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Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2018 shares
Document and Entity Information
Entity Registrant Name	Huazhu Group Ltd
Entity Central Index Key	0001483994
Document Type	20-F
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	293,501,124
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	htht
Entity Shell Company	false
Entity Emerging Growth Company	false

CONSOLIDATED BALANCE SHEETS ¥ in Millions, $ in Millions	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
Current assets:
Cash and cash equivalents	$ 620	¥ 4,262	¥ 3,475
Restricted cash	91	622	481
Equity securities with readily determinable fair value	13	89	130
Accounts receivable, net of allowance of RMB10 and RMB17 as of December 31, 2017 and 2018, respectively	28	195	163
Loan receivables	14	94	381
Amounts due from related parties	25	176	118
Prepaid rent	139	955	660
Inventories	6	41	24
Other current assets	78	540	329
Total current assets	1,014	6,974	5,761
Property and equipment, net	730	5,018	4,523
Intangible assets, net	267	1,834	1,644
Land use rights, net	32	220	140
Long-term investments, including marketable securities measured at fair value of RMB907 and RMB4,022 as of December 31, 2017 and 2018, respectively	895	6,152	2,362
Goodwill	383	2,630	2,265
Loan receivables	27	189	42
Other assets	69	471	365
Deferred tax assets	73	505	406
Total assets	3,490	23,993	17,508
Current liabilities:
Short-term debt	138	948	131
Accounts payable	129	890	766
Amounts due to related parties	11	75	37
Salary and welfare payables	76	521	427
Deferred revenue	146	1,005	943
Accrued expenses and other current liabilities	233	1,607	1,249
Dividends payable	96	658
Income tax payable	39	265	218
Total current liabilities	868	5,969	3,771
Long-term debt	1,282	8,812	4,922
Deferred rent	219	1,507	1,380
Deferred revenue	67	458	398
Other long-term liabilities	66	453	381
Deferred tax liabilities	69	475	422
Total liabilities	2,571	17,674	11,274
Commitments and contingencies (Note 20)
Equity:
Ordinary shares (US$0.0001 par value per share; 8,000,000,000 shares authorized; 294,040,234 and 296,597,888 shares issued as of December 31, 2017 and 2018, and 280,518,358 and 283,076,012 shares outstanding as of December 31, 2017 and 2018, respectively)	0	0	0
Treasury shares (3,096,764 and 3,096,764 shares as of December 31 2017 and 2018, respectively)	(16)	(107)	(107)
Additional paid-in capital	540	3,713	3,624
Retained earnings	380	2,610	2,513
Accumulated other comprehensive income (loss)	(6)	(42)	168
Total Huazhu Group Limited shareholders' equity	898	6,174	6,198
Noncontrolling interest	21	145	36
Total equity	919	6,319	6,234
Total liabilities and equity	$ 3,490	¥ 23,993	¥ 17,508

CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Millions	Dec. 31, 2018 CNY (¥) shares	Dec. 31, 2017 CNY (¥) shares
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance \| ¥	¥ 17	¥ 10
Long-term investments, marketable securities measured at fair value \| ¥	¥ 4,022	¥ 907
Ordinary shares, shares authorized	8,000,000,000	8,000,000,000
Ordinary shares, shares issued	296,597,888	294,040,234
Ordinary shares, shares outstanding	283,076,012	280,518,358
Treasury stock, shares	3,096,764	3,096,764

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2018 CNY (¥) ¥ / shares shares	Dec. 31, 2017 CNY (¥) ¥ / shares shares	Dec. 31, 2016 CNY (¥) ¥ / shares shares
Revenues:
Total revenues	$ 1,464	¥ 10,063	¥ 8,229	¥ 6,689
Less: Business tax and related taxes				116
Net revenues	1,464	10,063	8,229	6,573
Operating costs and expenses:
Hotel operating costs	942	6,476	5,675	4,934
Other operating costs	2	15	17	8
Selling and marketing expenses	50	348	285	209
General and administrative expenses	124	851	691	492
Pre-opening expenses	37	255	206	72
Total operating costs and expenses	1,155	7,945	6,874	5,715
Other operating income (expenses), net	32	226	71	(17)
Income from operations	341	2,344	1,426	841
Interest income	21	148	113	67
Interest expense	35	244	87	11
Other income, net	30	203	128	134
Unrealized gains (losses) from fair value changes of equity securities	(133)	(914)	35
Foreign exchange gain (loss)	(21)	(144)	(18)	16
Income before income taxes	203	1,393	1,597	1,047
Income tax expense	(83)	(569)	(357)	(279)
Income (loss) from equity method investments	(14)	(97)	(12)	6
Net income	106	727	1,228	774
Less: net (loss) income attributable to noncontrolling interest	2	11	0	(8)
Net income attributable to Huazhu Group Limited	104	716	1,228	782
Other comprehensive income
Unrealized securities holding gains, net of tax of (2), (8) and nil for 2016, 2017 and 2018, respectively			1	16
Reclassification of realized gains to net income, net of tax			(5)	(68)
Foreign currency translation adjustments, net of tax of nil for 2016, 2017 and 2018, respectively	(25)	(169)	177	(13)
Comprehensive income	81	558	1,401	709
Less: comprehensive (loss) income attributable to the noncontrolling interest	2	11	0	(8)
Comprehensive income attributable to Huazhu Group Limited	$ 79	¥ 547	¥ 1,401	¥ 717
Earnings per share:
Basic (in RMB and dollars per share) \| (per share)	$ 0.37	¥ 2.54	¥ 4.40	¥ 2.84
Diluted (in RMB and dollars per share) \| (per share)	$ 0.36	¥ 2.49	¥ 4.21	¥ 2.76
Weighted average number of shares used in computation:
Basic (in shares) \| shares	281,717,485	281,717,485	279,272,140	275,139,070
Diluted (in shares) \| shares	303,605,809	303,605,809	293,073,978	282,889,494
Leased and owned hotels
Revenues:
Total revenues	$ 1,087	¥ 7,470	¥ 6,338	¥ 5,239
Manachised and franchised hotels
Revenues:
Total revenues	368	2,527	1,851	1,419
Other revenues
Revenues:
Total revenues	$ 9	¥ 66	¥ 40	¥ 31

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unrealized securities holding gains (losses), tax	¥ 0	¥ (8)	¥ (2)
Foreign currency translation adjustments, tax	¥ 0	¥ 0	¥ 0

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ¥ in Millions, $ in Millions	Ordinary Shares CNY (¥) shares	Treasury Shares CNY (¥) shares	Additional Paid-in Capital CNY (¥)	Retained Earnings CNY (¥)	Accumulated Other Comprehensive (Loss) Income CNY (¥)	Noncontrolling Interest CNY (¥)	USD ($) shares	CNY (¥) shares
Increase (Decrease) in Stockholders' Equity
Cumulative effect of the adoption of ASU \| ASU 2014-09				¥ (209)				¥ (209)
Balance at Dec. 31, 2015	¥ 0	¥ (107)	¥ 2,470	1,007	¥ 60	¥ 11		¥ 3,441
Balance issued (in shares) at Dec. 31, 2015 \| shares	253,978,323
Balance outstanding (in shares) at Dec. 31, 2015 \| shares							250,881,559	250,881,559
Treasury shares, balance (in shares) at Dec. 31, 2015 \| shares		3,096,764
Increase (Decrease) in Stockholders' Equity
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks	¥ 0		11					¥ 11
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks (in shares) \| shares	2,505,264						2,505,264	2,505,264
Issuance of ordinary shares for acquisition	¥ 0		1,143					¥ 1,143
Issuance of ordinary shares for acquisition (in shares) \| shares	24,895,543						24,895,543	24,895,543
Share-based compensation			55					¥ 55
Excess tax benefit from share-based compensation			19					19
Net income				782		(8)		774
Unrealized securities holding gains, net of tax					16			16
Reclassification of realized gains to net income, net of tax					(68)			(68)
Dividends paid to noncontrolling interest holders						(4)		(4)
Capital contribution from noncontrolling interest holders			1			45		46
Disposal of noncontrolling interest for deconsolidation						(27)		(27)
Foreign currency translation adjustments					(13)			(13)
Balance at Dec. 31, 2016	¥ 0	¥ (107)	3,699	1,580	(5)	17		¥ 5,184
Balance issued (in shares) at Dec. 31, 2016 \| shares	281,379,130
Balance outstanding (in shares) at Dec. 31, 2016 \| shares							278,282,366	278,282,366
Treasury shares, balance (in shares) at Dec. 31, 2016 \| shares		3,096,764
Increase (Decrease) in Stockholders' Equity
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks	¥ 0		9					¥ 9
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks (in shares) \| shares	2,235,992						2,235,992	2,235,992
Share-based compensation			66					¥ 66
Issuance of ordinary shares under ADS lending arrangement	¥ 0							0
Issuance of ordinary shares under ADS lending arrangement (in shares) \| shares	10,425,112
Capped Call options in connection with issuance of convertible senior notes			(177)					(177)
ADS lending arrangement in connection with issuance of convertible senior notes			27					27
Noncontrolling interest recognized in connection with acquisitions						4		4
Net income				1,228		0		1,228
Cash dividends declared/paid				(295)				(295)
Unrealized securities holding gains, net of tax					1			1
Reclassification of realized gains to net income, net of tax					(5)			(5)
Dividends paid to noncontrolling interest holders						(3)		(3)
Capital contribution from noncontrolling interest holders						26		26
Disposal of noncontrolling interest for deconsolidation						(4)		(4)
Noncontrolling interest recognized from partial disposal						0		0
Acquisition of noncontrolling interest			0			(4)		(4)
Foreign currency translation adjustments					177			177
Balance at Dec. 31, 2017	¥ 0	¥ (107)	3,624	2,513	168	36		¥ 6,234
Balance issued (in shares) at Dec. 31, 2017 \| shares	294,040,234						294,040,234	294,040,234
Balance outstanding (in shares) at Dec. 31, 2017 \| shares							280,518,358	280,518,358
Treasury shares, balance (in shares) at Dec. 31, 2017 \| shares		3,096,764					3,096,764	3,096,764
Increase (Decrease) in Stockholders' Equity
Cumulative effect of the adoption of ASU \| ASU 2016-01				41	(41)
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks	¥ 0		14					¥ 14
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks (in shares) \| shares	2,557,654						2,557,654	2,557,654
Share-based compensation			83					¥ 83
Noncontrolling interest recognized in connection with acquisitions						150		150
Net income				716		11	$ 106	727
Cash dividends declared/paid				(660)				(660)
Dividends paid to noncontrolling interest holders						(5)		(5)
Capital contribution from noncontrolling interest holders						29		29
Acquisition of noncontrolling interest			(8)			(76)		(84)
Foreign currency translation adjustments					(169)		(25)	(169)
Balance at Dec. 31, 2018	¥ 0	¥ (107)	¥ 3,713	¥ 2,610	¥ (42)	¥ 145	$ 919	¥ 6,319
Balance issued (in shares) at Dec. 31, 2018 \| shares	296,597,888						296,597,888	296,597,888
Balance outstanding (in shares) at Dec. 31, 2018 \| shares							283,076,012	283,076,012
Treasury shares, balance (in shares) at Dec. 31, 2018 \| shares		3,096,764					3,096,764	3,096,764

CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
Operating activities:
Net income	$ 106	¥ 727	¥ 1,228	¥ 774
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation	12	83	66	55
Depreciation and amortization	130	891	789	695
Amortization of issuance cost of convertible senior notes	4	28	3
Deferred taxes	(13)	(91)	(79)	26
Bad debt expenses	1	10	2	1
Deferred rent	20	140	209	103
Loss from disposal of property and equipment	0	0	13	9
Impairment loss	5	35	169	154
Loss (Income) from equity method investments, net of dividends	23	157	12	(6)
Investment (income) loss	147	1,009	(160)	(117)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	(5)	(36)	4	(46)
Prepaid rent	(41)	(283)	(189)	(25)
Inventories	(2)	(14)	3	4
Amounts due from related parties	(5)	(32)	(31)	(9)
Other current assets	(8)	(56)	(76)	(41)
Other assets	(5)	(32)	(54)	(5)
Accounts payable	2	11	8	59
Amounts due to related parties	6	38	3	7
Salary and welfare payables	13	91	133	61
Deferred revenue	17	114	26	27
Accrued expenses and other current liabilities	20	140	278	225
Income tax payable	7	48	45	64
Other long-term liabilities	10	71	51	51
Net cash provided by operating activities	444	3,049	2,453	2,066
Investing activities:
Purchases of property and equipment for hotels in operation and headquarters	(82)	(568)	(405)	(296)
Purchases of property and equipment for hotels under development	(80)	(547)	(414)	(207)
Purchases of intangibles	(1)	(4)	(8)	(14)
Purchases of land use rights	(11)	(76)
Amount received as a result of government zoning	1	7	3	2
Acquisitions, net of cash received	(72)	(496)	(3,746)	132
Proceeds from disposal of subsidiary and branch, net of cash disposed	1	8	14	(21)
Purchases of long-term investments	(721)	(4,959)	(1,328)	(293)
Proceeds from maturity/sale and return of long-term investments	26	177	128	15
Payment for shareholder loan to equity investees	(1)	(7)	(113)	(39)
Collection of shareholder loan from equity investees			120	9
Purchases of short-term investments			(96)
Proceeds from maturity/sale of short-term investments				526
Payment for the origination of loan receivables	(46)	(313)	(446)	(36)
Proceeds from collection of loan receivables	63	433	56	46
Net cash provided by (used in) investing activities	(923)	(6,345)	(6,235)	(176)
Financing activities:
Net proceeds from issuance of ordinary shares upon exercise of options	2	14	9	12
Proceeds from short-term bank borrowings	135	928	137	282
Repayment of short-term bank borrowings	(19)	(128)	(295)	(333)
Proceeds from long-term bank borrowings	622	4,275	3,633
Repayment of long-term bank borrowings	(116)	(799)	(1,651)
Funds advanced from noncontrolling interest holders	5	36	84	12
Repayment of funds advanced from noncontrolling interest holders	(1)	(8)	(9)	(1)
Acquisitions of noncontrolling interest	(12)	(84)	(4)	(4)
Proceeds from amounts due to related parties	15	103
Repayment of amounts due to related parties	(16)	(113)
Contribution from noncontrolling interest holders	4	29	26	46
Dividends paid to noncontrolling interest holders	(1)	(5)	(3)	(4)
Dividends paid			(306)	(276)
Proceeds from issuance of convertible senior notes, net of issuance cost and capped call option			2,925
Debt financing costs paid			(10)
Proceeds from ADS lending			0
Net cash (used in) provided by financing activities	618	4,248	4,536	(266)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(3)	(24)	(34)	14
Net increase in cash and cash equivalents, and restricted cash	136	928	720	1,638
Cash, cash equivalents and restricted cash at the beginning of the year	575	3,956	3,236	1,598
Cash, cash equivalents and restricted cash at the end of the year	711	4,884	3,956	3,236
Supplemental disclosure of cash flow information:
Interest paid, net of amounts capitalized	35	239	187	9
Income taxes paid	89	613	380	184
Supplemental schedule of non-cash investing and financing activities:
Purchases of property and equipment included in payables	100	688	613	453
Consideration payable for business acquisition	6	40	118	173
Purchase of intangible assets included in payables	1	5	6	7
Reimbursement of government zoning included in receivables			¥ 2	3
Issuance of ordinary shares for acquisition of AccorHotels (Note 3)				¥ 1,144
Cash dividends declared in payables	$ 96	¥ 658

ORGANIZATION AND PRINCIPAL ACTIVITIES	12 Months Ended
ORGANIZATION AND PRINCIPAL ACTIVITIES	Dec. 31, 2018
ORGANIZATION AND PRINCIPAL ACTIVITIES
ORGANIZATION AND PRINCIPAL ACTIVITIES	HUAZHU GROUP LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2016, 2017 and 2018 (Renminbi in thousands, except share data and per share data, unless otherwise stated) 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Huazhu Group Limited (the “Company”) was incorporated in the Cayman Islands under the laws of the Cayman Islands on January 4, 2007. The principal business activities of the Company and its subsidiaries and variable interest entities (the “Group”) are to develop leased and owned, manachised and franchised hotels under the “Joya Hotel”, “Crystal Orange”, “Blossom Hill”, “Manxin Hotel”, “Orange Hotel Select”, “Orange Hotel”, “JI Hotel”, “Starway Hotel”, “HanTing Hotel”, “HanTing Premium”, “Elan Hotel” and “Hi Inn” brands in the People’s Republic of China (“PRC”). The Group also has the rights as master franchisee for “Mercure”, “Ibis” and “Ibis Styles”, and co-development rights for “Grand Mercure” and “Novotel”, in Pan-China region. Leased and owned hotels The Group leases hotel properties from property owners or purchases properties directly and is responsible for all aspects of hotel operations and management, including hiring, training and supervising the managers and employees required to operate the hotels. In addition, the Group is responsible for hotel development and customization to conform to the standards of the Group brands at the beginning of the lease or the construction, as well as repairs and maintenance, operating expenses and management of properties over the term of the lease or the land and building certificate. Under the lease arrangements, the Group typically receives rental holidays of two to six months and pays rent on a quarterly or biannual basis. Rent is typically subject to the fixed escalations of three to five percent every three to five years. The Group recognizes rental expense on a straight-line basis over the lease term. As of December 31, 2017 and 2018, the Group had 671 and 699 leased and owned hotels in operation, respectively. Manachised and franchised hotels Typically the Group enters into certain franchise and management arrangements with franchisees for which the Group is responsible for providing branding, quality assurance, training, reservation, hiring and appointing of the hotel general manager and various other support services relating to the hotel renovation and operation. Those hotels are classified as manachised hotels. Under typical franchise and management agreements, the franchisee is required to pay an initial franchise fee and ongoing franchise and management service fees, the majority of which are equal to a certain percentage of the revenues of the hotel. The franchisee is responsible for the costs of hotel development, renovation and the costs of its operations. The term of the franchise and management agreements are typically eight to ten years and are renewable upon mutual agreement between the Group and the franchisee. The Group also has some franchised hotels in which cases the Group does not provide a hotel general manager. As of December 31, 2017 and 2018, the Group had 2,874 and 3,309 manachised hotels in operation and 201 and 222 franchised hotels in operation, respectively.

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2018

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

Basis of presentation

The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”).

Basis of consolidation

The consolidated financial statements include the financial statements of the Company, its majority-owned subsidiaries and consolidated variable interest entities (the “VIEs”). All intercompany transactions and balances are eliminated on consolidation.

Variable Interest Entities

The Group evaluates the need to consolidate certain variable interest entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support.

The Company is deemed as the primary beneficiary of and consolidates variable interest entities when the Company has the power to direct the activities that most significantly impact the economic success of the entities and effectively assumes the obligation to absorb losses and has the rights to receive benefits that are potentially significant to the entities.

As of December 31, 2017 and 2018, the Group consolidated two and six entities under VIE model, and the assets and liabilities of the consolidated VIEs are immaterial to the Group's consolidated financial statements.

The Group evaluates its business activities and arrangements with the entities that operate the manachised and franchised hotels and the funds that it serves as general partner or fund manager to identify potential variable interest entities. Generally, these entities that operate the manachised and franchised hotels qualify for the business scope exception, therefore consolidation is not appropriate under the variable interest entity consolidation guidance. For the disclosure of significant non-consolidated variable interest entities, see Note7 Investments.

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group’s consolidated financial statements include the useful lives and impairment of property and equipment and intangible assets, valuation allowance of deferred tax assets, purchase price allocation, impairment of goodwill, fair value measurement and impairment of investments, share-based compensation, estimates involved in the accounting for its customer loyalty program, and contingent liabilities.

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less when purchased.

Restricted cash

Restricted cash mainly represents deposits used as security against borrowings and deposits restricted due to contract disputes or lawsuit.

