H World Group Limited Announces Preliminary Results for Hotel Operations in the Second Quarter of 2022
SHANGHAI, China, July 20, 2022 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the second quarter (“Q2 2022”) ended June 30, 2022.
COVID-19 update
For our Legacy-Huazhu business, the large-scale outbreak of Omicron variant in China since early-March 2022 led to massive lockdown in various cities and sharp decline in the demand for both business and leisure travel. As a result, our RevPAR in Q2 2022 only recovered to 69% of the 2019 level. Breaking down into each month, April and May 2022 were the hardest-hit with RevPAR only having recovered to 53% and 65% of the 2019 levels respectively. However, RevPAR recovery improved in June 2022 to 86% of the 2019 level due to gradual lift of lockdown since late May 2022. In addition, if we consider the impacts of requisitioned hotels, our RevPAR recovery in Q2 2022 would have been 75% of the 2019 level.
Steigenberger Hotels AG and its subsidiaries (“DH”, or “Legacy-DH”) have seen an accelerating RevPAR recovery in Q2 2022. While RevPAR in March 2022 was 35% lower than the 2019 level, June 2022 RevPAR was only 1% behind that of 2019. However, against the background of surging inflation in Europe and the resulting substantial increase in costs as well as uncertainties about the future development of COVID-19 and energy supplies, DH has been focusing on cash flow improvement measures. As a consequence, DH will continue to focus on efficiency improvements, re-negotiation of lease contracts, and personnel cost optimization.
| Operating Results: Legacy-Huazhu(1) | ||||||||
| Number of hotels | Number of rooms | |||||||
| Opened in Q2 2022 | Closed (2) in Q2 2022 | Net added in Q2 2022 | As of June 30, 2022 (3) | As of June 30, 2022 | ||||
| Leased and owned hotels | 5 | (12) | (7) | 646 | 91,171 | |||
| Manachised and franchised hotels | 264 | (74) | 190 | 7,405 | 657,771 | |||
| Total | 269 | (86) | 183 | 8,051 | 748,942 | |||
| (1) Legacy-Huazhu refers to H world and its subsidiaries, excluding DH. (2) The reasons for hotel closures mainly included non-compliance with our brand standards, operating losses, and property-related issues. In Q2 2022, we temporarily closed 7 hotels for brand upgrade and business model change purposes. (3) As of June 30, 2022,645 hotels were requisitioned by governmental authorities. | ||||||||
| As of June 30, 2022 | ||
| Number of hotels | Unopened hotels in pipeline | |
| Economy hotels | 4,859 | 974 |
| Leased and owned hotels | 381 | 1 |
| Manachised and franchised hotels | 4,478 | 973 |
| Midscale and upscale hotels | 3,192 | 1,225 |
| Leased and owned hotels | 265 | 19 |
| Manachised and franchised hotels | 2,927 | 1,206 |
| Total | 8,051 | 2,199 |
| Operational hotels excluding hotels under requisition(4) | ||||||||
| For the quarter ended | ||||||||
| June 30, | March 31, | June 30, | yoy | |||||
| 2021 | 2022 | 2022 | change | |||||
| Average daily room rate (in RMB) | ||||||||
| Leased and owned hotels | 311 | 263 | 243 | -21.7% | ||||
| Manachised and franchised hotels | 246 | 218 | 215 | -12.8% | ||||
| Blended | 255 | 224 | 218 | -14.5% | ||||
| Occupancy Rate (as a percentage) | ||||||||
| Leased and owned hotels | 81.1% | 56.7% | 62.9% | -18.1p.p. | ||||
| Manachised and franchised hotels | 82.5% | 59.6% | 64.9% | -17.6p.p. | ||||
| Blended | 82.3% | 59.2% | 64.6% | -17.7p.p. | ||||
| RevPAR (in RMB) | ||||||||
| Leased and owned hotels | 252 | 149 | 153 | -39.2% | ||||
| Manachised and franchised hotels | 203 | 130 | 139 | -31.4% | ||||
| Blended | 210 | 132 | 141 | -32.9% | ||||
| For the quarter ended | ||||||
| June 30, | June 30, | yoy | ||||
| 2019 | 2022 | change | ||||
| Average daily room rate (in RMB) | ||||||
| Leased and owned hotels | 281 | 243 | -13.5% | |||
| Manachised and franchised hotels | 225 | 215 | -4.7% | |||
| Blended | 236 | 218 | -7.8% | |||
