The redemption value is the greater of historical cost or fair value. The historical cost of the converted units was $4.6 million.

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Equity (Tables)

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Dividends Declared

The following table summarizes the common stock dividends declared during the period (in thousands):

	Year Ended December 31,
	2021		2020		2019
Common stock dividends declared	$	—	$	—	$	21,302

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series D Cumulative Preferred Stock	$	3,300	$	3,300	$	3,300

Schedule of Issuance Activity

The issuance activity is summarized below (in thousands):

	Year Ended December 31,
	2021		2020		2019
Common shares issued	2,711		4,729		—
Gross proceeds received	$	16,119	$	14,717	$	—
Commissions	202		184		—
Net proceeds	$	15,917	$	14,533	$	—

The issuance activity under the SEDA is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares sold to YA	1,700
Proceeds received	$	10,000

The issuance activity under the Lincoln Park agreement is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares sold to Lincoln Park	766
Additional commitment shares	15
Total common shares issued to Lincoln Park	781
Proceeds received	$	4,217

The issuance activity under the Virtu May 2021 EDA is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares issued	8,339
Gross proceeds received	$	50,000
Commissions	500
Net proceeds	$	49,500

The issuance activity under the Virtu July 2021 EDA is summarized below (in thousands):

	Year Ended December 31, 2021
Common shares issued	4,712
Gross proceeds received	$	24,020
Commissions	240
Net proceeds	$	23,780

Summarized Financial Information

The following table summarizes our carrying value and ownership interest in OpenKey:

	December 31, 2021			December 31, 2020
Carrying value of the investment in OpenKey (in thousands)	$	1,689		$	1,708
Ownership interest in OpenKey	7.8		%	8.2		%

The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Equity in earnings (loss) of unconsolidated entity	$	(252)	$	(217)	$	(199)

The following table summarizes the (income) loss allocated to noncontrolling interest in consolidated entities (in thousands):

	Year Ended December 31,
	2021		2020		2019
(Income) loss from consolidated entities attributable to noncontrolling interests	$	2,650	$	6,436	$	(2,032)

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Preferred Stock (Tables)

12 Months Ended

Dec. 31, 2021

Temporary Equity Disclosure [Abstract]

Summary of the Activity of Temporary Equity

A summary of the activity of the units in our operating partnership is as follows (in thousands):

	Year Ended December 31,
	2021	2020	2019
Units outstanding at beginning of year	4,277	4,538	4,833
LTIP units issued	469	129	91
Performance LTIP units issued	840	160	60
Common units issued for hotel acquisition	2,500	—	—
Units redeemed for shares of common stock	(868)	(339)	(165)
Performance LTIP units cancelled	(60)	(211)	(281)
Units outstanding at end of year	7,158	4,277	4,538
Units convertible/redeemable at end of year	5,533	3,823	4,027

The issuance activity is summarized below (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series B Convertible Preferred Stock shares issued	—		23		42
Gross proceeds received	$	—	$	439	$	809
Commissions	—		7		12
Net proceeds	$	—	$	432	$	797

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021		2020		2019
Series B Convertible Preferred Stock	$	4,747	$	6,919	$	6,842

The issuance activity of the Series E Preferred Stock is summarized below (in thousands):

	Year Ended December 31,
	2021
Series E Preferred Stock shares issued (1)	1,709
Net proceeds	$	38,450

__________________

(1)Exclusive of shares issued under the dividend reinvestment plan.

The redemption value adjustment of Series E Preferred Stock is summarized below (in thousands):

	December 31, 2021		December 31, 2020
Series E Preferred Stock	$	39,339	$	—
Adjustments to Series E Preferred Stock (1)	$	3,128	$	—

________

(1)    Reflects the excess of the redemption value over the accumulated carrying value.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021
Series E Preferred Stock	$	683

The issuance activity of Series M Preferred Stock is summarized below (in thousands):

	Year Ended December 31,
	2021
Series M Preferred Stock shares issued	29
Net proceeds	$	704

The redemption value adjustment of Series M Preferred stock is summarized below (in thousands):

	December 31, 2021		December 31, 2020
Series M Preferred Stock	$	715	$	—
Adjustments to Series M Preferred Stock (1)	$	133	$	—

________

(1)    Reflects the excess of the redemption value over the accumulated carrying value.

The following table summarizes dividends declared (in thousands):

	Year Ended December 31,
	2021
Series M Preferred Stock	$	15

Summary of Series B Cumulative Convertible Preferred Stock Activity

The table below summarizes the activity (in thousands):

	Year Ended December 31, 2021
	Preferred Shares Tendered	Common Shares Issued
Series B Convertible Preferred Stock	1,953	7,291

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Compensation Cost

The following table summarizes the stock-based compensation expense for restricted stock (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Advisory services fee	$	3,028	$	2,672	$	2,468
Management fees	56		133		155
Corporate general and administrative	111		71		72
Corporate general and administrative - independent directors	322		130		208
	$	3,517	$	3,006	$	2,903

The following table summarizes the compensation expense for PSUs (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Advisory services fee	$	3,374	$	2,695	2,439

Summary of Restricted Stock Activity

A summary of our restricted stock activity is as follows (shares in thousands):

	Year Ended December 31,
	2021			2020			2019
	Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant
Outstanding at beginning of year	536	$	7.98	497	$	11.89	441	$	10.91
Restricted shares granted	764	7.02		359	4.13		261	12.68
Restricted shares vested	(317)	6.31		(310)	9.81		(198)	10.75
Restricted shares forfeited	(26)	6.94		(10)	7.25		(7)	11.59
Outstanding at end of year	957	$	6.94	536	$	7.98	497	$	11.89

Summary of PSUs Activity

A summary of our PSU activity is as follows (shares in thousands):

	Year Ended December 31,
	2021			2020			2019
	Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant		Number of Units	Weighted Average Price at Grant
Outstanding at beginning of year	448	$	11.71	420	$	16.91	316	$	12.29
PSUs granted	446	7.01		225	3.51		223	19.96
PSUs canceled	(223)	19.96		(197)	13.43		(119)	10.42
Outstanding at end of year	671	$	5.84	448	$	11.71	420	$	16.91

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The following table summarizes the advisory services fees incurred (in thousands):

	Year Ended December 31,
	2021		2020		2019
Advisory services fee
Base advisory fee	$	10,806	$	9,981	$	10,834
Reimbursable expenses (1)	2,297		1,790		2,289
Equity-based compensation (2)	9,538		7,393		7,404
Incentive fee (3)	—		(678)		—
Total	$	22,641	$	18,486	$	20,527

________

(1)Reimbursable expenses include overhead, internal audit, risk management advisory and asset management services.

(2)    Equity-based compensation is associated with equity grants of Braemar’s common stock, PSUs, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.

(3)    The $(678,000) incentive fee in 2020 is a result of not meeting the FCCR threshold required for paying the final installment of the incentive fee incurred in 2018.

The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):

	Year Ended December 31,
Line Item	2021		2020		2019
Corporate, general and administrative	$	1,983	$	658	$	314

The following table presents the fees related to our hotel and design and construction services agreements with Remington Lodging prior to its transactions with Ashford Inc. (in thousands):

	Year Ended December 31,
	2019
Hotel management fees, including incentive hotel management fees	$	1,738
Corporate general and administrative	297
Total	$	2,035

The following tables summarize the entities in which our advisor has an interest with which we or our hotel properties contracted for products and services, the amounts recorded by us for those services and the applicable classification on our consolidated financial statements (in thousands):

		Year Ended December 31, 2021
Company	Product or Service	Total		Investments in Hotel Properties, net (1)		Indebtedness, net (2)		Other Assets		Other Hotel Revenue		Other Hotel Expenses		Preferred Stock (3)		Management fees		Property Taxes, Insurance and Other		Advisory Services Fee		Corporate General and Administrative		Write-off of Premiums, Loan Costs and Exit Fees
Ashford LLC	Insurance claims services	$	7	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	7	$	—	$	—	$	—
Ashford Securities	Broker/Dealer	1,983		—		—		—		—		—		—		—		—		—		1,983		—
Ashford Securities	Dealer Manager Fees	410		—		—		—		—		—		410		—		—		—		—		—
INSPIRE	Audio visual services	1,001		—		—		—		1,001		—		—		—		—		—		—		—
Lismore Capital	Debt placement and related services	491		—		150		—		—		—		—		—		—		—		—		341
Lismore Capital	Broker services	3		—		—		—		—		—		—		—		—		—		—		3
OpenKey	Mobile key app	38		—		—		—		—		38		—		—		—		—		—		—
Premier	Design and construction services	3,009		2,653		—		—		—		—		—		—		—		356		—		—
Pure Wellness	Hypoallergenic premium rooms	141		—		—		—		—		141		—		—		—		—		—		—
RED Leisure	Watersports activities and travel/transportation services	321		—		—		—		321		—		—		—		—		—		—		—
Remington Hotels	Hotel management services (4)	3,243		—		—		—		—		934		—		2,309		—		—		—		—

		Year Ended December 31, 2020
Company	Product or Service	Total		Investments in Hotel Properties, net (1)		Other Assets		Other Hotel Revenue		Other Hotel Expenses		Management fees		Property Taxes, Insurance and Other		Advisory Services Fee		Write-off of Premiums, Loan Costs and Exit Fees
Ashford LLC	FF&E purchases	$	1,816	$	1,816	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Ashford LLC	Insurance claims services	108		—		—		—		—		—		108		—		—
INSPIRE	Audio visual services	592		—		—		592		—		—		—		—		—
Lismore Capital	Debt placement and related services	4,093		—		1,022		—		—		—		—		—		3,071
OpenKey	Mobile key app	38		—		—		—		38		—		—		—		—
Premier	Design and construction services	2,849		2,505		—		—		—		—		—		344		—
Pure Wellness	Hypoallergenic premium rooms	52		—		—		—		52		—		—		—		—
RED Leisure	Watersports activities and travel/transportation services	139		—		—		139		—		—		—		—		—
Remington Hotels	Hotel management services (4)	1,446		—		—		—		410		1,036		—		—		—

		Year Ended December 31, 2019
Company	Product or Service	Total		Investments in Hotel Properties, net (1)		Indebtedness, net (2)		Other Hotel Revenue		Other Hotel Expenses		Management fees		Property Taxes, Insurance and Other		Advisory Services Fee		Corporate General and Administrative		Write-off of Premiums, Loan Costs and Exit Fees
Ashford LLC	Insurance claims services	$	135	$	—	$	—	$	—	$	—	$	—	$	135	$	—	$	—	$	—
INSPIRE	Audio visual services	560		—		—		560		—		—		—		—		—		—
Lismore Capital	Debt placement and related services	1,208		—		(995)		—		—		—		—		—		—		213
OpenKey	Mobile key app	34		—		—		—		34		—		—		—		—		—
Premier	Design and construction services	10,123		9,584		—		—		—		—		—		539		—		—
Pure Wellness	Hypoallergenic premium rooms	194		148		—		—		46		—		—		—		—		—
RED Leisure	Watersports activities and travel/transportation services	946		—		—		—		946		—		—		—		—		—
Remington Hotels	Hotel management services (4)	572		—		—		—		323		249		—		—		—		—

________

(1)Recorded in FF&E and depreciated over the estimated useful life.

(2)Recorded as deferred loan costs, which are included in “indebtedness, net” on our consolidated balance sheets and amortized over the initial term of the applicable loan agreement.

(3)Recorded as a reduction of Series E and Series M Redeemable Preferred Stock proceeds.

(4)Other hotel expenses include incentive hotel management fees and other hotel management costs.

The following table summarizes the components of due to Ashford Inc. (in thousands):

		Due to Ashford Inc.
Company	Product or Service	December 31, 2021		December 31, 2020
Ashford LLC	Advisory services	$	394	$	165
Ashford LLC	FF&E purchases	—		1,816
Ashford LLC	Insurance claims services	1		12
INSPIRE	Audio visual services	418		1
OpenKey	Mobile key app	—		3
Premier	Design and construction services	470		631
RED Leisure	Watersports activities and travel/transportation services	191		144
		$	1,474	$	2,772

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Commitment and Contingencies (Tables)

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of Licensing Fees Incurred

The table below summarizes the licensing fees incurred (in thousands):

Line Item	Year Ended December 31, 2021
Other hotel expenses	$	133

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Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Lease Balances

As of December 31, 2021 and 2020, our leased assets and liabilities consisted of the following (in thousands):

	December 31, 2021		December 31, 2020
Assets
Operating lease right-of-use assets	$	80,462	$	81,260
Liabilities
Operating lease liabilities	$	60,937	$	60,917

Lease Cost and Other Information

We incurred the following lease costs related to our operating leases (in thousands):

		Year Ended December 31,
	Classification	2021		2020		2019
Operating lease cost (1)	Hotel operating expenses - other	$	5,349	$	4,373	$	5,834

_______________________________________

(1) For the years ended December 31, 2021, 2020 and 2019, operating lease cost includes approximately $954,000, $(305,000) and $1.4 million, respectively, of variable lease cost associated with the ground leases, with the credit in 2020 primarily caused by the ground lease percentage rent true-up for fiscal year 2019-2020 at Hilton La Jolla Torrey Pines. Additionally, we recorded $512,000, $834,000 and $651,000, respectively, of amortization costs related to the intangible assets that were reclassified to “operating lease right-of-use assets” upon adoption of ASC 842. Short-term lease costs in aggregate are immaterial.