Investments

Investments represent equity-method investments, equity investments with readily determinable fair values, equity investments without readily determinable fair values and available-for-sale debt securities.

The Group accounts for equity investment in entities with significant influence under equity-method accounting. Under this method, the Group’s pro rata share of income (loss) from investment is recognized in the consolidated statements of comprehensive income. Dividends received reduce the carrying amount of the investment. When the Group’s share of loss in an equity-method investee equals or exceeds its carrying value of the investment in that entity, the Group continues to report its share of equity method losses in the statements of comprehensive income to the extent and as an adjustment to the carrying amount of its other investments in the investee. Equity-method investment is reviewed for impairment by assessing if the decline in market value of the investment below the carrying value is other-than-temporary. In making this determination, factors are evaluated in determining whether a loss in value should be recognized. These include consideration of the intent and ability of the Group to hold investment and the ability of the investee to sustain an earnings capacity, justifying the carrying amount of the investment. Impairment losses are recognized in other expense when a decline in value is deemed to be other-than- temporary.

Investments in equity securities that have readily determinable fair values (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are measured at fair value, with unrealized gains and losses from fair value changes recognized in net income in the consolidated statements of comprehensive income.

Investments in equity securities without readily determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the consolidated statements of comprehensive income equal to the amount by which the carrying value exceeds the fair value of the investment. Prior to the fiscal year of 2018, these investments were accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment.

Debt securities that the company has no intent to hold till maturity or may sell the security in response to the changes in economic conditions are classified as available-for-sale debt securities. Available-for-sale debt securities are reported at fair value, with unrealized gains and losses (other than impairment losses) recognized in accumulated other comprehensive income or loss. Realized gains and losses on debt securities are recognized in the net income in the consolidated statements of comprehensive income. The Group monitors its investments for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends and other company-specific information.

As a result of the impairment analysis, the Group recorded an impairment of RMB3, nil and nil in 2016, 2017 and 2018, respectively.

Accounts receivable, net of allowance

Accounts receivable mainly consist of franchise fee receivables, amounts due from corporate customers, travel agents, hotel guests and credit card receivables, which are recognized and carried at the original invoice amount less an allowance for doubtful accounts. The Group establishes an allowance for doubtful accounts primarily based on the age of the receivables and factors surrounding the credit risk of specific customers.

Loan receivables

Loan receivables are measured at amortized cost with interest accrued based on the contract rate. The Group classified loan receivables as long-term or short-term investments according to their contractual maturity or expected holding time. The Group evaluates the credit risk associated with the loans, and estimates the cash flow expected to be collected over the life of loans on an individual basis based on the Group’s past experiences, the borrowers’ financial position, their financial performance and their ability to continue to generate sufficient cash flows. A valuation allowance will be established for the loans unable to collect. No valuation allowance has been recorded in 2016, 2017 or 2018 based on the result of the assessment. The Group entered into entrusted loan agreements with certain franchisees with the typical terms to be two to three years and annual interest rates ranging from 8.0% to 8.5%, and with other un-related third-parties with the annual interest rates ranging from 6% to 12%.

Inventories

Inventories mainly consist of small appliances, bedding and daily consumables. Small appliances and bedding for new hotels opened are stated at cost, less accumulated amortization, and are amortized over their estimated useful lives, generally one year, from the time they are put into use. Daily consumables and beddings replacement are expensed when used.

Property and equipment, net

Property and equipment, net are stated at cost less accumulated depreciation and amortization. The renovations, betterments and interest cost incurred during construction are capitalized. Depreciation and amortization of property and equipment is provided using the straight line method over their expected useful lives. The expected useful lives are as follows:


Leasehold improvements		Shorter of the lease term or their estimated useful lives
Buildings		20-40 years
Furniture, fixtures and equipment		3-10 years
Motor vehicles		5 years

Construction in progress represents leasehold improvements and property under construction or being installed and is stated at cost. Cost comprises original cost of property and equipment, installation, construction and other direct costs. Construction in progress is transferred to leasehold improvements and depreciation commences when the asset is ready for its intended use.

Expenditures for repairs and maintenance are expensed as incurred. Gain or loss on disposal of property and equipment, if any, is recognized in the consolidated statements of comprehensive income as the difference between the net sales proceeds and the carrying amount of the underlying asset.

Intangible assets, net and unfavorable lease

Intangible assets consist primarily of brand name, master brand agreement, non-compete agreements, franchise agreements and favorable leases acquired in business combinations and purchased software. Intangible assets acquired through business combinations are recognized as assets separate from goodwill if they satisfy either the “contractual-legal” or “separability” criterion. Intangible assets, including brand name, master brand agreement, non-compete agreements, franchise agreements and favorable lease agreements acquired from business combination are recognized and measured at fair value upon acquisition.

Non-compete agreements, franchise agreements and favorable lease agreements are amortized over the expected useful life, remaining franchise contract terms and remaining operating lease terms respectively. Unfavorable lease agreements from business combination transactions are recognized as other long-term liabilities and are amortized over the remaining operating lease terms. Purchased software is stated at cost less accumulated amortization.

Brand name is considered to have an indefinite life. Master brand agreement, acquired in Accor acquisition (Note 3), granted the Group certain franchise rights with initial term of 70 years, and can be renewed without substantial obstacles. As a result, the useful life is determined to be indefinite. The Group evaluates the brand name and master brand agreement each reporting period to determine whether events and circumstances continue to support an indefinite useful life. Impairment is tested annually or more frequently if events or changes in circumstances indicate that it might be impaired. The Group measures the impairment by comparing the fair value of brand name and master brand agreement with its carrying amount. If the carrying amount of brand name and master brand agreement exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess. The Group measures the fair value of the brand name under the relief-from-royalty method, the master brand agreement under the multi-period excess earnings method. Management performs its annual brand name and master brand agreement impairment test on November 30.

Land use rights

Land use rights, which are all located in PRC, are recorded at cost and amortized on a straight-line basis over the remaining term of the land certificates, between 30 to 50 years. Amortization expense of land use rights for the years ended December 31, 2016, 2017 and 2018 amounted to RMB4, RMB5 and RMB5, respectively.

Impairment of long-lived assets

The Group evaluates its long-lived assets and finite lived intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss equal to the difference between the carrying amount and fair value of these assets.

The Group performed a recoverability test of its long-lived assets associated with certain hotels due to the continued underperformance relative to the projected operating results, of which the carrying amount of the property and equipment exceed the future undiscounted net cash flows, and recognized an impairment loss of RMB151, RMB169 and RMB35 during the years ended December 31, 2016, 2017 and 2018, respectively.

Fair value of the property and equipment was determined by the Group based on the income approach using the discounted cash flow associated with the underlying assets, which incorporated certain assumptions including projected hotels’ revenue, growth rates and projected operating costs based on current economic condition, expectation of management and projected trends of current operating results.

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets less liabilities acquired.

Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. The Group completes a two-step goodwill impairment test. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. A reporting unit is identified as a component for which discrete financial information is available and is regularly reviewed by management. All the acquired business has been migrated to the Group’s business, and the Group's management regularly reviews operation data including industrial metrics of revenue per available room, occupancy rate, and number of hotels by scale/brand, rather than discrete financial information for the purpose of performance evaluation and resource allocation at brand level. The Company concluded that it had only one reporting unit, and therefore the goodwill impairment testing was performed on consolidation level. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized in general and administrative expenses for any excess in the carrying value of goodwill over the implied fair value of goodwill. Management performs its annual goodwill impairment test on November 30.

The Group had not recognized any goodwill impairment for years ended December 31, 2016, 2017 and 2018.

Revenue recognition

Revenue are primarily derived from products and services in leased and owned hotels, contracts of manachised and franchised hotels with third-party franchisees as well as activities other than the operation of hotel businesses.

Leased and owned hotel revenues

Leased and owned hotel revenues are primarily derived from the rental of rooms, food and beverage sales and other ancillary goods and services, including but not limited to souvenir, laundry, parking and conference reservation. Each of these products and services represents an individual performance obligation and, in exchange for these services, the Group receives fixed amounts based on published rates or negotiated contracts. Payment is due in full at the time when the services are rendered or the goods are provided. Room rental revenue is recognized on a daily basis when rooms are occupied. Food and beverage revenue and other goods and services revenue are recognized when they have been delivered or rendered to the guests as the respective performance obligations are satisfied.

Manachised and franchised hotel revenues

The manachised and franchised agreement contains the following promised services:

Intellectual Property ("IP") license grant the right to access the Group’s hotel system IP, including brand names.

Pre-opening services include providing services (e.g., install IT information system and provide access to purchase platform, help to obtain operational qualification, and help to recruit and train employees) to the franchisees to assist in preparing for the hotel opening.

System maintenance services include providing standardization hotel property management system (PMS), central reservation system (CRS) and other internet related services.

Hotel management services include providing day-to-day management services of the hotels for the franchisees.

The promises to provide pre-opening services and system maintenance services are not distinct performance obligation because they are attendant to the license of IP. Therefore, the promises to provide pre-opening services and system maintenance services are combined with the license of IP to form a single performance obligation. Hotel management services forms a single distinct performance obligation.

Manachised and franchised hotel revenues are derived from franchise agreements where the franchisees are primarily required to pay (i) an initial one-time franchise fee, and (ii) continuing franchise fees, which mainly consist of (a) on-going management and franchise service fees, (b) central reservation system usage fees, system maintenance and support fees and (c) reimbursements for hotel manager fees.

Initial one-time franchise fee, is typically fixed and collected upfront and recognized as revenue over the term of the franchise contract. The Group does not consider this advance consideration to include a significant financing component, since it is used to protect the Group from the franchisees failing to adequately complete some or all of its obligations under the contract. These fees are typically collected upfront and are recognized as revenue over the term of the franchise contract.

On-going management and franchise service fees are generally calculated as a certain percentage of the room revenues of the franchised hotel. Generally, management and franchise service fees are due and payable on a monthly basis as services are provided and revenue is recognized over time as services are rendered.