| Occupancy Rate (as a percentage) | ||||||
| Leased and owned hotels | 89.4% | 62.9% | -26.5p.p. | |||
| Manachised and franchised hotels | 86.3% | 64.9% | -21.4p.p. | |||
| Blended | 86.9% | 64.6% | -22.3p.p. | |||
| RevPAR (in RMB) | ||||||
| Leased and owned hotels | 252 | 153 | -39.2% | |||
| Manachised and franchised hotels | 194 | 139 | -28.4% | |||
| Blended | 206 | 141 | -31.4% | |||
| (4) If including hotels under requisition, RevPAR in Q2 2022 would have been 75% of the 2019 level. | ||||||
| Same-hotel operational data by class | |||||||||||||||
| Mature hotels in operation for more than 18 months (excluding hotels under requisition) | |||||||||||||||
| Number of hotels | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | ||||||||||||
| As of June 30, | For the quarter | yoy | For the quarter | yoy | For the quarter | yoy | |||||||||
| ended June 30, | change | ended June 30, | change | ended June 30, | change | ||||||||||
| 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | (p.p.) | |||||||
| Economy hotels | 3127 | 3127 | 172 | 112 | -34.8% | 197 | 166 | -16.0% | 87.2% | 67.7% | -19.5 | ||||
| Leased and owned hotels | 350 | 350 | 193 | 121 | -37.3% | 229 | 177 | -22.7% | 84.3% | 68.4% | -15.9 | ||||
| Manachised and franchised hotels | 2777 | 2777 | 168 | 110 | -34.3% | 191 | 163 | -14.6% | 87.7% | 67.5% | -20.2 | ||||
| Midscale and upscale hotels | 1785 | 1785 | 275 | 173 | -37.2% | 335 | 281 | -16.4% | 81.9% | 61.5% | -20.4 | ||||
| Leased and owned hotels | 203 | 203 | 323 | 190 | -41.1% | 414 | 332 | -19.8% | 78.0% | 57.3% | -20.7 | ||||
| Manachised and franchised hotels | 1582 | 1582 | 266 | 169 | -36.3% | 322 | 272 | -15.6% | 82.7% | 62.3% | -20.3 | ||||
| Total | 4912 | 4912 | 217 | 138 | -36.2% | 255 | 213 | -16.7% | 84.9% | 65.0% | -19.9 | ||||
| Number of hotels | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | ||||||||||||
| As of June 30, | For the quarter ended June 30, | yoy change | For the quarter ended June 30, | yoy change | For the quarter ended June 30, | yoy change | |||||||||
| 2019 | 2022 | 2019 | 2022 | 2019 | 2022 | 2019 | 2022 | (p.p.) | |||||||
| Economy hotels | 1888 | 1888 | 182 | 110 | -39.4% | 195 | 164 | -15.8% | 93.1% | 67.0% | -26.1 | ||||
| Leased and owned hotels | 334 | 334 | 204 | 119 | -41.8% | 218 | 175 | -20.0% | 93.6% | 68.1% | -25.5 | ||||
| Manachised and franchised hotels | 1554 | 1554 | 176 | 108 | -38.7% | 189 | 161 | -14.5% | 93.0% | 66.7% | -26.3 | ||||
| Midscale and upscale hotels | 773 | 773 | 283 | 165 | -41.5% | 333 | 279 | -16.3% | 84.8% | 59.3% | -25.5 | ||||
| Leased and owned hotels | 155 | 155 | 348 | 170 | -51.0% | 401 | 312 | -22.3% | 86.6% | 54.7% | -31.9 | ||||
| Manachised and franchised hotels | 618 | 618 | 261 | 164 | -37.3% | 310 | 269 | -13.2% | 84.2% | 60.8% | -23.4 | ||||
| Total | 2661 | 2661 | 217 | 129 | -40.4% | 240 | 201 | -16.3% | 90.3% | 64.3% | -25.9 | ||||
| Operating Results: Legacy-DH(5) | ||||||||
| Number of hotels | Number of rooms | Unopened hotels in pipeline | ||||||
| Opened in Q2 2022 | Closed in Q2 2022 | Net added in Q2 2022 | As of June 30, 2022(6) | | As of June 30,2022 | | As of June 30,2022 | |
| Leased hotels | 2 | - | 2 | 79 | 14,939 | 25 | ||
| Manachised and franchised hotels | 3 | - | 3 | 46 | 10,017 | 12 | ||
| Total | 5 | - | 5 | 125 | 24,956 | 37 | ||
| (5) Legacy-DH refers to DH. (6) As of June 30, 2022, a total of 3 hotels were temporarily closed. 1 hotel was closed for renovation and 1 hotel was closed due to flood damage. Additionally, 1 hotel was temporarily closed due to extensive hotel refurbishment. | ||||||||
| For the quarter ended | ||||||||
| June 30, | March 31, | June 30, | yoy | |||||
| 2021 | 2022 | 2022 | change | |||||
| Average daily room rate (in EUR) | ||||||||
| Leased hotels | 85.2 | 90.0 | 112.6 | 32.2% | ||||
| Manachised and franchised hotels | 77.9 | 85.5 | 106.7 | 37.0% | ||||
| Blended | 81.5 | 88.0 | 110.4 | 35.5% | ||||
