Management's Discussion and Analysis of Financial Condition and Results of
Operations is intended to provide the reader with information that will assist
in understanding our financial statements and the reasons for changes in certain
key components of our financial statements from period to period. Management's
Discussion and Analysis of Financial Condition and Results of Operations also
provides the reader with our perspective on our financial position and
liquidity, as well as certain other factors that may affect our future results.
Our Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the 2021 Annual Report and
subsequent reports filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").

Business Overview

We are a self-managed, publicly owned, non-traded REIT that invests in, manages
and seeks to enhance the value of, interests in lodging and lodging-related
properties in the United States. We own a diversified lodging portfolio,
including full-service, select-service and resort hotels. Our results of
operations were significantly affected by the COVID-19 pandemic, as discussed
further below. Our results of operations are also significantly impacted by
seasonality and by hotel renovations. Generally, during the renovation period, a
portion of total rooms are unavailable and hotel operations are often disrupted,
negatively impacting our results of operations. As of June 30, 2022, we held
ownership interests in 24 hotels, with a total of 7,907 rooms.

Significant Developments

Proposed Merger



On May 6, 2022, the Company, along with the Operating Partnership, entered into
a definitive merger agreement with affiliates of private real estate funds
managed by affiliates of Brookfield under which Brookfield will acquire all of
the outstanding shares of common stock of the Company in an all-cash
transaction. If the proposed merger is completed, holders of common stock of the
Company will be entitled to receive $6.768 per share in cash for each share of
our Class A common stock owned and $6.699 per share in cash for each share of
our Class T common stock owned. We filed the definitive proxy statement with the
SEC on June 15, 2022 and commenced mailing the proxy statement to our
stockholders in late June 2022. Completion of the proposed transaction is
subject to certain customary closing conditions, including the approval of our
stockholders at a special meeting scheduled for September 9, 2022. The proposed
merger is expected to close in the fourth quarter of 2022, although there can be
no assurance that the proposed merger will be completed at such time or at all.
During the three and six months ended June 30, 2022, we incurred expenses
related to the proposed merger totaling approximately $6.0 million, which is
included in Transaction costs in our consolidated statements of operations.

COVID-19 Pandemic



The COVID-19 pandemic has had a material adverse effect on our business, results
of operations, financial condition and cash flows and will continue to do so for
the reasonably foreseeable future. Although results improved relative to 2021,
we cannot estimate with certainty when travel demand will fully recover or how
new variants of COVID-19 could impact recovery. The ultimate severity and
duration of the COVID-19 pandemic and its effects, the emergence of variants and
the acceptance and effectiveness of vaccines are uncertain, including whether
COVID-19 will become endemic or cyclical in nature. Given these uncertainties,
we cannot estimate with reasonable certainty the impact on our business,
financial condition or near- or long-term financial or operational results.
                                                         WLT 6/30/2022 10-Q - 25
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Financial and Operating Highlights

(Dollars in thousands, except average daily rate ("ADR") and revenue per available room ("RevPAR"))



                                              Three Months Ended June 30,                   Six Months Ended June 30,
                                               2022                  2021                  2022                     2021
Hotel revenues                           $     256,750           $  163,659          $    446,844               $  259,932

Net income (loss) attributable to Common


  Stockholders                                  14,908              (25,651)              (25,179)                (101,218)

Net cash provided by (used in) operating
activities                                                                                 48,884                  (35,456)
Net cash (used in) provided by investing
activities                                                                                (13,854)                  96,496
Net cash used in financing activities                                                     (70,925)                 (86,639)

Supplemental Financial Measures: (a)
FFO attributable to Common Stockholders         26,591              (16,940)                4,847                  (60,107)
MFFO attributable to Common Stockholders        36,517               (2,707)               35,738                  (36,440)

Consolidated Hotel Operating Statistics
(b)
Occupancy                                         70.5   %             51.8  %               62.1   %                 41.3  %
ADR                                      $      315.30           $   248.32          $     314.24               $   247.07
RevPAR                                          222.35               128.57                195.12                   102.09

Comparable Consolidated Hotel Operating
Statistics (c)
Occupancy                                         70.5   %             52.0  %               61.9   %                 41.5  %
ADR                                      $      318.53           $   269.64          $     319.35               $   270.52
RevPAR                                          224.61               140.14                197.64                   112.14


___________

(a)We consider funds from operations ("FFO") and MFFO, which are supplemental
measures that are not defined by GAAP ("non-GAAP measures"), to be important
measures in the evaluation of our results of operations and capital resources.
We evaluate our results of operations with a primary focus on the ability to
generate cash flow necessary to meet our objective of funding distributions to
stockholders. See   Supplemental Financial Measures   below for our definitions
of these non-GAAP measures and reconciliations to their most directly comparable
GAAP measures.
(b)Our consolidated hotel operating statistics represent statistical data for
our Consolidated Hotels during our ownership period.
(c)Our comparable hotel operating statistics represent statistical data for
Consolidated Hotels we owned as of the end of the reporting period, but
excluding those hotels that we classified as held for sale. Statistical data
prior to our ownership was included for hotels that were not owned for the
entirety of the comparison periods. Due to the impact of COVID-19 on hotel
operations and the effect on comparability between periods, we have included the
operating statistics of our Comparable Consolidated Hotel Portfolio for the
three and six months ended June 30, 2019 for comparative purposes. Occupancy,
ADR and RevPAR for our Comparable Consolidated Hotel Portfolio for the three and
six months ended June 30, 2019 were 77.0%, $269.67 and $207.68, respectively,
and 74.7%, $272.70 and $203.69, respectively.



