HPT Hospitality Properties Trust

ELECTION OF TRUSTEES (ITEM 1)

The Board serves as the decision making body of the Company, except for those matters reserved to the shareholders. The Board selects and oversees the Company's officers, who are charged by the Board with conducting the day to day business of the Company.

In accordance with our Amended and Restated Declaration of Trust (our "Declaration of Trust") and Bylaws, the Board consists of five members. Pursuant to our Declaration of Trust and Bylaws, three of our Trustees are Independent Trustees and two of our Trustees are Managing Trustees. On April 20, 2017, the Board elected to be subject to Section 3-803 of Subtitle 8 of the Maryland General Corporation Law, which subtitle is commonly referred to as the Maryland Unsolicited Takeovers Act ("MUTA"), effective that same day. Pursuant to this election, the Board was divided into three classes with the following terms: John L. Harrington and Barry M. Portnoy in Class I with a term expiring at the 2017 Annual Meeting and until their successors are duly elected and qualify; William A. Lamkin in Class II with a term expiring at our 2018 Annual Meeting of Shareholders and until his successor is duly elected and qualifies; and Donna D. Fraiche and Adam D. Portnoy in Class III with a term expiring at our 2019 Annual Meeting of Shareholders and until their successors are duly elected and qualify. The Board's decision to adopt a classified Board was not taken in response to any known takeover attempt or threat. The Trustees in Class I are standing for election at the 2017 Annual Meeting. For further information regarding the Board's election to be subject to Section 3-803 of MUTA, please see the Company's Current Report on Form 8-K dated April 20, 2017 filed with the SEC. This document is available at www.sec.gov.

A majority of all the votes cast at the meeting is required to elect a Trustee at the 2017 Annual Meeting.

The Nominating and Governance Committee is responsible for identifying and evaluating nominees for Trustee and for recommending to the Board nominees for election at each Annual Meeting of Shareholders. The Nominating and Governance Committee may consider candidates suggested by the Company's Trustees, officers or shareholders or by others.

Shareholder Recommendations for Nominees.  Shareholders who would like to recommend a nominee for the position of Trustee should submit their recommendations in writing by mail to the Chair of the Nominating and Governance Committee, c/o Hospitality Properties Trust, Secretary, at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458 or by e-mail to secretary@hptreit.com . A shareholder's recommendation should include any information that the recommending shareholder believes relevant to the Nominating and Governance Committee's consideration. The Nominating and Governance Committee may request additional information about the shareholder recommended nominee or about the shareholder recommending the nominee. Recommendations by shareholders will be considered by the Nominating and Governance Committee in its discretion using the same criteria as other candidates it considers.

Shareholder Nominations for Trustee.  Our Bylaws also provide that a shareholder of the Company may nominate a person for election to the Board provided the shareholder complies with the advance notice provisions set forth in our Bylaws, which include, among other things, requirements as to the proposing shareholder's timely delivery of advance notice, continuous requisite ownership of Common Shares and submission of specified documentation and information. For more information on how shareholders can nominate Trustees for election to the Board, see "Shareholder Nominations and Other Proposals" beginning on page 35.

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Trustees are responsible for overseeing the Company's business. This significant responsibility requires highly skilled individuals with various qualities, attributes and professional experience. The Board believes that there are general requirements that are applicable to all Trustees, qualifications applicable to Independent Trustees and other skills and experience that should be represented on the Board as a whole, but not necessarily by each Trustee. In accordance with our Declaration of Trust and Bylaws, the Board consists of five Trustees: two Managing Trustees and three Independent Trustees. Independent Trustees are not employees of RMR LLC, are not involved in the Company's day to day activities and are persons who qualify as independent under the applicable rules of The NASDAQ Stock Market LLC ("NASDAQ") and the SEC. Managing Trustees have been employees, officers or directors of RMR LLC or have been involved in the Company's day to day activities for at least one year prior to such Trustee's election. The Board and the Nominating and Governance Committee consider the qualifications of Trustees and Trustee candidates individually and in the broader context of the Board's overall composition and the Company's current and future needs.

In addition, our Bylaws require that candidates submit detailed personal and financial information required in connection with our regulation by state gaming authorities.

Qualifications for All Trustees

In its assessment of each potential candidate, including those recommended by shareholders, the Nominating and Governance Committee considers the potential nominee's integrity, experience, achievements, judgment, intelligence, competence, personal character, likelihood that a candidate will be able to serve on the Board for an extended period and other matters that the Nominating and Governance Committee deems appropriate. The Nominating and Governance Committee also takes into account the ability of a potential nominee to devote the time and effort necessary to fulfill his or her responsibilities to the Company.

The Board and Nominating and Governance Committee require that each Trustee candidate be a person of high integrity with a proven record of success in his or her field. Each Trustee candidate must demonstrate the ability to make independent analytical inquiries, familiarity with and respect for corporate governance requirements and practices and a commitment to serving the Company's long term best interests. In addition, the Nominating and Governance Committee may conduct interviews of potential Trustee candidates to assess intangible qualities, including the individual's ability to ask appropriate questions and to work collegially. The Board does not have a specific diversity policy in connection with the selection of nominees for Trustee, but due consideration is given to the Board's overall balance of diversity, including professional background, experience, perspective, gender and ethnicity.

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Specific Qualifications, Attributes, Skills and Experience to be Represented on the Board

The Board has identified particular qualifications, attributes, skills and experience that are important to be represented on the Board as a whole, in light of the Company's long term interests. The following table summarizes certain key characteristics of the Company's business and the associated qualifications, attributes, skills and experience that the Board believes should be represented on the Board.

Upon the recommendation of the Nominating and Governance Committee, the Board has nominated John L. Harrington and Barry M. Portnoy for election as an Independent Trustee and a Managing Trustee, respectively, in Class I. Each Trustee nominee currently serves on the Board. If elected, each nominee would serve until the Company's 2020 Annual Meeting of Shareholders and until his successor is duly elected and qualifies, subject to the individual's earlier death, resignation, retirement, disqualification or removal.

We expect each nominee for election as a Trustee will be able to serve if elected. However, if a nominee should become unable or unwilling to serve, proxies may be voted for the election of a substitute nominee designated by the Board.

The Board believes that the combination of the various qualifications, attributes, skills and experiences of the Trustee nominees would contribute to an effective Board serving the Company's long term best interests. The Board and the Nominating and Governance Committee believe that the Trustee nominees possess the necessary qualifications to provide effective oversight of the business and quality advice and counsel to the Company's management. Below is a summary of the key experiences, qualifications, attributes and skills that led the Nominating and Governance Committee and the Board to conclude such person is currently qualified to serve as a Trustee.

The Board of Trustees recommends a vote "FOR" the election of both Trustee nominees.

The following is some important biographical information, including the ages and recent principal occupations, as of March 31, 2017, of the Company's Trustees, Trustee nominees and executive officers. The business address of the Trustees, Trustee nominees and executive officers is c/o Hospitality Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458. Included in each Trustee's biography below are the attributes of that Trustee consistent with the qualifications, attributes, skills and experience the Board has determined are important to be represented on the Board. For a general discussion of the particular Trustee qualifications, attributes, skills and experience, and the process for selecting and nominating individuals for election to serve as a Trustee, please see "Election of Trustees" beginning on page 14.

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Executive Officers

John G. Murray

						President and Chief Operating Officer since 1996; Assistant Secretary since 2008 Age: 56 Mr. Murray has served in various capacities with RMR LLC and its affiliates since 1993, including as an executive vice president of RMR LLC since 2001 and as a senior vice president of RMR LLC from 1993 to 2001. Since 2014, Mr. Murray has been a member of the board of directors of the American Hotel & Lodging Association representing the owners' segment of the association. Prior to joining RMR LLC, Mr. Murray was employed at Fidelity Brokerage Services Inc. and at Ernst & Young LLP.