Other information related to leases is as follows:

	Year Ended December 31,
	2021			2020			2019
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)	$	3,302		$	3,261		$	3,223
Weighted Average Remaining Lease Term
Operating leases (1)	45 years			47 years			47 years
Weighted Average Discount Rate
Operating leases (1)	4.98		%	4.98		%	4.98		%

_______________________________________

(1) Calculated using the lease term, excluding extension options, and discount rates of the ground leases.

Maturities of Operating Lease Liabilities

Future minimum lease payments due under non-cancellable leases as of December 31, 2021 were as follows (in thousands):

	Operating Leases
2022	$	3,338
2023	3,333
2024	3,302
2025	3,294
2026	3,308
Thereafter	143,692
Total future minimum lease payments (1)	160,267
Less: interest	(99,330)
Present value of operating lease liabilities	$	60,937

_______________________________________

(1) Based on payment amounts as of December 31, 2021.

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

The following table reconciles the income tax expense at statutory rates to the actual income tax expense recorded (in thousands):

	Year Ended December 31,
	2021		2020		2019
Income tax (expense) benefit at federal statutory income tax rate of 21%	$	(2,652)	$	5,619	$	(6,509)
State income tax (expense) benefit, net of U.S. federal income tax benefit	574		3,136		107
State and local income tax (expense) benefit on pass-through entity subsidiaries	(9)		(5)		(16)
Gross receipts and margin taxes	(26)		(13)		(67)
Benefit of USVI Economic Development Commission credit	3,346		783		5,614
Other	(251)		311		16
Valuation allowance	(2,306)		(5,425)		(909)
Total income tax (expense) benefit	$	(1,324)	$	4,406	$	(1,764)

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense are as follows (in thousands):

	Year Ended December 31,
	2021		2020		2019
Current:
Federal	$	(1,477)	$	3,431	$	(765)
State	(21)		19		(235)
Total current income tax (expense) benefit	(1,498)		3,450		(1,000)
Deferred:
Federal	131		1,262		(357)
State	43		(306)		(407)
Total deferred income tax (expense) benefit	174		956		(764)
Total income tax (expense) benefit	$	(1,324)	$	4,406	$	(1,764)

Schedule of Deferred Tax Assets and Liabilities

At December 31, 2021 and 2020, our net deferred tax asset, included in “other assets,” and net deferred tax liability, included in “accounts payable and accrued expenses,” respectively, on our consolidated balance sheets, consisted of the following (in thousands):

	December 31,
	2021		2020
Deferred tax assets (liabilities):
Tax intangibles basis greater than book basis	$	722	$	718
Allowance for doubtful accounts	28		50
Unearned income	2,147		1,314
Federal and state net operating losses	15,677		14,166
Capital Loss Carryforward	529		523
Other	178		399
Accrued expenses	612		465
Tax property basis greater than book basis	(2,487)		(2,721)
Prepaid expenses	(4)		(91)
Net deferred tax asset	17,402		14,823
Valuation allowance	(17,343)		(14,938)
Net deferred tax asset (liability)	$	59	$	(115)

Summary of Valuation Allowance

The following table summarizes the changes in the valuation allowance (in thousands):

	Year Ended December 31,
	2021		2020		2019
Balance at beginning of year	$	14,938	$	11,581	$	14,483
Additions	2,405		3,357		—
Deductions	—		—		(2,902)
Balance at end of year	$	17,343	$	14,938	$	11,581

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Intangible Assets, net (Tables)

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets, net

Intangible assets, net consisted of the following (in thousands):

	December 31,
	2021		2020
Cost	$	5,682	$	5,682
Accumulated amortization	(1,421)		(1,042)
	$	4,261	$	4,640

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Estimated future amortization expense for intangible assets, net for each of the next five years and thereafter is as follows (in thousands):

	Intangible Assets, net
2022	$	379
2023	379
2024	379
2025	379
2026	379
Thereafter	2,366
Total	$	4,261

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Organization and Description of Business (Details) $ / shares in Units, $ in Thousands	Mar. 04, 2022 $ / shares	Dec. 31, 2021 USD ($) hotel room state	Dec. 31, 2020 USD ($) hotel	Dec. 31, 2019 USD ($) hotel	Dec. 31, 2018 USD ($)
Real Estate Properties [Line Items]
Number of hotel properties		14	13	13
Number of states in which entity operates | state		6
Number of rooms | room		3,875
Number of units in real estate property, net partnership interest | room		3,640
Cash and cash equivalents | $		$ 215,998	$ 78,606	$ 71,995	$ 182,578
Restricted cash | $		47,376	34,544	$ 58,388	$ 75,910
Due from third-party hotel managers | $		$ 27,461	$ 12,271
Subsequent Event
Real Estate Properties [Line Items]
Dividends declared per common share (in dollars per share) | $ / shares	$ 0.01
Wholly Owned Properties
Real Estate Properties [Line Items]
Number of hotel properties		12
Consolidated Properties
Real Estate Properties [Line Items]
Number of hotel properties		2
Leased by Wholly-Owned or Majority-Owned Taxable REIT Subsidiaries
Real Estate Properties [Line Items]
Number of hotel properties		13
US Virgin Islands Taxable REIT Subsidiary
Real Estate Properties [Line Items]
Number of hotel properties		1
Leased by Ashford Prime Wholly-Owned Taxable REIT Subsidiary
Real Estate Properties [Line Items]
Number of hotel properties		11
Remington Hotels
Real Estate Properties [Line Items]
Number of hotel properties managed by related party		4

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Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) hotel	Dec. 31, 2020 USD ($) hotel	Dec. 31, 2019 USD ($) hotel	Jan. 01, 2022 USD ($)	Dec. 31, 2018
Significant Accounting Policies [Line Items]
Period for settlement due to and from affiliates maximum	1 year
Number of hotel properties | hotel	14	13	13
Advance deposit balance	$ 31,800,000	$ 16,200,000
Advertising costs	4,000,000	2,100,000	$ 4,500,000
Indebtedness, gross	1,172,678,000	1,130,594,000
Stockholders' equity attributable to parent	$ 398,847,000	$ 276,258,000
Forecast | Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment
Significant Accounting Policies [Line Items]
Indebtedness, gross				$ 5,600,000
Stockholders' equity attributable to parent				$ (5,600,000)
Performance Long Term Incentive Plan Units
Significant Accounting Policies [Line Items]
Award vesting period	3 years
Performance Shares | 2021 Grants
Significant Accounting Policies [Line Items]
Award vesting period	3 years
Hotel Properties
Significant Accounting Policies [Line Items]
Noncontrolling interest. ownership percentage	25.00%	25.00%
Partially Owned Properties | Hotel Properties
Significant Accounting Policies [Line Items]
Number of hotel properties | hotel	2	2
Consolidated Properties
Significant Accounting Policies [Line Items]
Number of hotel properties | hotel	2
Leased by Wholly-Owned or Majority-Owned Taxable REIT Subsidiaries
Significant Accounting Policies [Line Items]
Number of hotel properties | hotel	13
OpenKey
Significant Accounting Policies [Line Items]
Ownership percentage	7.80%	8.20%			8.20%
Impairment	$ 0	$ 0	$ 0
Minimum | Performance Long Term Incentive Plan Units | 2019 and 2020 Grants
Significant Accounting Policies [Line Items]
Performance adjustment range (as a percent)	0.00%
Minimum | Performance Shares | 2021 Grants
Significant Accounting Policies [Line Items]
Performance adjustment range (as a percent)	0.00%
Minimum | Building and Building Improvements
Significant Accounting Policies [Line Items]
Estimated useful life	7 years 6 months
Minimum | Furniture and Fixtures
Significant Accounting Policies [Line Items]
Estimated useful life	1 year 6 months
Minimum | Restricted Cash
Significant Accounting Policies [Line Items]
Replacement reserve escrow as percentage of property revenue	4.00%
Maximum | Performance Long Term Incentive Plan Units | 2019 and 2020 Grants
Significant Accounting Policies [Line Items]
Performance adjustment range (as a percent)	200.00%
Maximum | Performance Shares | 2021 Grants
Significant Accounting Policies [Line Items]
Performance adjustment range (as a percent)	200.00%
Maximum | Building and Building Improvements
Significant Accounting Policies [Line Items]
Estimated useful life	39 years
Maximum | Furniture and Fixtures
Significant Accounting Policies [Line Items]
Estimated useful life	5 years
Maximum | Restricted Cash
Significant Accounting Policies [Line Items]
Replacement reserve escrow as percentage of property revenue	5.00%

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Revenue (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) hotel	Dec. 31, 2020 USD ($) hotel	Dec. 31, 2019 USD ($) hotel
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	14	13	13
Total revenue	$ 427,542,000	$ 226,974,000	$ 487,614,000
Other Hotel Revenue
Disaggregation of Revenue [Line Items]
Revenue from business interruption losses	$ 0	$ 4,000,000	$ 19,300,000
California
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	6	5	5
Total revenue	$ 131,426,000	$ 67,920,000	$ 168,778,000
Colorado
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1	1	1
Total revenue	$ 36,184,000	$ 25,554,000	$ 40,688,000
Florida
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	2	2	2
Total revenue	$ 114,216,000	$ 65,284,000	$ 90,580,000
Illinois
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1	1	1
Total revenue	$ 18,993,000	$ 7,882,000	$ 34,770,000
Pennsylvania
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1	1	1
Total revenue	$ 14,158,000	$ 9,000,000	$ 31,887,000
Washington
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1	1	1
Total revenue	$ 18,315,000	$ 7,021,000	$ 37,497,000
Washington, D.C.
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1	1	1
Total revenue	$ 13,929,000	$ 12,718,000	$ 57,285,000
USVI
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1	1	1
Total revenue	$ 80,321,000	$ 31,595,000	$ 26,122,000
Corporate entities
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel			0
Total revenue			$ 7,000
Rooms
Disaggregation of Revenue [Line Items]
Total revenue	280,568,000	136,265,000	303,848,000
Rooms | California
Disaggregation of Revenue [Line Items]
Total revenue	91,283,000	46,291,000	115,826,000
Rooms | Colorado
Disaggregation of Revenue [Line Items]
Total revenue	17,303,000	12,847,000	18,209,000
Rooms | Florida
Disaggregation of Revenue [Line Items]
Total revenue	65,974,000	33,829,000	47,166,000
Rooms | Illinois
Disaggregation of Revenue [Line Items]
Total revenue	14,422,000	5,979,000	25,366,000
Rooms | Pennsylvania
Disaggregation of Revenue [Line Items]
Total revenue	11,889,000	7,349,000	26,016,000
Rooms | Washington
Disaggregation of Revenue [Line Items]
Total revenue	15,105,000	5,604,000	29,235,000
Rooms | Washington, D.C.
Disaggregation of Revenue [Line Items]
Total revenue	9,773,000	7,595,000	38,735,000
Rooms | USVI
Disaggregation of Revenue [Line Items]
Total revenue	54,819,000	16,771,000	3,295,000
Rooms | Corporate entities
Disaggregation of Revenue [Line Items]
Total revenue			0
Food and Beverage
Disaggregation of Revenue [Line Items]
Total revenue	90,299,000	50,263,000	115,085,000
Food and Beverage | California
Disaggregation of Revenue [Line Items]
Total revenue	27,205,000	13,573,000	37,022,000
Food and Beverage | Colorado
Disaggregation of Revenue [Line Items]
Total revenue	10,936,000	6,178,000	12,430,000
Food and Beverage | Florida
Disaggregation of Revenue [Line Items]
Total revenue	27,148,000	17,009,000	26,656,000
Food and Beverage | Illinois
Disaggregation of Revenue [Line Items]
Total revenue	3,418,000	1,293,000	7,839,000
Food and Beverage | Pennsylvania
Disaggregation of Revenue [Line Items]
Total revenue	1,493,000	1,227,000	4,738,000
Food and Beverage | Washington
Disaggregation of Revenue [Line Items]
Total revenue	1,632,000	797,000	6,633,000
Food and Beverage | Washington, D.C.
Disaggregation of Revenue [Line Items]
Total revenue	3,014,000	3,519,000	16,710,000
Food and Beverage | USVI
Disaggregation of Revenue [Line Items]
Total revenue	15,453,000	6,667,000	3,057,000
Food and Beverage | Corporate entities
Disaggregation of Revenue [Line Items]
Total revenue			0
Other Hotel
Disaggregation of Revenue [Line Items]
Total revenue	56,675,000	40,446,000	68,674,000
Other Hotel | California
Disaggregation of Revenue [Line Items]
Total revenue	12,938,000	8,056,000	15,930,000
Other Hotel | Colorado
Disaggregation of Revenue [Line Items]
Total revenue	7,945,000	6,529,000	10,049,000
Other Hotel | Florida
Disaggregation of Revenue [Line Items]
Total revenue	21,094,000	14,446,000	16,758,000
Other Hotel | Illinois
Disaggregation of Revenue [Line Items]
Total revenue	1,153,000	610,000	1,565,000
Other Hotel | Pennsylvania
Disaggregation of Revenue [Line Items]
Total revenue	776,000	424,000	1,133,000
Other Hotel | Washington
Disaggregation of Revenue [Line Items]
Total revenue	1,578,000	620,000	1,629,000
Other Hotel | Washington, D.C.
Disaggregation of Revenue [Line Items]
Total revenue	1,142,000	1,604,000	1,840,000
Other Hotel | USVI
Disaggregation of Revenue [Line Items]
Total revenue	10,049,000	8,157,000	19,770,000
Other Hotel | Corporate entities
Disaggregation of Revenue [Line Items]
Total revenue			0
Other
Disaggregation of Revenue [Line Items]
Total revenue	0	0	7,000
Other | California
Disaggregation of Revenue [Line Items]
Total revenue	0	0	0
Other | Colorado
Disaggregation of Revenue [Line Items]
Total revenue	0	0	0
Other | Florida
Disaggregation of Revenue [Line Items]
Total revenue	0	0	0
Other | Illinois
Disaggregation of Revenue [Line Items]
Total revenue	0	0	0
Other | Pennsylvania
Disaggregation of Revenue [Line Items]
Total revenue	0	0	0
Other | Washington
Disaggregation of Revenue [Line Items]
Total revenue	0	0	0
Other | Washington, D.C.
Disaggregation of Revenue [Line Items]
Total revenue	0	0	0
Other | USVI
Disaggregation of Revenue [Line Items]
Total revenue	$ 0	$ 0	0
Other | Corporate entities
Disaggregation of Revenue [Line Items]
Total revenue			$ 7,000