Central reservation system usage fees, other system maintenance and support fees are typically billed and collected monthly along with base management and franchise fees, and revenue is generally recognized as services are provided.

Reimbursements for hotel manager fees, which cover the manachised hotel managers’ payroll, social welfare benefits and certain other out-of-pocket expenses that the Group incurs on behalf of the manachised hotels. The reimbursements are recognized over time within revenues for the reimbursement of costs incurred on behalf of manachised hotels.

Other Revenues

Other revenues are derived from activities other than the operation of hotel businesses, which mainly include revenues from Hua Zhu mall and the provision of IT products and services to hotels. Revenues from Hua Zhu mall are commissions charged from suppliers for goods sold through the platform and are recognized upon delivery of goods to end customers when its suppliers’ obligation is fulfilled. Revenues from IT products are recognized when goods are delivered and revenues from IT services are recognized when services are rendered.

Loyalty Program

Under the loyalty program the Group administers, members earn loyalty points that can be redeemed for future products and services. Points earned by loyalty program members represent a material right to free or discounted goods or services in the future. The loyalty program has one performance obligation that consists of marketing and managing the program and arranging for award redemptions by members. The Group is responsible for arranging for the redemption of points, but the Group does not directly fulfill the redemption obligation except at leased and owned hotels. Therefore, the Group is the agent with respect to this performance obligation for manachised and franchised hotels, and is the principal with respect to leased and owned hotels.

For leased and owned hotels, a portion of the leased and owned revenues is deferred until a member redeems points. The amount of revenue the Group recognize upon point redemption is impacted by the estimate of the “breakage” for points that members will never redeem in the Group's owned and leased hotels.

For manachised and franchised hotels, the portion of revenue deferred by manachised and franchised hotels are collected by the Group which will be refunded upon redemption of points at manachised and franchised hotels. The estimated breakage for points earned in manachised and franchised hotels are recognized as manachised and franchised revenue for each period. The Group estimates breakage based on the Group's historical experience and expectations of future member behavior and will true up the estimated breakage at end of each period.

Membership fees from the Group’s customer loyalty program are earned and recognized on a straight-line basis over the expected membership duration of the different membership levels. Such duration is estimated based on the Group’s and management’s experience and is adjusted on a periodic basis to reflect changes in membership retention. The membership duration is estimated to be two to five years which reflects the expected membership retention. Revenues recognized from membership fees were RMB145, RMB160 and RMB192 for the years ended December 31, 2016, 2017 and 2018, respectively, which amount were included in revenues from leased and owned hotel or revenues from manachised and franchised hotels depending on the type of hotels the membership was sold at.

Contract Balances

The Group's payments from customers are based on the billing terms established in contracts. Customer billings are classified as accounts receivable when the Group's right to consideration is unconditional. If the right to consideration is conditional on future performance under the contract, the balance is classified as a contract asset. Payments received in advance of performance under the contract are classified as current or non-current contract liabilities on the Group's consolidated balance sheets and are recognized as revenue as the Group performs under the contract.

PRC Value-Added Taxes and surcharges

Starting from May 2016, the accommodation services of the Group are subject to 6% of Value-Added Taxes.

The Group is subject to education surtax and urban maintenance and construction tax, on the services provided in the PRC.

Advertising and promotional expenses

Advertising related expenses, including promotion expenses and production costs of marketing materials, are charged to the consolidated statements of comprehensive income as incurred, and amounted to RMB65, RMB91 and RMB103 for the years ended December 31, 2016, 2017 and 2018, respectively.

Government grants

Government grants represent cash received by the Group in the PRC from local governments as incentives for investing in certain local districts, and are typically granted based on the amount of investments the Group made as well as income generated by the Group in such districts. Such subsidies allow the Group full discretion to utilize the funds and are used by the Group for general corporate purposes. The local governments have final discretion as to whether the Group has met all criteria to be entitled to the subsidies. Normally, the Group does not receive written confirmation from local governments indicating the approval of the cash subsidy before cash is received, and therefore cash subsidies are recognized when received and when all the conditions for their receipts have been satisfied. Government grants recognized were RMB83, RMB55 and RMB106 for the years ended December 31, 2016, 2017 and 2018, respectively, which were recorded as other operating income.

Leases

A lease of which substantially all the benefits and risks incidental to ownership remain with the lessor is classified as an operating lease. All leases of the Group are currently classified as operating leases. When a lease contains rent holidays or requires fixed escalations of the minimum lease payments, the Group records the total rental expense on a straight-line basis over the initial lease term and the difference between the straight-line rental expense and cash payment under the lease is recorded as deferred rent. As of December 31, 2017 and 2018, deferred rent of RMB50 and RMB71 were recorded as other current liabilities and RMB1,380 and RMB1,507 were recorded as long-term liabilities, respectively.

Income taxes

Current income taxes are provided for in accordance with the relevant statutory tax laws and regulations.

Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Net operating losses are carried forward and credited by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of the Group, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

Foreign currency translation

The reporting currency of the Group is the Renminbi (“RMB”). The functional currency of the Company is the United States dollar (“US dollar”). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at the applicable rates of exchange prevailing on the day transactions occurred. Transaction gains and losses are recognized in the statements of comprehensive income.

Assets and liabilities are translated into RMB at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of comprehensive income.

The financial records of the Group’s subsidiaries are maintained in local currencies, which are the functional currencies.

Comprehensive income

Comprehensive income includes all changes in equity except for those resulting from investments by owners and distributions to owners and is comprised of net income, foreign-currency translation adjustments and unrealized securities holding gains (losses) recognized before the adoption of ASU No. 2016-01.

Concentration of credit risk

Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, short-term and long-term investments, loan receivables, amount due from related parties and accounts receivable.

All of the Group’s cash and cash equivalents and restricted cash are held with financial institutions that Group management believes to be high credit quality. In addition, the Group’s investment policy limits its exposure to concentrations of credit risk and the Group’s short-term and long-term investments consist of equity investments in listing and private companies. The Group’s loan receivables are lent to entities with high credit quality. The Group conducts credit evaluations on its group and agency customers and generally does not require collateral or other security from such customers. The Group periodically evaluates the creditworthiness of the existing customers in determining an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers.

Fair value

The Group defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs may be used to measure fair value include:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Group’s financial instruments include cash and cash equivalent, restricted cash, loan receivables current and non-current portion, receivables, payables, short-term debts, long-term debts. The carrying amounts of these short-term financial instruments approximates their fair value due to their short-term nature. The long-term debts and long-term loan receivables approximate their fair values, because the bearing interest rate approximates market interest rate, and market interest rates have not fluctuated significantly since the commencement of loan contracts signed.

When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group measures fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates.

As of December 31, 2017 and 2018, information about inputs into the fair value measurements of the Group’s assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows:


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active		Significant
			Markets for Identical	Significant Other	Unobservable
Years Ended			Assets	Observable Inputs	Inputs
December 31,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2017	Equity securities with readily determinable fair value	1,037	1,037	—	—
2017	Available-for-sale debt securities	346	—	346	—
2018	Equity securities with readily determinable fair value	4,111	4,111	—	—
2018	Available-for-sale debt securities	320	—	320	—

The following table presents the Group’s assets measured at fair value on a non-recurring basis for the years ended December 31, 2016, 2017 and 2018:


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active	Significant
		Fair Value for	Markets for Identical	Other Observable	Significant Unobservable	Total
Years Ended		Years Ended	Assets	Inputs	Inputs	Loss for
December 31,	Description	December 31	(Level 1)	(Level 2)	(Level 3)	the Year
2016	Property and equipment	21	—	—	21	151
2016	Equity-method investments	—	—	—	—	3
2017	Property and equipment	52	—	—	52	169
2018	Property and equipment	10	—	—	10	35

As a result of reduced expectations of future cash flows from certain leased hotels, the Group determined that the hotels property and equipment with a carrying amount of RMB172 RMB221 and RMB45 was not fully recoverable and consequently recorded an impairment charge of RMB151, RMB169 and RMB35 for the years ended December 31, 2016, 2017 and 2018, respectively. As a result of the impairment assessment, the Group determined that the long term investment amount with a carrying amount of RMB3, nil and nil was impaired as a result of the impairment assessment for the years ended December 31, 2016, 2017 and 2018, respectively.

Fair value of the property and equipment impairment testing was determined by the Group based on the income approach using the discounted cash flow associated with the underlying assets, which incorporated certain assumptions including projected hotels’ revenue, growth rates and projected operating costs based on current economic condition, expectation of management and projected trends of current operating results. As a result, the Group has determined that the majority of the inputs used to value its long-lived assets held and used and its reporting units are unobservable inputs that fall within Level 3 of the fair value hierarchy. The revenue growth rate and the discount rate were the significant unobservable input used in the fair value measurement, which are 4% and 20%, respectively, for the years ended December 31, 2016, 2017 and 2018, respectively.

Share-based compensation

The Group recognizes share-based compensation in the consolidated statements of comprehensive income based on the fair value of equity awards on the date of the grant, with compensation expenses recognized over the period in which the grantee is required to provide service to the Group in exchange for the equity award. Vesting of certain equity awards are based on the performance conditions for a period of time following the grant date. Share-based compensation expense is recognized according to the Group’s judgement of likely future performance and will be adjusted in future periods based on the actual performance. The share-based compensation expenses have been categorized as either hotel operating costs, general and administrative expenses or selling and marketing expenses, depending on the job functions of the grantees. For the years ended December 31, 2016, 2017 and 2018, the Group recognized share-based compensation expenses of RMB55, RMB66 and RMB83, respectively, which was classified as follows:


	Years Ended December 31,
	2016	2017	2018
Hotel operating costs	13	20	27
Selling and marketing expenses	1	2	3
General and administrative expenses	41	44	53
Total	55	66	83

Earnings per share

Basic earnings per share is computed by dividing income attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares, which consist of the ordinary shares issuable upon the conversion of the convertible senior notes (using the if-converted method) and ordinary shares issuable upon the exercise of stock options and vest of nonvested restricted stocks (using the treasury stock method).

