Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the First Quarter of 2021
SHANGHAI, China, April 22, 2021 (GLOBE NEWSWIRE) -- Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the first quarter (“Q1 2021”) ended March 31, 2021.
COVID-19 update
Due to COVID-19 resurgence in Shanghai, Beijing and Hebei Province and the “stay local” guidance prior to the Chinese New Year holiday (CNY), RevPAR in January and February 2021 recovered to 74% and 56% of 2019 respectively. Our hotel openings were also negatively impacted by the resurgence of COVID-19 during the first quarter. However, our performance started to recover steadily again post the CNY holiday. Particularly, after the National People’s Congress and the Chinese People’s Political Consultative Conference during the first week of March, the Chinese government further eased travel restrictions which were in effect from March 16, 2021. After that, we saw strong recovery in hotel demand in the Beijing area, followed by other major tier 1 cities. Our RevPAR in March 2021 recovered to 95% of 2019, mainly driven by the strong recovery of business demand. Heading into April, the recovery trend continued. Our RevPAR during the Tomb Sweeping holiday recovered to 96% of same period of 2019, which demonstrated the strong recovery of leisure demand.
Steigenberger Hotels AG and its subsidiaries (“DH”) suffered from the several resurgences of COVID-19 pandemic in European countries. The lock down period there has been extended several times, and most likely to further extend to the end of May, 2021. European countries began their vaccination process in December 2020. However, due to the uncertainty of the completion of the vaccination process, and consequently the timing of business recovery, we are taking further cost reduction and cash flow measures, such as negotiating with landlords to reduce our rental costs, reducing or eliminating discretionary corporate spending and capital expenditures, etc. However, the extension of lockdown impacts should be partially offset by extension of the scope and duration of European government subsidy programs.
Operating Results: Legacy-Huazhu(1)
| Number of hotels | Number of rooms | |||||||
| Opened in Q1 2021 | Closed (2) in Q1 2021 | Net added in Q1 2021 | As of March 31, 2021 (3) | As of March 31, 2021 | ||||
| Leased and owned hotels | 2 | (19 | ) | (17 | ) | 664 | 89,901 | |
| Manachised and franchised hotels | 207 | (98 | ) | 109 | 6,097 | 548,718 | ||
| Total | 209 | (117 | ) | 92 | 6,761 | 638,619 | ||
| (1) Legacy-Huazhu refers to Huazhu and its subsidiaries, excluding DH. (2) The reasons for hotel closures mainly include non-compliance with our brand standards, operating losses, and property-related issues. In Q1 2021, we temporarily closed 16 hotels for brand upgrade and business model change purposes. (3) As of March 31, 2021, 43 hotels were requisitioned by governmental authorities. | ||||||||
| As of March 31, 2021 | ||
| Number of hotels | Unopened hotels in pipeline | |
| Economy hotels | 4,383 | 1,269 |
| Leased and owned hotels | 422 | 5 |
| Manachised and franchised hotels | 3,961 | 1,264 |
| Midscale and upscale hotels | 2,378 | 1,339 |
| Leased and owned hotels | 242 | 14 |
| Manachised and franchised hotels | 2,136 | 1,325 |
| Total | 6,761 | 2,608 |
| Operational hotels excluding hotels under requisition | ||||
| For the quarter ended | ||||
| March 31, | December 31, | March 31, | yoy | |
| 2020 | 2020 | 2021 | change | |
| Average daily room rate (in RMB) | ||||
| Leased and owned hotels | 211 | 272 | 243 | 15.6% |
| Manachised and franchised hotels | 184 | 224 | 203 | 10.2% |
| Blended | 189 | 231 | 209 | 10.6% |
| Occupancy rate (as a percentage) | ||||
| Leased and owned hotels | 43.8% | 79.6% | 64.0% | 20.2 p.p. |