Mark L. Kleifges

						Chief Financial Officer and Treasurer since 2002 Age: 56 Mr. Kleifges has been an executive vice president of RMR LLC since 2008 and has served in various capacities with RMR LLC and its affiliates for more than ten years. Mr. Kleifges has been chief financial officer and treasurer of Government Properties Income Trust since 2011. Mr. Kleifges was a vice president of RMR Advisors LLC from 2003 to 2004 and since 2004 has been its chief financial officer and treasurer. He has also served as chief financial officer and treasurer of RMR Real Estate Income Fund since 2003. Mr. Kleifges is a certified public accountant and was previously a partner at Arthur Andersen LLP.

Ethan S. Bornstein

						Senior Vice President since 2008; Vice President since 1999 to 2008 Age: 43 Mr. Bornstein has served in various capacities with RMR LLC and its affiliates for more than seventeen years, including as a senior vice president of RMR LLC since 2008.

Barry Portnoy is the father of Adam Portnoy. Ethan Bornstein is the son-in-law of Barry Portnoy and the brother-in-law of Adam Portnoy. There are no other family relationships among any of the Company's Trustees or executive officers. The Company's executive officers serve at the discretion of the Board.

RMR LLC provides management services to public and private companies, including the Company, Government Properties Income Trust, Select Income REIT, Senior Housing Properties Trust, Five Star Senior Living Inc., TravelCenters of America LLC, Sonesta International Hotels Corporation and Affiliates Insurance Company. Government Properties Income Trust is a public REIT that primarily invests in properties that are majority leased to government tenants ("GOV"). Select Income REIT is a public REIT

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that primarily owns net leased, single tenant properties ("SIR"). Senior Housing Properties Trust is a public REIT that primarily owns healthcare, senior living and medical office buildings ("SNH" and, together with GOV and SIR, the "Other REITs"). Five Star Senior Living Inc. is a public real estate based operating company in the healthcare and senior living services business ("FVE"). TravelCenters of America LLC is a public real estate based operating company in the travel center, convenience store and restaurant businesses ("TA"). Sonesta International Hotels Corporation is a private company that operates and franchises hotels, resorts and cruise ships. Affiliates Insurance Company is a privately owned Indiana insurance company ("AIC"). RMR LLC is a majority owned subsidiary of RMR Inc., a public company whose controlling shareholder is ABP Trust, which is owned by our Managing Trustees and to which RMR LLC provides management services. RMR Advisors LLC, a subsidiary of RMR LLC, is an SEC registered investment adviser to the RMR Real Estate Income Fund, which is an investment company registered under the Investment Company Act of 1940, as amended ("RIF"). Tremont Realty Advisors LLC, a subsidiary of RMR LLC, is an SEC registered investment advisor that advises private funds and separately managed accounts that invest in commercial real estate debt, including secured mortgage debt and mezzanine financing opportunities. The foregoing entities may be considered to be affiliates of the Company.

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TRUSTEE COMPENSATION

The Compensation Committee is responsible for reviewing and determining the Common Share awards granted to Trustees and making recommendations to the Board regarding cash compensation paid to Trustees in each case for Board, committee and committee chair services. Managing Trustees do not receive cash compensation for their services as Trustees but do receive Common Share awards for their Board service. The number of Common Shares awarded to each Managing Trustee for Board service is the same as the number awarded to each Independent Trustee.

All Trustees receive compensation in Common Shares to align the interests of Trustees with those of the Company's shareholders. To this end, the Company's Governance Guidelines codify its expectation that, subject to certain exemptions, each Trustee retain at least 20,000 Common Shares within five years of the later of: (i) June 10, 2014 or (ii) the Annual Meeting of Shareholders at which the Trustee was initially elected or, if earlier, the first Annual Meeting of Shareholders following the initial appointment of the Trustee to the Board.

In determining the amount and composition of Trustee compensation, the Compensation Committee and the Board take various factors into consideration, including, but not limited to, the responsibilities of Trustees generally, as well as for service on committees and as committee chairs, and the forms of compensation paid to trustees or directors by comparable companies, including the compensation of trustees and directors of other companies managed by RMR LLC. The Board reviews the Compensation Committee's recommendations regarding Independent Trustee cash compensation and determines the amount of such compensation.

Each Independent Trustee received an annual fee of $40,000 for services as a Trustee, plus a fee of $1,000 for each meeting attended prior to May 25, 2016, and a fee of $1,250 for each meeting attended on or after May 25, 2016. Up to two $1,000 or $1,250 fees, as applicable, were or are paid if a Board meeting and one or more Board committee meetings, or two or more Board committee meetings, were or are held on the same date. Each Independent Trustee and Managing Trustee received an award of 2,500 Common Shares in 2016.

Each Independent Trustee who served as a committee chair of the Board's Audit, Compensation or Nominating and Governance Committees received an additional annual fee of $15,000, $10,000 and $10,000, respectively. The Lead Independent Trustee received an additional annual cash retainer fee of $12,500 for serving in this role. Trustees are reimbursed for travel expenses they incur in connection with their duties as Trustees and for out of pocket costs they incur in connection with their attending certain continuing education programs.

The following table details the total compensation of the Trustees for the year ended December 31, 2016 for services as a Trustee.

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CORPORATE GOVERNANCE

The Company is committed to corporate governance which promotes the long term interests of our shareholders. The Board has established Governance Guidelines which provide a framework for effective governance. The guidelines address matters such as general qualification standards for the Board, Trustee responsibilities, Board meetings and communications, Board committees, Trustee access to management and independent advisers, Trustee compensation and share ownership guidelines, Trustee orientation and continuing education, executive development and succession planning, related person transactions, annual performance evaluation of the Board and other matters. The Board regularly reviews developments in corporate governance and updates our Governance Guidelines and other governance materials as it deems necessary and appropriate.

The governance section of our website makes available our corporate governance materials, including the Governance Guidelines, the charter for each Board committee, the Code and information about how to report matters directly to management, the Board or the Audit Committee. To access these documents on the Company's website, www.hptreit.com , click on "Investors" and then "Governance." In addition, instructions on how to obtain copies of the Company's corporate governance materials are included in the response to question 16 in the "Questions and Answers" section on page 12.

The Board is comprised of five Trustees, including three Independent Trustees and two Managing Trustees. All Trustees play an active role in overseeing the Company's business both at the Board and committee levels. As set forth in the Company's Governance Guidelines, the core responsibility of our Trustees is to exercise sound, informed and independent business judgment in overseeing the Company and its strategic direction. Our Trustees are skilled and experienced leaders and currently serve or have served as members of senior management in public and private for profit organizations and law firms, and have also served in academia. Our Trustees may be called upon to provide solutions to various complex issues and are expected to, and do, ask hard questions of the Company's officers and advisors. The Board is small, which facilitates informal discussions and communication from management to the Board and among Trustees.

We do not have a Chairman of the Board. In 2015, the Board amended the Company's Governance Guidelines to provide for the role and responsibilities of a Lead Independent Trustee to be selected annually by a majority of the Independent Trustees, and our Independent Trustees selected Mr. Harrington to serve in such role. Among other things, the Lead Independent Trustee's responsibilities include: serving as a liaison between the Company's management and the Independent Trustees; presiding at all meetings of the Board at which the Managing Trustees are not present, including each executive session of the Independent Trustees; assisting the Compensation Committee in its annual evaluation of the performance of the Company's management; being reasonably available for consultation and direct communication with shareholders upon request; and such other responsibilities as the Board may determine. The Lead Independent Trustee may call meetings of the Independent Trustees or executive sessions of Independent Trustees and presides at any such meeting.

Our President and Treasurer are not members of the Board, but they regularly attend Board and Board committee meetings, as does our Director of Internal Audit. Other officers of RMR LLC also sometimes attend Board meetings at the invitation of the Board. Special meetings of the Board may be called at any time by any Managing Trustee, the president or pursuant to the request of any two Trustees then in office. Our Managing Trustees, in consultation with the Lead Independent Trustee and the Company's management, set the agenda for Board meetings. The Lead Independent Trustee may place an item on an agenda, and any Trustee may suggest agenda items and raise other matters at meetings. Discussions at Board meetings are led by the Managing Trustee or Independent Trustee who is most knowledgeable on a subject.