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Investments in Hotel Properties, net (Details) - USD ($)	1 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 480,530,000	$ 455,298,000
Buildings and improvements		1,215,810,000	1,190,437,000
Furniture, fixtures and equipment		123,954,000	127,692,000
Construction in progress		12,038,000	11,422,000
Residences		12,746,000	0
Total cost		1,845,078,000	1,784,849,000
Accumulated depreciation		(399,481,000)	(360,259,000)
Investments in hotel properties, net		1,445,597,000	1,424,590,000
Cost of land and depreciable property, net of accumulated depreciation, for federal income tax purposes		1,400,000,000	1,300,000,000
Depreciation		73,000,000	72,800,000	$ 69,500,000
Proceeds from insurance carriers			14,500,000	36,600,000
Gain associated with proceeds received from insurance	$ 10,100,000	481,000
Gain upon settlement of a portion of the insurance claim				26,200,000
Impairment charges		$ 0	$ 0	$ 0

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Investments in Hotel Properties, net - Mr. C Beverly Hills Hotel (Details) $ / shares in Units, shares in Thousands, $ in Thousands	Aug. 05, 2021 USD ($) residence room $ / shares shares	Dec. 31, 2021 room
Real Estate Properties [Line Items]
Number of rooms | room		3,875
Mr. C Beverly Hills Hotel and Luxury Residences
Real Estate Properties [Line Items]
Ownership interest acquired	100.00%
Number of rooms | room	138
Number of real estate properties acquired | residence	5
Consideration transferred, cash	$ 10,000
Strike price of warrants (in dollars per share) | $ / shares	$ 6.00
Fair value of warrants	$ 1,500
Fair value of assumed mortgage loan	49,815
Mortgages | Mr. C Beverly Hills Hotel and Luxury Residences
Real Estate Properties [Line Items]
Consideration transferred, debt assumed	50,000
Fair value of assumed mortgage loan	49,800
Repayment of assumed debt	$ 20,000
Operating Partnership Units | Mr. C Beverly Hills Hotel and Luxury Residences
Real Estate Properties [Line Items]
Consideration transferred, equity issued (in shares) | shares	2,500
Consideration transferred, fair value of equity issued	$ 13,200
Warrants | Mr. C Beverly Hills Hotel and Luxury Residences
Real Estate Properties [Line Items]
Consideration transferred, equity issued (in shares) | shares	500

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Investments in Hotel Properties, net - Schedule of Preliminary Estimated Fair Value of the Assets Acquired and Liabilities Assumed in the Acquisition (Details) - Mr. C Beverly Hills Hotel and Luxury Residences $ in Thousands	Aug. 05, 2021 USD ($)
Business Acquisition [Line Items]
Land	$ 25,232
Buildings and improvements	35,689
Furniture, fixtures and equipment	758
Residences	12,746
Investments in hotel properties	74,425
Inventories	94
Mortgage loan	(49,815)
Net assets (liabilities)	24,704
Net other assets (liabilities)	$ (486)

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Investments in Hotel Properties, net - Schedule of Pro Forma Information Since Acquisition Date (Details) - Mr. C Beverly Hills Hotel and Luxury Residences $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)
Business Acquisition [Line Items]
Total revenue	$ 6,592
Net income (loss)	$ (1,630)

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Investments in Hotel Properties, net - Schedule of Pro Forma Financial Results (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Net income (loss)	$ (32,911)	$ (124,677)	$ 1,196
Mr. C Beverly Hills Hotel and Luxury Residences
Business Acquisition [Line Items]
Total revenue	433,813	235,379
Net income (loss)	(32,720)	(128,461)
Net income (loss) attributable to common stockholders	$ (38,334)	$ (111,613)
Pro forma income (loss) per share;
Basic (in dollars per share)	$ (0.72)	$ (3.28)
Diluted (in dollars per share)	$ (0.72)	$ (3.28)
Weighted average common shares outstanding (in thousands):
Basic (in shares)	52,684	33,998
Diluted (in shares)	52,684	33,998
Transaction costs | Mr. C Beverly Hills Hotel and Luxury Residences
Business Acquisition [Line Items]
Net income (loss)	$ 563

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Investment in Unconsolidated Entity (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated entity	$ 233,000	$ 26,000	$ 332,000
Carrying value of the investment in OpenKey	1,689,000	1,708,000
Equity in earnings (loss) of unconsolidated entity	$ (252,000)	$ (217,000)	(199,000)
OpenKey
Schedule of Equity Method Investments [Line Items]
Ownership interest in OpenKey (as a percent)	7.80%	8.20%		8.20%
Investment in unconsolidated entity	$ 233,000
Aggregate equity method investments	2,600,000
Impairment	0	$ 0	$ 0
Carrying value of the investment in OpenKey	$ 1,689,000	$ 1,708,000

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Indebtedness, net (Schedule of Indebtedness) (Details) $ in Thousands				12 Months Ended
	Sep. 23, 2021	Feb. 22, 2021	Jun. 08, 2020	Dec. 31, 2021 USD ($) extension	May 31, 2021 USD ($)	May 18, 2021 USD ($)	Dec. 31, 2020 USD ($)	Aug. 25, 2020 USD ($)	Jan. 15, 2019 USD ($)
Debt Instrument [Line Items]
Indebtedness, gross				$ 1,180,750			$ 1,128,724
Book Value of Collateral				1,445,597			1,424,590
Capitalized default interest and late charges				3,904			7,304
Deferred loan costs, net				(3,538)			(5,434)
Discounts, net				(8,438)			0
Indebtedness, net				$ 1,172,678			$ 1,130,594
LIBOR rate				0.101%			0.144%
Mortgages | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.00%
Mortgages | Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate				0.50%
Mortgages | Mortgage Loan 1
Debt Instrument [Line Items]
Indebtedness, gross				$ 67,500			$ 67,500
Book Value of Collateral				$ 137,718			140,516
Number of extension options | extension				3
Term of extension options (in years)				1 year
Mortgages | Mortgage Loan 1 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				3.00%
Mortgages | Mortgage Loan 2
Debt Instrument [Line Items]
Indebtedness, gross				$ 435,000			435,000	$ 435,000
Book Value of Collateral				$ 417,109			439,215
Number of extension options | extension				5
Term of extension options (in years)				1 year
Mortgages | Mortgage Loan 2 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.16%
Mortgages | Mortgage Loan 3
Debt Instrument [Line Items]
Indebtedness, gross				$ 42,500			42,500
Book Value of Collateral				$ 124,114			130,216
Number of extension options | extension				3
Term of extension options (in years)				1 year
Mortgages | Mortgage Loan 3 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				3.95%
LIBOR floor (as a percent)				1.00%
Mortgages | Mortgage Loan 4
Debt Instrument [Line Items]
Indebtedness, gross				$ 99,500			100,000
Book Value of Collateral				$ 162,621			163,814
Mortgages | Mortgage Loan 4 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.65%
LIBOR floor (as a percent)				0.25%
Mortgages | Mortgage Loan 5
Debt Instrument [Line Items]
Indebtedness, gross				$ 51,000			51,000
Book Value of Collateral				$ 85,847			87,795
Term of maturity date extension	1 year
Mortgages | Mortgage Loan 5 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.55%
LIBOR floor (as a percent)				0.25%
Mortgages | Mortgage Loan 6
Debt Instrument [Line Items]
Indebtedness, gross				$ 40,000			40,000
Book Value of Collateral				$ 53,413			56,645
Term of maturity date extension	1 year
Mortgages | Mortgage Loan 6 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.55%
LIBOR floor (as a percent)				0.25%
Mortgages | Mortgage Loan 7
Debt Instrument [Line Items]
Indebtedness, gross				$ 54,000			54,000
Book Value of Collateral							113,821		$ 112,713
Mortgages | Mortgage Loan 7 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.10%
LIBOR floor (as a percent)				0.25%
Mortgages | Mortgage Loan 8
Debt Instrument [Line Items]
Indebtedness, gross				$ 195,000			197,229
Book Value of Collateral				$ 193,194			203,918
Mortgages | Mortgage Loan 8 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.70%
Mortgages | Mortgage Loan 9
Debt Instrument [Line Items]
Indebtedness, gross				$ 30,000			0
Book Value of Collateral				$ 73,587			0
Mortgages | Mortgage Loan 9 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				3.60%
LIBOR floor (as a percent)				1.50%
Mortgages | Mortgage Loan 10
Debt Instrument [Line Items]
Indebtedness, gross				$ 80,000			80,000
Book Value of Collateral				$ 85,281			88,650
Mortgages | Mortgage Loan 10 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.85%
LIBOR floor (as a percent)				0.25%
Term Loan | Term loan
Debt Instrument [Line Items]
Indebtedness, gross				$ 0			61,495
Book Value of Collateral				0			0
Term Loan | Term loan | LIBOR
Debt Instrument [Line Items]
LIBOR floor (as a percent)			0.50%
Term Loan | Term loan | LIBOR | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate			2.25%
Term Loan | Term loan | LIBOR | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate		3.65%	3.50%
Term Loan | Term loan | Base Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate			1.25%
Term Loan | Term loan | Base Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate		2.65%	2.50%
Convertible Senior Notes | Convertible senior notes
Debt Instrument [Line Items]
Indebtedness, gross				86,250			0
Book Value of Collateral				$ 0			$ 0
Interest rate				4.50%	4.50%
Face amount of debt					$ 86,250	$ 86,250

XML

Indebtedness, net (Narrative) (Details)		1 Months Ended	12 Months Ended
	Aug. 05, 2021 USD ($)	May 31, 2021 USD ($) day $ / shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	May 18, 2021 USD ($)
Debt Instrument [Line Items]
Gain (loss) recognized on loans				$ 0
Non-cash loan principal associated with default interest and late charges			$ 0	9,859,000	$ 0
Amortization of principal			3,400,000	2,600,000
Net proceeds from long-term debt			$ 83,231,000	$ 109,317,000	$ 329,500,000
Mortgages | Mr. C Beverly Hills Hotel and Luxury Residences
Debt Instrument [Line Items]
Consideration transferred, debt assumed	$ 50,000,000
Repayment of assumed debt	20,000,000
Mortgages | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate			1.00%
Mortgage Loan 9 | Mortgages | Mr. C Beverly Hills Hotel and Luxury Residences
Debt Instrument [Line Items]
Consideration transferred, debt assumed	50,000,000
Repayment of assumed debt	$ 20,000,000
Mortgage Loan 9 | Mortgages | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate			3.60%
Mortgage Loan 9 | Mortgages | LIBOR | Mr. C Beverly Hills Hotel and Luxury Residences
Debt Instrument [Line Items]
Basis spread on variable rate	3.60%
Convertible senior notes | Convertible Senior Notes
Debt Instrument [Line Items]
Face amount of debt		$ 86,250,000				$ 86,250,000
Interest rate		4.50%	4.50%
Net proceeds from long-term debt		$ 82,800,000
Coupon interest expense			$ 2,400,000
Carrying amount of the equity component		6,300,000
Initial discount		$ 9,300,000
Discount amortization			$ 974,000
Conversion rate		0.1577909
Conversion price (in dollars per share) | $ / shares		$ 6.34
Threshold percentage of stock price trigger		130.00%
Threshold trading days | day		20
Threshold consecutive trading days | day		30
Redemption price, percentage		100.00%
Convertible senior notes | Convertible Senior Notes | Discount rate
Debt Instrument [Line Items]
Debt instrument, measurement input		0.071

XML

Indebtedness, net (Maturities and Scheduled Amortization of Indebtedness) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
2022	$ 546,000
2023	189,500
2024	359,000
2025	0
2026	86,250
Thereafter	0
Total	$ 1,180,750	$ 1,128,724

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Derivative Instruments (Details) - Not Designated as Hedging Instrument - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Interest rate derivatives - caps
Derivative [Line Items]
Notional amount (in thousands)	$ 882,500,000	$ 779,000,000
Aggregate principal balance on corresponding mortgage loans (in thousands)	$ 857,000,000	$ 779,000,000
Interest rate derivatives - caps | Minimum
Derivative [Line Items]
Strike rate	0.75%	3.00%
Interest rate derivatives - caps | Maximum
Derivative [Line Items]
Strike rate	4.00%	4.00%
Interest rate derivatives - caps
Derivative [Line Items]
Notional amount (in thousands)	$ 882,500,000	$ 602,500,000	$ 391,000,000
Total cost of interest rate caps (in thousands)	$ 200,000	$ 92,000	$ 115,000
Interest rate derivatives - caps | Minimum
Derivative [Line Items]
Strike rate	0.75%	3.00%	3.00%
Interest rate derivatives - caps | Maximum
Derivative [Line Items]
Strike rate	4.00%	4.00%	7.80%
Interest rate derivatives - floors
Derivative [Line Items]
Notional amount (in thousands)	$ 0	$ 0	$ 2,000,000,000
Total cost of interest rate caps (in thousands)	$ 0	$ 0	$ 75,000
Interest rate derivatives - floors | Minimum
Derivative [Line Items]
Strike rate			1.63%
Interest rate derivatives - floors | Maximum
Derivative [Line Items]
Strike rate			1.63%