The loaned shares under the ADS lending agreement are excluded from both the basic and diluted earnings per share calculation unless default of the ADS lending arrangement occurs which the Group considered the possibility is remote.

Segment reporting

The Group identifies a business as an operating segment if: i) it engages in business activities from which it may earn revenues and incur expenses; ii) its operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The Group’s chief operating decision maker has been identified as the chief executive officer. CODM regularly reviews the operation data, such as industrial metrics of revenue per available room, occupancy rate, and number of hotels by scale/brand, to assess the performance and allocate the resources at brand level. All the acquired business including Accor, Crystal Orange and Blossom Hill has been migrated to the Group’s business, and the Group operates and manages its business as a single segment. Therefore, the Group has one single operating segment.

The Group primarily generates its revenues from customers in the PRC. Substantially all of the Group’s long-lived assets are located in the PRC.

Treasury shares

Treasury shares represent shares repurchased by the Company that are no longer outstanding and are held by the Company. Treasury shares are accounted for under the cost method. As of December 31, 2018, under the repurchase plan, the Company had repurchased an aggregate of 3,096,764 ordinary shares on the open market for total cash consideration of RMB107. The repurchased shares were presented as “treasury shares” in shareholders’ equity on the Group’s consolidated balance sheets.

Recently Issued Accounting Pronouncements

Adopted Accounting Standards

The Group adopted the ASU 2014-09 and all related ASUs (collectively, the "new revenue standards") on January 1, 2018 utilizing the full retrospective basis in the consolidated financial statements, which required the Group to adjust each prior reporting period presented. The adoption of new revenue standards impacted the timing of revenue recognition related to initial one-time franchise fee from upon the opening of hotels to over the term of the franchise contract. In addition, the adoption of new revenue standards also impacted the accounting of the loyalty program. Under previous guidance, the Group adopted the incremental cost model to account for customer loyalty program. The estimated incremental costs, net of the reimbursement received from the franchisees, were accrued and recorded as accruals for customer loyalty program as members accumulate points and were recognized as cost and expense in the accompanying consolidated statements of comprehensive income. Upon adoption of new revenue standards, loyalty program is considered a separate performance obligation and the consideration allocated to the loyalty program are recognized as revenue upon point redemption, net of any cost paid to the franchisees and other third parties. The impact of the changes made to the Group’s consolidated financial statements as a result of the adoption of new revenue standards was as follows:


	Years Ended December 31,
	2016			2017
		Effect of the			Effect of the
		Adoption of			Adoption of
		New Revenue	As		New Revenue
	As Reported	Standards	Adjusted	As Reported	Standards	As Adjusted
Revenues:
Leased and owned hotels	5,212	27	5,239	6,343	(5)	6,338
Manachised and franchised hotels	1,412	7	1,419	1,787	64	1,851
Total revenues	6,655	34	6,689	8,170	59	8,229
Net revenues	6,539	34	6,573	8,170	59	8,229
Operating costs and expenses:
Hotel operating costs	4,932	2	4,934	5,674	1	5,675
Selling and marketing expenses	146	63	209	215	70	285
Total operating costs and expenses	5,650	65	5,715	6,803	71	6,874
Income from operations	872	(31)	841	1,438	(12)	1,426
Income before income taxes	1,078	(31)	1,047	1,609	(12)	1,597
Income tax expense	287	(8)	279	360	(3)	357
Net income	797	(23)	774	1,237	(9)	1,228
Net income attributable to Huazhu Group Limited	805	(23)	782	1,237	(9)	1,228

Earnings per share:
Basic	2.92		2.84	4.43		4.40
Diluted	2.84		2.76	4.24		4.21


	December 31, 2017
		Effect of the
		Adoption of
		New Revenue
	As Reported	Standards	As Adjusted
Deferred tax assets	326	80	406
Total assets	17,428	80	17,508
Deferred revenue – current	832	111	943
Accrued expenses and other current liabilities	1,265	(16)	1,249
Deferred revenue - noncurrent	172	226	398
Total liabilities	10,953	321	11,274
Retained earnings	2,754	(241)	2,513
Total equity	6,475	(241)	6,234
Total liabilities and equity	17,428	80	17,508

In January 2016, the FASB issued ASU No. 2016-01, which improves the recognition and measurement of financial instruments. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income and separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Group adopted the ASU effective January 1, 2018. The unrealized gains (losses), net of tax, on the available-for- sale securities of RMB41 were reclassified from accumulated other comprehensive income to retained earnings as of January 1, 2018.

In November, 2016, the FASB issued ASU 2016-18, which amends ASC 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. Under ASU 2016-18, restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. This ASU should be applied retrospectively and becomes effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, but early adoption is permitted. As a result of this update, restricted cash are included within cash and cash equivalents on the statements of consolidated cash flows. The Group adopted the ASU effective January 1, 2018. The balance of restricted cash of the Group of RMB361, RMB1 and RMB481 million are included within the beginning balance of cash, cash equivalents, and restricted cash on the statements of consolidated cash flows for the year ended December 31, 2016, 2017 and 2018, respectively.

In June, 2018, the FASB issued ASU 2018-07, which simplifies aspects of share-based compensation issued to non-employees by making the guidance consistent with the accounting for employee share-based compensation. The ASU is effective for public business entities for fiscal years beginning after December 15, 2018. The Group's early adoption of this ASU in the year ended December 31, 2018 had no material impact on the Group's consolidated financial statements.

Accounting Standards Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities with certain practical expedients available on the balance sheet and disclosing key information about leasing arrangements. The accounting for lessors remains largely unchanged. Subsequent to ASU 2016-02, the FASB issued related ASUs, including ASU No. 2018-11 ("ASU 2018-11"), Leases (Topic 842): Targeted Improvements, which provides for another transition method in addition to the modified retrospective approach required by ASU 2016-02. This option allows entities to initially apply the new leases standard at the adoption date and recognize a cumulative adjustment to the opening balance of retained earnings in the period of adoption. The provisions of ASU 2016-02, and all related ASUs, are effective for interim periods and fiscal years beginning after December 15, 2018, with early adoption permitted. The Group expect to adopt ASU 2016-02 utilizing the optional transition approach allowed under ASU 2018-11 and applying the package of practical expedients beginning January 1, 2019. By applying ASU 2016-02 at the adoption date, as opposed to at the beginning of the earliest period presented, the reporting for periods prior to January 1, 2019 will continue to be reported in accordance with Leases (Topic 840). The Group expects material changes to its consolidated balance sheet. On January 1, 2019, the Group expects to recognize right-of-use lease assets in the range of RMB19 billion to RMB22 billion and related lease liabilities in the range of RMB20 billion to RMB23 billion for operating leases. As a result of adoption, the Group will reclassify from assets and liabilities approximately RMB1 billion, net to right-of-use lease assets which has been factored into the range above. The Group does not believe the standard will materially affect the consolidated statements of income or consolidated statements of cash flows. The standard will have no impact on the debt covenant compliance under the current agreements.

In January 2017, the FASB issued ASU 2017-04, "Intangibles-Goodwill and Other", which removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under the ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, the ASU clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units in connection with an entity’s testing of reporting units for goodwill impairment. The ASU also clarifies that an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. For public business entities, the ASU is effective prospectively for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Group is in the process of evaluating the impact on the consolidated financial statements.

In June 2016, the FASB released Accounting Standards Update No.2016-13 ("ASU 2016-13"), Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the existing impairment model for most financial assets from an incurred loss impairment model to a current expected credit loss model, which requires an entity to recognize an impairment allowance equal to its current estimate of all contractual cash flows the entity does not expect to collect. ASU 2016-13 also requires credit losses relating to AFS debt securities to be recognized through an allowance for credit losses. The provisions of ASU 2016-13 are to be applied using a modified retrospective approach and are effective for interim periods and fiscal years beginning after December 15, 2019, with early adoption permitted. The Group is currently evaluating the impact of adopting ASU 2016-13.

In August 2018, the FASB released Accounting Standards Update No. 2018-13 ("ASU 2018-13"), Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements. The provisions of ASU 2018-13 are to be applied using a prospective or retrospective approach, depending on the amendment, and are effective for interim periods and fiscal years beginning after December 15, 2019, with early adoption permitted. The Group is still evaluating the impact of adopting ASU 2018-13.

In August 2018, the FASB released Accounting Standards Update No. 2018-15 ("ASU 2018-15"), Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The provisions of ASU 2018-15 are to be applied using a prospective or retrospective approach and are effective for interim periods and fiscal years beginning after December 15, 2019, with early adoption permitted. The Group is currently evaluating the impact of adopting ASU 2018-15.

Translation into United States Dollars

The financial statements of the Group are stated in RMB. Translations of amounts from RMB into United States dollars are solely for the convenience of the reader and were calculated at the rate of US$1 = RMB6.8755, on December 31, 2018, as set forth in H.10 statistical release of the Federal Reserve Board. The translation is not intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into United States dollars at that rate on December 31, 2018, or at any other rate.

ACQUISITIONS

12 Months Ended

Dec. 31, 2018

ACQUISITIONS

ACQUISITIONS

3. ACQUISITIONS

(i) In January 2016, the Group completed the transaction of strategic alliance with AccorHotels (“Accor”). Pursuant to the master purchase agreement, the Group acquired 100% equity interest of certain wholly-owned subsidiaries of Accor engaged in the business of owning, leasing, franchising, operating and managing hotels under Accor brands in the midscale and economy market in the PRC, Taiwan and Mongolia, as well as a non-controlling stake of 28% for Accor Luxury and Upscale hotel operating platform, held by AAPC Hotel Management Limited (“AAPC LUB”) in Greater China. The total consideration consists of consideration amounted to RMB1,144, which was measured at the market price of the 24,895,543 ordinary shares on the issuance date and cash consideration of RMB120.

The net revenue and net income of the acquiree included in the consolidated statements of operations for the year ended December 31, 2016 were RMB153 and RMB64, respectively.

