Concentration

12 Months Ended

Dec. 31, 2011

Concentration

Concentration

9. Concentration

Geographic Concentration

        At December 31, 2011, our 473 properties were located in 44 states in the United States, Ontario, Canada and Puerto Rico. Between 6% and 12% of our properties, by investment, were located in each of California, Texas and Georgia. Our two hotels in Ontario, Canada and our hotel in Puerto Rico represent 1% and 2% of our hotels, by investment, respectively.

Credit Concentration

        All of our managers and tenants are subsidiaries of other companies. The percentage of our minimum return payments and minimum rents, for each management or lease agreement is shown below, as of December 31, 2011.

Agreement Reference Name	Number of Properties		Minimum Return/ Minimum Rent		% of Total			Investment(1)		% of Total
Marriott (No. 1)		53	$	67,557		12	%	$	676,948		10	%
Marriott (No. 234)		71		98,854		17	%		957,026		15	%
Marriott (No. 5)		1		9,495		2	%		90,078		1	%
InterContinental		130		156,220		28	%		1,820,743		27	%
Hyatt		22		22,037		4	%		301,942		5	%
Carlson		11		12,920		2	%		202,251		3	%
TA (No. 1)(2)		145		144,391		25	%		1,897,029		28	%
TA (No. 2)		40		55,852		10	%		725,407		11	%
Total		473	$	567,326		100	%	$	6,671,424		100	%

(1)

Amounts exclude expenditures made from FF&E reserves funded from hotel operations, but include amounts funded by us separately.

(2)

In addition to minimum rents, the minimum rent amount for the TA No. 1 lease includes approximately $5,069 of ground rent due to us from TA in 2012.

        Minimum return and minimum rent payments due to us under some of our hotel management agreements and leases are supported by guarantees. The guarantee provided by Marriott, with respect to the 71 hotels (Marriott No. 234 Contract) managed by Marriott is limited to $40,000 ($30,873 remaining at December 31, 2011) and expires on December 31, 2017. The guarantee provided by Hyatt, with respect to the 22 hotels managed by Hyatt is limited to $50,000 ($21,020 remaining at December 31, 2011). The guarantee provided by Carlson, with respect to the 11 hotels managed by Carlson is limited to $40,000 ($25,598 remaining at December 31, 2011). The guarantee provided by Marriott with respect to the one hotel leased by Marriott (Marriott No. 5 Contract) is unlimited and does not expire.

        Security deposits support minimum return and minimum rent payments that may be due to us under some of our management agreements and leases. As of December 31, 2011, we hold security deposits for our 53 hotels leased by Host ($50,540) and 130 hotels managed or leased by InterContinental ($55,820). The security deposit we held for our Marriott No. 234 Contract has been exhausted, but may be replenished in the future from available cash flow.

        Certain of our managed hotel portfolios had net operating results that were, in the aggregate, $60,264, $85,592 and $75,205 less than the minimum returns due to us in 2011, 2010 and 2009, respectively. When the shortfalls are funded by the managers of these hotels under the terms of our operating agreements, we reflect such fundings (including security deposit applications) in our consolidated statements of income as a reduction of hotel operating expenses. The reduction to operating expenses was $58,771, $85,592 and $75,205 in 2011, 2010 and 2009, respectively.

Significant Tenant

        TA is the lessee of 39% of our investments, at cost, as of December 31, 2011. See Note 8 for further information regarding our leases with TA.