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Pursuant to the Company's Governance Guidelines, the Company's Independent Trustees are expected to meet in regularly scheduled meetings at which only Independent Trustees are present. It is expected that these executive sessions will occur at least twice per year in conjunction with regularly scheduled Board meetings. Our Independent Trustees also meet to consider Company business without the attendance of the Managing Trustees or officers, and they meet separately with the Company's officers, with the Company's Director of Internal Audit and with the Company's independent auditors.

In 2016, the Board held eight meetings. In 2016, each Trustee attended 75% or more of the aggregate of all meetings of the Board and the committees on which he or she served. All of the Trustees attended last year's Annual Meeting of Shareholders. The Company's policy with respect to Board members' attendance at meetings of the Board and Annual Meetings of Shareholders can be found in the Company's Governance Guidelines, the full text of which appears at the Company's website, www.hptreit.com .

Under the corporate governance listing standards of NASDAQ, the Board must consist of a majority of Independent Trustees. To be considered independent:

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a trustee must not have a disqualifying relationship, as defined in the corporate governance section of the NASDAQ rules; and



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the Board must affirmatively determine that the trustee otherwise has no relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a trustee. To facilitate the trustee independence assessment process, the Board has adopted written Governance Guidelines as described below.

Our Bylaws also require that a majority of the Board be Independent Trustees. Under our Bylaws, Independent Trustees are not employees of RMR LLC, are not involved in the Company's day to day activities and are persons who qualify as independent under the applicable rules of NASDAQ and the SEC.

The Board affirmatively determines whether Trustees have a direct or indirect material relationship with the Company, including the Company's subsidiaries, other than serving as the Company's Trustees or trustees or directors of the Company's subsidiaries. In making independence determinations, the Board observes NASDAQ and SEC criteria, as well as our Bylaws. When assessing a Trustee's relationship with the Company, the Board considers all relevant facts and circumstances, not merely from the Trustee's standpoint, but also from that of the persons or organizations with which the Trustee has an affiliation. Based on this review, the Board has determined that Donna D. Fraiche, John L. Harrington and William A. Lamkin currently qualify as independent trustees under applicable NASDAQ rules and SEC criteria and are Independent Trustees under our Bylaws. In making these determinations, the Board reviewed and discussed additional information provided by the Trustees and the Company with regard to each of the Trustees' relationships with the Company, RMR Inc. or RMR LLC and the other companies to which RMR LLC and its affiliates provide management and advisory services. The Board has concluded that none of these three Trustees possessed or currently possesses any relationship that could impair his or her judgment in connection with his or her duties and responsibilities as a Trustee or that could otherwise be a direct or indirect material relationship under applicable NASDAQ and SEC standards.

The Board has an Audit Committee, Compensation Committee and Nominating and Governance Committee. The Audit Committee, Compensation Committee and Nominating and Governance Committee have each adopted a written charter, which is available on our website, www.hptreit.com , by clicking on "Investors" and then "Governance." Shareholders may also request copies free of charge by writing to

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Investor Relations, Hospitality Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458.

Our Audit, Compensation and Nominating and Governance Committees are comprised entirely of Independent Trustees, and an Independent Trustee serves as Chair of each committee. The Chairs of the Audit Committee, Compensation Committee and Nominating and Governance Committee set the agendas for their respective committee meetings, but any Trustee, member of management or the Director of Internal Audit may suggest agenda items to be considered by these committees. Additionally, the charter of each of our Audit Committee, Compensation Committee and Nominating and Governance Committee provides that the committee may form and delegate authority to subcommittees of one or more members when appropriate. Subcommittees are subject to the provisions of the applicable committee's charter. Additional information about the committees is provided below.

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Audit Committee

		William A. Lamkin Committee Chair

"The Audit Committee is dedicated to maintaining the integrity of the Company's financial reporting; monitoring and mitigating the Company's financial risk exposure; selecting, assessing the independence and performance of, and working productively with, the Company's independent auditors; overseeing and collaborating with the Company's internal audit function; and monitoring the Company's legal and regulatory compliance."

Additional Committee Members: Donna D. Fraiche, John L. Harrington
Meetings Held in 2016: 7

Purpose and Primary Responsibilities:
The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. The purpose of the Audit Committee is to assist the Board in fulfilling its responsibilities for oversight of: (1) the Company's accounting and financial reporting processes; (2) the audits of the Company's financial statements and internal control over financial reporting; (3) the Company's compliance with legal and regulatory requirements; and (4) the Company's internal audit function generally. Under its charter, the Audit Committee is directly responsible for the appointment, compensation, retention and oversight, and the evaluation of the qualifications, performance and independence, of the Company's independent auditor and the resolution of disagreements between management and the independent auditor regarding financial reporting. The independent auditor reports directly to the Audit Committee. The Audit Committee also has final authority and responsibility for the appointment and assignment of duties to the Director of Internal Audit.

Independence:
Each member of the Audit Committee meets the independence requirements of NASDAQ, the Exchange Act and the Company's Governance Guidelines. Each member of the Audit Committee is financially literate, knowledgeable and qualified to review financial statements. The Board has determined that Mr. Harrington is the Audit Committee's "financial expert" and is independent as defined by the rules of the SEC and NASDAQ. The Board's determination that Mr. Harrington is a financial expert was based on his experience as: (i) executive director of a large charitable organization; (ii) chief executive officer of a major professional sports business; (iii) a member of the Audit Committee and of the audit committees of other public companies; (iv) a certified public accountant; (v) a director of a large national bank; and (vi) a college assistant professor of accounting.

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Compensation Committee

		John L. Harrington Committee Chair

"The Compensation Committee regularly evaluates the Company's compensation practices and considers the incentives and risks associated with the Company's compensation practices."

Additional Committee Members: Donna D. Fraiche, William A. Lamkin
Meetings Held in 2016: 4

Purpose and Primary Responsibilities:
The purpose of the Compensation Committee is to discharge directly, or assist the Board in discharging, its responsibilities related to: (1) the evaluation of the performance and compensation of the business and property management services provider to the Company, the President, the Treasurer and any other executive officer of the Company and the Director of Internal Audit of the Company; (2) the compensation of the Trustees; and (3) the approval, evaluation and administration of any equity compensation plans of the Company. Under its charter, the Compensation Committee is responsible for the determination and approval of any compensation payable by the Company to the President, the Treasurer and any other executive officer of the Company based on such evaluation. The Compensation Committee is also responsible for the evaluation and recommendation to the Board of the cash compensation payable by the Company to the Trustees for Board and committee service and the annual evaluation of the performance of the Director of Internal Audit and the determination of his or her compensation. In addition, the Compensation Committee is responsible for the annual review of any business and property management agreement of the Company with the business and property management services provider to the Company, the proposal and approval of amendments to or termination of any business and property management agreement of the Company with any such provider to the Company and the review of amounts payable by the Company under any such management agreements.

Independence:
Each member of the Compensation Committee meets the independence requirements of NASDAQ, the Exchange Act and the Company's Governance Guidelines.

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Nominating and Governance Committee

		Donna D. Fraiche Committee Chair

"The Nominating and Governance Committee regularly evaluates the Board's leadership structure and corporate governance to promote the best long term interests of the Company."

Additional Committee Members: John L. Harrington, William A. Lamkin
Meetings Held in 2016: 4

Purpose and Primary Responsibilities:
The principal purposes of the Nominating and Governance Committee are: (1) to identify individuals qualified to become Board members, consistent with criteria approved by the Board, and to recommend candidates to the entire Board for nomination or selection as Board members for each Annual Meeting of Shareholders (or special meeting of shareholders at which Trustees are to be elected) or when vacancies occur; (2) to perform certain assessments of the Board and Company management; and (3) to develop and recommend to the Board a set of governance principles applicable to the Company. Under its charter, the Nominating and Governance Committee is also responsible for overseeing the evaluation of Company management to the extent not overseen by the Compensation Committee or another committee of the Board.