The following is a summary of the fair values of the assets acquired and liabilities assumed:


	2016	Amortization Period
Current assets	207
Property and equipment	311	5-30 years
Favorable leases	3	remaining lease terms
Master brand agreement	192
Land use rights	150	remaining contracts terms
Long-term investments	418
Goodwill	63
Other noncurrent assets	2
Current liabilities	(39)
Deferred tax liabilities	(43)
Total	1,264

(ii) On May 25, 2017, the Group completed the acquisition of 100% of the equity interest of Crystal Orange Hotel Holdings Limited (the “Crystal Orange”) engaged in the business of owning, leasing, franchising, operating and managing hotels under Crystal Orange brands in the midscale market in the PRC, with an aggregated consideration in cash of approximately RMB3,765.

The net revenue and net income of the acquiree included in the consolidated statements of operations for the year ended December 31, 2017 were RMB777 and RMB100, respectively.

The following table summarizes unaudited pro forma results of operation for the years ended December 31, 2016 and 2017 assuming that the acquisition occurred as of January 1, 2016. The pro forma results have been prepared for comparative purpose only based on management’s best estimate and do not purport to be indicative of the results of operations which actually would have resulted had the acquisition occurred as of January 1, 2016.


	Years Ended December 31,
	2016	2017
Pro forma net revenue	7,508	8,630
Pro forma net income	835	1,267

The Group incurred transaction cost of RMB46 for the acquisition, which was expensed in 2017. In addition, Crystal Orange incurred certain costs directly attributable to the business combination including RMB256 related to the consultation services agreements and option cancellation agreement. These expenses are non-recurring in nature, and were eliminated from the calculation of pro forma net income above.

The following is a summary of the fair values of the assets acquired and liabilities assumed:


	2017	Amortization Period
Current assets	137
Property and equipment	842	3-20 years
Favorable leases	91	remaining lease terms
Franchise agreement	58	remaining contract terms
Brand Name	1,142	indefinite life
Goodwill	2,093
Other noncurrent assets	131
Current liabilities	(222)
Noncurrent liabilities	(180)
Deferred tax liabilities	(323)
Noncontrolling interest	(4)
Total	3,765

(iii) In August, 2018, the Group completed the acquisition of 83% equity interest of Blossom Hill Hotel Investment Management (Kunshan) Co., Ltd. (the "Blossom Hill"). Blossom Hill was engaged in the business of owning, leasing, franchising, operating and managing hotels under Blossom Hill brand in the upscale market in the PRC. The aggregated consideration RMB536 consisted of RMB463 cash consideration transferred and RMB73 implied fair value of the 11% equity interest originally owned by the Group. The previously held 11% equity interest that was accounted for using cost method was remeasured to fair value on the acquisition date, resulting in a gain of RMB13 recognized in investment income.

The net revenue and net loss of the acquiree included in the consolidated statements of operations for the year ended December 31, 2018 were RMB30 and RMB15, respectively.

The following table summarizes unaudited pro forma results of operation for the years ended December 31, 2017 and 2018 assuming that the acquisition occurred as of January 1, 2017. The pro forma results have been prepared for comparative purpose only based on management's best estimate and do not purport to be indicative of the results of operations which actually would have resulted had the acquisition occurred as of January 1, 2017.


	Years Ended December 31,
	2017	2018
Pro forma net revenue	8,331	10,124
Pro forma net income	1,214	701

The transaction cost for the acquisition was immaterial.

The following is a summary of the fair values of the assets acquired and liabilities assumed:


	2018	Amortization Period
Current assets	84
Property and equipment	187	3-20 years
Favorable leases	7	remaining lease terms
Unfavorable leases	(1)	remaining lease terms
Franchise agreement	25	remaining contract terms
Brand name	170	indefinite life
Goodwill	365
Land use rights	10
Deferred tax assets	12
Current liabilities	(105)
Noncurrent liabilities	(18)
Deferred tax liabilities	(50)
Noncontrolling interest	(150)
Total	536

In August 2018, the Group purchased 11% noncontrolling interest from several minority shareholders for total cash consideration of RMB73. The purchase of the noncontrolling interest is treated as an equity transaction. As of December 31, 2018, the Group owns 94% equity interest of Blossom Hill in total.

(iv) During the years ended December 31, 2016, 2017 and 2018, the Group acquired two individual hotels, two individual hotels, and two individual hotels for total cash consideration of RMB3, nil and RMB7, respectively. The business acquisitions were accounted for under purchase accounting. The assets and liabilities of these acquired hotels were immaterial to the consolidated financial statements.

Goodwill was recognized as a result of expected synergies from combining operations of the Group and acquired business and other intangible assets that don’t qualify for separate recognition. Goodwill is not amortized and is not deductible for tax purposes. In accordance with ASC 350, the Group assigned and assessed goodwill for impairment at the reporting unit level. All the acquired business has been migrated to the Group’s business. The Group concluded that it had only one reporting unit. Accordingly, goodwill is allocated to one single reporting unit.

REVENUE FROM CONTRACTS WITH CUSTOMERS

12 Months Ended

Dec. 31, 2018

REVENUE FROM CONTRACT WITH CUSTOMERS

REVENUE FROM CONTRACT WITH CUSTOMERS

4. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregated Revenues

The following tables present our revenues disaggregated by the nature of the product or service:


	Years Ended December 31,
	2016	2017	2018
Room revenues	4,781	5,842	6,894
Food and beverage revenues	218	249	304
Others	240	247	272
Leased and owned hotels revenue	5,239	6,338	7,470
Initial one-time franchise fee	56	59	79
On-going management and service fees	589	759	983
Central reservation system usage fees, other system maintenance and support fees	308	436	630
Reimbursements for hotel manager fees	321	371	455
Other fees	145	226	380
Manachised and franchised hotels revenue	1,419	1,851	2,527
Other revenues	31	40	66
Total revenues	6,689	8,229	10,063

Contract Balances

Our contract assets are insignificant at December 31, 2017 and December 31, 2018.


	As of December 31,
	2017	2018
Current contract liabilities	943	1,005
Long-term contract liabilities	398	458
Total contract liabilities	1,341	1,463

The contract liabilities balances above, as of December 31, 2017 and 2018 were comprised of the following:


	As of December 31,
	2017	2018
Initial fees received from franchisees owners	553	674
Cash received for membership fees and not recognized as revenue	305	357
Advances received from customers	425	374
Deferred revenue related to the loyalty program	58	58
Total	1,341	1,463

We recognized revenues that were previously deferred as contract liabilities of RMB445 and RMB468 during the years ended December 31, 2017 and 2018, respectively.

Revenue Allocated to Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods.

As of December 31,2018, we had RMB58 of deferred revenues related to unsatisfied performance obligations under HUAZHU Rewards that will be recognized as revenues when the points are redeemed, which we estimate will occur over the next two years. We had RMB674 of deferred revenues related to initial fees received from franchisees owners are expected to be recognized as revenues over the remaining contract periods over one to ten years. Additionally, we had RMB357 of deferred revenues related to membership fees that are expected to be recognized as revenues over the remaining membership life, which is estimated to be one to five years. We also had RMB374 of deferred revenues related to advances received from customers, which are expected to be recognized as revenues in future periods over the terms of the related contracts.

We did not estimate revenues expected to be recognized related to our unsatisfied performance for the following:

Revenues related to on-going management and franchise service fees, as they are considered sales-based royalty fees.

Revenues related to central reservation system usage fees, other system maintenance and support fees, and reimbursement for hotel manager fee, as the related revenues from the satisfaction of these performance obligations is recognized when the Group is entitled to invoice the amount.

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2018

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

5. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following:


	As of December 31,
	2017	2018
Cost:
Buildings	247	247
Leasehold improvements	6,453	7,389
Furniture, fixtures and equipment	1,034	1,162
Motor vehicles	1	1
	7,735	8,799
Less: Accumulated depreciation	(3,707)	(4,344)
	4,028	4,455
Construction in progress	495	563
Property and equipment, net	4,523	5,018

Depreciation expense was RMB674, RMB753 and RMB847 for the years ended December 31, 2016, 2017 and 2018, respectively.

The Group occasionally demolishes certain leased hotels due to local government zoning requirements, which typically results in receiving compensation from the government.

INTANGIBLE ASSETS, NET AND UNFAVORABLE LEASE

12 Months Ended

Dec. 31, 2018

INTANGIBLE ASSETS, NET AND UNFAVORABLE LEASE

INTANGIBLE ASSETS, NET AND UNFAVORABLE LEASE

6. INTANGIBLE ASSETS, NET AND UNFAVORABLE LEASE

Intangible assets, net consist of the following:


	As of December 31,
	2017	2018
Intangible assets with indefinite life:
Brand name (Note 3)	1,170	1,340
Master brand agreement (Note 3)	192	192
Intangible assets with definite life:
Franchise agreements	70	95
Non-compete agreement	0	0
Favorable lease agreements	256	278
Purchased software	65	69
Total	1,753	1,974
Less: Accumulated amortization	(109)	(140)
Total	1,644	1,834

Unfavorable lease


	As of December 31,
	2017	2018
Unfavorable lease agreements	4	3
Less: Accumulated amortization	(3)	(2)
Unfavorable lease agreements, net	1	1

The values of favorable lease agreements were determined based on the estimated present value of the amount the Group has avoided paying as a result of entering into the lease agreements. Unfavorable lease agreements were determined based on the estimated present value of the acquired lease that exceeded market prices and are recognized as other long-term liabilities. The value of favorable and unfavorable lease agreements is amortized using the straight-line method over the remaining lease term.

Amortization expense of intangible assets for the years ended December 31, 2016, 2017 and 2018 amounted to RMB17, RMB31 and RMB39, respectively.

The annual estimated amortization expense for the above intangible assets and unfavorable lease excluding brand name and master brand agreement for the following years is as follows:


	Amortization for	Amortization for
	Intangible Assets	Unfavorable Lease	Net Amortization
2019	37	0	37
2020	35	0	35
2021	34	0	34
2022	32	0	32
2023	30	0	30
Thereafter	134	1	133
Total	302	1	301

INVESTMENTS

12 Months Ended

Dec. 31, 2018

INVESTMENTS.