| Occupancy rate (as a percentage) | ||||||||
| Leased hotels | 20.0% | 34.1% | 61.2% | +41.2 p.p. | ||||
| Managed and franchised hotels | 30.8% | 44.0% | 57.9% | +27.1 p.p. | ||||
| Blended | 24.4% | 38.0% | 59.8% | +35.4 p.p. | ||||
| RevPAR (in EUR) | ||||||||
| Leased hotels | 17.0 | 30.7 | 68.9 | 305.3% | ||||
| Managed and franchised hotels | 24.0 | 37.6 | 61.8 | 157.5% | ||||
| Blended | 19.8 | 33.4 | 66.0 | 233.3% | ||||
| Hotel Portfolio by Brand | |||
| As of June 30, 2022 | |||
| Hotels | Rooms | Unopened hotels | |
| in operation | in pipeline | ||
| Economy hotels | 4,874 | 384,177 | 985 |
| HanTing Hotel | 3,124 | 277,284 | 626 |
| Hi Inn | 458 | 24,036 | 120 |
| Ni Hao Hotel | 106 | 7,503 | 188 |
| Elan Hotel | 952 | 50,910 | 7 |
| Ibis Hotel | 219 | 22,734 | 33 |
| Zleep Hotels | 15 | 1,710 | 11 |
| Midscale hotels | 2,666 | 291,349 | 949 |
| Ibis Styles Hotel | 84 | 8,679 | 13 |
| Starway Hotel | 557 | 44,683 | 185 |
| JI Hotel | 1,515 | 180,847 | 528 |
| Orange Hotel | 479 | 52,168 | 215 |
| CitiGO Hotel | 31 | 4,972 | 8 |
| Upper midscale hotels | 494 | 72,304 | 244 |
| Crystal Orange Hotel | 155 | 20,639 | 56 |
| Manxin Hotel | 99 | 9,432 | 52 |
| Madison Hotel | 43 | 6,346 | 55 |
| Mercure Hotel | 131 | 22,533 | 43 |
| Novotel Hotel | 15 | 4,032 | 14 |
| IntercityHotel(7) | 51 | 9,322 | 24 |
| Upscale hotels | 118 | 20,367 | 51 |
| Jaz in the City | 3 | 587 | 1 |
| Joya Hotel | 8 | 1,386 | - |
| Blossom House | 39 | 1,888 | 28 |
| Grand Mercure Hotel | 7 | 1,485 | 5 |
| Steigenberger Hotels & Resorts(8) | 53 | 13,710 | 9 |
| MAXX (9) | 8 | 1,311 | 8 |
| Luxury hotels | 15 | 2,326 | 2 |
| Steigenberger Icon(10) | 9 | 1,847 | 1 |
| Song Hotels | 6 | 479 | 1 |
| Others | 9 | 3,375 | 5 |
| Other hotels(11) | 9 | 3,375 | 5 |
| Total | 8,176 | 773,898 | 2,236 |
| (7) As of June 30, 2022, 2 operational hotels and 9 pipeline hotels of IntercityHotel were in China. | |||
| (8) As of June 30, 2022, 11 operational hotels and 2 pipeline hotels of Steigenberger Hotels & Resorts were in China. | |||
| (9) As of June 30, 2022, 2 operational hotels and 8 pipeline hotels of MAXX were in China. | |||
| (10) As of June 30, 2022, 3 operational hotels of Steigenberger Icon were in China. | |||
| (11) Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House). | |||
About H World Group Limited
Originated in China, H World Group Limited is a world-leading hotel group. As of June 30, 2022, H World operated 8,176 hotels with 773,898 rooms in operation in 17 countries. H World’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels. In addition, H World also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.
H World’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, H World directly operates hotels typically located on leased or owned properties. Under the manachise model, H World manages manachised hotels through the on-site hotel managers that H World appoints, and H World collects fees from franchisees. Under the franchise model, H World provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. H World applies a consistent standard and platform across all of its hotels. As of June 30, 2022, H World operates 14 percent of its hotel rooms under lease and ownership model, and 86 percent under manachise and franchise models.
For more information, please visit H World’s website: https://ir.hworld.com.
Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; economic conditions; the regulatory environment; our ability to attract and retain customers and leverage our brands; trends and competition in the lodging industry; the expected growth of demand for lodging; and other factors and risks detailed in our filings with the U.S. Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results.
H World undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
Contact Information
H World Investor Relations
Tel: 86 (21) 6195 9561
Email: ir@huazhu.com
https://ir.hworld.com