Independence:
Each member of the Nominating and Governance Committee meets the independence requirements of NASDAQ, the Exchange Act and the Company's Governance Guidelines.

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The Board is elected by shareholders to oversee the Company's business and long term strategy. As part of fulfilling its responsibilities, the Board oversees the safeguarding of the assets of the Company, the maintenance of appropriate financial and other internal controls and the Company's compliance with applicable laws and regulations. Inherent in these responsibilities is the Board's understanding and oversight of the various risks facing the Company. The Board considers that risks should not be viewed in isolation and should be considered in virtually every business decision and as part of the Company's business strategy.

The Board oversees risk as part of its general oversight of the Company. Oversight of risk is addressed as part of various Board and Board committee activities and through regular and special Board and Board committee meetings. The actual day to day business of the Company is conducted by RMR LLC, and RMR LLC and the Company's officers and Director of Internal Audit are responsible to incorporate risk management in their activities. The Company's Director of Internal Audit provides the Company advice and assistance with the Company's risk management function.

In discharging their oversight responsibilities, the Board and Board committees review regularly a wide range of reports provided to them by RMR LLC and other service providers, including:

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reports on market and industry conditions;



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operating and regulatory compliance reports;



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financial reports;



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reports on risk management activities;



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regulatory and legislative updates that may impact the Company;



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reports on the security of the Company's information technology processes and the Company's data; and



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legal proceedings updates and reports on other business related matters.

The Board and Board committees discuss these matters among themselves and with representatives of RMR LLC, officers of the Company, the Director of Internal Audit, counsel and the Company's independent auditors.

The Audit Committee takes a leading role in helping the Board fulfill its responsibilities for oversight of the Company's financial reporting, internal audit function, risk management and the Company's compliance with legal and regulatory requirements. The Audit Committee meets at least quarterly and reports its findings to the Board. The Board and Audit Committee review periodic reports from the Company's independent auditors regarding potential risks, including risks related to the Company's internal control over financial reporting. The Audit Committee also reviews annually, approves and oversees an internal audit plan developed by the Company's Director of Internal Audit with the goal of helping the Company systematically evaluate the effectiveness of its risk management, control and governance processes. The Audit Committee also meets periodically with the Company's Director of Internal Audit to review the results of the Company's internal audits, and directs or recommends to the Board actions or changes it determines appropriate measures to enhance or improve the effectiveness of the Company's risk management.

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The Compensation Committee evaluates the performance of the Company's Director of Internal Audit and RMR LLC's performance under the Company's business and property management agreements, including any perceived risks created by compensation arrangements. Also, the Compensation Committee and the Board consider that the Company has a share award program that requires share awards to executive officers to vest over a period of years. The Company believes that the use of share awards vesting over time rather than stock options mitigates the incentives for the Company's management to undertake undue risks and encourages management to make longer term and appropriately risk balanced decisions.

It is not possible to identify all of the risks that may affect the Company or to develop processes and controls to eliminate all risks and their possible effects, and processes and controls employed to address risks may be limited in their effectiveness. Moreover, it is necessary for the Company to bear certain risks to achieve its objectives. As a result of the foregoing and other factors, the Company's ability to manage risk is subject to substantial limitations.

To learn more about the risks facing the Company, you can review the matters discussed in Part I, "Item 1A. Risk Factors" and "Warning Concerning Forward Looking Statements" in our Annual Report. The risks described in the Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known or that may currently be deemed to be immaterial also may materially adversely affect the Company's business, financial condition or results of operations in future periods.

Shareholders may effectively communicate a point of view to the Board in a number of ways, including:

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recommending candidates for election to the Board;



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participating in the advisory vote to approve executive compensation;



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participating in the advisory vote on the frequency of future advisory votes to approve executive compensation;



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directing communications to individual Trustees or the entire Board; and



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attending the Annual Meeting of Shareholders.

The Board has established a process to facilitate communication by shareholders and other interested parties with Trustees. Communications should be addressed to Trustees in care of the Secretary, Hospitality Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458, by email to secretary@hptreit .com or sent by filling out a report by visiting the Company's website, www.hptreit.com, clicking "Investors," clicking "Governance" and then clicking "Governance Hotline." In addition, shareholders and other interested parties may call the Company's toll free confidential message system at (866) 511-5038.

The Company has adopted the Code to, among other things, provide guidance to its Trustees and officers and RMR LLC, its officers and employees and its parent's and subsidiaries' directors, officers and employees to ensure compliance with applicable laws and regulations.

The Company's shareholders, Trustees, executive officers and persons involved in the Company's business can ask questions about the Code and other ethics and compliance issues, or report potential violations as follows: by writing to the Director of Internal Audit at Hospitality Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458; by calling toll free (866) 511-5038; by e-mailing Internal.Audit@hptreit.com ; or by filling out a report by visiting the

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Company's website, www.hptreit.com , clicking "Investors," clicking "Governance" and then clicking "Governance Hotline." We intend to satisfy the requirements under Item 5.05 of Form 8-K regarding disclosure of amendments to, or waivers from, provisions of our Code that apply to the principal executive officer, principal financial officer or controller, or persons performing similar functions, by posting such information on our website.

Trustee Share Ownership Policy.     All Trustees receive compensation in Common Shares to align the interests of Trustees with those of the Company's shareholders. The Governance Guidelines codify the Company's expectation that, subject to certain exemptions, each Trustee retain at least 20,000 Common Shares within five years of the later of: (i) June 10, 2014 or (ii) the Annual Meeting of Shareholders at which the Trustee was initially elected or, if earlier, the first Annual Meeting of Shareholders following the initial appointment of the Trustee to the Board.

Pursuant to the Company's insider trading policy, Trustees and executive officers are required to obtain pre-approval from at least two designated individuals before trading or agreeing to trade in, including by entering into a share trading plan such as a 10b5-1 trading plan, with respect to any Company security, except for regular reinvestments in the Company's securities made pursuant to a dividend reinvestment plan.

The Company's insider trading policy generally prohibits (i) the Company's Trustees and officers, (ii) the trustees and officers of the Company's subsidiaries, (iii) RMR Inc. and its directors and officers and (iv) RMR LLC and its officers and employees, to the extent they are involved in RMR LLC's services to the Company, from, directly or indirectly through family members or others, purchasing or selling Common Shares or the Company's other equity or debt securities while in possession of material, non-public information concerning the Company. Similar prohibitions also apply to trading in the securities of RMR Inc. and the other public companies to which RMR LLC provides management or advisory services on the basis of material, non-public information learned in the course of performing services for those companies.

See the "Compensation Discussion and Analysis" beginning on page 49 for a detailed discussion of the Company's executive compensation program.

Trustee Nominations and Shareholder Proposals for the 2018 Annual Meeting of Shareholders:  In order for a shareholder to propose a nominee for election to the Board or propose business outside of Rule 14a-8 under the Exchange Act at the 2018 Annual Meeting of Shareholders, the shareholder must comply with the advance notice and other requirements set forth in our Bylaws, which include, among other things, requirements as to the shareholder's timely delivery of advance notice, continuous requisite ownership of Common Shares, holding of a share certificate for such shares at the time of the advance notice and submission of specified information.

Deadline to Submit Nominations and Proposals for the 2018 Annual Meeting of Shareholders under our Bylaws:  To be timely, shareholder nominations and proposals intended to be made outside of Rule 14a-8 under the Exchange Act at the 2018 Annual Meeting of Shareholders must be received by the Company's Secretary at the Company's principal executive offices, in accordance with the requirements of our Bylaws, not later than 5:00 p.m. Eastern time on November 2, 2017 and not earlier than October 3, 2017;

HOSPITALITY PROPERTIES TRUST       2017 Proxy Statement    35

provided, that, if the date of the 2018 Annual Meeting of Shareholders is more than 30 days earlier or later than June 15, 2018, then a shareholder's notice must be so delivered not later than 5:00 p.m. Eastern time on the tenth day following the earlier of the day on which (i) notice of the date of the 2018 Annual Meeting of Shareholders is mailed or otherwise made available or (ii) public announcement of the date of the 2018 Annual Meeting of Shareholders is first made by the Company.

