What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-03-10 compared with 2021-03-05 · 276 added, 190 removed, 1433 unchanged (25% of the section changed)

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.

We are an externally-advised Maryland corporation formed in 2013 that invests primarily in high revenue per available room (“RevPAR”) luxury hotels and resorts.

2 unchanged sentences

Two times the U.S.

national average RevPAR was $91 for the year ended December 31, 2020.

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.

1 unchanged sentence

We operate in the direct hotel investment segment of the hotel lodging industry.

As of March 3, 2021, we owned interests in thirteen hotel properties in six states, the District of Columbia and St.

As of March 8, 2022, we owned interests in 14 hotel properties in six states, the District of Columbia and St.

Virgin Islands with 3,875 total rooms, or 3,640 net rooms, excluding those attributable to our joint venture partner.

1 unchanged sentence

urban and resort locations with favorable growth characteristics resulting from multiple demand generators.

We own eleven of our hotel properties directly, and the remaining two hotel properties through an investment in a majority-owned consolidated joint venture entity.

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.

8 unchanged sentences

Bennett, chairman of our board of directors, and Mr.

Archie Bennett, Jr., chairman emeritus of Ashford Trust.

Archie Bennett, Jr.,

chairman emeritus of Ashford Trust.

Remington Hotels, a subsidiary of Ashford Inc.

after November 6, 2019, manages three of our thirteen hotel properties.

after November 6, 2019, manages four of our 14 hotel properties.

Third-party management companies manage the remaining hotel properties.

1 unchanged sentence

has an ownership interest.

These products and services include, but are not limited to project management 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.

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.

4 unchanged sentences

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 March 3, 2021 would have increased the Bennetts’ ownership interest in Ashford Inc.

to approximately 66.9%.

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.

5 unchanged sentences

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.

The negative impact on room demand within our portfolio stemming from the COVID-19 pandemic was significant in 2020.

A more detailed discussion of the ongoing impact of COVID-19 on our business is contained in “Item 7.

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.”

15 unchanged sentences

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 performance.

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.

1 unchanged sentence

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 (for example, spa, food and beverage, parking, and Internet).

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.

1 unchanged sentence

Disciplined Capital Allocation Strategy .

We intend to pursue a disciplined capital allocation strategy as it relates to the acquisition, operation, disposition and financing of assets in our portfolio and those that we may acquire in the future.

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.

As of March 3, 2021, we own interests in a high-quality, geographically diverse portfolio of thirteen hotel properties located in six states, the District of Columbia and St.

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.

Virgin Islands.

1 unchanged sentence

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 thirteen hotel properties in our portfolio operate under premium brands affiliated with Marriott International, Inc.

Eight of the 14 hotel properties in our portfolio operate under premium brands affiliated with Marriott International, Inc.

(“Marriott”) and Hilton Worldwide, Inc.

One hotel property is managed by Accor Management US Inc.

(“Accor”), one is managed by Hyatt Corporation (“Hyatt”) and three hotel properties are managed by Remington Hotels, a subsidiary of Ashford Inc.

approximately 85% of the rooms revenue was generated by transient business;

approximately 13% was generated by group sales and 2% was generated by contract sales.

(“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:

7 unchanged sentences

Marriott Seattle Waterfront Seattle, WA 361 100 % 52.22 % 219.51 114.64 3,557

The Clancy (3)

San Francisco, CA 410 100 % 19.52 % 281.66 54.97 (3,695)

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

10 unchanged sentences

Hotel Yountville Yountville, CA 80 100 % 57.90 % 762.15 441.29 6,433

C Beverly Hills Hotel (5)

Los Angeles, CA 143 100 % 63.88 % 332.86 212.62 1,052

Total / Weighted Average (6)

6 unchanged sentences

The ground lease contains one extension option of either 10 or 20 years dependent upon capital investment spend during the lease term.

(3) On October 1, 2020, the Company announced the opening The Clancy (previously known as “Courtyard San Francisco Downtown”).

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

1 unchanged sentence

The ground lease contains two 25-year extension options, at our election.

(6) Calculated on a portfolio basis for the thirteen hotel properties in our portfolio as of December 31, 2020.

Hilton La Jolla Torrey Pines, La Jolla, CA

(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 HHC Partners III LP is owned by Park Hotels & Resorts, Inc.

The remaining 25% partnership interest in Ashford

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.

2 unchanged sentences

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.

Each room has a private balcony or patio with ocean, garden or golf course views.

