Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the Third Quarter of 2021
SHANGHAI, China, Oct. 27, 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 third quarter (“Q3 2021”) ended September 30, 2021.
COVID-19 update
For our Legacy-Huazhu business, our RevPAR recovery momentum resumed quickly in early July. Since late July, however, the spread of the Delta variant of COVID-19 from Nanjing to several provinces and cities resulted in the relevant governmental authorities imposing a new round of strict travelling restrictions, and the blended RevPAR of Legacy-Huazhu in August dropped significantly to only 54% of the 2019 level. After the Delta variant of COVID-19 in Nanjing became largely contained in early September, the monthly blended RevPAR of Legacy-Huazhu continued to recover, reaching approximately 92% of the 2019 level. However, with the relatively small-scale outbreak occurred in Fujian province in mid-September, the relevant governmental authorities again imposed strict travelling restrictions, especially for students, during the “Golden Week” in celebration of the National Day Holidays. As a result, the blended RevPAR of Legacy-Huazhu during the Golden Week recovered to only approximately 82% of the 2019 level. Nevertheless, RevPAR recovery in the second week of October resumed to close to 90% of the 2019 level, mainly driven by the rebound of business travelling. In addition, despite the uncertainty of the COVID-19 situation, we made significant progress in upscale hotel penetration and signed up over 20 upscale hotels in early October through our joint venture with Sunac.
Steigenberger Hotels AG and its subsidiaries (“DH”) observed continued recovery since the first lockdown in November 2020, along with the rollout of vaccination campaign in Germany. As of October 25th, 2021, approximately 69% of the German population have received at least one dose of vaccine and approximately 66% of the population are fully vaccinated. During the summer holiday season, the recovery of hotel demand was encouraging due to the strong leisure demand. After the summer holiday, the recovery of DH hotels’ RevPAR remained resilient, mainly driven by the business demand. For the third quarter of 2021, the occupancy rate of DH hotels’ reached approximately 49% and blended RevPAR reached approximately 65% of the 2019 level. Meanwhile, DH continued to implement further cost reduction and cash flow management measures, especially regarding personnel and lease costs.
Operating Results: Legacy-Huazhu(1)
| Number of hotels | Number of rooms | |||||||
| Opened in Q3 2021 | Closed (2) in Q3 2021 | Net added in Q3 2021 | As of September 30, 2021 (3) | As of September 30, 2021 | ||||
| Leased and owned hotels | 2 | (14 | ) | (12 | ) | 663 | 91,609 | |
| Manachised and franchised hotels | 479 | (126 | ) | 353 | 6,682 | 607,059 | ||
| Total | 481 | (140 | ) | 341 | 7,345 | 698,668 | ||
| (1) Legacy-Huazhu refers to Huazhu 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 Q3 2021, we temporarily closed 18 hotels for brand upgrade and business model change purposes. (3) As of September 30, 2021, 120 hotels were requisitioned by governmental authorities. | ||||||||
| As of September 30, 2021 | ||
| Number of hotels | Unopened hotels in pipeline | |
| Economy hotels | 4,621 | 1,374 |
| Leased and owned hotels | 404 | 3 |
| Manachised and franchised hotels | 4,217 | 1,371 |
| Midscale and upscale hotels | 2,724 | 1,414 |
| Leased and owned hotels | 259 | 14 |
| Manachised and franchised hotels | 2,465 | 1,400 |
| Total | 7,345 | 2,788 |
| Operational hotels excluding hotels under requisition | ||||||||
| For the quarter ended | ||||||||
| September 30, | June 30, | September 30, | yoy | |||||