Deadline to Submit Proposals for the 2018 Annual Meeting of Shareholders for Purposes of Rule 14a-8:  Shareholder proposals pursuant to Rule 14a-8 under the Exchange Act must be received at the Company's principal executive offices on or before December 25, 2017 in order to be eligible to be included in the proxy statement for the 2018 Annual Meeting of Shareholders; provided, that, if the date of the 2018 Annual Meeting of Shareholders is more than 30 days before or after June 15, 2018, such a proposal must be submitted within a reasonable time before the Company begins to print its proxy materials. Under Rule 14a-8, the Company is not required to include shareholder proposals in its proxy materials in certain circumstances or if conditions specified in the rule are not met.

The foregoing description of the requirements for a shareholder to propose a nomination for election to the Board at an Annual Meeting of Shareholders or other business for consideration at an Annual Meeting of Shareholders is only a summary and is not a complete listing of all requirements. Copies of our Bylaws, including the requirements for shareholder nominations and other proposals, may be obtained by writing to the Company's Secretary at Hospitality Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458, or from the SEC's website, www.sec.gov . Any shareholder considering making a nomination or other proposal should carefully review and comply with those provisions.

The descriptions of agreements in this "Related Person Transactions" section do not purport to be complete and are subject to, and qualified in their entirety by, reference to the actual agreements, copies of certain of which are filed as exhibits to the Annual Report.

A "related person transaction" is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which (i) the Company was, is or will be a participant, (ii) the amount involved exceeds $120,000 and (iii) any related person had, has or will have a direct or indirect material interest.

A "related person" means any person who is, or at any time since January 1, 2016 was:

•

a Trustee, a nominee for Trustee or an executive officer of the Company;



•

known to the Company to be the beneficial owner of more than 5% of the outstanding Common Shares when a transaction in which such person had a direct or indirect material interest occurred or existed;



•

an immediate family member of any of the persons referenced in the preceding two bullets, which means any child, stepchild, parent, stepparent, spouse, sibling, mother in law, father in law, son in law, daughter in law, brother in law or sister in law of any of the persons referenced in the preceding two bullets, and any person (other than a tenant or employee) sharing the household of any of the persons referenced in the preceding two bullets; or



•

a firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.

36     HOSPITALITY PROPERTIES TRUST       2017 Proxy Statement

The Company has adopted written Governance Guidelines that describe the consideration and approval of related person transactions. Under these Governance Guidelines, the Company may not enter into a transaction in which any Trustee or executive officer, any member of the immediate family of any Trustee or executive officer or other related person, has or will have a direct or indirect material interest unless that transaction has been disclosed or made known to the Board and the Board reviews and approves or ratifies the transaction by the affirmative vote of a majority of the disinterested Trustees, even if the disinterested Trustees constitute less than a quorum. If there are no disinterested Trustees, the transaction must be reviewed, authorized and approved or ratified by both (i) the affirmative vote of a majority of the Board and (ii) the affirmative vote of a majority of the Independent Trustees. In determining whether to approve or ratify a transaction, the Board, or disinterested Trustees or Independent Trustees, as the case may be, also act in accordance with any applicable provisions of the Company's Declaration of Trust and Bylaws, consider all of the relevant facts and circumstances and approve only those transactions that they determine are fair and reasonable to the Company. All related person transactions described below were reviewed and approved or ratified by a majority of the disinterested Trustees or otherwise in accordance with the Company's policies, Declaration of Trust and Bylaws, each as described above. In the case of transactions with the Company by employees of RMR Inc. and its subsidiaries who are subject to the Code but who are not Trustees or executive officers of the Company, the employee must seek approval from an executive officer who has no interest in the matter for which approval is being requested. Copies of the Company's Governance Guidelines and the Code are available on the Company's website, www.hptreit.com.

Certain Related Person Transactions

Relationship with TA. TA was the Company's 100% owned subsidiary until the Company distributed its common shares to the Company's shareholders in 2007. TA is the Company's largest tenant and property operator, leasing 36% of the Company's gross carrying value of real estate properties as of December 31, 2016. The Company is TA's largest shareholder; as of December 31, 2016, the Company owned 3,420,000 common shares, representing approximately 8.7% of TA's outstanding common shares.

One of the Company's Managing Trustees, Barry Portnoy, is a managing director of TA. Thomas O'Brien, the other managing director and the president and chief executive officer of TA, is also an officer of RMR LLC, and was an executive officer of the Company until 2007. TA's executive vice president, chief financial officer and treasurer and executive vice president and general counsel are also officers of RMR LLC. RMR LLC provides management services to both the Company and TA.

Spin-Off Transaction Agreement.  In connection with TA's spin-off, the Company entered a transaction agreement with TA and RMR LLC, pursuant to which TA granted the Company a right of first refusal to purchase, lease, mortgage or otherwise finance any interest TA owns in a travel center before it sells, leases, mortgages or otherwise finances that travel center to or with another party, and TA also granted the Company and any other company managed by RMR LLC a right of first refusal to acquire or finance any real estate of the types in which the Company or they invest before TA does. TA also agreed that for so long as TA is a tenant of the Company's TA will not permit: the acquisition by any person or group of beneficial ownership of 9.8% or more of the voting shares or the power to direct the management and policies of TA or any of its subsidiary tenants or guarantors under its leases with the Company; the sale of a material part of the assets of TA or any such tenant or guarantor; or the cessation of certain continuing directors constituting a majority of the board of directors of TA or any such tenant or guarantor. TA also agreed not to take any action that might reasonably be expected to have a material adverse impact on the Company's ability to qualify as a REIT and to indemnify the Company for any liabilities it may incur relating to TA's assets and business.

The TA leases are "triple net" leases that require TA to pay all costs incurred in the operation of the leased travel centers, including personnel, utility, inventory, customer service and insurance expenses, real estate and personal property taxes, environmental related expenses, underground storage tank removal costs and ground lease payments at those travel centers at which the Company leases the property and subleases it to TA. The TA leases generally require TA to indemnify the Company for certain environmental matters and for liabilities that arise during the terms of the leases from ownership or operation of the leased travel centers. In addition, TA is obligated to pay the Company at lease expiration an amount equal to an estimate of the cost of removing underground storage tanks on the leased properties. TA has granted to the Company in the TA leases a right of first refusal to acquire or finance any travel center that TA determines to acquire.

The TA leases do not require FF&E escrow deposits. However, TA is required to maintain the leased travel centers, including structural and non-structural components. Under the TA leases, TA may request that the Company fund capital improvements in return for increases in TA's annual minimum rent according to the following formula: the annual minimum rent is increased by an amount equal to the amount funded by the Company multiplied by the greater of (1) 8.5% or (2) a benchmark U.S. Treasury interest rate plus 3.5%. TA is not obligated to request and the Company is not obligated to fund any such improvements. The Company funded approximately $109.9 million, during the year ended December 31, 2016, for capital improvements to the Company's travel center properties and, as a result, TA's annual minimum rent payable to the Company increased by approximately $9.3 million. The Company currently expects to fund $80.7 million for renovations and other capital improvements to the Company's travel centers during the year ending December 31, 2017.

The Company recognized rental income of approximately $279.2 million for the year ended December 31, 2016 under the TA leases. Rental income for the year ended December 31, 2016 includes approximately $13.1 million of adjustments necessary to record the deferred rent obligations under the TA leases and the estimated future payments to the Company by TA for the cost of removing underground storage tanks, in each case on a straight line basis. As of December 31, 2016, the Company had receivables for current rent amounts owed to it by TA and straight line rent adjustments of approximately $65.3 million.

