Company: DRH-PA
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001298946-25-000015
Chunk: 57

Company: DiamondRock Hospitality Co
Filing Date: 2025-02-28
Form: 10-K
Item: Item 2
Chunk 57
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 Lauderdale Beach Resort2%15%(4)Westin San Diego Bayview1.5%(10)10%(5)Westin Washington D.C. City Center1.5%(6)10%Worthington Renaissance Fort Worth Hotel3%25%

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(1)As a percentage of gross revenues.    

(2)As a percentage of hotel operating profits above a specified return on our invested capital or specified operating profit thresholds.

(3)Aggregate management fees (base plus incentive) are capped at 3.5% of total operating revenue.

(4)Total incentive management fees are capped at 1% of gross revenues.

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(5)The property will not individually earn their incentive fee unless a collective owner's priority threshold is met.

(6)The base management fee is the sum of 1.5% of gross revenues and 1.5% gross operating profit. Total management fees are capped at 3% of gross revenues.

(7)Calculated as 15% of net operating income.

(8)The incentive management fee increases to 1.5% of gross revenues if the gross operating profit exceeds a specified amount plus any owner's priority.

(9)The incentive management fee is capped at 0.75% of gross revenues. 

(10)Total management fees are capped at 2.5% of gross revenues.

(11)The base management fee decreases to 0.5% of gross revenues if the annual gross operating profit is less than $36 million. Effective January 1, 2025, the GOP threshold increases annually by the percentage increase in CPI. Base management fees for the year ended December 31, 2024 were 0.5% of gross revenues.

(12)The base management fee decreased from 2.25% of gross revenues to 2% of gross revenues beginning September 1, 2024.

Additional information regarding fees incurred under hotel management agreements can be found in Note 13 to our accompanying consolidated financial statements. 

Franchise Agreements

The following table sets forth the terms of the hotel franchise agreements for our 20 franchised hotels as of December 31, 2024:

Franchised HotelsExpiration Date of AgreementFranchise FeeAC Hotel Minneapolis Downtown10/20416% of gross room salesAtlanta Marriott Alpharetta9/2040 (1)6% of gross room sales and 3% of gross food and beverage salesEmbassy Suites by Hilton Bethesda2/203