XML

Derivative Instruments - Warrants (Details) - Mr. C Beverly Hills Hotel and Luxury Residences $ / shares in Units, $ in Millions	Aug. 05, 2021 USD ($) residence $ / shares shares	Dec. 31, 2021 shares
Business Acquisition [Line Items]
Number of real estate properties acquired | residence	5
Strike price of warrants (in dollars per share) | $ / shares	$ 6.00
Warrants exercised (in shares)		0
Fair value of warrants | $	$ 1.5
Contractual Term | Valuation Technique, Option Pricing Model | Warrants | Fair Value, Inputs, Level 2
Business Acquisition [Line Items]
Warrants, measurement input	3
Volatility | Valuation Technique, Option Pricing Model | Warrants | Fair Value, Inputs, Level 2
Business Acquisition [Line Items]
Warrants, measurement input	0.9793
Dividend Rate | Valuation Technique, Option Pricing Model | Warrants | Fair Value, Inputs, Level 2
Business Acquisition [Line Items]
Warrants, measurement input	0
Risk-Free Interest Rate | Valuation Technique, Option Pricing Model | Warrants | Fair Value, Inputs, Level 2
Business Acquisition [Line Items]
Warrants, measurement input	0.0038
Warrants
Business Acquisition [Line Items]
Consideration transferred, equity issued (in shares)	500,000

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Jan. 01, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Significance of current credit spreads to level 3 input considerations (as a percent)	10.00%
LIBOR interest rate forward curve (as a percent)	0.101%	0.144%
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on investment in Ashford Inc.	$ 0	$ 0	$ 7,872
Unrealized gain (loss) on derivatives	32	4,959	(1,103)
Ashford Inc.
Effect of Fair Value Hedges on Results of Operations [Abstract]
Realized gain (loss) on investment in Ashford Inc.	0	0	(13,424)
Subsequent Event
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
LIBOR interest rate forward curve (as a percent)				1.50%
Credit default swaps | Derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Derivative cost		191	253
Fair Value, Recurring
Effect of Fair Value Hedges on Results of Operations [Abstract]
Net	32	24	(6,933)
Fair Value, Recurring | Ashford Inc.
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on investment in Ashford Inc.	0	0
Fair Value, Recurring | Derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income, Asset	(62)	24	(1,381)
Fair Value, Recurring | Non-derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income, Asset	(62)	24	(6,933)
Unrealized gain (loss) on investment in Ashford Inc.	0	0	(5,552)
Fair Value, Recurring | Derivative
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on derivatives	32	4,959	(1,103)
Fair Value, Recurring | Interest rate derivatives - floors
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on derivatives	0	3,615	126
Realized gain (loss) on interest rate floors	0	(3,615)	(278)
Fair Value, Recurring | Interest rate derivatives - floors | Derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income, Asset	0	0	(152)
Fair Value, Recurring | Interest rate derivatives - caps
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on derivatives	(62)	(93)	(134)
Fair Value, Recurring | Interest rate derivatives - caps | Derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income, Asset	(62)	(93)	(134)
Fair Value, Recurring | Credit default swaps
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on derivatives	0	1,437	(1,095)
Realized gain (loss) on credit default swaps	0	(1,320)	0
Fair Value, Recurring | Credit default swaps | Derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income, Asset	0	117	(1,095)
Fair Value, Recurring | Warrants
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on derivatives	94	0	0
Fair Value, Recurring | Warrants | Derivative liabilities
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income, Liability	$ 94	$ 0	$ 0

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Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 139	$ 0
Derivative liabilities	(1,435)	$ 0
Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	139
Net	(1,296)
Quoted Market Prices (Level 1) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0
Net	0
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	139
Net	(1,296)
Significant Unobservable Inputs (Level 3) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0
Net	0
Interest rate derivatives - caps | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	139
Interest rate derivatives - caps | Quoted Market Prices (Level 1) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0
Interest rate derivatives - caps | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	139
Interest rate derivatives - caps | Significant Unobservable Inputs (Level 3) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0
Warrants | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	(1,435)
Warrants | Quoted Market Prices (Level 1) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	0
Warrants | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	(1,435)
Warrants | Significant Unobservable Inputs (Level 3) | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	$ 0

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Summary of Fair Value of Financial Instruments (Carrying Amounts and Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Financial assets and liabilities measured at fair value:
Derivative assets, Carrying value	$ 139	$ 0
Derivative liabilities, Carrying value	1,435	0
Financial assets not measured at fair value:
Cash and cash equivalents, Carrying value	215,998	78,606	$ 71,995	$ 182,578
Restricted cash, Carrying value	47,376	34,544	58,388	$ 75,910
Accounts receivable, net, Carrying value	23,701	13,557
Due from related parties, net, Carrying value	1,770	991
Due from third-party hotel managers, Carrying value	27,461	12,271
Financial liabilities not measured at fair value:
Indebtedness, Carrying value	1,180,750	1,128,724
Accounts payable and accrued expenses, Carrying value	96,316	61,758
Dividends and distributions payable, Carrying value	2,173	2,736
Due to Ashford Inc., Carrying Value	1,474	2,772	$ 2,772
Due to third-party hotel managers, Carrying value	610	1,393
Carrying Value
Financial assets and liabilities measured at fair value:
Derivative assets, Carrying value	139	0
Derivative liabilities, Carrying value	1,435	0
Financial assets not measured at fair value:
Cash and cash equivalents, Carrying value	215,998	78,606
Restricted cash, Carrying value	47,376	34,544
Accounts receivable, net, Carrying value	23,701	13,557
Due from related parties, net, Carrying value	1,770	991
Due from third-party hotel managers, Carrying value	27,461	12,271
Financial liabilities not measured at fair value:
Indebtedness, Carrying value	1,172,312	1,128,724
Accounts payable and accrued expenses, Carrying value	96,316	61,758
Dividends and distributions payable, Carrying value	2,173	2,736
Due to Ashford Inc., Carrying Value	1,474	2,772
Due to third-party hotel managers, Carrying value	610	1,393
Estimated Fair Value
Financial assets and liabilities measured at fair value:
Derivative assets, Estimated fair value	139	0
Derivative liabilities, Estimated fair value	1,435	0
Financial assets not measured at fair value:
Cash and cash equivalents, Estimated fair value	215,998	78,606
Restricted cash, Estimated fair value	47,376	34,544
Accounts receivable, net, Estimated fair value	23,701	13,557
Due from related parties, net, Estimated fair value	1,770	991
Due from third-party hotel managers, Estimated fair value	27,461	12,271
Financial liabilities not measured at fair value:
Accounts payable and accrued expenses, Estimated fair value	96,316	61,758
Dividends and distributions payable, Estimated fair value	2,173	2,736
Due to Ashford Inc., Fair Value Disclosure	1,474	2,772
Due to third-party hotel managers, Estimated fair value	610	1,393
Minimum | Estimated Fair Value
Financial liabilities not measured at fair value:
Indebtedness, Estimated fair value	1,022,408	884,325
Maximum | Estimated Fair Value
Financial liabilities not measured at fair value:
Indebtedness, Estimated fair value	$ 1,130,029	$ 977,411

XML

Summary of Fair Value of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Maximum maturity term of financial assets (in days)	90 days
Indebtedness, Carrying value	$ 1,180,750	$ 1,128,724
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Indebtedness, Carrying value	$ 1,172,312	$ 1,128,724
Minimum
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total indebtedness fair value variance from carrying value (as a percent)	87.20%	78.30%
Maximum
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total indebtedness fair value variance from carrying value (as a percent)	96.40%	86.60%

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Income (Loss) Per Share (Reconciliation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Net income (loss) attributable to common stockholders - basic and diluted:
Net income (loss)	$ (26,664)	$ (105,262)	$ 371
Less: Dividends on preferred stock	(8,745)	(10,219)	(10,142)
Less: Loss on extinguishment of preferred stock - Series B	(4,595)	0	0
Add: Claw back of dividends on cancelled performance stock units	143	202
Undistributed net income (loss) allocated to common stockholders	(39,861)	(115,279)	(34,582)
Distributed and undistributed net income (loss) - basic	(39,861)	(115,279)	(10,437)
Distributed and undistributed net income (loss) - diluted	$ (39,861)	$ (115,279)	$ (10,437)
Weighted average common shares outstanding:
Weighted average common shares outstanding – basic (in shares)	52,684	33,998	32,289
Weighted average common shares outstanding – diluted (in shares)	52,684	33,998	32,289
Income (loss) per share - basic:
Net income (loss) allocated to common stockholders per share (in dollars per share)	$ (0.76)	$ (3.39)	$ (0.32)
Income (loss) per share - diluted:
Net income (loss) allocated to common stockholders per share (in dollars per share)	$ (0.76)	$ (3.39)	$ (0.32)
Performance Shares
Net income (loss) attributable to common stockholders - basic and diluted:
Less/Add back: Dividends	$ 0	$ 0	$ 261
Add: Claw back of dividends on cancelled performance stock units	143	202	0
Restricted Stock
Net income (loss) attributable to common stockholders - basic and diluted:
Less/Add back: Dividends	0	0	405
Common Stock
Net income (loss) attributable to common stockholders - basic and diluted:
Less/Add back: Dividends	$ 0	$ 0	$ 24,145

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Income (Loss) Per Share (Antidilutive) (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Net income (loss) allocated to common stockholders is not adjusted for:
Loss on extinguishment of preferred stock - Series B	$ 4,595	$ 0	$ 0
Total	$ 9,821	$ (6,060)	$ 6,301
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	19,884	10,673	11,044
Series E Preferred Stock
Net income (loss) allocated to common stockholders is not adjusted for:
Dividends on preferred stock	$ 683
Series M Preferred Stock
Net income (loss) allocated to common stockholders is not adjusted for:
Dividends on preferred stock	15
Restricted Stock
Net income (loss) allocated to common stockholders is not adjusted for:
Income (loss) allocated to unvested shares	$ 0	$ 0	$ 405
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	99	22	51
Performance Shares
Net income (loss) allocated to common stockholders is not adjusted for:
Income (loss) allocated to unvested shares	$ 0	$ 0	$ 261
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	0	0	193
Operating Partnership Units
Net income (loss) allocated to common stockholders is not adjusted for:
Income (loss) attributable to redeemable noncontrolling interests in operating partnership	$ (3,597)	$ (12,979)	$ (1,207)
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	4,980	3,923	4,219
Equity Unit Purchase Agreements | Series B Preferred Stock
Net income (loss) allocated to common stockholders is not adjusted for:
Dividends on preferred stock	$ 4,747	$ 6,919	$ 6,842
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	4,614	6,728	6,581
Equity Unit Purchase Agreements | Series E Preferred Stock
Net income (loss) allocated to common stockholders is not adjusted for:
Dividends on preferred stock	$ 683	$ 0	$ 0
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	1,345	0	0
Equity Unit Purchase Agreements | Series M Preferred Stock
Net income (loss) allocated to common stockholders is not adjusted for:
Dividends on preferred stock	$ 15	$ 0	$ 0
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	32	0	0
Series B Preferred Stock
Net income (loss) allocated to common stockholders is not adjusted for:
Loss on extinguishment of preferred stock - Series B	$ 4,595	$ 0	$ 0
Exchanged Shares of Series B Preferred Stock
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	364	0	0
Convertible Senior Notes
Net income (loss) allocated to common stockholders is not adjusted for:
Interest expense on Convertible Senior Notes	$ 3,378	$ 0	$ 0
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	8,450	0	0

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Redeemable Noncontrolling Interest in Operating Partnership (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands		12 Months Ended
	Aug. 05, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Noncontrolling Interest [Line Items]
Claw back of dividends		$ 143	$ 202
Operating Partnership Units | Mr. C Beverly Hills Hotel and Luxury Residences
Noncontrolling Interest [Line Items]
Consideration transferred, equity issued (in shares)	2,500
Long Term Incentive Plan Units
Noncontrolling Interest [Line Items]
Vesting period (in years)		3 years
Other than options (in shares)		2,400
Units which have not reached full economic parity with the common units (in shares)		569
Unamortized cost		$ 2,500
Unamortized cost, period of recognition		2 years 2 months 12 days
Weighted average period for recognition		2 years
Performance Long Term Incentive Plan Units
Noncontrolling Interest [Line Items]
Vesting period (in years)		3 years
Claw back of dividends		$ 38	270	$ 0
Units which have not reached full economic parity with the common units (in shares)		840
Unamortized cost		$ 4,600
Unamortized cost, period of recognition		2 years
Weighted average period for recognition		1 year 8 months 12 days
Performance Shares
Noncontrolling Interest [Line Items]
Claw back of dividends		$ 143	$ 202	$ 0
Unamortized cost		$ 5,000
Unamortized cost, period of recognition		2 years
Weighted average period for recognition		1 year 8 months 12 days
Performance Shares | 2021 Grants
Noncontrolling Interest [Line Items]
Vesting period (in years)		3 years
Minimum | Performance Long Term Incentive Plan Units | 2019 and 2020 Grants
Noncontrolling Interest [Line Items]
Award performance target (as a percent)		0.00%
Minimum | Performance Shares | 2019 and 2020 Grants
Noncontrolling Interest [Line Items]
Award performance target (as a percent)		0.00%
Minimum | Performance Shares | 2021 Grants
Noncontrolling Interest [Line Items]
Award performance target (as a percent)		0.00%
Maximum | Performance Long Term Incentive Plan Units | 2019 and 2020 Grants
Noncontrolling Interest [Line Items]
Award performance target (as a percent)		200.00%
Maximum | Performance Shares | 2019 and 2020 Grants
Noncontrolling Interest [Line Items]
Award performance target (as a percent)		200.00%
Maximum | Performance Shares | 2021 Grants
Noncontrolling Interest [Line Items]
Award performance target (as a percent)		200.00%