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.

2 unchanged sentences

• Meeting Space :

Approximately 60,000 square feet of meeting space, including:

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;

5 unchanged sentences

• Other Amenities :

The hotel has a fitness center, outdoor pool, outdoor whirlpool, tennis courts, basketball court, business center, valet parking and a gift shop.

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—Lindbergh Field.

The hotel is approximately 17 miles from the San Diego International Airport.

Operating History.

16 unchanged sentences

6,235 353 15,695

EBITDA Margin (1)

Hotel EBITDA Margin (1)

24.2 % 2.3 % 33.4 %

19 unchanged sentences

• Other Amenities :

The hotel has a newly renovated health club as well as a gift shop, business center and valet parking.

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

Location and Access .

20 unchanged sentences

(3,342) (5,076) 14,141

EBITDA Margin (1)

Hotel EBITDA Margin (1)

(24.0) % (39.9) % 24.7 %

3 unchanged sentences

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, WA

Marriott Seattle Waterfront, Seattle, Washington

Our subsidiary, Ashford Seattle Waterfront LP, owns a fee simple interest in the Marriott Seattle Waterfront.

12 unchanged sentences

• Food and Beverage :

The Marriott Seattle Waterfront hosts (i) Hook and Plow, a full-service restaurant with 192 seats;

The Marriott Seattle Waterfront hosts:

(i) Hook and Plow, a full-service restaurant with 192 seats;

(ii) Lobby Bar/Library with 120 seats;

24 unchanged sentences

3,557 (1,733) 14,250

EBITDA Margin (1)

Hotel EBITDA Margin (1)

19.4 % (24.7) % 38.0 %

1 unchanged sentence

(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, CA

The Clancy, San Francisco, California

Our subsidiary, Ashford San Francisco II LP, owns a fee simple interest in The Clancy.

5 unchanged sentences

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 to provide travelers with an intriguing and unique experience.

On November 1, 2017, we announced plans to convert 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, public areas and façade.

Additional amenities and accessories were added to the guest rooms to make them more commensurate with an upper upscale brand.

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.

On October 1, 2020, we announced the opening of The Clancy.

The hotel is located conveniently downtown in the heart of the SoMa district of San Francisco.

3 unchanged sentences

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 includes completely reconfigured outlets.

The Seven Square Tap Room, open for breakfast, lunch and dinner has 118 seats.

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 of Seven Square 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, seating a total of 43 guests including 10 at the bar, 10 at the community table and 23 in various other seating configurations.

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.

2 unchanged sentences

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

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.

1 unchanged sentence

• Other Amenities :

The hotel has a fully equipped fitness center with plans to expand this area.

SOMA Mercantile, a gift shop of approximately 100 square feet contains food and retail items unique to San Francisco, along with national brand favorites.

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.

5 unchanged sentences

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 .

14 unchanged sentences

14,627 8,249 40,576

EBITDA Margin (1)

Hotel EBITDA (1)

(2,217) (3,695) 14,248

EBITDA Margin (1)

Hotel EBITDA Margin (1)

(12.8) % (38.4) % 32.3 %

1 unchanged sentence

The Notary Hotel, Philadelphia, PA

The Notary Hotel, Philadelphia, Pennsylvania

Our subsidiary, Ashford Philadelphia Annex LP, owns a fee simple interest in The Notary Hotel.

37 unchanged sentences

1,924 (1,633) 9,850

EBITDA Margin (1)

Hotel EBITDA Margin (1)

13.6 % (18.1) % 30.9 %

1 unchanged sentence

Sofitel Chicago Magnificent Mile, Chicago, IL

Sofitel Chicago Magnificent Mile, Chicago, Illinois

On February 24, 2014, we acquired a fee simple interest in the Sofitel Chicago Magnificent Mile.

4 unchanged sentences

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 Chicago skyline.

The 32-story building was designed by French architect Jean-Paul Viguier and has views of Lake Michigan and the

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.

1 unchanged sentence

• Meeting Space :

Approximately 12,500 square feet of conference space.

Approximately 10,000 square feet of meeting space.

• Food and Beverage :

The Sofitel Chicago Magnificent Mile includes (i) the Café des Architectes, an 82 seat contemporary, Michelin Guide recommended restaurant featuring modern French cuisine;

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 Café des Architectes;

(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).

24 unchanged sentences

Pier House Resort & Spa, Key West, FL

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.

