Annual report [Section 13 and 15(d), not S-K Item 405]

Accounts Receivables

v3.25.4
Accounts Receivables
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Accounts and Nontrade Receivable
5. RECEIVABLES
Allowance for Doubtful Accounts
The Company generates trade receivables in the ordinary course of its business and provides for estimated bad debts on such receivables. The Company measures the expected credit losses of its receivables on a collective (pool) basis which aggregates receivables with similar risk characteristics and uses historical collection attrition rates for ten years to estimate its expected credit losses. As such, the Company measures the expected credit losses of its receivables by segment and geographical area. The Company provides an estimate of expected credit losses for its receivables immediately upon origination or acquisition and may adjust this estimate in subsequent reporting periods as required. When the Company determines that an account is not collectible, the account is written-off to the allowance for doubtful accounts. As applicable, the Company also estimates the recovery value of the underlying collateral using a discounted cash flow model, which may include the assistance of a third-party valuation firm. This may require significant judgments, including estimation of future cash flows, which are dependent on discount rates and to a lesser extent, estimation of long-term rates of growth. The
Company also considers whether the historical economic conditions are comparable to current economic conditions. If current or expected future conditions differ from the conditions in effect when the historical experience was generated, the Company would adjust the allowance for doubtful accounts to reflect the expected effects of the current environment on the collectability of the Company’s trade receivables which may be material.
The following table sets forth the activity in the Company’s allowance for doubtful accounts on trade accounts receivables for the years ended:
December 31, 2025 December 31, 2024 December 31, 2023
Beginning balance $ 61 $ 60 $ 64
Provision for doubtful accounts 33 6 3
Bad debt write-offs (2) (5) (7)
Ending balance $ 92 $ 61 $ 60
During 2025, the Company recorded a $20 million provision for doubtful accounts on accounts receivables associated with the insolvency filing of Revo. See Note 16 - Other Expenses and Charges for more details.
Loans Receivable
The Company strategically provides financing to franchisees or their affiliates to support hotel development efforts and related initiatives, typically in the form of loans receivable. The maturity of these loans may vary by franchisee, ranging from under twelve months to over three years. The loans bear interest and are expected to be repaid in accordance with the terms, though in some cases they may be converted into development advance notes associated with hotel openings or the completion of required property improvements. The Company obtains guarantees from the borrower or an affiliate and/or secures collateral to mitigate credit risk. Since the loans receivable do not share similar risk characteristics, the Company evaluates expected credit losses on an individual basis rather than on a collective (pool) basis. At loan inception, the Company evaluates the collectability of each loan, which includes reviewing collection history on any amounts which had been due from these franchisees and evaluating any collateral value, and records expected credit losses as required. Additionally, the Company evaluates the collectability of these loans each reporting period to determine if a change to the allowance for loan losses is needed. Loans deemed uncollectible are written-off against the allowance for loan losses. As applicable, the Company also estimates the recovery value of the underlying collateral using a discounted cash flow model, which may include the assistance of a third-party valuation firm. This may require significant judgments, including estimation of future cash flows, which are dependent on discount rates and to a lesser extent, estimation of long-term rates of growth. The Company also considers whether the historical economic conditions are comparable to current economic conditions. If current or expected future conditions differ from the conditions in effect when the historical experience was generated, the Company would adjust the allowance for loan losses to reflect the expected effects of the current environment on the collectability of the Company’s loans receivable.
The Company’s Consolidated Balance Sheets include the following with respect to loans receivable, including accrued interest:
Consolidated Balance Sheets: December 31, 2025 December 31, 2024
Gross Allowance Net Gross Allowance Net
Other current assets $ 4  $ (3) $ 1  $ 1  $ (1) $ — 
Other non-current assets 84  (52) 32  31  —  31 
Total loan receivables, net (a)
$ 88  $ (55) $ 33  $ 32  $ (1) $ 31 
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(a)    Loan receivables had a weighted average interest rate of 7.8% and 5.0% and a weighted average remaining contractual term of 2.1 years and 0.5 years as of December 31, 2025 and December 31, 2024, respectively.
The following table sets forth the activity in the Company’s allowance for loan losses on loans receivable for the years ended:
December 31, 2025 December 31, 2024 December 31, 2023
Beginning balance $ 1 $ 1 $ 1
Provision for loan losses 54 — —
Write-offs — — —
Ending balance $ 55 $ 1 $ 1
During 2025, the Company recorded a $54 million provision for loan losses on loan receivables associated with the insolvency filing of Revo. See Note 16 - Other Expenses and Charges for more details.

Notes Receivable
The Company had $25 million and $19 million of notes receivable, which is included in other current assets on the Company’s Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively, which are fully offset by a corresponding amount in deferred revenues.