                                                         WLT 6/30/2022 10-Q - 26
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Portfolio Overview

The following table sets forth certain information for each of our Consolidated Hotels and our Unconsolidated Hotel as of June 30, 2022:



                                                                                    Number
Hotels                                                        State                of Rooms               % Owned                Hotel Type
Consolidated Hotels
Charlotte Marriott City Center                                  NC                   446                    100%                Full-Service
Courtyard Times Square West                                     NY                   224                    100%               Select-service

Embassy Suites by Hilton Denver-Downtown/Convention Center

                                                          CO                   403                    100%                Full-Service
Equinox Golf Resort & Spa                                       VT                   199                    100%                   Resort
Fairmont Sonoma Mission Inn & Spa                               CA                   226                    100%                   Resort
Hawks Cay Resort (a)                                            FL                   384                    100%                   Resort
Hyatt Centric French Quarter New Orleans (b)                    LA                   254                    100%                Full-service
Le Méridien Arlington                                           VA                   154                    100%                Full-Service
Le Méridien Dallas, The Stoneleigh                              TX                   176                    100%                Full-service
Marriott Kansas City Country Club Plaza                         MO                   295                    100%                Full-service
Marriott Raleigh City Center                                    NC                   401                    100%                Full-service
Marriott Sawgrass Golf Resort & Spa                             FL                   514                    100%                   Resort
Renaissance Atlanta Midtown Hotel                               GA                   304                    100%                Full-Service
Renaissance Chicago Downtown                                    IL                   560                    100%                Full-service
Ritz-Carlton Bacara, Santa Barbara                              CA                   358                    100%                   Resort
Ritz-Carlton Fort Lauderdale (c)                                FL                   198                    100%                   Resort
Ritz-Carlton Key Biscayne (d)                                   FL                   426                   66.7%                   Resort
Ritz-Carlton San Francisco                                      CA                   336                    100%                Full-Service
Sanderling Resort                                               NC                   128                    100%                   Resort
San Diego Marriott La Jolla                                     CA                   376                    100%                Full-Service
San Jose Marriott                                               CA                   510                    100%                Full-Service
Seattle Marriott Bellevue                                       WA                   384                    100%                Full-Service
Westin Pasadena                                                 CA                   350                    100%                Full-Service
                                                                                    7,606
Unconsolidated Hotel
Ritz-Carlton Philadelphia                                       PA                   301                    60%                 Full-service
                                                                                    7,907


_________

(a)Includes 207 privately owned villas that participate in the villa/condo
rental program as of June 30, 2022.
(b)On April 6, 2021, we acquired the remaining 20% interest in the Hyatt Centric
French Quarter Venture from an unaffiliated third party, bringing our ownership
interest to 100%.
(c)Includes 32 condo-hotel units that participate in the villa/condo rental
program as of June 30, 2022.
(d)Includes 135 condo-hotel units that participate in the resort rental program
as of June 30, 2022.

Results of Operations

We evaluate our results of operations with a primary focus on our ability to
generate cash flow necessary to meet our objectives of funding distributions to
stockholders and increasing the value in our real estate investments. As a
result, our assessment of operating results gives less emphasis to the effect of
unrealized gains and losses, which may cause fluctuations in net (loss) income
for comparable periods but have no impact on cash flows, and to other non-cash
charges, such as depreciation.
In addition, we use other information that may not be financial in nature,
including statistical information, to evaluate the operating performance of our
business, including occupancy rate, ADR and RevPAR. Occupancy rate, ADR and
RevPAR are commonly used measures within the hotel industry to evaluate
operating performance. RevPAR, which is calculated as the product of ADR and
occupancy rate, is an important statistic for monitoring operating performance
at our hotels. Our occupancy rate, ADR and RevPAR performance may be impacted by
macroeconomic factors such as U.S. economic conditions, regional and local
employment growth, personal income and corporate earnings, business relocation
decisions, business and leisure travel, new hotel construction and the pricing
strategies of competitors.
                                                         WLT 6/30/2022 10-Q - 27
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Beginning in March 2020, we experienced a significant decline in occupancy and
RevPAR. The economic downturn and restrictions on travel resulting from the
COVID-19 pandemic has significantly impacted our business and the overall
lodging industry. Although results improved relative to 2021, we cannot estimate
with certainty when travel demand will fully recover or how new variants of
COVID-19 could impact recovery.