32 unchanged sentences

18,039 6,707 11,700

EBITDA Margin (1)

Hotel EBITDA Margin (1)

57.4 % 42.6 % 46.7 %

1 unchanged sentence

Bardessono Hotel and Spa, Yountville, CA

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 two LEED Platinum certified hotels in California and one of five LEED Platinum certified hotels in the U.S.

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.

12 unchanged sentences

Outdoor amenities include a rooftop pool and a vegetable garden.

Carbon fiber bicycles and five Lexus vehicles are available for guest use.

Complimentary bicycles and five Lexus vehicles are available for guest use.

Location and Access .

19 unchanged sentences

9,208 1,018 5,610

EBITDA Margin (1)

Hotel EBITDA Margin (1)

39.5 % 10.3 % 29.4 %

18 unchanged sentences

(iii) Sails, a 155-seat beachside restaurant and bar;

(iv) Coconut Cove, a second beachside 118 seat restaurant, on the grounds of the adjacent Ritz-Carlton Destination Club.

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.

27 unchanged sentences

27,550 4,624 11,399

EBITDA Margin (1)

Hotel EBITDA Margin (1)

34.3 % 14.6 % 43.6 %

1 unchanged sentence

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

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.

8 unchanged sentences

• Food and Beverage :

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

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 :

3 unchanged sentences

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 event 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.

3 unchanged sentences

December 31, 2017 Period from January 1, 2017 through

March 30, 2017 Year Ended December 31, 2016

March 30, 2017

2021 2020 2019 2018

13 unchanged sentences

9,609 4,977 10,142

EBITDA Margin (1)

Hotel EBITDA Margin (1)

26.6 % 19.5 % 24.9 %

2 unchanged sentences

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 and for the year ended December 31, 2016 represent periods before our ownership and were obtained from the prior owner.

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.

The financial statements as of and for the year ended December 31, 2016 were audited and included in an amendment to our Current Report on Form 8-K filed on June 13, 2017.

No financial statements were prepared, audited or reviewed for the period from January 1, 2017 through March 30, 2017.

Hotel Yountville, Yountville, CA

Hotel Yountville, Yountville, California

On May 11, 2017, we acquired a 100% interest in the 80-room Hotel Yountville in Yountville, California.

5 unchanged sentences

• Meeting Space :

The property has approximately 1,200 square feet of indoor and 1,500 square feet of outdoor meeting space.

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

• Food and Beverage :

4 unchanged sentences

Location and Access .

Located in the heart of Yountville, CA, 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.

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.

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 .

3 unchanged sentences

Period from January 1, 2017 through

May 10, 2017 Year Ended December 31, 2016

2021 2020 2019 2018

13 unchanged sentences

6,433 (86) 6,202

EBITDA Margin (1)

Hotel EBITDA Margin (1)

42.4 % (1.5) % 40.5 %

2 unchanged sentences

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 and for the year ended December 31, 2016 represent periods before our ownership and were obtained from the prior owner.

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.

The financial statements as of and for the year ended September 30, 2016 were audited and as of and for the three months ended December 31, 2016 were reviewed and included in an amendment to our Current Report on Form 8-K filed on July 17, 2017.

No financial statements were prepared, audited or reviewed for the period from January 1, 2017 through May 10, 2017.

The Ritz-Carlton, Sarasota, FL

On April 4, 2018, we acquired a 100% interest in the 266-room Ritz-Carlton Sarasota in Sarasota, Florida for $171.4 million and a 22-acre plot of vacant land for $9.7 million.

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.

3 unchanged sentences

• Meeting Space :

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

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 :

17 unchanged sentences

$ 545.68 $ 410.53 $ 391.92 $ 375.23 $ 334.02 $ 484.46 $ 364.04

$ 420.14 $ 221.49 $ 287.68 $ 275.25 $ 238.74 $ 382.06 $ 284.38

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, 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,

2021 2020 2019

Total Revenue

4 unchanged sentences

25,663 11,502 13,626

EBITDA Margin (1)

Hotel EBITDA Margin (1)

31.0 % 23.2 % 20.8 %

6 unchanged sentences

No financial statements were prepared, audited or reviewed for the period from January 1, 2018 through April 3, 2018.

The Ritz-Carlton, Lake Tahoe, CA

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.

1 unchanged sentence

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, an 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.

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:

5 unchanged sentences

• Other Amenities :

The property offers 170 luxurious guest rooms and suites with in-room gas fire places 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.