| 2020 | 2021 | 2021 | change | |||||
| Average daily room rate (in RMB) | ||||||||
| Leased and owned hotels | 255 | 311 | 296 | 16.0 | % | |||
| Manachised and franchised hotels | 211 | 246 | 238 | 12.8 | % | |||
| Blended | 218 | 255 | 246 | 12.8 | % | |||
| Occupancy Rate (as a percentage) | ||||||||
| Leased and owned hotels | 82.9 | % | 81.1 | % | 69.7 | % | -13.1p.p. | |
| Manachised and franchised hotels | 81.8 | % | 82.5 | % | 72.2 | % | -9.6p.p. | |
| Blended | 82.0 | % | 82.3 | % | 71.9 | % | -10.1p.p. | |
| RevPAR (in RMB) | ||||||||
| Leased and owned hotels | 211 | 252 | 206 | -2.4 | % | |||
| Manachised and franchised hotels | 173 | 203 | 172 | -0.5 | % | |||
| Blended | 179 | 210 | 177 | -1.1 | % | |||
| For the quarter ended | ||||||
| September 30, | September 30, | yoy | ||||
| 2019 | 2021 | change | ||||
| Average daily room rate (in RMB) | ||||||
| Leased and owned hotels | 288 | 296 | 2.7 | % | ||
| Manachised and franchised hotels | 235 | 238 | 1.2 | % | ||
| Blended | 245 | 246 | 0.3 | % | ||
| Occupancy Rate (as a percentage) | ||||||
| Leased and owned hotels | 90.0 | % | 69.7 | % | -20.3p.p. | |
| Manachised and franchised hotels | 87.2 | % | 72.2 | % | -15.0p.p. | |
| Blended | 87.7 | % | 71.9 | % | -15.8p.p. | |
| RevPAR (in RMB) | ||||||
| Leased and owned hotels | 259 | 206 | -20.4 | % | ||
| Manachised and franchised hotels | 205 | 172 | -16.2 | % | ||
| Blended | 215 | 177 | -17.8 | % | ||
| 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 September 30, | For the quarter | yoy | For the quarter | yoy | For the quarter | yoy | |||||||||
| ended September 30, | change | ended September 30, | change | ended September 30, | change | ||||||||||
| 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | (p.p.) | |||||||
| Economy hotels | 3,157 | 3,157 | 147 | 141 | -3.9 | % | 170 | 187 | 10.3 | % | 86.6 | % | 75.4 | % | -11.2 |
| Leased and owned hotels | 398 | 398 | 162 | 157 | -3.4 | % | 187 | 213 | 14.2 | % | 87.0 | % | 73.6 | % | -13.4 |
| Manachised and franchised hotels | 2,759 | 2,759 | 144 | 138 | -4.1 | % | 166 | 182 | 9.5 | % | 86.5 | % | 75.8 | % | -10.7 |
| Midscale and upscale hotels | 1,646 | 1,646 | 244 | 225 | -7.9 | % | 301 | 323 | 7.2 | % | 80.9 | % | 69.6 | % | -11.3 |
| Leased and owned hotels | 218 | 218 | 280 | 257 | -8.3 | % | 358 | 392 | 9.5 | % | 78.4 | % | 65.7 | % | -12.7 |
| Manachised and franchised hotels | 1,428 | 1,428 | 236 | 217 | -7.8 | % | 289 | 309 | 6.7 | % | 81.5 | % | 70.4 | % | -11.0 |
| Total | 4,803 | 4,803 | 187 | 176 | -5.9 | % | 222 | 241 | 8.7 | % | 84.2 | % | 73.0 | % | -11.3 |
| Number of hotels | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | ||||||||||||
| As of September 30, | For the quarter | yoy | For the quarter | yoy | For the quarter | yoy | |||||||||
| ended September 30, | change | ended September 30, | change | ended September 30, | change | ||||||||||
| 2019 | 2021 | 2019 | 2021 | 2019 | 2021 | 2019 | 2021 | (p.p.) | |||||||
| Economy hotels | 2,364 | 2,364 | 187 | 141 | -24.5 | % | 201 | 187 | -6.7 | % | 93.2 | % | 75.4 | % | -17.8 |
| Leased and owned hotels | 385 | 385 | 209 | 154 | -26.2 | % | 224 | 210 | -6.2 | % | 93.5 | % | 73.5 | % | -19.9 |
| Manachised and franchised hotels | 1,979 | 1,979 | 181 | 138 | -24.1 | % | 195 | 181 | -6.9 | % | 93.1 | % | 75.9 | % | -17.2 |
| Midscale and upscale hotels | 1,057 | 1,057 | 293 | 219 | -25.4 | % | 340 | 321 | -5.6 | % | 86.4 | % | 68.2 | % | -18.1 |
| Leased and owned hotels | 187 | 187 | 355 | 245 | -31.0 | % | 406 | 379 | -6.7 | % | 87.3 | % | 64.5 | % | -22.8 |
| Manachised and franchised hotels | 870 | 870 | 275 | 211 | -23.4 | % | 320 | 304 | -4.9 | % | 86.1 | % | 69.4 | % | -16.7 |