The following table presents our comparative results of operations (in
thousands):

                                                   Three Months Ended June 30,                                Six Months Ended June 30,
                                            2022                2021             Change              2022               2021               Change
Hotel Revenues                          $  256,750          $ 163,659          $ 93,091          $ 446,844          $  259,932          $ 186,912

Hotel Operating Expenses                   200,543            156,083            44,460            376,203             282,270             93,933
Corporate general and administrative
expenses                                     8,383              8,344                39             15,864              15,601                263
Transaction costs                            6,026                  -             6,026              6,026                   -              6,026
 (Gain) loss on property-related
insurance claims, net                            -             (1,361)            1,361                250              (2,527)             2,777
Total Expenses                             214,952            163,066            51,886            398,343             295,344            102,999
Operating Income (Loss) before gain on
sale of real estate, net                    41,798                593            41,205             48,501             (35,412)            83,913
Gain on sale of real estate, net            11,344             18,075            (6,731)            11,344              18,075             (6,731)
Operating Income (Loss)                     53,142             18,668            34,474             59,845             (17,337)            77,182
  Interest expense                         (37,294)           (43,104)            5,810            (71,831)            (85,487)            13,656
Equity in earnings (losses) of equity
method investments in real estate, net         847             (1,666)            2,513               (823)             (5,586)             4,763
Loss on extinguishment of debt                (136)            (5,519)            5,383            (13,999)             (5,519)            (8,480)
 Other (expense) and income, net              (101)              (234)              133                368                (156)               524
Net gain on change in control of
interests                                        -              8,612            (8,612)                 -               8,612             (8,612)
Income (loss) before income taxes           16,458            (23,243)           39,701            (26,440)           (105,473)            79,033
 Provision for income taxes                   (293)            (1,097)              804               (823)             (1,222)               399
Net Income (Loss)                           16,165            (24,340)           40,505            (27,263)           (106,695)            79,432
(Income) loss attributable to
noncontrolling interests                    (1,257)            (1,311)               54              2,084               5,477             (3,393)
Net Income (Loss) Attributable to
Common
   Stockholders                         $   14,908          $ (25,651)         $ 40,559          $ (25,179)         $ (101,218)         $  76,039
Supplemental Financial Measure:(a)
MFFO Attributable to Common
Stockholders                            $   36,517          $  (2,707)         $ 39,224          $  35,738          $  (36,440)         $  72,178


___________

(a)We consider MFFO, a non-GAAP measure, to be an important metric in the
evaluation of our results of operations and capital resources. We evaluate our
results of operations with a primary focus on the ability to generate cash flow
necessary to meet our objective of funding distributions to stockholders. See

Supplemental Financial Measures below for our definition of non-GAAP measures and reconciliations to their most directly comparable GAAP measures.

Hotel Revenues



For the three and six months ended June 30, 2022 as compared to the same periods
in 2021, hotel revenues increased by $93.1 million and $186.9 million,
respectively. We benefited from significant growth in demand due to an increase
in vaccinations and corresponding loosening of government-imposed restrictions
on travel and large gatherings relative to the prior years. The increase in room
revenue was attributable to an increase in RevPAR resulting from an increase in
demand as compared to the prior periods.

                                                         WLT 6/30/2022 10-Q - 28
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Hotel Operating Expenses



Room expense, food and beverage expense and other operating department costs
fluctuate based on various factors, including occupancy, labor costs, utilities
and insurance costs.

For the three and six months ended June 30, 2022 as compared to the same periods
in 2021, aggregate hotel operating expenses increased by $44.5 million and $93.9
million, respectively, with the increase in line with the change in revenue
discussed above, driven by an increase in demand as compared to the prior
periods.

Transaction Costs



For both the three and six months ended June 30, 2022 as compared to the same
periods in 2021, transactions costs increased by $6.0 million. Transaction costs
for the three and six months ended June 30, 2022 represented advisory, legal,
accounting, investor relations and other transaction costs related to the
proposed merger (  N    ote 1  ).

Gain on Sale of Real Estate, Net



During the three and six months ended June 30, 2022, we recognized a gain on
sale on real estate of $11.3 million resulting from the sale of the Holiday Inn
Manhattan 6th Avenue Chelsea to an unaffiliated third-party.

During the three and six months ended June 30, 2021, we recognized a gain on
sale on real estate of $18.1 million from
the sale of the Sheraton Austin Hotel at the Capitol to an unaffiliated
third-party by the Sheraton Austin Hotel at the Capitol venture. We owned an 80%
controlling interest in the venture.

Interest Expense



For the three and six months ended June 30, 2022, as compared to the same
periods in 2021, interest expense decreased by $5.8 million and $13.7 million,
respectively, primarily due to a decrease in the amortization of the fair value
discount related to the mortgage loans assumed in the merger of Carey Watermark
Investors Incorporated and Carey Watermark Investors 2 Incorporated in April
2020 of $5.3 million and $10.0 million, respectively, and a decrease of $3.1
million and $6.5 million, respectively, resulting from dispositions of hotels
during 2021 and 2022 and payoff of related mortgage debt, partially offset by an
increase in interest expense of $2.2 million and $2.5 million, respectively,
resulting from refinancings and $0.9 million and $1.4 million, respectively,
largely the result of an increase in the weighted average interest rate relative
to the prior year periods.

Equity in Earnings (Losses) of Equity Method Investments in Real Estate, Net



Equity in income (losses) of equity method investments in real estate, net
represents income (losses) from our equity investments in Unconsolidated Hotels
recognized in accordance with each investment agreement and based upon the
allocation of the investment's net assets at book value as if the investment
were hypothetically liquidated at the end of each reporting period (  Note 4  ).
We are required to periodically compare an investment's carrying value to its
estimated fair value and recognize an impairment charge to the extent that the
carrying value exceeds the estimated fair value and is determined to be other
than temporary.

