Lease Agreement

Under our lease agreements, we lease a hotel building from a property owner or other partner and are entitled to the benefits of, and carry the risks associated with, operating the hotel. We derive revenue primarily from room sales and food and beverage sales in restaurants, bars and banqueting. Typically, our lease agreements include a variable rent clause under which we are obligated to pay a variable rent based on a percentage of the total revenue generated by a hotel ("variable rent") and the majority of our lease agreements also include a minimum rent payment obligation which is independent of the revenue generated by the hotel ("fixed rent").

The duration of our lease agreements varies, but they are typically long-term, 20 years or longer.