| Total | 3,421 | 3,421 | 226 | 170 | -24.8 | % | 249 | 234 | -6.3 | % | 90.7 | % | 72.7 | % | -17.9 |
Operating Results: Legacy-DH(4)
| Number of hotels | Number of rooms | Unopened hotels in pipeline | ||||||||
| Opened in Q3 2021 | Closed in Q3 2021 | Net added in Q3 2021 | As of September 30, 2021(5) | | As of September 30, 2021 | | As of September 30, 2021 | |||
| Leased hotels | 1 | - | 1 | 75 | 14,002 | 28 | ||||
| Manachised and franchised hotels | - | (2 | ) | (2 | ) | 46 | 10,313 | 11 | ||
| Total | 1 | (2 | ) | (1 | ) | 121 | 24,315 | 39 | ||
| (4) Legacy-DH refers to DH. (5) As of September 30, 2021, a total of 4 DH brand hotels were temporarily closed due to COVID-19. 1 hotel is closed for renovation and 1 hotel due to flood damage. | ||||||||||
| For the quarter ended | ||||||||
| September 30, | June 30, | September 30, | yoy | |||||
| 2020 | 2021 | 2021 | change | |||||
| Average daily room rate (in EUR) | ||||||||
| Leased hotels | 88 | 85 | 94 | 6.8 | % | |||
| Manachised and franchised hotels | 101 | 78 | 104 | 3.6 | % | |||
| Blended | 93 | 81 | 99 | 6.1 | % | |||
| Occupancy rate (as a percentage) | ||||||||
| Leased hotels | 38.2 | % | 20.0 | % | 48.0 | % | 9.8p.p. | |
| Managed and franchised hotels | 37.5 | % | 30.8 | % | 49.4 | % | 12.0p.p. | |
| Blended | 37.9 | % | 24.4 | % | 48.6 | % | 10.7p.p. | |
| RevPAR (in EUR) | ||||||||
| Leased hotels | 34 | 17 | 45 | 34.1 | % | |||
| Managed and franchised hotels | 38 | 24 | 52 | 36.7 | % | |||
| Blended | 35 | 20 | 48 | 35.9 | % | |||
Hotel Portfolio by Brand
| Total | |||
| Hotels | Rooms | Unopened hotels | |
| in operation | in pipeline | ||
| Economy hotels | 4,635 | 382,337 | 1,386 |
| HanTing Hotel | 2,937 | 268,347 | 765 |
| Hi Inn | 430 | 25,069 | 107 |
| Elan Hotel(6) | 1,040 | 64,757 | 468 |
| Ibis Hotel | 214 | 22,503 | 34 |
| Zleep Hotels | 14 | 1,661 | 12 |
| Midscale hotels | 2,288 | 256,146 | 1,099 |
| Ibis Styles Hotel | 78 | 8,299 | 17 |
| Starway Hotel | 496 | 41,913 | 280 |
| JI Hotel | 1,294 | 158,008 | 588 |
| Orange Hotel | 390 | 43,146 | 209 |
| CitiGO Hotel | 30 | 4,780 | 5 |
| Upper midscale hotels | 429 | 63,959 | 276 |
| Crystal Orange Hotel | 137 | 18,406 | 67 |
| Manxin Hotel | 76 | 7,416 | 63 |
| Madison Hotel | 35 | 5,247 | 54 |
| Mercure Hotel | 119 | 20,561 | 52 |
| Novotel Hotel | 14 | 3,723 | 16 |
| IntercityHotel(7) | 48 | 8,606 | 24 |
| Upscale hotels | 107 | 18,383 | 62 |
| Jaz in the City | 3 | 587 | 1 |
| Joya Hotel | 9 | 1,760 | 0 |
| Blossom House | 32 | 1,579 | 35 |
| Grand Mercure Hotel | 7 | 1,485 | 6 |
| Steigenberger Hotels & Resorts(8) | 50 | 12,013 | 14 |
| MAXX (9) | 6 | 959 | 6 |
| Others | 7 | 2,158 | 4 |
| Other hotels(10) | 7 | 2,158 | 4 |
| Total | 7,466 | 722,983 | 2,827 |
(6) As of September 30, 2021, 46 Ni Hao Hotels were included in the operational hotel for Elan Hotels and 145 Ni Hao hotels were included in the pipeline for Elan Hotels.
(7) As of September 30, 2021, 2 operational hotels and 6 pipeline hotels of IntercityHotel were in China.
(8) As of September 30, 2021, 1 operational hotel and 7 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(9) As of September 30, 2021, 1 operational hotel and 5 pipeline hotels of MAXX were in China.
(10) Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).
About Huazhu Group Limited
Originated in China, Huazhu Group Limited is a world-leading hotel group. As of September 30, 2021, Huazhu operated 7,466 hotels with 722,983 rooms in operation in 17 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, Ni Hao Hotel and CitiGO 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 September 30, 2021, Huazhu operates 15 percent of its hotel rooms under lease and ownership model, and 85 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