The following table sets forth our share of equity in earnings (losses) from our
Unconsolidated Hotels, which are based on the HLBV model, as well as certain
amortization adjustments related to basis differentials from acquisitions of
investments (in thousands):

                                           Three Months Ended June 30,               Six Months Ended June 30,
Venture                                     2022                 2021                 2022                2021

Ritz-Carlton Philadelphia Venture (a) $ 847 $ (1,666)

      $      (823)         $   (4,729)
Hyatt Centric French Quarter Venture
(b)                                               -                   -                    -                (857)
Total equity in earnings (losses) of
equity method investments in real
estate, net                            $        847          $   (1,666)         $      (823)         $   (5,586)


___________

(a)The results for the three and six months ended June 30, 2022 reflect an improvement in the performance of the hotel during 2022 as compared to comparable periods in 2021.


                                                         WLT 6/30/2022 10-Q - 29
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(b)On April 6, 2021, we acquired the remaining 20% interest in the Hyatt Centric
French Quarter Venture from an unaffiliated third party. Upon completion of the
acquisition, the Company owns 100% of this hotel and consolidates its real
estate interest in this hotel therefore these amounts represent the equity in
losses prior to the acquisition.

Loss on Extinguishment of Debt



During the six months ended June 30, 2022, we recognized a loss on
extinguishment of debt of $14.0 million comprised primarily of a $9.7 million
loss related to the Series A Preferred Stock redemption, representing the
write-off of the unamortized fair value discount at the date of redemption and a
$4.1 million loss resulting from the refinancing of the San Diego Marriott La
Jolla non-recourse mortgage loan.

During the three and six months ended June 30, 2021 we recognized a loss on
extinguishment of debt of $5.5 million, comprised of a $4.8 million loss
resulting from the refinancing of the Seattle Marriott Bellevue non-recourse
mortgage loan and a $0.7 million loss in connection with the disposition of the
Sheraton Austin Hotel at the Capitol.

Provision for Income Taxes



For the three and six months ended June 30, 2022, as compared to the same
periods in 2021, provision for income taxes decreased by $0.8 million and $0.4
million, respectively. Provision for income taxes for the three and six months
ended June 30, 2021 included the establishment of a valuation allowance of $0.5
million in connection with the acquisition of the remaining 20% interest in the
Hyatt Centric French Quarter Venture in April 2021, increasing deferred tax
expense during the prior year periods.

(Income) Loss Attributable to Noncontrolling Interests

The following table sets forth our (income) loss attributable to noncontrolling interests (in thousands):



                                             Three Months Ended June 30,                 Six Months Ended June 30,
Venture                                       2022                  2021                  2022                 2021

Ritz-Carlton Key Biscayne Venture $ (24) $ (21)

                   (48)                (29)
Sheraton Austin Hotel at the Capitol
Venture (a)                                         16              (3,383)                    19              (2,867)
Ritz-Carlton Fort Lauderdale Venture
(b)                                                  -                 (60)                     -                (146)
Operating Partnership - Noncontrolling
interest (c)                                    (1,249)              2,153                  2,113               8,519
(Income) Loss attributable to
noncontrolling
  interests                             $       (1,257)         $   (1,311)         $       2,084          $    5,477


___________

(a)On May 5, 2021, the Sheraton Austin Hotel at the Capitol venture sold the
Sheraton Austin Hotel at the Capitol to an unaffiliated third-party. We owned an
80% controlling interest in the venture.
(b)On November 9, 2021, we acquired the remaining 30% interest in the
Ritz-Carlton Fort Lauderdale Venture from an unaffiliated third party, bringing
our ownership interest to 100%.
(c)Reflects the OP Units' and Warrant Units' proportionate share of net loss.

Modified Funds from Operations

MFFO is a non-GAAP measure that we use to evaluate our business. For a definition of MFFO and a reconciliation to net income or loss attributable to Common Stockholders, see Supplemental Financial Measures below.

For the three and six months ended June 30, 2022 as compared to the same periods in 2021, MFFO improved by $39.2 million and $72.2 million, respectively. Relative to the prior year periods, we benefited from significant growth in demand due to an increase in vaccinations and corresponding loosening of government-imposed restrictions on travel and large gatherings.



                                                         WLT 6/30/2022 10-Q - 30
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Liquidity and Capital Resources



Our primary cash uses over the next 12 months are expected to be payment of debt
service, costs associated with the refinancing or restructuring of indebtedness,
funding corporate and hotel level operations, payment of real estate taxes and
insurance and payment of preferred stock dividends. Our primary capital sources
to meet such uses are expected to be funds generated by hotel operations, cash
on hand and proceeds from additional asset sales.

The COVID-19 pandemic has had a material adverse effect on our business, results
of operations, financial condition and cash flows and will continue to do so for
the reasonably foreseeable future. Although results improved relative to 2021,
we cannot estimate with certainty when travel demand will fully recover or how
new variants of COVID-19 could impact recovery. The ultimate severity and
duration of the COVID-19 pandemic and its effects, the emergence of variants and
the acceptance and effectiveness of vaccines are uncertain, including whether
COVID-19 will become endemic or cyclical in nature. Given these uncertainties,
we cannot estimate with reasonable certainty the impact on our business,
financial condition or near- or long-term financial or operational results.