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Redeemable Noncontrolling Interests in Operating Partnership (Compensation Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Allocated compensation expense	$ 3,313	$ 2,146	$ 2,601
Performance Long Term Incentive Plan Units | Advisory Services Fee
Debt Instrument [Line Items]
Allocated compensation expense	1,765	884	1,144
Long Term Incentive Plan Units | Advisory Services Fee
Debt Instrument [Line Items]
Allocated compensation expense	1,372	1,142	1,354
Long Term Incentive Plan Units | Corporate General and Administrative
Debt Instrument [Line Items]
Allocated compensation expense	12	0	0
Long Term Incentive Plan Units | Corporate General and Administrative | Director
Debt Instrument [Line Items]
Allocated compensation expense	$ 164	$ 120	$ 103

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Redeemable Noncontrolling Interests in Operating Partnership (Activity of Units in Operating Partnership) (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Summary of the activity of the operating partnership units
Units outstanding at beginning of year (in shares)	4,277	4,538	4,833
Units redeemed for shares of common stock (in shares)	(868)	(339)	(165)
Units outstanding at end of year (in shares)	7,158	4,277	4,538
Common units convertible/redeemable at end of year (in shares)	5,533	3,823	4,027
Common Units
Summary of the activity of the operating partnership units
Units issued (in shares)	2,500	0	0
Long Term Incentive Plan Units
Summary of the activity of the operating partnership units
Units issued (in shares)	469	129	91
Performance LTIP units
Summary of the activity of the operating partnership units
Units issued (in shares)	840	160	60
Performance LTIP units forfeited/cancelled (in shares)	(60)	(211)	(281)

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Redeemable Noncontrolling Interests in Operating Partnership (Redeemable Noncontrolling Interests) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Noncontrolling Interest [Line Items]
Redeemable noncontrolling interests in Braemar OP	$ 36,087	$ 27,655
Adjustments to redeemable noncontrolling interests	(108)	(102)	$ (534)
Braemar Hotels & Resorts, Inc.
Noncontrolling Interest [Line Items]
Redeemable noncontrolling interests in Braemar OP	36,087	27,655
Adjustments to redeemable noncontrolling interests	$ 275	$ 167
Ownership percentage of operating partnership	8.83%	9.43%

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Redeemable Noncontrolling Interests in Operating Partnership (Allocated Redeemable Noncontrolling Interests) - (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Noncontrolling Interest [Line Items]
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	$ 3,597	$ 12,979	$ 1,207
Distributions declared to holders of common units, LTIP units and Performance LTIP units	0	0	3,050
Performance LTIP dividend claw back upon cancellation	(143)	(202)
Performance Long Term Incentive Plan Units
Noncontrolling Interest [Line Items]
Performance LTIP dividend claw back upon cancellation	$ (38)	$ (270)	$ 0

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Redeemable Noncontrolling Interests in Operating Partnership (Units Redeemed) (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Temporary Equity [Line Items]
Fair value of common units converted	$ (4,584)	$ (3,454)	$ (2,201)
Historical cost	$ 4,600	$ 3,500
Operating Partnership Units
Temporary Equity [Line Items]
Common units converted to common stock (in shares)	868	339	165
Fair value of common units converted	$ 4,122	$ 390	$ 2,201

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Equity (Common Stock Dividends) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Common stock dividends declared			$ 21,302
Common Stock
Class of Stock [Line Items]
Common stock dividends declared	$ 0	$ 0	$ 21,302

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Equity (Narrative) (Details)					12 Months Ended
	Jul. 12, 2021 USD ($)	May 25, 2021 USD ($)	Apr. 21, 2021 shares	Feb. 04, 2021 USD ($) day shares	Dec. 31, 2021 USD ($) hotel $ / shares shares	Dec. 31, 2020 USD ($) hotel $ / shares shares	Dec. 31, 2019 shares	Dec. 11, 2017 USD ($)	Dec. 05, 2017 USD ($) $ / shares	Oct. 27, 2014 USD ($)
Class of Stock [Line Items]
Common stock, par value (in dollars per share) | $ / shares					$ 0.01	$ 0.01
Number of hotel properties with JV interests | hotel					2	2
Noncontrolling interest in consolidated entities | $					$ (16,549,000)	$ (15,088,000)
Hotel Properties
Class of Stock [Line Items]
Noncontrolling interest. ownership percentage					25.00%	25.00%
Co-venturer
Class of Stock [Line Items]
Noncontrolling interest in consolidated entities | $					$ (16,500,000)	$ (15,100,000)
Private Placement | YA
Class of Stock [Line Items]
Shares sold (in shares) | shares					1,700,000
Proceeds received | $					$ 10,000,000
Shares authorized (in shares) | shares				7,780,786
Anniversary of agreement (in months)				36 months
Percentage of the Market Price				95.00%
Ownership threshold (as a percent)				4.99%
Consecutive trading days after advance notice | day				5
Maximum advance shares (in shares) | shares				1,200,000
Price per share percentage of average daily VWAP				100.00%
Consecutive trading days prior to advance notice | day				5
Structuring fee | $				$ 10,000
Private Placement | Lincoln Park
Class of Stock [Line Items]
Shares sold (in shares) | shares			15,000		781,000
Proceeds received | $					$ 4,217,000
Shares authorized (in shares) | shares			8,893,565
May 2021 Equity Distribution Agreement
Class of Stock [Line Items]
Shares sold (in shares) | shares					8,339,000
Proceeds received | $					$ 49,500,000
May 2021 Equity Distribution Agreement | Virtu
Class of Stock [Line Items]
Maximum offering price | $		$ 50,000,000
Percentage of the gross sales price		0.01%
July 2021 Equity Distribution Agreements
Class of Stock [Line Items]
Shares sold (in shares) | shares					4,712,000
Proceeds received | $					$ 23,780,000
July 2021 Equity Distribution Agreements | Virtu
Class of Stock [Line Items]
Maximum offering price | $	$ 100,000,000
Percentage of the gross sales price	1.00%
Common Stock
Class of Stock [Line Items]
Shares of stock repurchased during period (in shares) | shares					50,000	47,000	45,000
Common Stock | At-The-Market Equity Distribution
Class of Stock [Line Items]
Maximum offering price | $								$ 50,000,000
Shares sold (in shares) | shares					7,400,000
Proceeds received | $					$ 30,500,000
Stock Repurchase Program
Class of Stock [Line Items]
Share repurchase program authorized amount | $					$ 50,000,000				$ 50,000,000	$ 100,000,000
Common stock, par value (in dollars per share) | $ / shares									$ 0.01
Shares of stock repurchased during period (in shares) | shares					0	0	0
Stock Repurchase Program | Common Stock
Class of Stock [Line Items]
Shares of stock repurchased during period (in shares) | shares					50,000	47,000	45,000
Series D Preferred Stock
Class of Stock [Line Items]
Preferred stock dividend rate (in dollars per share)					8.25%	8.25%	8.25%
Preferred stock, shares issued (in shares) | shares					1,600,000	1,600,000
Redemption price (in dollars per share) | $ / shares					$ 25.00
Temporary equity conversion rate					5.12295
Annual preferred stock dividend (in dollars per share) | $ / shares					$ 2.0625

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Equity (Preferred Stock Dividends) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Series D Preferred Stock
Class of Stock [Line Items]
Series D Cumulative Preferred Stock	$ 3,300,000	$ 3,300,000	$ 3,300,000

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Equity (Issuance Activity) (Details) - Common Stock - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Common shares issued/sold (in shares)	2,711	4,729	0
Gross proceeds received	$ 16,119	$ 14,717	$ 0
Commissions	202	184	0
Net proceeds	$ 15,917	$ 14,533	$ 0

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Equity (Issuance Activity Under the SEDA) (Details) - USD ($) $ in Thousands		12 Months Ended
	Apr. 21, 2021	Dec. 31, 2021
Private Placement, Shares Sold | Lincoln Park
Class of Stock [Line Items]
Common shares issued/sold (in shares)		766,000
Private Placement, Additional Commitment Shares | Lincoln Park
Class of Stock [Line Items]
Common shares issued/sold (in shares)		15,000
Private Placement | Lincoln Park
Class of Stock [Line Items]
Common shares issued/sold (in shares)	15,000	781,000
Proceeds received		$ 4,217
Private Placement | YA
Class of Stock [Line Items]
Common shares issued/sold (in shares)		1,700,000
Proceeds received		$ 10,000
May 2021 Equity Distribution Agreement
Class of Stock [Line Items]
Common shares issued/sold (in shares)		8,339,000
Gross proceeds received		$ 50,000
Commissions		500
Proceeds received		$ 49,500
July 2021 Equity Distribution Agreements
Class of Stock [Line Items]
Common shares issued/sold (in shares)		4,712,000
Gross proceeds received		$ 24,020
Commissions		240
Proceeds received		$ 23,780

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Equity (Noncontrolling Interest in Consolidated Entities) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Equity [Abstract]
(Income) loss from consolidated entities attributable to noncontrolling interests	$ 2,650	$ 6,436	$ (2,032)

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Preferred Stock (Details)			3 Months Ended	12 Months Ended
	Apr. 02, 2021 $ / shares shares	Dec. 04, 2019 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) day $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) shares	Dec. 31, 2018 USD ($)
Class of Stock [Line Items]
Series Preferred Stock				$ 8,745,000	$ 10,219,000	$ 10,142,000
Common Stock
Class of Stock [Line Items]
Common Shares Issued (in shares) | shares				7,291,000
Equity Distribution Agreements
Class of Stock [Line Items]
Maximum offering price		$ 40,000,000
Percentage of the gross sales price		2.00%
Series B Preferred Stock
Class of Stock [Line Items]
Initial conversion/redemption price (in dollars per share) | $ / shares				$ 18.70
Temporary equity conversion rate				1.3372
Annual preferred stock dividend (in dollars per share) | $ / shares				$ 1.375
Consecutive trading days | day				45
Days ending prior to notice of conversion				3 days
Redemption price (in dollars per share) | $ / shares				$ 25.00
Redemption percent of liquidation preference				103.00%
Liquidation preference per share (in dollars per share) | $ / shares				$ 25.00
Series Preferred Stock				$ 4,747,000	$ 6,919,000	$ 6,842,000
Preferred Shares Tendered (in shares) | shares				1,953,000
Series preferred stock, par value (in dollars per share) | $ / shares				$ 0.01	$ 0.01
Temporary equity, dividend rate (as a percent)				5.50%	5.50%	5.50%
Series Preferred Stock				$ 65,426,000	$ 106,949,000
Series B Preferred Stock | Minimum
Class of Stock [Line Items]
Percent of conversion price				110.00%
Series B Preferred Stock | Preferred Stock
Class of Stock [Line Items]
Series Preferred Stock shares issued (in shares) | shares				0	23,000	42,000
Gross proceeds received				$ 0	$ 439,000	$ 809,000
Commissions				0	7,000	12,000
Net proceeds				0	$ 432,000	$ 797,000
Issuance of preferred stock (in shares) | shares					23,000	42,000
Series Preferred Stock				$ 65,426,000	$ 106,949,000	$ 106,920,000	$ 106,123,000
Series B Preferred Stock | Equity Distribution Agreements
Class of Stock [Line Items]
Shares sold (in shares) | shares				65,000
Proceeds received				$ 1,200,000
Series E Preferred Stock
Class of Stock [Line Items]
Initial conversion/redemption price (in dollars per share) | $ / shares				$ 25.00
Temporary equity conversion rate				5.69476
Series preferred stock, par value (in dollars per share) | $ / shares				$ 0.01	$ 0.01
Sale of temporary equity, offering price (in dollars per share) | $ / shares				$ 25.00
Period of preferred dividends in arrears (in months)				18 months
Redemption fee, percent of stated value on the original issue date				8.00%
Redemption fee, percent of stated value beginning on the first anniversary				5.00%
Redemption fee, percent of stated value beginning on the third anniversary				0.00%
Issuance of preferred stock (in shares) | shares				1,709,000
Net proceeds				$ 38,450,000
Series Preferred Stock				39,339,000	$ 0
Adjustments to Series Preferred Stock			$ 0	3,128,000
Dividends declared on Series Preferred Stock				$ 683,000
Series E Preferred Stock | Initial Closing Date
Class of Stock [Line Items]
Temporary equity, dividend rate (as a percent)				0.0008%
Series E Preferred Stock | First Anniversary From Initial Closing Date
Class of Stock [Line Items]
Temporary equity, dividend rate (as a percent)				0.0775%
Series E Preferred Stock | Second Anniversary From Initial Closing Date
Class of Stock [Line Items]
Temporary equity, dividend rate (as a percent)				0.00075%
Series E Preferred Stock | Preferred Stock
Class of Stock [Line Items]
Issuance of preferred stock (in shares) | shares				1,710,000
Series Preferred Stock				$ 39,339,000	$ 0	0	0
Series E Preferred Stock | Equity Distribution Agreements
Class of Stock [Line Items]
Sale of temporary equity, number of shares authorized in transaction (in shares) | shares	20,000,000
Sale of temporary equity, offering price (in dollars per share) | $ / shares	$ 25.00
Series E Preferred Stock | Dividend Reinvestment Plan
Class of Stock [Line Items]
Sale of temporary equity, number of shares authorized in transaction (in shares) | shares	8,000,000
Sale of temporary equity, offering price (in dollars per share) | $ / shares	$ 25.00
Series M Preferred Stock
Class of Stock [Line Items]
Preferred stock dividend rate (in dollars per share)				0.00082%
Series preferred stock, par value (in dollars per share) | $ / shares	0.01			$ 0.01	$ 0.01
Sale of temporary equity, offering price (in dollars per share) | $ / shares	$ 25.00			$ 25.00
Redemption fee, percent of stated value on the original issue date				1.50%
Redemption fee, percent of stated value beginning on the first anniversary				0.00%
Issuance of preferred stock (in shares) | shares				29,000
Net proceeds				$ 704,000
Series Preferred Stock				715,000	$ 0
Adjustments to Series Preferred Stock				133,000	0
Dividends declared on Series Preferred Stock				$ 15,000
Dividend rate (in dollars per share) | $ / shares				$ 2.05
Dividend rate increase each year from original issuance (as a percent)				0.10%
Dividend rate, maximum percentage of stated value				8.70%
Series M Preferred Stock | Preferred Stock
Class of Stock [Line Items]
Issuance of preferred stock (in shares) | shares				29,000
Series Preferred Stock				$ 715,000	$ 0	$ 0	$ 0
Series M Preferred Stock | Equity Distribution Agreements
Class of Stock [Line Items]
Sale of temporary equity, number of shares authorized in transaction (in shares) | shares	20,000,000
Sale of temporary equity, offering price (in dollars per share) | $ / shares	$ 25.00
Series M Preferred Stock | Dividend Reinvestment Plan
Class of Stock [Line Items]
Sale of temporary equity, number of shares authorized in transaction (in shares) | shares	8,000,000
Sale of temporary equity, offering price (in dollars per share) | $ / shares	$ 25.00