INVESTMENTS

7. INVESTMENTS

The investments as of December 31, 2017 and 2018 were as follows:


	As of December 31,
	2017	2018

Equity securities with readily determinable fair values:
Accor	780	3,816
Other marketable securities	257	295
Equity securities without readily determinable fair values:
OYO	66	66
Mobike	67	—
BJ GOOAGOO/GOOAGOO	60	—
Blossom Hill (Note 3)	60	—
Other equity securities without readily determinable fair values	103	113
Equity-method investments:
AAPC LUB	478	461
Hotel related funds	56	503
Shared office management entities	148	111
China Young	41	34
Cjia/Cjia Group	—	298
China Hospitality JV	—	117
BJ GOOAGOO/GOOAGOO	—	52
Other investments	30	55
Available-for-sale debt securities:
Cjia/Cjia Group	246	220
CREATER	100	100
Total	2,492	6,241

Equity securities with readily determinable fair values:

In 2017 and 2018, the Group purchased 2,309,981 and 10,782,131 ordinary shares of Accor, a hotel group listed in Paris stock exchange, from open market. As of December 31, 2018, the Group accumulatively hold 13,092,112 shares of Accor, which accounts for less than 5% of Accor’ total outstanding shares where the Group does not have the ability to significantly influence the operations of this entity. In 2018, along with the adoption of ASU 2016-01, the Group recognized unrealized losses from fair value changes of Accor of RMB794.

At December 31, 2017 and December 31, 2018, the Group had RMB257 and RMB295, respectively, of other marketable securities, which represent investments in entities in hospitality or related industries where the Group do not have the ability to significantly influence the operations of these entities. In 2018, the Group recognized unrealized losses from fair value changes of other marketable securities of RMB120.

Equity securities without readily determinable fair values:

In September 2017, the Group purchased approximately 1% equity interest of Oravel Stays Private limited (“OYO”), an India leading hospitality company. The Group accounted the investment as equity securities without readily determinable fair values since the Group does not have the ability to exert significant influence over OYO.

In January 2017, the Group purchased 1,316,205 preferred shares and invested in convertible notes with principal amount of US$5.0 million and interest rate of 8% of Mobike Ltd. (“Mobike”), a Chinese bike-sharing company. As of December 31, 2017, the Group had less than 1% equity interest of Mobike. The Group accounted the investment at cost method prior to 2018. Along with the adoption of ASC 2016-01, the Group accounted it as equity securities without readily determinable fair values. In 2018, the Group disposed all the Mobike preferred shares and recognized a gain of RMB55.

Other equity securities without readily determinable fair values included several insignificant investments in certain privately-held companies.

Equity-method investments:

In January 2016, the Group acquired approximately 28% equity interest in AAPC LUB (Note 3). The Group accounted for the investment in AAPC LUB under equity-method as the Group has the ability to exert significant influence. The Group recognized investment income of RMB31 and RMB43 in income (loss) from equity method investments in 2017 and 2018, respectively. In 2018, the Group received cash dividend from AAPC LUB of RMB60 which was recognized as a return on investment.

As of December 31, 2017 and 2018, the Group had RMB56 and RMB503, respectively, of investments in hotel related funds. Those funds were VIEs and were managed by or power shared with un-related third-parties. However, the Group determined that they were not the primary beneficiary of those VIEs since the Group did not have the power to direct the activities of these VIEs that most significantly impacted its economic performance. The Group accounted for the investment under equity-method. The Group recognized investment loss of nil and RMB28 in income (loss) from equity method investments in 2017 and 2018, respectively. The maximum potential financial statement loss the Group could incur if the investment funds were to default on all of their obligations is the loss of value of the interests in such investments of RMB503 that the Group holds as of December 31, 2018.

In 2016, the Group sold its subsidiary, Chengjia Hotel Management Co., Ltd. to Chengjia (Shanghai) Apartment Management Co., Limited (“Cjia”), the Group's equity investee. As a result, the Group recognized a gain of RMB50 in other income in 2016. As of December 31, 2016, the Group had approximately 23% equity interest of Cjia and a sixty-month convertible note with original value of RMB52. In 2017, the Group invested in Cjia for convertible notes totaled RMB200. With the injection from an unrelated investor to Cjia, the Group recognized gain on deemed disposal of RMB40 in other income in 2017. As of December 31, 2017, the Group had approximately 17% equity interest and three convertible notes with original value totaled RMB252 of Cjia. The Group accounted for the equity investment in Cjia under equity-method as the Group has the ability to exert significant influence. The convertible notes are recorded as available-for-sale debt securities. In 2018, Cjia completed its restructuring, and accordingly the Company's equity interest of 17% in Cjia was transformed to be the Group's equity interest of 17% in China Cjia Group Limited (“Cjia Group”). In addition, the Group made further investment in preferred shares of Cjia Group of US$45 million in 2018. Meanwhile, the convertible notes of Cjia could be replaced by converted notes of Cjia Group in the next four years. The Group recognized investment loss of RMB25, RMB33 and RMB38 in income (loss) from equity method investments in 2016, 2017 and 2018, respectively. Loss from equity method investments reduced the cost of equity-method investment to zero and further adjusted the carrying amount of convertible notes and preferred shares.

In 2018, the Group partnered with an unrelated third party investor to form China Hospitality JV, Ltd. (“China Hospitality JV”), of which the Group holds 20% equity interest. The business of China Hospitality JV was to acquire and operate two hotel properties. As of December 31, 2018, the Group had approximately 20% equity interest of China Hospitality JV. The Group accounted for the investment in China Hospitality JV under equity-method as the Group has the ability to exert significant influence. The Group recognized investment loss of RMB11 in income (loss) from equity method investments in 2018.

In 2014, the Group purchased approximately 8% equity interest in Beijing GOOAGOO Technology Service Co., Ltd. (“BJ GOOAGOO”), a high-tech service provider for Offline-To-Online data processing and platform operation. After restructuring of BJ GOOAGOO and further investment of the Group in 2015 and 2016, as of December 31, 2017, the Group had approximately 19% equity interest of in Gooagoo Group Holdings Limited (“GOOAGOO”). The Group accounted for the investment as equity securities without readily determinable fair values since the Group does not have the ability to exert significant influence over those companies. In 2018, the Group further invested in GOOAGOO. As of December 31, 2018, the Group had approximately 41% equity interest of in GOOAGOO and reclassified GOOAGOO from equity securities without readily determinable fair values to equity-method investments as the Group has the ability to exert significant influence through the increased voting power. The Group recognized investment loss of RMB14 in income (loss) from equity method investments in 2018.

Other investments included several insignificant equity investments in certain privately-held companies.

Available-for-sale debt securities:

In September 2017, the Group invested in Shanghai CREATER Industrial Co., Ltd. (“CREATER”), a staged office space company in China, for two-year convertible notes amounted RMB100 with an interest rate of 10% per year. The convertible notes with equity pledge are convertible upon satisfaction of certain conditions or at the option of the Group to ordinary shares in the last month before the expiration. The convertible notes are recorded as available-for-sale debt securities.

GOODWILL

12 Months Ended

Dec. 31, 2018

GOODWILL.

GOODWILL

8. GOODWILL

The changes in the carrying amount of goodwill for the years ended December 31, 2016, 2017 and 2018 were as follows:


	Gross	Accumulated	Net
	Amount	Impairment Loss	Amount
Balance at January 1, 2016	113	(4)	109
Increase in goodwill related to acquisitions	63	—	63
Balance at December 31, 2016	176	(4)	172
Increase in goodwill related to acquisitions	2,093	—	2,093
Balance at December 31, 2017	2,269	(4)	2,265
Increase in goodwill related to acquisitions	365	—	365
Balance at December 31, 2018	2,634	(4)	2,630

DEBT

12 Months Ended

Dec. 31, 2018

DEBT

DEBT

9. DEBT

The short-term and long-term debt as of December 31, 2017 and 2018 were as follows:


	As of December 31,
	2017	2018
Short-term debt:
Long-term bank borrowings, current portion	0	0
Short-term bank borrowings	131	948
Total	131	948

Long-term debt:
Long-term bank borrowings, non-current portion	1,895	5,603
Convertible senior notes	3,027	3,209
Total	4,922	8,812

Bank borrowings

In May 2017, the Group entered into an US$250 million term facility and US$250 million revolving credit facility agreement with several banks. The US$250 million revolving credit facility is available for 35 months after the date of the agreement. The interest rate on the loan is Libor plus 1.75%. There are some financial covenants including interest coverage ratio, leverage and tangible net worth related to this facility and the Group was in compliance as of December 31, 2017 and 2018. The Group had drawn down US$250 million under the term facility agreement in 2017 and repaid nil in 2017 and 2018. For revolving credit facility agreement, the Group had drawn down US$250 million in May 2017 and fully repaid the amount in November 2017. The group had drawn down total US$370 million in succession under the revolving facility agreement and repaid US$120 million in 2018. The weighted average interest rate of borrowings drawn under this agreement was 3.04% and 3.93% for the years ended December 31, 2017 and 2018, respectively.

In February 2018, the Group entered into a three-year term facility agreement under which the Group can borrow up to EUR260 million within 30 London business days. The interest rate on the loan for each interest period is the aggregate of the applicable EURIBOR and a spread of 1.70%. The Group had pledged 13,092,112 shares of Accor the Group acquired from open market in 2017 and 2018 as collateral. The loan contains certain financial covenants including debt ratio and the value of pledged shares and the Group was in compliance as of December 31, 2018. The Group had drawn down EUR241 million under the term facility agreement in 2018 and repaid nil. The weighted average interest rate of borrowings drawn under this agreement was 1.70% for the year ended December 31 2018.

Convertible Senior Notes due 2022

On November 3, 2017, the Company issued US$475 million of Convertible Senior Notes (“the Notes”). The Notes mature on November 1, 2022 and bear interest at a rate of 0.375% per annum, payable in arrears semi-annually on May 1 and November 1, beginning May 1, 2018.