As of June 30, 2022, we had cash and cash equivalents of $205.7 million. As of
June 30, 2022, the mortgage loans for our Consolidated Hotels had an aggregate
principal balance totaling $1.9 billion outstanding, all of which is mortgage
indebtedness and is generally non-recourse, subject to customary non-recourse
carve-outs, except that we have provided certain lenders with limited corporate
guaranties aggregating $34.0 million for items such as taxes, deferred debt
service and amounts drawn from furniture, fixtures and equipment reserves to pay
expenses, in connection with loan modification agreements. We have continued to
work with our lenders to address loans with near-term mortgage maturities and
have refinanced or extended the maturity date of seven Consolidated Hotel
mortgage loans, aggregating $547.0 million of indebtedness, during the six
months ended June 30, 2022. Of the $1.9 billion aggregate principal balance
indebtedness outstanding as of June 30, 2022, approximately $1.0 billion is
scheduled to mature during the 12 months after the date of this Report. If the
Company is unable to repay, refinance or extend maturing mortgage loans, we may
choose to market these assets for sale or the lenders may declare events of
default and seek to foreclose on the underlying hotels or we may also seek to
surrender properties back to the lender.

Sources and Uses of Cash During the Period



Operating Activities - For the six months ended June 30, 2022, net cash provided
by operating activities was $48.9 million as compared to net cash used in
operating activities of $35.5 million for the six months ended June 30, 2021.
Relative to the prior year period, we benefited from significant growth in
demand due to an increase in vaccinations and corresponding loosening of
government-imposed restrictions on travel and large gatherings.

Investing Activities - During the six months ended June 30, 2022, net cash used
in investing activities was $13.9 million primarily as a result of funding $16.3
million for capital expenditures at our Consolidated Hotels, partially offset by
the receipt of property insurance proceeds of $2.7 million.

Financing Activities - Net cash used in financing activities for the six months
ended June 30, 2022 was $70.9 million primarily as a result of payments and
prepayments of mortgage financing totaling $402.1 million, the redemption of the
Series A Preferred Stock of $65.0 million and deferred financing costs of $8.4
million, partially offset by $408.7 million of proceeds from mortgage
financings.

Distributions and Redemptions



On March 18, 2020, in light of the impact that the COVID-19 pandemic has had on
our business, we announced that we were suspending future distributions on our
common stock. We also announced that redemptions would be suspended including,
as of December 2, 2020, special circumstances redemptions. Requests for special
circumstances redemptions may continue to be submitted, however, the Company
will not take any action with regard to those requests until the Board of
Directors has elected to lift the suspension and provided the terms and
conditions for any continuation of the program. Distributions and redemptions in
respect of future periods will be evaluated by the Board of Directors based on
circumstances and expectations existing at the time of consideration, and are
also subject to the terms of the Series B Preferred Stock.

Among other terms of the Series B Preferred Stock, the Series B Preferred Stock
generally prohibits the Company from paying distributions on common stock or
redeeming common stock unless all accrued dividends on the Series B Preferred
Stock are paid in cash for all past dividend periods and the dividend for the
current dividend period is also paid in cash. There are certain exceptions for
the payment of dividends on common stock required for the Company to maintain
its REIT qualification, special
                                                         WLT 6/30/2022 10-Q - 31
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circumstances redemptions of common stock and redemptions of common stock that are funded with proceeds from issuances of common stock under the Company's distribution reinvestment plan.

Summary of Financing

The table below summarizes our non-recourse debt, net (dollars in thousands):



                                                                June 30, 2022          December 31, 2021
Carrying Value
Fixed rate (a)                                                $      545,083          $         951,318
Variable rate (a):
Amount subject to interest rate caps                                 970,463                    507,919
Amount subject to floating interest rate                             196,057                    317,497
Amount subject to interest rate swaps                                183,902                    182,007
                                                                   1,350,422                  1,007,423
                                                              $    1,895,505          $       1,958,741
Percent of Total Debt
Fixed rate                                                                29  %                      49  %
Variable rate                                                             71  %                      51  %
                                                                         100  %                     100  %
Weighted-Average Interest Rate at End of Period
Fixed rate                                                               4.3  %                     4.3  %
Variable rate (b)                                                        5.1  %                     4.0  %


_________

(a)Aggregate debt balance includes unamortized fair value discount of $3.3
million and $13.4 million as of June 30, 2022 and December 31, 2021,
respectively, and unamortized deferred financing costs totaling $13.5 million
and $7.6 million as of June 30, 2022 and December 31, 2021, respectively.
(b)The impact of our derivative instruments is reflected in the weighted-average
interest rates.

Covenants

Pursuant to our mortgage loan agreements, our consolidated subsidiaries are
subject to various operational and financial covenants, including minimum debt
service coverage and debt yield ratios. Most of our mortgage loan agreements
contain "lock-box" provisions, which permit the lender to access or sweep a
hotel's excess cash flow and could be triggered by the lender under limited
circumstances, including the failure to maintain minimum debt service coverage
ratios. If a lender requires that we enter into a cash management agreement, we
would generally be permitted to spend an amount equal to our budgeted hotel
operating expenses, taxes, insurance and capital expenditure reserves for the
relevant hotel. The lender would then hold all excess cash flow after the
payment of debt service in an escrow account until certain performance hurdles
are met. As of June 30, 2022, we have effectively entered into cash management
agreements with the lenders on 12 of our 23 Consolidated Hotel mortgage loans
either because the minimum debt service coverage ratio was not met or as a
result of a loan modification agreement. The cash management agreements
generally permit cash generated from the operations of each hotel to fund the
hotel's operating expenses, debt service, taxes and insurance but restrict
distributions of excess cash flow, if any, to the Company to fund corporate
expenses.