| Manachised and franchised hotels | 47.4% | 80.8% | 66.6% | 19.2 p.p. |
| Blended | 46.7% | 80.6% | 66.2% | 19.5 p.p. |
| RevPAR (in RMB) | ||||
| Leased and owned hotels | 92 | 217 | 156 | 68.9% |
| Manachised and franchised hotels | 87 | 181 | 135 | 54.9% |
| Blended | 88 | 186 | 138 | 56.7% |
| For the quarter ended | |||
| March 31, | March 31, | yoy | |
| 2019 | 2021 | change | |
| Average daily room rate (in RMB) | |||
| Leased and owned hotels | 258 | 243 | -5.6% |
| Manachised and franchised hotels | 211 | 203 | -3.9% |
| Blended | 221 | 209 | -5.6% |
| Occupancy rate (as a percentage) | |||
| Leased and owned hotels | 83.6% | 64.0% | -19.6p.p. |
| Manachised and franchised hotels | 79.8% | 66.6% | -13.3p.p. |
| Blended | 80.6% | 66.2% | -14.4p.p. |
| RevPAR (in RMB) | |||
| Leased and owned hotels | 216 | 156 | -27.8% |
| Manachised and franchised hotels | 169 | 135 | -19.9% |
| Blended | 178 | 138 | -22.5% |
| 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 March 31, | For the quarter | yoy | For the quarter | yoy | For the quarter | yoy | ||||||||||
| ended March 31, | change | ended March 31, | change | ended March 31, | change | |||||||||||
| 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | (p.p.) | ||||||||
| Economy hotels | 2,832 | 2,832 | 80 | 113 | 42.1 | % | 153 | 160 | 4.9 | % | 52.0 | % | 70.5 | % | 18.4 | |
| Leased and owned hotels | 417 | 417 | 79 | 120 | 50.8 | % | 164 | 175 | 7.3 | % | 48.5 | % | 68.2 | % | 19.7 | |
| Manachised and franchised hotels | 2,415 | 2,415 | 80 | 111 | 40.0 | % | 150 | 157 | 4.4 | % | 53.0 | % | 71.0 | % | 18.1 | |
| Midscale and upscale hotels | 1,377 | 1,377 | 111 | 176 | 58.2 | % | 260 | 278 | 7.0 | % | 42.7 | % | 63.1 | % | 20.4 | |
| Leased and owned hotels | 198 | 198 | 113 | 191 | 68.6 | % | 297 | 326 | 9.5 | % | 38.1 | % | 58.7 | % | 20.6 | |
| Manachised and franchised hotels | 1,179 | 1,179 | 110 | 172 | 55.6 | % | 251 | 268 | 6.6 | % | 44.0 | % | 64.2 | % | 20.2 | |
| Total | 4,209 | 4,209 | 92 | 138 | 50.2 | % | 190 | 204 | 7.6 | % | 48.4 | % | 67.5 | % | 19.2 | |
| Number of hotels | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | |||||||||||||
| As of March 31, | For the quarter | yoy | For the quarter | yoy | For the quarter | yoy | ||||||||||
| ended March 31, | change | ended March 31, | change | ended March 31, | change | |||||||||||
| 2019 | 2021 | 2019 | 2021 | 2019 | 2021 | 2019 | 2021 | (p.p.) | ||||||||
| Economy hotels | 2,290 | 2,290 | 158 | 110 | -30.0 | % | 181 | 158 | -12.7 | % | 87.1 | % | 69.8 | % | -17.3 | |
| Leased and owned hotels | 396 | 396 | 175 | 117 | -33.1 | % | 199 | 173 | -13.1 | % | 88.1 | % | 67.9 | % | -20.2 | |
| Manachised and franchised hotels | 1,894 | 1,894 | 153 | 109 | -29.1 | % | 176 | 154 | -12.4 | % | 86.9 | % | 70.4 | % | -16.5 | |
| Midscale and upscale hotels | 842 | 842 | 248 | 174 | -30.0 | % | 321 | 279 | -13.0 | % | 77.2 | % | 62.2 | % | -15.0 | |
| Leased and owned hotels | 173 | 173 | 302 | 189 | -37.4 | % | 381 | 319 | -16.4 | % | 79.1 | % | 59.2 | % | -19.9 | |
| Manachised and franchised hotels | 669 | 669 | 229 | 168 | -26.5 | % | 299 | 266 | -11.0 | % | 76.5 | % | 63.2 | % | -13.3 | |
| Total | 3,132 | 3,132 | 187 | 131 | -29.9 | % | 224 | 195 | -12.6 | % | 83.9 | % | 67.3 | % | -16.6 | |
Operating Results: Legacy-DH(4)
| Number of hotels | Number of rooms | Unopened hotels in pipeline | ||||||||
| Opened in Q1 2021 | Closed in Q1 2021 | Net added in Q1 2021 | As of March 31, 2021(5) | | As of March 31, 2021 | | As of March 31, 2021 | |||
| Leased hotels | 1 | - | 1 | 73 | 13,527 | 27 | ||||
| Manachised and franchised hotels | - | (1 | ) | (1 | ) | 47 | 10,366 | 14 | ||
| Total | 1 | (1 | ) | - | 120 | 23,893 | 41 | |||