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Stock-Based Compensation (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Claw back of dividends	$ 143	$ 202
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unamortized cost	$ 1,800
Unamortized cost, period of recognition	2 years 4 months 24 days
Weighted average period for recognition	1 year 10 months 24 days
Fair value of vested restricted stock	$ 2,100	$ 1,200	$ 2,200
Shares forfeited (in shares)	26	10	7
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unamortized cost	$ 5,000
Unamortized cost, period of recognition	2 years
Weighted average period for recognition	1 year 8 months 12 days
Award service period (in years)	3 years
Shares forfeited (in shares)	223	197	119
Claw back of dividends	$ 143	$ 202	$ 0
Performance Shares | 2021 Grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Performance Shares | Minimum | 2019 and 2020 Grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award performance target (as a percent)	0.00%
Performance Shares | Minimum | 2021 Grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award performance target (as a percent)	0.00%
Performance Shares | Maximum | 2019 and 2020 Grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award performance target (as a percent)	200.00%
Performance Shares | Maximum | 2021 Grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award performance target (as a percent)	200.00%
Equity Incentive Plan 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized to grant (in shares)	3,300
Shares available for future issuance (in shares)	774

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Stock-Based Compensation (Summary of Compensation Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated compensation expense	$ 3,313	$ 2,146	$ 2,601
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated compensation expense	3,517	3,006	2,903
Restricted Stock | Advisory Services Fee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated compensation expense	3,028	2,672	2,468
Restricted Stock | Management fees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated compensation expense	56	133	155
Restricted Stock | Corporate General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated compensation expense	111	71	72
Restricted Stock | Corporate General and Administrative | Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated compensation expense	322	130	208
Performance Shares | Advisory Services Fee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated compensation expense	$ 3,374	$ 2,695	$ 2,439

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Stock-Based Compensation (Summary of Unit Activity) (Details) - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Restricted Stock
Number of Units
Outstanding at beginning of year (in shares)	536	497	441
Granted (in shares)	764	359	261
Vested (in shares)	(317)	(310)	(198)
Forfeited (in shares)	(26)	(10)	(7)
Outstanding at end of year (in shares)	957	536	497
Weighted Average Price at Grant
Outstanding at beginning of year (in dollars per share)	$ 7.98	$ 11.89	$ 10.91
Granted (in dollars per share)	7.02	4.13	12.68
Vested (in dollars per share)	6.31	9.81	10.75
Forfeited (in dollars per share)	6.94	7.25	11.59
Outstanding at end of year (in dollars per share)	$ 6.94	$ 7.98	$ 11.89
Performance Shares
Number of Units
Outstanding at beginning of year (in shares)	448	420	316
Granted (in shares)	446	225	223
Forfeited (in shares)	(223)	(197)	(119)
Outstanding at end of year (in shares)	671	448	420
Weighted Average Price at Grant
Outstanding at beginning of year (in dollars per share)	$ 11.71	$ 16.91	$ 12.29
Granted (in dollars per share)	7.01	3.51	19.96
Forfeited (in dollars per share)	19.96	13.43	10.42
Outstanding at end of year (in dollars per share)	$ 5.84	$ 11.71	$ 16.91

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Related Party Transactions (Narrative) (Details)							3 Months Ended	10 Months Ended	12 Months Ended
	Dec. 31, 2020 USD ($) hotel	Aug. 25, 2020 USD ($)	Mar. 20, 2020 USD ($)	Sep. 25, 2019 USD ($)	Jan. 15, 2019 USD ($)	Aug. 08, 2018 USD ($)	Sep. 30, 2021 USD ($)	Nov. 05, 2019 USD ($)	Dec. 31, 2021 USD ($) hotel	Mar. 20, 2021 USD ($)	Dec. 31, 2020 USD ($) hotel	Dec. 31, 2019 USD ($) hotel	Jul. 01, 2019 USD ($)	Jun. 26, 2019 USD ($)	Dec. 31, 2015 USD ($)
Related Party Transaction [Line Items]
Base fee, net asset fee adjustment (as a percent)									0.70%
Minimum base fee (as a percent)									90.00%
Term of advisory agreement (in years)									3 years
Indebtedness, gross	$ 1,128,724,000								$ 1,180,750,000		$ 1,128,724,000
Aggregate non-listed preferred equity offerings	400,000,000			$ 400,000,000
Capital contributions	$ 3,750,000
Advisory agreement, percent of total construction costs						6.50%
Advisory agreement, construction management fees (as a percent)						10.00%
Advisory agreement, interior design fees (as a percent)						6.00%
Advisory agreement, FF&E purchasing fees (as a percent)						8.00%
Advisory Agreement, FF&E purchasing fees, freight and tax threshold						$ 2,000,000
Advisory Agreement, FF&E purchasing fees, with freight and tax threshold (as a percent)						6.00%
Number of hotel properties | hotel	13								14		13	13
Due from related parties, net	$ 991,000								$ 1,770,000		$ 991,000
Loss on litigation settlement									917,000		0	$ 0
Mortgage Loan Two [Member] | Mortgages
Related Party Transaction [Line Items]
Indebtedness, gross	$ 435,000,000	$ 435,000,000							435,000,000		435,000,000
Ashford Inc.
Related Party Transaction [Line Items]
Allocation percentage	50.00%			25.00%
Ashford Inc. | Ashford Trust
Related Party Transaction [Line Items]
Allocation percentage	0.00%			75.00%
Ashford Inc. | Ashford Inc.
Related Party Transaction [Line Items]
Allocation percentage	50.00%
Purchase of FF&E | Affiliated Entity
Related Party Transaction [Line Items]
Related party transaction amount							$ 144,000
Design and construction fees
Related Party Transaction [Line Items]
Percentage of project costs						4.00%
Lismore Capital | Subsidiaries
Related Party Transaction [Line Items]
Related party transaction amount			$ 1,400,000							$ 4,100,000
Advisory services, expense included in write-off of loan costs and exit fees									341,000		3,100,000
Lismore Capital | Periodic installments | Subsidiaries
Related Party Transaction [Line Items]
Related party transaction amount			1,400,000
Total			683,000
Payment amount to be offset against future fees			681,000
Lismore Capital | Success fees | Subsidiaries
Related Party Transaction [Line Items]
Related party transaction amount			$ 1,400,000
Lismore Capital | Success Fees Waived
Related Party Transaction [Line Items]
Related party transaction amount		$ 1,600,000
Lismore Capital | Debt placement fee | Subsidiaries
Related Party Transaction [Line Items]
Total									150,000
Ashford Inc.
Related Party Transaction [Line Items]
Amount funded									3,500,000
Key money consideration															$ 2,000,000
Purchased FF&E											200,000
Ashford Inc. | Other Assets
Related Party Transaction [Line Items]
Amount funded									338,000
Ashford LLC
Related Party Transaction [Line Items]
ERFP agreement, percent of property acquisition price					10.00%
ERFP agreement, funding term (in years)					2 years
ERFP agreement, initial term (in years)					2 years
ERFP agreement, renewal term (in years)					1 year
ERFP agreement, notice term (in days)					60 days
ERFP Agreement, amount due									10,300,000
ERFP Agreement, amount sold													$ 8,900,000	$ 1,400,000
Gain on sale of hotel FF&E												9,000
Ashford LLC | Hotel FF&E
Related Party Transaction [Line Items]
Gain on sale of hotel FF&E									197,000
Proceeds from sale of hotel FF&E									$ 1,600,000
Ashford LLC | Affiliated Entity
Related Party Transaction [Line Items]
Gain on sale of hotel FF&E												23,000
Remington Hotels
Related Party Transaction [Line Items]
Total												$ 2,035,000
Number of hotel properties managed by related party | hotel									4
Due from related parties, net	$ 626,000								$ 677,000		626,000
Remington Hotels | Affiliated Entity
Related Party Transaction [Line Items]
Due from related parties, net	$ 365,000								365,000		$ 365,000
Ashford Trust | Legal settlement | Affiliated Entity
Related Party Transaction [Line Items]
Due from related parties, net									728,000
Loss on litigation settlement									728,000
Maximum | Ashford Inc.
Related Party Transaction [Line Items]
Funding amount				$ 15,000,000
Maximum | Ashford LLC
Related Party Transaction [Line Items]
ERFP agreement, commitment					$ 50,000,000
ERFP agreement, commitment with increase					$ 100,000,000
Minimum | Management fees
Related Party Transaction [Line Items]
Monthly property management fee									$ 15,000
Property management fee, percent								3.00%	3.00%
Minimum | Remington Hotels | Management fees
Related Party Transaction [Line Items]
Monthly property management fee								$ 14,000	$ 15,000
Property management fee, percent									3.00%

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Related Party Transactions (Schedule of Advisory Services Fee) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Advisory services fee	$ 22,641	$ 18,486	$ 20,527
Ashford LLC | Affiliated Entity
Related Party Transaction [Line Items]
Advisory services fee	22,641	18,486	20,527
Ashford LLC | Affiliated Entity | Base advisory fee
Related Party Transaction [Line Items]
Advisory services fee	10,806	9,981	10,834
Ashford LLC | Affiliated Entity | Reimbursable expenses
Related Party Transaction [Line Items]
Advisory services fee	2,297	1,790	2,289
Ashford LLC | Affiliated Entity | Equity-based compensation
Related Party Transaction [Line Items]
Advisory services fee	9,538	7,393	7,404
Ashford LLC | Affiliated Entity | Incentive fee (3)
Related Party Transaction [Line Items]
Advisory services fee	$ 0	$ (678)	$ 0

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Related Party Transactions (Schedule of Reimbursed Operating Expenses) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Ashford Inc.
Related Party Transaction [Line Items]
Corporate, general and administrative	$ 1,983	$ 658	$ 314

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Related Party Transactions (Schedule of Hotel and Project Management Agreements) (Details) - Remington Hotels $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Related Party Transaction [Line Items]
Hotel management fees, including incentive hotel management fees	$ 1,738
Corporate general and administrative	297
Total	$ 2,035