Courtyard Times Square West

The $60.6 million outstanding mortgage loan on Courtyard Times Square West matured on June 1, 2021 and we have not paid off the outstanding principal balance. The loan does not have any cross-default provisions with our other mortgage obligations. We are currently in the process of exploring various options as it relates to this asset, including but not limited to, surrendering the property back to the lender.



                                                         WLT 6/30/2022 10-Q - 32
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Cash Resources

At June 30, 2022, our cash resources consisted of cash and cash equivalents totaling $205.7 million, of which $61.7 million was designated as hotel operating cash and was held at our hotel operating properties.

Cash Requirements



Our primary cash uses through June 30, 2023 are expected to be payments of debt
service, real estate taxes and insurance, payment of preferred stock dividends,
costs associated with the refinancing or restructuring of indebtedness and
funding corporate and hotel level operations. Our primary capital sources to
meet such uses are expected to be cash on hand, funds generated by hotel
operations and proceeds from additional asset sales. We may satisfy certain debt
maturities during this period by turning the properties back to the lenders.

Capital Expenditures and Reserve Funds



With respect to our hotels that are operated under management or franchise
agreements with major international hotel brands and for most of our hotels
subject to mortgage loans, we are obligated to maintain furniture, fixtures and
equipment reserve accounts for future capital expenditures sufficient to cover
the cost of routine improvements and alterations at these hotels. The amount
funded into each of these reserve accounts is generally determined pursuant to
the management agreements, franchise agreements and/or mortgage loan documents
for each of the respective hotels and typically ranges between 3.0% and 5.0% of
the respective hotel's total gross revenue. As of June 30, 2022 and December 31,
2021, $54.8 million and $58.7 million, respectively, was held in furniture,
fixtures and equipment reserve accounts for future capital expenditures and is
included in Restricted cash in the consolidated financial statements. In
addition, due to the effects of the COVID-19 pandemic on our operations, we have
been working with the brands, management companies and lenders and have used a
portion of the available restricted cash reserves to cover operating costs at
our properties, of which $1.3 million is subject to replenishment as of June 30,
2022.

Supplemental Financial Measures



In the real estate industry, analysts and investors employ certain non-GAAP
supplemental financial measures in order to facilitate meaningful comparisons
between periods and among peer companies. Additionally, in the formulation of
our goals and in the evaluation of the effectiveness of our strategies, we use
FFO and MFFO, which are non-GAAP measures defined by our management. We believe
that these measures are useful to investors to consider because they may assist
them to better understand and measure the performance of our business over time
and against similar companies. A description of FFO and MFFO, and
reconciliations of these non-GAAP measures to the most directly comparable GAAP
measures, are provided below.

FFO and MFFO

Due to certain unique operating characteristics of real estate companies, as
discussed below, the National Association of Real Estate Investment Trusts
("NAREIT"), an industry trade group, has promulgated a non-GAAP measure known as
FFO, which we believe to be an appropriate supplemental measure, when used in
addition to and in conjunction with results presented in accordance with GAAP,
to reflect the operating performance of a REIT. The use of FFO is recommended by
the REIT industry as a supplemental non-GAAP measure. FFO is not equivalent to,
nor a substitute for, net income or loss as determined under GAAP.

We define FFO, a non-GAAP measure, consistent with the standards established by
the White Paper on FFO approved by the Board of Governors of NAREIT, as restated
in December 2018. The White Paper defines FFO as net income or loss computed in
accordance with GAAP, excluding gains or losses from sales of property,
impairment charges on real estate, and depreciation and amortization from real
estate assets; and after adjustments for unconsolidated partnerships and jointly
owned investments. Adjustments for unconsolidated partnerships and jointly owned
investments are calculated to reflect FFO. Our FFO calculation complies with
NAREIT's policy described above. However, NAREIT's definition of FFO does not
distinguish between the conventional method of equity accounting and the HLBV
method of accounting for unconsolidated partnerships and jointly owned
investments.