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 .

25 unchanged sentences

January 1, 2019 through

January 14, 2019 Year Ended

December 31, 2018 (unaudited)

January 14, 2019

Total Revenue

4 unchanged sentences

7,835 1,867 9,007 8,175 832

EBITDA Margin (2)

Hotel EBITDA Margin (2)

18.2 % 6.9 % 19.5 % 18.9 % 28.7 %

5 unchanged sentences

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.

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.

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.

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.

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.

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.

Operating History .

The following table shows certain historical information regarding The Mr.

C Beverly Hills Hotel since 2019:

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,

143 143 143 143 143

50.1 % 63.9 % 40.7 % 30.5 % 74.5 %

$ 327.85 $ 332.86 $ 322.42 $ 336.43 $ 334.40

$ 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):

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,

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 %

__________________

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

1 unchanged sentence

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 key executives with 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.

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.

5 unchanged sentences

See “Certain Agreements-Hotel Management Agreement.”

Project Management

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 project management services through Premier, including construction management, interior design, architectural oversight, and the purchasing, expediting, warehousing coordination, freight management and supervision of installation of FF&E, and related services.

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

installation of furniture, fixtures and equipment (“FF&E”), and related services.

See “Certain Agreements—Premier Master Project Management Agreement.”

1 unchanged sentence

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 three of our hotel properties are operated pursuant to a hotel management agreement with Remington Hotels, a hotel management company acquired by Ashford Inc.

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.

13 unchanged sentences

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.

As of December 31, 2020, 100.0% of our debt is variable rate debt with a weighted average interest rate of LIBOR plus 2.44%.

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

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 also from time to time receive additional capital from our advisor pursuant to the Enhanced Return Funding Program (the “ERFP Agreement”).

See “Certain Agreements—ERFP Agreement.”

We may utilize Lismore Capital II LLC (“Lismore”), a subsidiary of Ashford Inc.

7 unchanged sentences

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, among us, Braemar OP, Braemar TRS, Ashford Inc.

and Ashford LLC.

14 unchanged sentences

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, project management and certain other services offered by Ashford Inc.

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.

5 unchanged sentences

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.

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 omission (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).

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.

10 unchanged sentences

(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;

(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;

4 unchanged sentences

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 5th 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 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 base fee is payable on the fifth business day of each month.

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:

1 unchanged sentence

▪ 1/12 th 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 month by each member of a select peer group, divided by the total market capitalization of such peer group member.

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.

8 unchanged sentences

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.

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.

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”).

2 unchanged sentences

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 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 the 2013 Equity Incentive Plan and the Advisor Equity Incentive Plan, there are no limitations on the amount of these equity awards.

These annual equity awards are intended to provide an incentive to Ashford LLC and its

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.

18 unchanged sentences

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 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:

In the advisory agreement, we declared

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.

10 unchanged sentences

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.

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 comprised solely of independent members of our board of directors to review all related party transactions that involve conflicts.

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).

1 unchanged sentence

ERFP Agreement

On January 15, 2019, we entered into the ERFP Agreement and Amendment No.

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.

2 unchanged sentences

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 TRSs on a rent-free basis.

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.

5 unchanged sentences

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 business 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).

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.

2 unchanged sentences

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 TRS and with a fair market value equal to the value of such FF&E as established in connection with such disposition.

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.

The initial term of the ERFP Agreement is two (2) years (the “Initial Term”), which began on January 15, 2019.

3 unchanged sentences

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.

\ Hotel Management Agreements

3 unchanged sentences

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 and Hotel Yountville (which are operated by Remington Hotels) are operated pursuant to a hotel management agreement with one of four independent hotel management companies:

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.

1 unchanged sentence

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 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:

29 unchanged sentences

Two 10-year options

Each hotel management company receives a base management fee (expressed as a percentage of gross revenues) ranging from 2.5%–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:

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)

13 unchanged sentences

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

Hotel Management Fee (1)

Incentive Fee

Marketing Fee

Owner’s Priority (2)

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.

7 unchanged sentences

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

Hotel Management Fee (1)

3 unchanged sentences

Investment (2)

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 (4)

Not applicable

Park Hyatt Beaver Creek Resort & Spa Greater of 3.0% or $2,035,009 (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 $14,288.17 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

The Ritz-Carlton Lake Tahoe 3% The sum of (i) 15% 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;

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

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

__________________

2 unchanged sentences

For some properties these amounts will continue to increase over time by the amount of additional owner-funded capital expenses.