| (4) Legacy-DH refers to DH. (5) As of March 31, 2021, a total of 20 DH brand hotels were temporarily closed due to COVID-19. | ||||||||||
| For the quarter ended | ||||
| March 31, | December 31, | March 31, | yoy | |
| 2020 | 2020 | 2021 | change | |
| Average daily room rate (in EUR) | ||||
| Leased hotels | 96.8 | 78.4 | 77.9 | -19.6% |
| Manachised and franchised hotels | 79.5 | 73.3 | 59.0 | -25.8% |
| Blended | 89.3 | 76.3 | 68.5 | -23.3% |
| Occupancy rate (as a percentage) | ||||
| Leased hotels | 52.6% | 20.9% | 14.6% | -38.0p.p. |
| Managed and franchised hotels | 50.4% | 25.4% | 26.5% | -24.0p.p. |
| Blended | 51.7% | 22.5% | 18.8% | -32.8p.p. |
| RevPAR (in EUR) | ||||
| Leased hotels | 51.0 | 16.4 | 11.4 | -77.7% |
| Managed and franchised hotels | 40.1 | 18.6 | 15.6 | -61.0% |
| Blended | 46.1 | 17.2 | 12.9 | -72.1% |
Hotel Portfolio by Brand
| As of March 31, 2021 | |||
| Hotels | Rooms | Unopened hotels | |
| in operation | in pipeline | ||
| Economy hotels | 4,397 | 363,494 | 1,280 |
| HanTing Hotel | 2,767 | 255,385 | 659 |
| Hi Inn | 436 | 25,228 | 99 |
| Elan Hotel(6) | 972 | 59,319 | 468 |
| Ibis Hotel | 208 | 21,901 | 43 |
| Zleep Hotels | 14 | 1,661 | 11 |
| Midscale and upscale hotels | 2,484 | 299,018 | 1,369 |
| Ibis Styles Hotel | 70 | 8,119 | 26 |
| Starway Hotel | 453 | 38,110 | 272 |
| JI Hotel | 1,137 | 139,943 | 577 |
| Orange Hotel | 345 | 38,537 | 181 |
| Crystal Orange Hotel | 121 | 16,240 | 69 |
| Manxin Hotel | 63 | 6,155 | 54 |
| Madison Hotel | 25 | 3,850 | 43 |
| Mercure Hotel | 108 | 17,846 | 64 |
| Novotel Hotel | 12 | 3,387 | 14 |
| Joya Hotel | 10 | 1,842 | 0 |
| Blossom House | 27 | 1,272 | 26 |
| Grand Mercure Hotel | 7 | 1,485 | 6 |
| Steigenberger Hotels & Resorts | 49 | 11,574 | 9 |
| IntercityHotel(7) | 45 | 7,931 | 21 |
| MAXX by Steigenberger(8) | 5 | 777 | 4 |
| Jaz in the City | 2 | 424 | 2 |
| Other partner hotels | 5 | 1,526 | 1 |
| Total | 6,881 | 662,512 | 2,649 |
| (6) As of March 31, 2021, 9 Ni Hao Hotels were included in the operational hotel total for Elan Hotels and 96 Ni Hao hotels were included in the pipeline total for Elan Hotels. (7) As of March 31, 2021, 4 pipeline hotels of IntercityHotel were in China. (8) As of March 31, 2021, 3 pipeline hotels of MAXX by Steigenberger were in China. | |||
About Huazhu Group Limited
Originated in China, Huazhu Group Limited is a world-leading hotel group. As of March 31, 2021, Huazhu operated 6,881 hotels with 662,512 rooms in operation in 16 countries. Huazhu’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, and Ni Hao Hotel. Upon the completion of the acquisition of DH on January 2, 2020, Huazhu added five brands to its portfolio, including Steigenberger Hotels & Resorts, MAXX by Steigenberger, Jaz in the City, IntercityHotel and Zleep Hotels. In addition, Huazhu 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.
Huazhu’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, Huazhu directly operates hotels typically located on leased or owned properties. Under the manachise model, Huazhu manages manachised hotels through the on-site hotel managers that Huazhu appoints, and Huazhu collects fees from franchisees. Under the franchise model, Huazhu provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. Huazhu applies a consistent standard and platform across all of its hotels. As of March 31, 2021, Huazhu operates 16 percent of its hotel rooms under lease and ownership model, and 84 percent under manachise and franchise models.
For more information, please visit Huazhu’s website: http://ir.huazhu.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.
Huazhu 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
Huazhu Investor Relations
Tel: 86 (21) 6195 9561
Email: ir@huazhu.com
http://ir.huazhu.com