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Related Party Transactions (Summary of Entities with Advisor Interest) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Due to Ashford Inc.	$ 1,474	$ 2,772	$ 2,772
Ashford LLC | FF&E purchases
Related Party Transaction [Line Items]
Total		1,816
Due to Ashford Inc.	0	1,816
Ashford LLC | FF&E purchases | Other Hotel Revenue
Related Party Transaction [Line Items]
Total		0
Ashford LLC | FF&E purchases | Other Hotel Expenses
Related Party Transaction [Line Items]
Total		0
Ashford LLC | FF&E purchases | Management fees
Related Party Transaction [Line Items]
Total		0
Ashford LLC | FF&E purchases | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total		0
Ashford LLC | FF&E purchases | Advisory Services Fee
Related Party Transaction [Line Items]
Total		0
Ashford LLC | FF&E purchases | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total		0
Ashford LLC | FF&E purchases | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total		1,816
Ashford LLC | FF&E purchases | Other Assets
Related Party Transaction [Line Items]
Total		0
Ashford LLC | Insurance claims services
Related Party Transaction [Line Items]
Total	7	108	135
Due to Ashford Inc.	1	12
Ashford LLC | Insurance claims services | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	0	0	0
Ashford LLC | Insurance claims services | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	0	0	0
Ashford LLC | Insurance claims services | Management fees
Related Party Transaction [Line Items]
Total	0	0	0
Ashford LLC | Insurance claims services | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	7	108	135
Ashford LLC | Insurance claims services | Advisory Services Fee
Related Party Transaction [Line Items]
Total	0	0	0
Ashford LLC | Insurance claims services | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	0		0
Ashford LLC | Insurance claims services | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	0	0	0
Ashford LLC | Insurance claims services | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	0	0	0
Ashford LLC | Insurance claims services | Indebtedness, net
Related Party Transaction [Line Items]
Total	0		0
Ashford LLC | Insurance claims services | Other Assets
Related Party Transaction [Line Items]
Total	0	0
Ashford LLC | Insurance claims services | Preferred Stock
Related Party Transaction [Line Items]
Total	0
Ashford LLC | Advisory Services Fee
Related Party Transaction [Line Items]
Due to Ashford Inc.	394	165
Ashford Securities | Broker/Dealer
Related Party Transaction [Line Items]
Total	1,983
Ashford Securities | Broker/Dealer | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Broker/Dealer | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Broker/Dealer | Management fees
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Broker/Dealer | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Broker/Dealer | Advisory Services Fee
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Broker/Dealer | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	1,983
Ashford Securities | Broker/Dealer | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Broker/Dealer | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Broker/Dealer | Indebtedness, net
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Broker/Dealer | Other Assets
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Broker/Dealer | Preferred Stock
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees
Related Party Transaction [Line Items]
Total	410
Ashford Securities | Dealer Manager Fees | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees | Management fees
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees | Advisory Services Fee
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees | Indebtedness, net
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees | Other Assets
Related Party Transaction [Line Items]
Total	0
Ashford Securities | Dealer Manager Fees | Preferred Stock
Related Party Transaction [Line Items]
Total	410
INSPIRE | Audio visual services
Related Party Transaction [Line Items]
Total	1,001	592	560
Due to Ashford Inc.	418	1
INSPIRE | Audio visual services | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	1,001	592	560
INSPIRE | Audio visual services | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	0	0	0
INSPIRE | Audio visual services | Management fees
Related Party Transaction [Line Items]
Total	0	0	0
INSPIRE | Audio visual services | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	0	0	0
INSPIRE | Audio visual services | Advisory Services Fee
Related Party Transaction [Line Items]
Total	0	0	0
INSPIRE | Audio visual services | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	0		0
INSPIRE | Audio visual services | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	0	0	0
INSPIRE | Audio visual services | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	0	0	0
INSPIRE | Audio visual services | Indebtedness, net
Related Party Transaction [Line Items]
Total	0		0
INSPIRE | Audio visual services | Other Assets
Related Party Transaction [Line Items]
Total	0	0
INSPIRE | Audio visual services | Preferred Stock
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Debt placement and related services
Related Party Transaction [Line Items]
Total	491	4,093	1,208
Lismore Capital | Debt placement and related services | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	0	0	0
Lismore Capital | Debt placement and related services | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	0	0	0
Lismore Capital | Debt placement and related services | Management fees
Related Party Transaction [Line Items]
Total	0	0	0
Lismore Capital | Debt placement and related services | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	0	0	0
Lismore Capital | Debt placement and related services | Advisory Services Fee
Related Party Transaction [Line Items]
Total	0	0	0
Lismore Capital | Debt placement and related services | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	0		0
Lismore Capital | Debt placement and related services | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	341	3,071	213
Lismore Capital | Debt placement and related services | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	0	0	0
Lismore Capital | Debt placement and related services | Indebtedness, net
Related Party Transaction [Line Items]
Total	150		(995)
Lismore Capital | Debt placement and related services | Other Assets
Related Party Transaction [Line Items]
Total	0	1,022
Lismore Capital | Debt placement and related services | Preferred Stock
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Broker services
Related Party Transaction [Line Items]
Total	3
Lismore Capital | Broker services | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Broker services | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Broker services | Management fees
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Broker services | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Broker services | Advisory Services Fee
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Broker services | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Broker services | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	3
Lismore Capital | Broker services | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Broker services | Indebtedness, net
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Broker services | Other Assets
Related Party Transaction [Line Items]
Total	0
Lismore Capital | Broker services | Preferred Stock
Related Party Transaction [Line Items]
Total	0
OpenKey | Mobile key app
Related Party Transaction [Line Items]
Total	38	38	34
Due to Ashford Inc.	0	3
OpenKey | Mobile key app | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	0	0	0
OpenKey | Mobile key app | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	38	38	34
OpenKey | Mobile key app | Management fees
Related Party Transaction [Line Items]
Total	0	0	0
OpenKey | Mobile key app | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	0	0	0
OpenKey | Mobile key app | Advisory Services Fee
Related Party Transaction [Line Items]
Total	0	0	0
OpenKey | Mobile key app | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	0		0
OpenKey | Mobile key app | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	0	0	0
OpenKey | Mobile key app | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	0	0	0
OpenKey | Mobile key app | Indebtedness, net
Related Party Transaction [Line Items]
Total	0		0
OpenKey | Mobile key app | Other Assets
Related Party Transaction [Line Items]
Total	0	0
OpenKey | Mobile key app | Preferred Stock
Related Party Transaction [Line Items]
Total	0
Premier | Design and construction services
Related Party Transaction [Line Items]
Total	3,009	2,849	10,123
Due to Ashford Inc.	470	631
Premier | Design and construction services | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	0	0	0
Premier | Design and construction services | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	0	0	0
Premier | Design and construction services | Management fees
Related Party Transaction [Line Items]
Total	0	0	0
Premier | Design and construction services | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	0	0	0
Premier | Design and construction services | Advisory Services Fee
Related Party Transaction [Line Items]
Total	356	344	539
Premier | Design and construction services | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	0		0
Premier | Design and construction services | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	0	0	0
Premier | Design and construction services | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	2,653	2,505	9,584
Premier | Design and construction services | Indebtedness, net
Related Party Transaction [Line Items]
Total	0		0
Premier | Design and construction services | Other Assets
Related Party Transaction [Line Items]
Total	0	0
Premier | Design and construction services | Preferred Stock
Related Party Transaction [Line Items]
Total	0
Pure Wellness | Hypoallergenic premium rooms
Related Party Transaction [Line Items]
Total	141	52	194
Pure Wellness | Hypoallergenic premium rooms | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	0	0	0
Pure Wellness | Hypoallergenic premium rooms | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	141	52	46
Pure Wellness | Hypoallergenic premium rooms | Management fees
Related Party Transaction [Line Items]
Total	0	0	0
Pure Wellness | Hypoallergenic premium rooms | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	0	0	0
Pure Wellness | Hypoallergenic premium rooms | Advisory Services Fee
Related Party Transaction [Line Items]
Total	0	0	0
Pure Wellness | Hypoallergenic premium rooms | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	0		0
Pure Wellness | Hypoallergenic premium rooms | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	0	0	0
Pure Wellness | Hypoallergenic premium rooms | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	0	0	148
Pure Wellness | Hypoallergenic premium rooms | Indebtedness, net
Related Party Transaction [Line Items]
Total	0		0
Pure Wellness | Hypoallergenic premium rooms | Other Assets
Related Party Transaction [Line Items]
Total	0	0
Pure Wellness | Hypoallergenic premium rooms | Preferred Stock
Related Party Transaction [Line Items]
Total	0
RED Leisure | Watersports activities and travel/transportation services
Related Party Transaction [Line Items]
Total	321	139	946
Due to Ashford Inc.	191	144
RED Leisure | Watersports activities and travel/transportation services | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	321	139	0
RED Leisure | Watersports activities and travel/transportation services | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	0	0	946
RED Leisure | Watersports activities and travel/transportation services | Management fees
Related Party Transaction [Line Items]
Total	0	0	0
RED Leisure | Watersports activities and travel/transportation services | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	0	0	0
RED Leisure | Watersports activities and travel/transportation services | Advisory Services Fee
Related Party Transaction [Line Items]
Total	0	0	0
RED Leisure | Watersports activities and travel/transportation services | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	0		0
RED Leisure | Watersports activities and travel/transportation services | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	0	0	0
RED Leisure | Watersports activities and travel/transportation services | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	0	0	0
RED Leisure | Watersports activities and travel/transportation services | Indebtedness, net
Related Party Transaction [Line Items]
Total	0		0
RED Leisure | Watersports activities and travel/transportation services | Other Assets
Related Party Transaction [Line Items]
Total	0	0
RED Leisure | Watersports activities and travel/transportation services | Preferred Stock
Related Party Transaction [Line Items]
Total	0
Remington Hotels | Hotel management services
Related Party Transaction [Line Items]
Total	3,243	1,446	572
Remington Hotels | Hotel management services | Other Hotel Revenue
Related Party Transaction [Line Items]
Total	0	0	0
Remington Hotels | Hotel management services | Other Hotel Expenses
Related Party Transaction [Line Items]
Total	934	410	323
Remington Hotels | Hotel management services | Management fees
Related Party Transaction [Line Items]
Total	2,309	1,036	249
Remington Hotels | Hotel management services | Property Taxes, Insurance and Other
Related Party Transaction [Line Items]
Total	0	0	0
Remington Hotels | Hotel management services | Advisory Services Fee
Related Party Transaction [Line Items]
Total	0	0	0
Remington Hotels | Hotel management services | Corporate General and Administrative
Related Party Transaction [Line Items]
Total	0		0
Remington Hotels | Hotel management services | Write-off of Premiums, Loan Costs and Exit Fees
Related Party Transaction [Line Items]
Total	0	0	0
Remington Hotels | Hotel management services | Investments in Hotel Properties, net
Related Party Transaction [Line Items]
Total	0	0	0
Remington Hotels | Hotel management services | Indebtedness, net
Related Party Transaction [Line Items]
Total	0		$ 0
Remington Hotels | Hotel management services | Other Assets
Related Party Transaction [Line Items]
Total	0	$ 0
Remington Hotels | Hotel management services | Preferred Stock
Related Party Transaction [Line Items]
Total	$ 0

XML

Commitments and Contingencies - Narrative (Details)			10 Months Ended	12 Months Ended
	Jan. 28, 2022 USD ($)	Aug. 05, 2021	Nov. 05, 2019	Dec. 31, 2021 USD ($) hotel managementCompany extension groundLease	Dec. 31, 2020 USD ($) hotel	Dec. 31, 2019 USD ($) hotel	Feb. 16, 2022 USD ($)	Jul. 20, 2020 USD ($)	Dec. 20, 2016 managementCompany hotel
Loss Contingencies [Line Items]
Number of hotel properties | hotel				14	13	13
Loss on litigation settlement				$ (917,000)	$ 0	$ 0
Pending Litigation | Accor
Loss Contingencies [Line Items]
Incorrect amount payable to cure performance test failure								$ 1,031,549
Correct amount payable to cure performance test failure								$ 535,120
Amounts accrued				0
Pending Litigation | Accor | Subsequent Event
Loss Contingencies [Line Items]
Amount to cure performance test failure for 2018							$ 867,682
Amount to cure performance test failure for 2019							$ 784,919
Pending Litigation | California Hotel Employment Policies and Practices
Loss Contingencies [Line Items]
Amounts accrued				$ 500,000
Number of hotel management companies | managementCompany				1
Number of hotel properties | hotel				1
Pending Litigation | California Hotel Employment Policies and Practices | Subsequent Event
Loss Contingencies [Line Items]
Loss on litigation settlement	$ 448,000
Indemnification amount	$ 291,000
Class Action Lawsuit, California Employment Laws
Loss Contingencies [Line Items]
Amounts accrued				$ 0
Number of hotel management companies | managementCompany									1
Number of hotel properties | hotel									2
Intellectual Property Sublease Agreement
Loss Contingencies [Line Items]
Licensing fee, percent fee of total operating revenue		1.00%
Licensing fee, percent fee of gross food and beverage revenues		2.00%
Licensing fee, percent fee of food and beverage profits		25.00%
Leases | Ground Lease
Loss Contingencies [Line Items]
Number of ground leases | groundLease				2
Leases | Ground Lease | La Jolla, CA
Loss Contingencies [Line Items]
Number of extension options | extension				1
Leases | Ground Lease | Yountville, CA
Loss Contingencies [Line Items]
Number of extension options | extension				2
Term of lease extension option				25 years
Capital Commitments
Loss Contingencies [Line Items]
Capital commitment related to general capital improvement				$ 23,000,000
Period of capital commitment related to general capital improvement				12 months
Minimum | Management fees
Loss Contingencies [Line Items]
Monthly property management fee				$ 15,000
Property management fee, percent			3.00%	3.00%
Minimum | Restricted Cash
Loss Contingencies [Line Items]
Replacement reserve escrow as percentage of property revenue				4.00%
Minimum | Management fees
Loss Contingencies [Line Items]
Property management fee, percent				3.00%
Minimum | Leases | Ground Lease | La Jolla, CA
Loss Contingencies [Line Items]
Term of lease extension option				10 years
Maximum | Restricted Cash
Loss Contingencies [Line Items]
Replacement reserve escrow as percentage of property revenue				5.00%
Maximum | Management fees
Loss Contingencies [Line Items]
Property management fee, percent				5.00%
Maximum | Leases | Ground Lease | La Jolla, CA
Loss Contingencies [Line Items]
Term of lease extension option				20 years