(3) The Management fee at this hotel was subject to a temporary reduction with the opening of a new Marriott branded hotel.

The management fee returns to 3.0% in 2021.

(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.

4 unchanged sentences

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 extension to five 10-year extensions.

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.

16 unchanged sentences

(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 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 Ritz-Carlton Lake Tahoe, The Ritz-Carlton Sarasota, and The Ritz-Carlton St.

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.

5 unchanged sentences

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, such as (i) we are in default under the hotel management agreement, (ii) such party is known to be of bad moral character or has been convicted of a felony or is in control of or controlled by persons who have been convicted of felonies, (iii) such party does not (in the reasonable judgment of manager) have sufficient financial resources and liquidity to fulfill our obligations under the hotel management agreement, or (iv) such party has an ownership interest, either directly or indirectly, in a brand or group of hotels that competes with the manager or any affiliate thereof.

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.

4 unchanged sentences

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 manager (with certain details regarding the terms of sale).

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

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.

4 unchanged sentences

The base term of each of our two management agreements with Hilton (or its affiliates) was 10 years, expiring December 31, 2013.

Each of these agreements has been extended through December 31, 2023 and has three 10-year automatic extension options remaining, at the discretion of the manager.

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.

6 unchanged sentences

The performance criteria are:

(i) the hotel’s operating cash flow (before deducting our priority return) does not equal or exceed 85% of the our priority return (as defined in the hotel management agreement);

(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 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.

8 unchanged sentences

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 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;

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);

28 unchanged sentences

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, 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 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.

9 unchanged sentences

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 fifteen days’ written notice to the defaulting party.

Early Termination for Casualty.

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.

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.

8 unchanged sentences

Remington Hotels Master Hotel Management Agreement

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 project management services with respect to hotels owned or leased by us.

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 Pier House Resort & Spa, the Bardessono Hotel and Spa and Hotel Yountville.

Pursuant to the master hotel management agreement, Remington Hotels currently manages the

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.

12 unchanged sentences

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

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.

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.

9 unchanged sentences

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:

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 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.

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.

7 unchanged sentences

Upon a performance test failure, the TRS lessee must give Remington Hotels two years to cure.

lessee, to make a determination as to whether or not another management company could manage the hotel in a materially more efficient manner.

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.

10 unchanged sentences

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

All non-routine repairs and maintenance, either to a hotel or its fixtures,

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

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.

28 unchanged sentences

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 limitations;

(i) the fraud, willful misconduct or gross negligence of Remington Hotels subject to certain

(ii) infringement by Remington Hotels of any third party’s intellectual property rights;

21 unchanged sentences

Premier Master Project Management Agreement

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 project management services to be provided to us by Premier, solely in order to effect the transfer of the project management 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 project management services to all of our hotels.

The master project management agreement will also govern the provision of project management services to hotels we acquire in the future, as Premier has the right to provide project management 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.

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.”

5 unchanged sentences

Amounts Payable under the Master Project Management Agreement.

The master project management agreement provides that the TRS lessee will pay Premier a project management 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 project management fee will be 3% of total project costs in excess of the 5% of gross revenue threshold.

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:

14 unchanged sentences

• 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 project management 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 project management fees and market service fees for the preceding full fiscal year) and (ii) nine.

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.

17 unchanged sentences

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.

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.

15 unchanged sentences

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 specifically set forth in such agreements).

specifically set forth in such agreements).

85 unchanged sentences

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 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 investment opportunities are identified and are subject to the project management MEA, and we have not materially modified our initial investment

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.

4 unchanged sentences

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.

23 unchanged sentences

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.

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.

18 unchanged sentences

Virgin Islands, is owned by our USVI TRS.

The leases for our hotel properties include a term of five years, which expires on December 31, 2025.

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.

7 unchanged sentences

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.

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.

64 unchanged sentences

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 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.

Percentage rent is adjusted at least

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.

4 unchanged sentences

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.

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.

24 unchanged sentences

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.

We carry comprehensive general liability, “All Risk” property, business interruption, cyber security, 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.

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, war or acts of God.

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.

20 unchanged sentences

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 to utilize cash on hand, cash generated through borrowings and issuances of common or preferred stock to fund required distributions.

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.

1 unchanged sentence

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”).

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 Executive Officer, Chief Financial Officer and Chief Accounting Officer will be disclosed on our website under the Corporate Governance section.

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.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business