In addition to the payment of annual minimum rent, the TA Nos. 1, 2, 3 and 4 leases provide for payment to the Company of percentage rent, beginning in 2016, based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2015 non-fuel revenues) and the TA No. 5 lease provides for payment to the Company of percentage rent based on increases in total non-fuel revenues

38     HOSPITALITY PROPERTIES TRUST       2017 Proxy Statement

over base year levels (3% of non-fuel revenues above 2012 non-fuel revenues). The Company waived approximately $0.4 million of percentage rent under the TA No. 5 lease for the year ended December 31, 2016. As of December 31, 2016, the Company has cumulatively waived all of the $2.5 million of percentage rent it previously agreed to waive. The total amount of percentage rent from TA that the Company recognized (which is net of the waived amount) was approximately $1.3 million for the year ended December 31, 2016.

On June 1, 2015, the Company entered into a transaction agreement with TA pursuant to which, among other things, the Company agreed to acquire from, and lease back to, TA five travel centers owned by TA and under development for purchase prices equal to TA's development costs, which were estimated to be not more than $118.0 million in the aggregate. The following transactions were completed in 2016 in connection with this transaction agreement:

•

On March 31, 2016, the Company acquired from, and leased back to, TA one of these development properties for approximately $19.7 million, excluding acquisition related costs. In connection with this transaction, the Company and TA entered into an amendment to the TA No. 4 lease. The annual minimum rent payable by TA increased by approximately $1.7 million as a result of the Company's completion of the purchase and leaseback of this property.



•

On June 22, 2016, the Company entered into an amendment to this transaction agreement to, among other things, replace one of the development properties that the Company had agreed to acquire from, and leaseback to, TA with two alternative existing travel centers owned by TA. On June 22, 2016, pursuant to this transaction agreement, as amended, the Company acquired from, and leased back to, TA these two alternative travel centers for approximately $23.9 million, excluding acquisition related costs. In connection with this amendment, the Company also entered into amendments to each of the Company's five leases with TA which, among other things, added the two alternative travel centers that the Company acquired from TA and extended the term of the TA No. 5 lease to 2032. The annual minimum rent payable by TA increased by approximately $2.0 million as a result of the Company's completion of the purchase and leaseback of these two alternative travel centers.



•

On June 30, 2016, the Company acquired from, and leased back to, TA one of the development properties for approximately $22.3 million, excluding acquisition related costs. In connection with this transaction, the Company entered into an amendment to the TA No. 2 lease. The annual minimum rent payable by TA increased by approximately $1.9 million as a result of the Company's completion of the purchase and leaseback of this property.



•

On September 30, 2016, the Company acquired from, and leased back to, TA one of the development properties for approximately $16.6 million, excluding acquisition related costs. In connection with this transaction, the Company entered into an amendment to the TA No. 2 lease. The annual minimum rent payable by TA increased by approximately $1.4 million as a result of the Company's completion of the purchase and leaseback of this property.

The Company currently expects to purchase, and lease back to TA, the one remaining development property from TA pursuant to this transaction agreement before June 30, 2017 at a purchase price equal to its development cost, not to exceed $29.0 million.

On September 14, 2016, the Company purchased land adjacent to a travel center that TA leases from the Company in Holbrook, AZ for approximately $0.3 million. TA and the Company subsequently amended the TA No. 4 lease to add this parcel and the minimum annual rent under the TA No. 4 lease increased by approximately $28,000.

On August 13, 2013, a travel center located in Roanoke, VA that the Company leased to TA was taken by eminent domain proceedings brought by the Virginia Department of Transportation, or VDOT, in connection with certain highway construction. In January 2014, the Company received proceeds from the

HOSPITALITY PROPERTIES TRUST       2017 Proxy Statement    39

VDOT of approximately $6.2 million, which is a substantial portion of the VDOT's estimate of the value of the property, and as a result the annual minimum rent payable by TA to the Company under the then applicable lease decreased by approximately $0.5 million, effective January 6, 2014. In November 2014, this property was surrendered to the VDOT. The Company and TA are challenging the VDOT's estimate of this property's value and the Company expects that the final resolution of this matter will take considerable time.

Relationships With RMR LLC and Others Related to It.  The Company has relationships and historical and continuing transactions with RMR LLC, RMR Inc. and others related to them. RMR LLC is a subsidiary of RMR Inc. One of the Company's Managing Trustees, Adam Portnoy, is a managing director, president and chief executive officer and controlling shareholder (through ABP Trust) of RMR Inc. and an officer of RMR LLC. The Company's other Managing Trustee, Barry Portnoy, is a managing director, officer and controlling shareholder (through ABP Trust) of RMR Inc. and an officer of RMR LLC. ABP Trust is owned by Adam Portnoy and Barry Portnoy. Adam Portnoy and Barry Portnoy also own class A membership units of RMR LLC (through ABP Trust). Each of the Company's executive officers is also an officer of RMR LLC, including Ethan Bornstein, the son in law of Barry Portnoy and the brother in law of Adam Portnoy. Certain of TA's and Sonesta's executive officers are officers of RMR LLC. The Company's Independent Trustees also serve as independent directors or independent trustees of other companies to which RMR LLC or its affiliates provide management services. Barry Portnoy serves as a managing director or managing trustee of all of the public companies to which RMR LLC or its affiliates provide management services and Adam Portnoy serves as a managing trustee of a majority of those companies. In addition, officers of RMR LLC and RMR Inc. serve as the Company's officers and officers of other companies to which RMR LLC or its affiliates provide management services.

The Company has no employees. The personnel and various services the Company requires to operate its business are provided to it by RMR LLC. The Company has two agreements with RMR LLC to provide management services to the Company: (i) a business management agreement, which relates to the Company's business generally, and (ii) a property management agreement, which relates to the Company's property level operations of the office building component of one of the Company's hotels. Both of these management agreements are described below, see "—Management Agreements With RMR LLC."

Interest in RMR Inc.  The Company currently holds 2,503,777 shares of class A common stock of RMR Inc., the parent and managing member of RMR LLC. The Company and three other REITs to which RMR LLC provides management services, GOV, SIR and SNH, acquired shares of class A common stock of RMR Inc. in a transaction completed on June 5, 2015 (the "Up-C Transaction"). Through their ownership of class A common stock of RMR Inc., class B-1 common stock of RMR Inc., class B-2 common stock of RMR Inc. and class A membership units of RMR LLC, as of February 1, 2017, Adam Portnoy and Barry Portnoy, in aggregate hold, directly and indirectly, a 51.9% economic interest in RMR LLC and control 91.5% of the voting power of outstanding capital stock of RMR Inc. As part of the Up-C Transaction, on June 5, 2015, the Company entered into a registration rights agreement with RMR Inc. covering the class A common stock of RMR Inc. that the Company received in the Up-C Transaction, pursuant to which the Company received demand and piggyback registration rights, subject to certain limitations, and the Company entered into a lock up and registration rights agreement with ABP Trust, Adam Portnoy and Barry Portnoy pursuant to which they agreed not to transfer the 1,490,000 Common Shares that ABP Trust received in the Up-C Transaction for a 10 year period ending on June 5, 2025, and the Company granted them certain registration rights, subject, in each case, to certain exceptions.

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Management Agreements with RMR LLC.  The Company's management agreements with RMR LLC provide for an annual base management fee, an annual incentive management fee and property management and construction supervision fees, payable in cash:

•

Base Management Fee.   The annual base management fee payable to RMR LLC by the Company for each applicable period is equal to the lesser of:



o

the sum of (a) 0.7% of the average aggregate historical cost of the Company's real estate investments up to $250.0 million, plus (b) 0.5% of the average aggregate historical cost of the Company's real estate investments exceeding $250.0 million; and



o

the sum of (a) 0.7% of the average closing price per share of the Common Shares on the applicable stock exchange on which such Common Shares are principally traded during such period, multiplied by the average number of the Common Shares outstanding during such period, plus the daily weighted average of the aggregate liquidation preference of each class of the Company's preferred shares outstanding during such period, plus the daily weighted average of the aggregate principal amount of the Company's consolidated indebtedness during such period (together, the "Company's Average Market Capitalization"), up to $250.0 million, plus (b) 0.5% of the Company's Average Market Capitalization exceeding $250.0 million.