XML

Commitments and Contingencies - Schedule of Licensing Fees Incurred (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Other Commitments [Line Items]
Other hotel expenses	$ 287,026	$ 189,977	$ 323,612
Intellectual Property Sublease Agreement
Other Commitments [Line Items]
Other hotel expenses	$ 133

XML

Leases (Narrative) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Jan. 01, 2019
Lessee, Lease, Description [Line Items]
Operating lease liabilities	$ 60,937	$ 60,917
Operating lease right-of-use assets	$ 80,462	$ 81,260
ASU 2016-02
Lessee, Lease, Description [Line Items]
Operating lease liabilities			$ 60,600
Operating lease right-of-use assets			82,500
Derecognized intangible assets			$ 22,300
Minimum
Lessee, Lease, Description [Line Items]
Lease renewal term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Lease renewal term	50 years

XML

Leases (Lease Balances) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Assets
Operating lease right-of-use assets	$ 80,462	$ 81,260
Liabilities
Operating lease liabilities	$ 60,937	$ 60,917

XML

Leases (Lease Cost and Other Information) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease cost	$ 5,349	$ 4,373	$ 5,834
Variable lease, cost (credit), net	954	(305)	1,400
Amortization costs related to the intangible assets and liabilities	512	834	651
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)	$ 3,302	$ 3,261	$ 3,223
Weighted Average Remaining Lease Term
Operating leases	45 years	47 years	47 years
Weighted Average Discount Rate
Operating leases	4.98%	4.98%	4.98%

XML

Leases (Maturities of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Operating Leases
2022	$ 3,338
2023	3,333
2024	3,302
2025	3,294
2026	3,308
Thereafter	143,692
Total future minimum lease payments	160,267
Less: interest	(99,330)
Present value of operating lease liabilities	$ 60,937	$ 60,917

XML

Income Taxes (Narrative) (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) hotel $ / shares	Dec. 31, 2020 USD ($) hotel $ / shares	Dec. 31, 2019 USD ($) hotel $ / shares	Dec. 31, 2018 USD ($)
Income Tax Examination [Line Items]
Number of hotel properties | hotel	14	13	13
Net book income before income taxes	$ 12,600,000	$ (27,000,000.0)	$ 31,000,000
Income tax interest and penalties expense	3,000	7,000	27,000
Income tax interest and penalties accrued	0	0
Valuation allowance	17,343,000	14,938,000	11,581,000	$ 14,483,000
Net operating loss carryforwards	61,200,000
Net operating loss carryforwards, subject to expiration	52,300,000
Net operating loss carryforwards subject to substantial limitation on use	$ 51,600,000
Income tax benefit, net operating loss, CARES Act		3,400,000
Leased by Wholly-Owned or Majority-Owned Taxable REIT Subsidiaries
Income Tax Examination [Line Items]
Number of hotel properties | hotel	13
Virgin Islands Bureau of Internal Revenue | Foreign Tax Authority
Income Tax Examination [Line Items]
Tax holiday amount	$ 907,000	$ 0	$ 807,000
Benefit of the tax holiday on net income (loss) (in dollars per share) | $ / shares	$ 0.02	$ 0.00	$ 0.02

XML

Income Taxes (Income Tax Expense Reconciliation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Income tax (expense) benefit at federal statutory income tax rate of 21%	$ (2,652)	$ 5,619	$ (6,509)
State income tax (expense) benefit, net of U.S. federal income tax benefit	574	3,136	107
State and local income tax (expense) benefit on pass-through entity subsidiaries	(9)	(5)	(16)
Gross receipts and margin taxes	(26)	(13)	(67)
Benefit of USVI Economic Development Commission credit	3,346	783	5,614
Other	(251)	311	16
Valuation allowance	(2,306)	(5,425)	(909)
Total income tax (expense) benefit	$ (1,324)	$ 4,406	$ (1,764)

XML

Income Taxes (Components of Income Tax Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current:
Federal	$ (1,477)	$ 3,431	$ (765)
State	(21)	19	(235)
Total current income tax (expense) benefit	(1,498)	3,450	(1,000)
Deferred:
Federal	131	1,262	(357)
State	43	(306)	(407)
Total deferred income tax (expense) benefit	174	956	(764)
Total income tax (expense) benefit	$ (1,324)	$ 4,406	$ (1,764)

XML

Income Taxes (Deferred Tax Assets (Liabilities)) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets (liabilities):
Tax intangibles basis greater than book basis	$ 722	$ 718
Allowance for doubtful accounts	28	50
Unearned income	2,147	1,314
Federal and state net operating losses	15,677	14,166
Capital Loss Carryforward	529	523
Other	178	399
Accrued expenses	612	465
Tax property basis greater than book basis	(2,487)	(2,721)
Prepaid expenses	(4)	(91)
Net deferred tax asset	17,402	14,823
Valuation allowance	(17,343)	(14,938)	$ (11,581)	$ (14,483)
Net deferred tax asset (liability)	$ 59
Net deferred tax asset (liability)		$ (115)

XML

Income Taxes (Change in Valuation Allowance) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of year	$ 14,938	$ 11,581	$ 14,483
Additions	2,405	3,357	0
Deductions	0	0	(2,902)
Balance at end of year	$ 17,343	$ 14,938	$ 11,581

XML

Intangible Assets, net (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Cost	$ 5,682	$ 5,682
Accumulated amortization	(1,421)	(1,042)
Total	$ 4,261	$ 4,640

XML

Intangible Assets, net (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Amortization of intangibles	$ 379	$ 379	$ 379
Ritz-Carlton Sarasota, Florida | Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Expected life	15 years

XML

Intangible Assets, net (Schedule of Future Amortization Expense) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Intangible Assets, net
2022	$ 379
2023	379
2024	379
2025	379
2026	379
Thereafter	2,366
Total	$ 4,261	$ 4,640

XML

Concentration of Risk (Details)	12 Months Ended
	Dec. 31, 2021
Revenue | Generated Excess of 10% of Total | Three Hotel Properties
Concentration Risk [Line Items]
Concentration risk	48.00%

XML

Segment Reporting (Details)	12 Months Ended
	Dec. 31, 2021 segment
Segment Reporting [Abstract]
Number of operating segments	1

XML

Subsequent Event (Details) $ in Thousands		12 Months Ended
	Feb. 02, 2022 USD ($) extension	Dec. 31, 2021 USD ($) extension	Dec. 31, 2020 USD ($)
Subsequent Event [Line Items]
Indebtedness, gross		$ 1,180,750	$ 1,128,724
Mortgages | Mortgage Loan 1
Subsequent Event [Line Items]
Indebtedness, gross		$ 67,500	$ 67,500
Number of extension options | extension		3
Term of extension options (in years)		1 year
Subsequent Event | Mortgages | Mortgage Loan 1
Subsequent Event [Line Items]
Indebtedness, gross	$ 70,500
Debt term	2 years
Number of extension options | extension	3
Term of extension options (in years)	1 year
Subsequent Event | Mortgages | Mortgage Loan 1 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Subsequent Event [Line Items]
Basis spread on variable rate	2.86%

XML

Schedule III - Real Estate and Accumulated Depreciation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 1,094,500
Initial Cost of Land	484,644
Initial Cost of FF&E, Buildings and improvements	1,117,238
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	243,196
Gross Carrying Amount At Close of Period, Land	484,644
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	1,360,434
Gross Carrying Amount At Close of Period, Total	1,845,078	$ 1,784,849	$ 1,791,174	$ 1,562,806
Accumulated Depreciation	$ 399,481	$ 360,259	$ 309,752	$ 262,905
Building
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Estimated useful life	39 years
Building Improvements
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Estimated useful life	7 years 6 months
Minimum | Furniture and Fixtures
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Estimated useful life	1 year 6 months
Maximum | Furniture and Fixtures
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Estimated useful life	5 years
Washington DC Hilton
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 107,000
Initial Cost of Land	45,721
Initial Cost of FF&E, Buildings and improvements	106,245
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	34,436
Gross Carrying Amount At Close of Period, Land	45,721
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	140,681
Gross Carrying Amount At Close of Period, Total	186,402
Accumulated Depreciation	64,999
La Jolla, CA Hilton
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	88,000
Initial Cost of Land	0
Initial Cost of FF&E, Buildings and improvements	114,614
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	8,224
Gross Carrying Amount At Close of Period, Land	0
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	122,838
Gross Carrying Amount At Close of Period, Total	122,838
Accumulated Depreciation	51,047
Seattle, WA Marriott
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	134,700
Initial Cost of Land	31,888
Initial Cost of FF&E, Buildings and improvements	112,176
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	12,486
Gross Carrying Amount At Close of Period, Land	31,888
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	124,662
Gross Carrying Amount At Close of Period, Total	156,550
Accumulated Depreciation	45,547
Philadelphia, PA The Notary Hotel
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	84,600
Initial Cost of Land	9,814
Initial Cost of FF&E, Buildings and improvements	94,029
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	33,320
Gross Carrying Amount At Close of Period, Land	9,814
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	127,349
Gross Carrying Amount At Close of Period, Total	137,163
Accumulated Depreciation	52,655
San Francisco CA Courtyard By Marriott
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	116,300
Initial Cost of Land	22,653
Initial Cost of FF&E, Buildings and improvements	72,731
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	60,666
Gross Carrying Amount At Close of Period, Land	22,653
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	133,397
Gross Carrying Amount At Close of Period, Total	156,050
Accumulated Depreciation	59,333
Chicago, IL Chicago Sofitel Magnificent Mile
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	99,400
Initial Cost of Land	12,631
Initial Cost of FF&E, Buildings and improvements	140,369
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	11,480
Gross Carrying Amount At Close of Period, Land	12,631
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	151,849
Gross Carrying Amount At Close of Period, Total	164,480
Accumulated Depreciation	39,599
Key West, FL Pier House Resort
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	80,000
Initial Cost of Land	59,731
Initial Cost of FF&E, Buildings and improvements	33,011
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	4,428
Gross Carrying Amount At Close of Period, Land	59,731
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	37,439
Gross Carrying Amount At Close of Period, Total	97,170
Accumulated Depreciation	11,889
Yountville, CA Bardessono
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	40,000
Initial Cost of Land	0
Initial Cost of FF&E, Buildings and improvements	64,184
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	2,060
Gross Carrying Amount At Close of Period, Land	0
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	66,244
Gross Carrying Amount At Close of Period, Total	66,244
Accumulated Depreciation	12,831
Yountville CA, Hotel Yountville
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	51,000
Initial Cost of Land	47,849
Initial Cost of FF&E, Buildings and improvements	48,567
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	273
Gross Carrying Amount At Close of Period, Land	47,849
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	48,840
Gross Carrying Amount At Close of Period, Total	96,689
Accumulated Depreciation	10,842
Beaver Creek, CO Park Hyatt
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	67,500
Initial Cost of Land	89,117
Initial Cost of FF&E, Buildings and improvements	56,383
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	5,649
Gross Carrying Amount At Close of Period, Land	89,117
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	62,032
Gross Carrying Amount At Close of Period, Total	151,149
Accumulated Depreciation	13,431
Ritz-Carlton Sarasota, Florida
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	99,500
Initial Cost of Land	83,630
Initial Cost of FF&E, Buildings and improvements	99,782
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	(8,894)
Gross Carrying Amount At Close of Period, Land	83,630
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	90,888
Gross Carrying Amount At Close of Period, Total	174,518
Accumulated Depreciation	11,897
St. Thomas, USVI Ritz-Carlton
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	42,500
Initial Cost of Land	25,533
Initial Cost of FF&E, Buildings and improvements	38,467
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	76,471
Gross Carrying Amount At Close of Period, Land	25,533
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	114,938
Gross Carrying Amount At Close of Period, Total	140,471
Accumulated Depreciation	16,357
Truckee, CA Ritz-Carlton
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	54,000
Initial Cost of Land	26,731
Initial Cost of FF&E, Buildings and improvements	91,603
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	2,461
Gross Carrying Amount At Close of Period, Land	26,731
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	94,064
Gross Carrying Amount At Close of Period, Total	120,795
Accumulated Depreciation	8,082
Mr. C Beverly Hills Hotel
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	30,000
Initial Cost of Land	29,346
Initial Cost of FF&E, Buildings and improvements	45,077
Costs Capitalized Since Acquisition, Land	0
Costs Capitalized Since Acquisition, FF&E, Buildings and improvements	136
Gross Carrying Amount At Close of Period, Land	29,346
Gross Carrying Amount at Close of Period, FF&E, Buildings and improvements	45,213
Gross Carrying Amount At Close of Period, Total	74,559
Accumulated Depreciation	$ 972

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Schedule III - Real Estate and Accumulated Depreciation (Roll Forward) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Investment in real estate:
Beginning balance	$ 1,784,849	$ 1,791,174	$ 1,562,806
Additions	95,663	16,067	262,541
Write-offs	(32,677)	(22,392)	(14,445)
Impairment	0	0	(476)
Sales/disposals	(2,757)	0	(19,252)
Ending balance	1,845,078	1,784,849	1,791,174
Accumulated depreciation:
Beginning balance	360,259	309,752	262,905
Depreciation expense	73,054	72,899	69,195
Impairment	0	0	(105)
Write-offs	(32,677)	(22,392)	(14,445)
Sales/disposals	(1,155)	0	(7,798)
Ending balance	399,481	360,259	309,752
Investment in real estate, net	$ 1,445,597	$ 1,424,590	$ 1,481,422