The historical accounting convention used for real estate assets requires
straight-line depreciation of buildings and improvements, which implies that the
value of real estate assets diminishes predictably over time, especially if such
assets are not adequately maintained or repaired and renovated as required by
relevant circumstances in order to maintain the value disclosed. We believe
that, since real estate values historically rise and fall with market
conditions, including inflation, interest
                                                         WLT 6/30/2022 10-Q - 33
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rates, the business cycle, unemployment and consumer spending, presentations of
operating results for a REIT using historical accounting for depreciation may be
less informative. Historical accounting for real estate involves the use of
GAAP. Any other method of accounting for real estate such as the fair value
method cannot be construed to be any more accurate or relevant than the
comparable methodologies of real estate valuation found in GAAP. Nevertheless,
we believe that the use of FFO, which excludes the impact of real estate-related
depreciation and amortization, as well as impairment charges of real
estate-related assets, provides a more complete understanding of our performance
to investors and to management; and when compared year over year, reflects the
impact on our operations from trends in occupancy rates, operating costs,
general and administrative expenses, and interest costs, which may not be
immediately apparent from net income or loss. In particular, we believe it is
appropriate to disregard impairment charges, as this is a fair value adjustment
that is largely based on market fluctuations and assessments regarding general
market conditions, which can change over time. An asset will only be evaluated
for impairment if certain impairment indicators exist. For real estate assets
held for investment and related intangible assets in which an impairment
indicator is identified, we follow a two-step process to determine whether an
asset is impaired and to determine the amount of the charge. First, we compare
the carrying value of the property's asset group to the estimated future net
undiscounted cash flow that we expect the property's asset group will generate,
including any estimated proceeds from the eventual sale of the property's asset
group. It should be noted, however, that the property's asset group's estimated
fair value is primarily determined using market information from outside sources
such as broker quotes or recent comparable sales. In cases where the available
market information is not deemed appropriate, we perform a future net cash flow
analysis discounted for inherent risk associated with each asset to determine an
estimated fair value. While impairment charges are excluded from the calculation
of FFO described above due to the fact that impairments are based on estimated
future undiscounted cash flows, it could be difficult to recover any impairment
charges. However, FFO and MFFO, as described below, should not be construed to
be more relevant or accurate than the current GAAP methodology in calculating
net income or loss or in its applicability in evaluating the operating
performance of the company. The method utilized to evaluate the value and
performance of real estate under GAAP should be construed as a more relevant
measure of operational performance and considered more prominently than the
non-GAAP measures FFO and MFFO and the adjustments to GAAP in calculating FFO
and MFFO.

Changes in the accounting and reporting promulgations under GAAP (for
acquisition fees and expenses from a capitalization/depreciation model to an
expensed-as-incurred model) were put into effect subsequent to the establishment
of NAREIT's definition of FFO. Management believes these cash-settled expenses,
such as acquisition fees that are typically accounted for as operating expenses,
do not affect our overall long-term operating performance. Publicly-registered,
non-traded REITs typically have a significant amount of acquisition activity and
are substantially more dynamic during their initial years of investment and
operation. While other start-up entities may also experience significant
acquisition activity during their initial years, we believe that non-traded
REITs are unique in that they have a limited life with targeted exit strategies
within a relatively limited time frame after acquisition activity ceases. Due to
the above factors and other unique features of publicly registered, non-traded
REITs, the Institute for Portfolio Alternatives (formerly known as the
Investment Program Association) ("IPA"), an industry trade group, has
standardized a measure known as MFFO, which the IPA has recommended as a
supplemental measure for publicly registered non-traded REITs and which we
believe to be another appropriate non-GAAP measure to reflect the operating
performance of a non-traded REIT having the characteristics described above.
MFFO is not equivalent to our net income or loss as determined under GAAP, and
MFFO may not be a useful measure of the impact of long-term operating
performance on value if we do not continue to operate with a limited life and
targeted exit strategy, as currently intended. We believe that, because MFFO
excludes costs that we consider more reflective of investing activities and
other non-operating items included in FFO and also excludes acquisition fees and
expenses that affect our operations only in periods in which properties are
acquired, MFFO can provide, on a going forward basis, an indication of the
sustainability (that is, the capacity to continue to be maintained) of our
operating performance after the period in which we are acquiring properties and
once our portfolio is in place. By providing MFFO, we believe we are presenting
useful information that assists investors and analysts to better assess the
sustainability of our operating performance now that our offering has been
completed and once essentially all of our properties have been acquired. We also
believe that MFFO is a recognized measure of sustainable operating performance
by the non-traded REIT industry. Further, we believe MFFO is useful in comparing
the sustainability of our operating performance, with the sustainability of the
operating performance of other real estate companies that are not as involved in
acquisition activities. MFFO should only be used to assess the sustainability of
a company's operating performance after a company's offering has been completed
and properties have been acquired, as it excludes acquisition costs that have a
negative effect on a company's operating performance during the periods in which
properties are acquired.

We define MFFO consistent with the IPA's Practice Guideline 2010-01,
Supplemental Performance Measure for Publicly Registered, Non-Listed REITs:
Modified Funds from Operations (the "Practice Guideline"), issued by the IPA in
November 2010. This Practice Guideline defines MFFO as FFO further adjusted for
the following items, included in the determination of GAAP net income or loss,
as applicable: acquisition fees and expenses; accretion of discounts and
amortization of premiums on debt investments; where applicable, payments of loan
principal made by our equity investees accounted for under the HLBV
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model where such payments reduce our equity in earnings of equity method
investments in real estate, nonrecurring impairments of real estate-related
investments (i.e., infrequent or unusual, not reasonably likely to recur in the
ordinary course of business); mark-to-market adjustments included in net income
or loss; nonrecurring gains or losses included in net income or loss from the
extinguishment or sale of debt, hedges, derivatives or securities holdings,
where trading of such holdings is not a fundamental attribute of the business
plan, unrealized gains or losses resulting from consolidation from, or
deconsolidation to, equity accounting, and after adjustments for Consolidated
and Unconsolidated Hotels, with such adjustments calculated to reflect MFFO on
the same basis. The accretion of discounts and amortization of premiums on debt
investments, unrealized gains and losses on hedges, derivatives or securities
holdings, unrealized gains and losses resulting from consolidations, as well as
other listed cash flow adjustments are adjustments made to net income or loss in
calculating the cash flows provided by operating activities and, in some cases,
reflect gains or losses that are unrealized and may not ultimately be realized.