The average aggregate historical cost of the Company's real estate investments includes its consolidated assets invested, directly or indirectly, in equity interests in or loans secured by real estate and personal property owned in connection with such real estate (including acquisition related costs and costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or bad debts or other similar non-cash reserves.

•

Incentive Fee.   The incentive fee which may be earned by RMR LLC for an annual period is calculated as follows:



o

An amount, subject to a cap, based on the value of the outstanding Common Shares, equal to 12% of the product of:



–

the Company's equity market capitalization on the last trading day of the year immediately prior to the relevant measurement period, and



–

the amount (expressed as a percentage) by which the total returns per share realized by the holders of Common Shares (i.e., share price appreciation plus dividends) exceeds the total shareholder return of the SNL U.S. REIT Hotel Index (in each case subject to certain adjustments) for the relevant measurement period.



o

The measurement periods are generally three year periods ending with the year for which the incentive fee is being calculated.



o

The benchmark return per share is adjusted if the Company's total return per share exceeds 12% per year in any measurement period and, generally, no incentive management fee is payable by the Company unless the Company's total return per share during the measurement period is positive.



o

The incentive management fee is subject to a cap equal to the value of 1.5% of the number of the Common Shares then outstanding multiplied by the average closing price of the Common Shares during the 10 consecutive trading days having the highest average closing prices during the final 30 trading days of the relevant measurement period.

HOSPITALITY PROPERTIES TRUST       2017 Proxy Statement    41

o

If the Company's financial statements are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the bad faith, fraud, willful misconduct or gross negligence of RMR LLC, for one or more periods in respect of which RMR LLC received an incentive management fee, the incentive management fee payable with respect to periods for which there has been a restatement shall be recalculated by, and approved by a majority vote of, the Company's Independent Trustees, and RMR LLC may be required to pay the Company an amount equal to the value in excess of that which RMR LLC would have received based upon the incentive management fee as recalculated, either in cash or Common Shares.



•

Property Management and Construction Supervision Fees.   The property management fees payable to RMR LLC by the Company for each applicable period are equal to 3% of gross collected rents and the construction supervision fees payable to RMR LLC by the Company for each applicable period are equal to 5% of construction costs for the office building component of one of the Company's hotels that is subject to the Company's property management agreement with RMR LLC.

Pursuant to the Company's business management agreement with RMR LLC, the Company recognized net business management fees of approximately $36.8 million for the year ended December 31, 2016, which amount reflects a reduction of approximately $3.6 million for the amortization of the liability the Company recorded in accordance with generally accepted accounting principles in connection with the Up-C Transaction. Pursuant to the Company's business management agreement with RMR LLC, in January 2017 and 2016, the Company paid RMR LLC incentive fees of approximately $52.4 million and $62.3 million for the years ended December 31, 2016 and 2015, respectively. Pursuant to the Company's property management agreement with RMR LLC, the Company recognized aggregate net property management and construction supervision fees of $64,000 for the year ended December 31, 2016.

Expense Reimbursement.  The Company is generally responsible for all of its operating expenses, including certain expenses incurred by RMR LLC on its behalf. The Company's property level operating expenses are generally incorporated into rents charged to its tenants, including certain payroll and related costs incurred by RMR LLC.

The Company reimbursed RMR LLC approximately $0.2 million for property management related expenses related to the office building component of one of the Company's hotels for the year ended December 31, 2016. The Company is generally not responsible for payment of RMR LLC's employment, office or administrative expenses incurred to provide management services to the Company, except for the employment and related expenses of RMR LLC employees assigned to work exclusively or partly at the office building component of one of the Company's hotels, its share of the wages, benefits and other related costs of centralized accounting personnel and its share of RMR LLC's costs for providing the Company's internal audit function. The Audit Committee appoints the Company's Director of Internal Audit and the Compensation Committee approves the costs of the Company's internal audit function. The amounts recognized as expense for internal audit costs were approximately $0.2 million for the year ended December 31, 2016.

Term.  The Company's management agreements with RMR LLC have terms that end on December 31, 2036, and automatically extend on December 31st of each year for an additional year, so that the terms of the management agreements thereafter end on the 20th anniversary of the date of the extension.

Termination Rights.  The Company has the right to terminate one or both of the management agreements with RMR LLC: (i) at any time on 60 days' written notice for convenience, (ii) immediately on written notice for cause, as defined therein, (iii) on written notice given within 60 days after the end of an applicable calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR LLC, as defined therein. RMR LLC has the right to terminate the management agreements for good reason, as defined therein.

Termination Fee.  If the Company terminates one or both of the management agreements with RMR LLC for convenience, or if RMR LLC terminates one or both of the management agreements for good reason,

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the Company has agreed to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated management agreement(s) for the term that was remaining prior to such termination, which, depending on the time of termination would be between 19 and 20 years. If the Company terminates one or both of its management agreements with RMR LLC for a performance reason, the Company has agreed to pay RMR LLC the termination fee calculated as described above, but assuming a 10 year term was remaining prior to the termination. The Company is not required to pay any termination fee if it terminates its management agreements with RMR LLC for cause or as a result of a change of control of RMR LLC.

Transition Services. RMR LLC has agreed to provide certain transition services to the Company for 120 days following an applicable termination by the Company or notice of termination by RMR LLC, including cooperating with the Company and using commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under the business management agreement and to facilitate the orderly transfer of the management of the managed properties, as applicable.

Vendors. Pursuant to the Company's management agreements with RMR LLC, RMR LLC may from time to time negotiate on the Company's behalf with certain third party vendors and suppliers for the procurement of goods and services to the Company. As part of this arrangement, the Company may enter into agreements with RMR LLC and other companies to which RMR LLC provides management services for the purpose of obtaining more favorable terms from such vendors and suppliers.

Share Awards to RMR LLC Employees. The Company has historically granted share awards to certain RMR LLC employees under the Company's equity compensation plans. During the year ended December 31, 2016, the Company made annual share awards to the Company's officers and to other employees of RMR LLC of 79,100 Common Shares valued at approximately $2.3 million, based upon the closing price of the Common Shares on NASDAQ on the date of grant. One fifth of these share awards vested on the grant date and one fifth vests on each of the next four anniversaries of the grant date. These awards to RMR LLC employees are in addition to the share awards granted to Adam Portnoy and Barry Portnoy as the Company's Managing Trustees and the fees the Company paid to RMR LLC. In September 2016, the Company purchased 20,689 Common Shares, at the closing price for the Common Shares on NASDAQ on the date of purchase, from certain of the Company's officers and other employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of Common Shares.

On occasion, the Company has entered into arrangements with former employees of RMR LLC in connection with the termination of their employment with RMR LLC, providing for the acceleration of vesting of Common Share awards previously granted to them under the Company's equity compensation plans. Additionally, each of the Company's executive officers during 2016 received share awards of other companies to which RMR LLC provides management services, including TA, in their capacities as officers and employees of RMR LLC.

Lease with RMR LLC. The Company leases office space to RMR LLC in the office building component of one of the Company's hotels. Pursuant to the Company's lease agreement with RMR LLC, the Company recognized rental income from RMR LLC for leased office space of $35,000 for the year ended December 31, 2016. The Company's office space lease with RMR LLC is terminable by RMR LLC if the Company's management agreements with RMR LLC are terminated.

Relationship with Sonesta and Others Related to It. As of December 31, 2016, Sonesta managed 34 of the Company's hotels. Sonesta is a private company owned by our Managing Trustees, Adam Portnoy and Barry Portnoy, who also serve as Sonesta's directors. Sonesta's chief executive officer and chief financial officer are officers of RMR LLC. Certain other officers and employees of Sonesta are former employees of RMR LLC. RMR LLC also provides certain services to Sonesta.

HOSPITALITY PROPERTIES TRUST       2017 Proxy Statement    43

Management Agreements With Sonesta. The Company has hotel management agreements with Sonesta that provide for Sonesta to manage, as of December 31, 2016, nine of the Company's full service hotels and 25 of the Company's limited service hotels. The Company and Sonesta are also parties to a pooling agreement which combines those management agreements for purposes of calculating gross revenues, payment of hotel operating expenses, payment of fees and distributions and minimum returns due to the Company. The Company refers to this pooling agreement as the Sonesta agreement.

The Sonesta management agreements provide that the Company is paid a fixed annual minimum return equal to 8% of its invested capital, as defined therein, which was approximately $90.2 million as of December 31, 2016, if gross revenues of the hotels, after payment of hotel operating expenses and management and related fees (other than Sonesta's incentive fee, if applicable), are sufficient to do so. The Sonesta management agreements further provide that the Company is paid an additional return based upon operating profits, as defined therein, after payment of Sonesta's incentive fee, if applicable. The Company realized returns of approximately $59.6 million during the year ended December 31, 2016 under the Sonesta agreement. The Company does not have any security deposits or guarantees for its Sonesta hotels. Accordingly, the returns the Company receives from its Sonesta hotels are limited to available hotel cash flows after payment of operating expenses.

The Sonesta management agreements provide that Sonesta is entitled to receive, after payment of hotel operating expenses, a base management fee equal to 3% of gross revenues for the Company's full service Sonesta hotels and 5% of gross revenues for our limited service Sonesta hotels. Additionally, Sonesta is entitled to a reservation fee equal to 1.5% of gross room revenues, as defined in the management agreements, a system fee for centralized services of 1.5% of gross revenues, a procurement and construction supervision fee equal to 3% of third party costs of capital expenditures and an incentive management fee equal to 20% of operating profits remaining after reimbursement to the Company and to Sonesta of certain advances and payment of the Company's minimum returns. Sonesta's incentive management fee, but not its other fees, is earned only after the Company's minimum returns are paid. The Company incurred base management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing program and third party reservation transmission fees of approximately $24.2 million for the year ended December 31, 2016 under the Sonesta agreement. In addition, the Company recognized procurement and construction supervision fees of approximately $1.5 million for the year ended December 31, 2016 under the Sonesta agreement.

Under the Sonesta management agreements, the costs incurred by Sonesta for advertising, marketing, promotional and public relations programs and campaigns, including "frequent stay" rewards programs, for the benefit of the Company's Sonesta hotels are subject to reimbursement by the Company or are otherwise treated as hotel operating expenses, subject to the Company's approval.

The Sonesta management agreements do not require FF&E escrow deposits, but do require the Company to fund capital expenditures the Company approves at its Sonesta hotels. The Company funded approximately $54.1 million for renovations and other capital improvements to hotels included in the Sonesta agreement during the year ended December 31, 2016. The Company currently expects to fund approximately $35.8 million for renovations and other capital improvements during the year ending December 31, 2017. The Company owed Sonesta approximately $2.4 million for capital expenditure reimbursements and for a previously estimated overpayment of minimum returns advanced at December 31, 2016.

The Sonesta management agreements expire in January 2037, and will be extended automatically for up to two successive 15 year renewal terms unless Sonesta elects not to renew the management agreements. The Company generally has the right to terminate the Sonesta management agreements after three years without cause upon payment of a termination fee. The Company also has the right to terminate the Sonesta management agreements without a termination fee if the Company's minimum return is less than 6% of its invested capital during any three of four applicable consecutive years. Both the Company and Sonesta have the right to terminate the Sonesta management agreements upon a change of control, as defined therein, of the other party, and under certain other circumstances that, in

44     HOSPITALITY PROPERTIES TRUST       2017 Proxy Statement

the case of termination by Sonesta, may require the payment of a termination fee. Under the Sonesta management agreements, the termination fee is an amount equal to the present value of the payments that would have been made to Sonesta as a base management fee, reservation fee, system fee and incentive fee, each as defined therein, between the date of termination of the applicable agreement and the scheduled expiration date of the term that was remaining prior to such termination, which present value is calculated based upon the average of each of such fees earned in each of the three years ended prior to the date of termination, discounted at an annual rate equal to 8%.

On January 4, 2016, the Company and Sonesta amended the Sonesta pooling agreement and management agreements. Pursuant to the amendment, a hotel may be designated as "non-economic" under the applicable management agreement and removed from the Sonesta pooling agreement and subject to sale, and the Company has an early termination right under each of the Sonesta management agreements if the applicable hotel does not meet certain criteria for the stipulated measurement period. These stipulated measurement periods begin on the later of January 1, 2017 and January 1st of the year beginning at least 18 months following the effective date of the applicable management agreement.

On February 1, 2016, the Company acquired two extended stay hotels with 262 suites in Cleveland and Westlake, OH for $12.0 million, excluding acquisition related costs. In connection with this acquisition, the Company entered into a long term management agreement for Sonesta to manage these hotels and this management agreement was combined with the Company's other Sonesta hotel management agreements under the Company's pooling agreement with Sonesta.

On December 5, 2016, the Company acquired a 236 room hotel located in Milpitas, CA for $46.0 million, excluding acquisition related costs. This hotel was rebranded as a Sonesta hotel and is being managed by Sonesta.

Relationship with AIC. The Company, ABP Trust, TA and four other companies to which RMR LLC provides management services currently own AIC, an Indiana insurance company, in equal amounts and are parties to an amended and restated shareholders agreement regarding AIC.

All of the Company's Trustees and all of the trustees and directors of the other AIC shareholders currently serve on the board of directors of AIC. RMR LLC provides management and administrative services to AIC pursuant to a management and administrative services agreement with AIC. Pursuant to this agreement, AIC pays RMR LLC a service fee equal to 3.0% of the total annual net earned premiums payable under then active policies issued or underwritten by AIC or by a vendor or an agent of AIC on its behalf or in furtherance of AIC's business.

The Company and the other AIC shareholders participate in a combined property insurance program arranged and insured or reinsured in part by AIC. The Company paid aggregate annual premiums, including taxes and fees, of approximately $4.0 million in connection with this insurance program for the policy year ending June 30, 2017, which amount may be adjusted from time to time as the Company acquires and disposes of properties that are included in this insurance program.

Directors' and Officers' Liability Insurance. The Company, RMR Inc., RMR LLC and certain companies to which RMR LLC provides management services, including TA, participate in a combined directors' and officers' liability insurance policy. This combined policy expires in September 2018. The Company paid an aggregate premium of approximately $0.1 million for this policy purchased in August 2016.

The foregoing descriptions of the Company's agreements with RMR Inc., RMR LLC, Sonesta, TA, AIC and other related persons are summaries and are qualified in their entirety by the terms of the agreements. A further description of the terms of certain of those agreements is included in the Annual Report. In addition, copies of certain of the agreements evidencing these relationships are filed with the SEC and may be obtained from the SEC's website, www.sec.gov. The Company may engage in additional transactions with related persons, including businesses to which RMR LLC or its affiliates provide management services.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Executive officers, Trustees and certain persons who own more than 10% of the outstanding Common Shares are required by Section 16(a) of the Exchange Act and related regulations:

•

to file reports of their ownership of Common Shares with the SEC and NASDAQ; and



•

to furnish the Company with copies of the reports.

To the Company's knowledge, based solely on review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended December 31, 2016, our executive officers, Trustees and greater than 10% beneficial owners timely filed all required Section 16(a) reports.

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OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY

The following table sets forth information regarding beneficial ownership of Common Shares by each Trustee, each of our named executive officers, and our Trustees, Trustee nominees and executive officers as a group, all as of March 31, 2017. Unless otherwise noted, to the Company's knowledge, voting power and investment power in the Common Shares are exercisable solely by the named person and the principal business address of the named person is c/o Hospitality Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458.

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