Our MFFO calculation complies with the Practice Guideline described above. In
calculating MFFO, we exclude acquisition-related expenses, fair value
adjustments of derivative financial instruments and the adjustments of such
items related to noncontrolling interests. Under GAAP, acquisition fees and
expenses are characterized as operating expenses in determining operating net
income or loss. These expenses are paid in cash by a company. All paid and
accrued acquisition fees and expenses will have negative effects on returns to
investors, the potential for future distributions, and cash flows generated by
the company, unless earnings from operations or net sales proceeds from the
disposition of other properties are generated to cover the purchase price of the
property, these fees and expenses and other costs related to such property.
Further, under GAAP, certain contemplated non-cash fair value and other non-cash
adjustments are considered operating non-cash adjustments to net income or loss
in determining cash flow from operating activities. We account for certain of
our equity investments using the HLBV model which is based on distributable cash
as defined in the operating agreement.

Our management uses MFFO and the adjustments used to calculate it in order to
evaluate our performance against other non-traded REITs, which have limited
lives with short and defined acquisition periods and targeted exit strategies
shortly thereafter. As noted above, MFFO may not be a useful measure of the
impact of long-term operating performance on value if we do not continue to
operate in this manner. We believe that MFFO and the adjustments used to
calculate it allow us to present our performance in a manner that takes into
account certain characteristics unique to non-traded REITs, such as their
limited life, defined acquisition period and targeted exit strategy, and is
therefore a useful measure for investors. For example, acquisition costs are
generally funded from the proceeds of our offering and other financing sources
and not from operations. By excluding expensed acquisition costs, the use of
MFFO provides information consistent with management's analysis of the operating
performance of the properties. Additionally, fair value adjustments, which are
based on the impact of current market fluctuations and underlying assessments of
general market conditions, but can also result from operational factors such as
occupancy rates, may not be directly related or attributable to our current
operating performance. By excluding such changes that may reflect anticipated
and unrealized gains or losses, we believe MFFO provides useful supplemental
information.

Presentation of this information is intended to provide useful information to
investors as they compare the operating performance of different REITs, although
it should be noted that not all REITs calculate FFO and MFFO the same way, so
comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO
are not necessarily indicative of cash flow available to fund cash needs and
should not be considered as an alternative to net income or loss as an
indication of our performance, as an alternative to cash flows from operations
as an indication of our liquidity, or indicative of funds available to fund our
cash needs including our ability to make distributions to our stockholders. FFO
and MFFO should be reviewed in conjunction with other GAAP measurements as an
indication of our performance.

Neither the SEC, NAREIT nor any other regulatory body has passed judgment on the
acceptability of the adjustments that we use to calculate FFO or MFFO. In the
future, the SEC, NAREIT or another regulatory body may decide to standardize the
allowable adjustments across the non-traded REIT industry and we would have to
adjust our calculation and characterization of FFO and MFFO accordingly.

                                                         WLT 6/30/2022 10-Q - 35
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FFO and MFFO were as follows (in thousands):



                                                Three Months Ended June 30,                    Six Months Ended June 30,
                                                 2022                  2021                    2022                    2021

Net Income (Loss) Attributable to Common


   Stockholders                            $       14,908          $  (25,651)         $     (25,179)              $ (101,218)

Adjustments:


Depreciation and amortization of real
property                                           24,427              28,891                 50,512                   60,812
Gain on sale of real estate, net                  (11,344)            (18,075)               (11,344)                 (18,075)
Net gain on change in control of interests              -              (8,612)                     -                   (8,612)
Proportionate share of adjustments for
partially-owned entities - FFO adjustments         (1,400)              6,507                 (9,142)                   6,986
Total adjustments                                  11,683               8,711                 30,026                   41,111
FFO attributable to Common Stockholders
(as defined by NAREIT)                             26,591             (16,940)                 4,847                  (60,107)

Adjustments:


Transaction costs (a)                               6,026                   -                  6,026                        -
Amortization of fair value adjustments              3,460               9,652                  7,938                   19,375
 Straight-line and other rent adjustments           1,728               1,727                  3,456                    3,063
  Net loss on extinguishment of debt                  136               5,519                 13,999                    5,519
  (Gain) loss on property-related
insurance
   claims, net (a)                                      -              (1,361)                   250                   (2,527)
Proportionate share of adjustments for
partially
    owned entities - MFFO adjustments              (1,424)             (1,304)                  (778)                  (1,763)
Total adjustments                                   9,926              14,233                 30,891                   23,667

MFFO attributable to Common Stockholders $ 36,517 $ (2,707) $ 35,738

$  (36,440)


___________

(a)We have excluded these costs because of their non-recurring nature. By
excluding such costs, management believes MFFO provides useful supplemental
information that is comparable for each type of real estate investment and is
consistent with management's analysis of the investing and operating performance
of our properties.

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