Holders of the Notes have the option to convert their Notes at any time prior to the close of business on the second business day immediately preceding the maturity date. The Notes can be converted into the Company’s ADSs at an initial conversion rate of 5.4869 of the Company’s ADSs per US$1,000 principal amount of the Notes (equivalent to an initial conversion price of US$182.25 per ADS). The conversion rate is subject to adjustment in some events but is not adjusted for any accrued and unpaid interest. In addition, following a make-whole fundamental change (as defined in the Indenture) that occur prior to the maturity date or following the Company’s delivery of a notice of a tax redemption, the Company will increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event or such tax redemption.

The holders may require the Company to repurchase all or portion of the Notes for cash on November 3, 2020, or upon a fundamental change, at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest. The Company believes that the likelihood of occurrence of events considered a fundamental change is remote.

The conversion option meets the definition of a derivative. However, since the conversion option is considered indexed to the Company’s own stock and classified in stockholders’ equity, the scope exception is met, accordingly the bifurcation of conversion option from the Notes is not required. There is no beneficial conversion feature (“BCF”) attribute to the Notes as the set conversion prices for the Notes are greater than the respective fair values of the ordinary share price at date of issuance.

The feature of mandatory redemption upon maturity is clearly and closely related to the debt host and this feature is no need to be bifurcated. Furthermore, the Company concluded that the feature of contingent put options upon tax events or fundamental changes does not need to be considered as an embedded derivative to be bifurcated.

Therefore, the Company accounted for the Notes in accordance with ASC 470, as a single instrument under long-term debt. Issuance costs related to the Notes is recorded in consolidated balance sheet as a direct deduction from the principal amount of the Notes, and is amortized over the period from November 3, 2017, the date of issuance, to November 1, 2020, the first put date of the Notes, using the effective interest method.

In 2017, proceeds to the Company were RMB3,093 (equivalently US$467 million), net of issuance costs of RMB54 (equivalently US$8 million).

ADS Lending Arrangement

Concurrent with the offering of the Notes, the Company entered into ADS lending agreements with the affiliates of the initial purchasers of the Notes (“ADS Borrowers”), pursuant to which the Company lent to the ADS Borrowers 2,606,278 ADSs (the “Loaned ADSs”) at a price equal to par, or $0.0004 per ADS (“ADS lending arrangement”). The purpose of the ADS lending arrangements is to facilitate privately negotiated transactions in which the ultimate holders of the Notes may elect to hedge their investment in the related notes. As of December 31, 2017 and 2018, the outstanding number of Loaned ADSs was 2,606,278.

The Loaned ADSs must be returned to the Company by the earliest of (a) the maturity date of the Notes, November 1, 2022, (b) upon the Company’s election to terminate the ADS lending agreement at any time after the later of (x) the date on which the entire principal amount of the Notes ceases to be outstanding, and (y) the date on which the entire principal amount of any additional convertible securities that the Company has in writing consented to permit the ADS Borrower to hedge under the ADS lending agreement ceases to be outstanding, in each case, whether as a result of conversion, redemption, repurchase, cancellation or otherwise; and (c) the termination of the ADS lending agreement. The Company is not required to make any payment to the initial purchasers or ADS Borrower upon the return of the Loaned ADSs. The ADS Borrowers do not have the choice or option to pay cash in exchange for the return of the Loaned ADSs.

No collateral is required to be posted for the Loaned ADSs. The initial purchasers are required to remit to the Company any dividends paid to the holders of the Loaned ADSs. An ADS Borrower has the ability to vote without restriction. However, the ADS Borrowers have agreed not to vote on the Loaned ADSs.

In accordance with FASB ASC Sub-topic 470-20, the Company has accounted for the ADS lending agreement initially at fair value and recognized it as an issuance cost associated with the convertible debt offering. As a result, additional debt issuance costs of RMB26 (equivalently US$4 million) were recorded on the issuance date with a corresponding increase to additional paid-in-capital. This debt issuance costs have also been amortized from the date of issuance to the put date of Notes, using the effective interest method.

In accordance with ASC Topic 470-20, although legally issued, the Loaned ADSs are not considered outstanding, and then excluded from basic and diluted earnings per share unless default of the ADS lending arrangement occurs, at which time the Loaned ADSs would be included in the basic and diluted earnings per share calculation. As of December 31, 2018, it is not probable that the ADS Borrower or the counterparty to the ADS lending arrangement will default.

Capped Call Options

In connection with the issuance of the Notes, the Company has entered into capped call option transactions with some of the initial purchasers or their affiliates (the "Option Counterparties") to reduce the potential dilution to existing shareholders of the Company upon conversion of the Notes. The cap price of the capped call transactions will initially be US$221.31 per ADS, subject to adjustment under the terms of the capped call transactions. The total premium paid by the Company for the capped call transactions was RMB177 (equivalently US$27 million) on the purchased date. The capped call option is classified in stockholders’ equity, recorded at the cost with no subsequent changes in fair value be recorded.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

12 Months Ended

Dec. 31, 2018

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES


	As of December 31,
	2017	2018
Payable for business acquisitions	118	39
Liabilites related to customer loyalty program	138	154
Payable to noncontrolling interest holders	87	107
Payable to franchisees	418	698
Other payables	264	351
Accrued rental, utilities and other accrued expenses	174	187
Deferred rent, current	50	71
Total	1,249	1,607

From time to time, the Group receives cash advances from noncontrolling interest holders of hotels that are not wholly owned by the Group. Such advances are non-interest bearing and are payable within one year. Payable to franchisees mainly represents room charges received on behalf of franchisees and are payable within one year.

HOTEL OPERATING COSTS

12 Months Ended

Dec. 31, 2018

HOTEL OPERATING COSTS.

HOTEL OPERATING COSTS

11. HOTEL OPERATING COSTS

Hotel operating costs include all direct costs incurred in the operation of the leased and owned hotels, manachised and franchised hotels and consist of the following:


	Years Ended December 31,
	2016	2017	2018
Rents	1,871	2,059	2,406
Utilities	346	366	399
Personnel costs	1,089	1,388	1,663
Depreciation and amortization	677	773	869
Consumable, food and beverage	495	551	673
Others	456	538	466
Total	4,934	5,675	6,476

PRE-OPENING EXPENSES

12 Months Ended

Dec. 31, 2018

PRE-OPENING EXPENSES

PRE-OPENING EXPENSES

12. PRE-OPENING EXPENSES

The Group expenses all costs incurred in connection with start-up activities, including pre-operating costs associated with new hotel facilities and costs incurred with the formation of the subsidiaries, such as organization costs. Pre-opening expenses primarily include rental expenses and employee costs incurred during the hotel pre-opening period.


	Years Ended December 31,
	2016	2017	2018
Rents	67	192	221
Personnel costs	2	6	18
Others	3	8	16
Total	72	206	255

SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2018

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

13. SHARE-BASED COMPENSATION

In February 2007, the Group adopted the 2007 Global Share Plan which allows the Group to offer incentive awards to employees, officers, directors and consultants or advisors (the “Participants”). Under the 2007 Global Share Plan, the Group may issue incentive awards to the Participants to purchase not more than 10,000,000 ordinary shares. In June 2007, the Group adopted the 2008 Global Share Plan which allows the Group to offer incentive awards to Participants to purchase up to 3,000,000 ordinary shares. In October 2008, the Group increased the maximum number of incentive awards available under the 2008 Global Share Plan to 7,000,000. In September 2009, the Group adopted the 2009 Share Incentive Plan which allows the Group to offer incentive awards to Participants. Under the 2009 Share Incentive Plan, the Group may issue incentive awards to purchase up to 3,000,000 ordinary shares. In August 2010, the Group increased the maximum number of incentive awards available under the 2009 Share Incentive Plan to 15,000,000. In March 2015, the Group increased the maximum number of incentive awards available under the 2009 Share Incentive Plan to 43,000,000. The 2007 and 2008 Global Share Plans and 2009 Share Incentive Plan (collectively, the “Incentive Award Plans”) contain the same terms and conditions. The incentive awards granted under the Incentive Award Plans typically have a maximum life of ten years and vest in typical ways as listed below:

a.) Vest 50% on the second anniversary of the stated vesting commencement date with the remaining 50% vesting ratably over the following two years;

b.) Vest over a period of ten years in equal yearly installments;

As of December 31, 2018, the Group had granted 24,577,669 options and 23,795,090 nonvested restricted stocks.

Share options

No share options were granted during the years 2016, 2017 and 2018.

The following table summarized the Group’s share option activity under the option plans:


			Weighted Average
	Number of	Weighted Average	Remaining	Aggregate Intrinsic
	Options	Exercise Price	Contractual Life	Value
		US$	Years	US$'million
Share options outstanding at January 1, 2018	2,044,724	2.12
Forfeited	(32,019)	1.75
Exercised	(876,715)	2.42
Share options outstanding at December 31, 2018	1,135,990	1.89	0.91	30
Share options vested or expected to vest at December 31, 2018	1,125,336	1.87	0.89	30
Share options exercisable at December 31, 2018	1,099,720	1.81	0.83	29

As of December 31, 2018, total unrecognized compensation expense related to unvested share-based compensation arrangements was immaterial, which is expected to be recognized over a weighted-average period of 1.10 years.

During the years ended December 31, 2016, 2017 and 2018, 684,632, 609,224 and 876,715 options were exercised with an aggregate intrinsic value of RMB41, RMB77 and RMB194 respectively.

Nonvested restricted stocks

The fair value of nonvested restricted stock with service conditions or performance conditions is based on the fair market value of the underlying ordinary shares on the date of grant.

In 2016 and 2018, the Group granted 1,876,975 and 661,973 nonvested restricted stocks, respectively to senior officers and managers, each was in ten tranches with performance conditions. Each tranche is accounted for as a separate award with the same grant date, its own service inception date and requisite service period. The share-based compensation cost is recognized for each vesting tranche during the respective service period based on the estimated performance conditions at the service inception date. The Group reassesses the performance condition at each reporting period for true up. For each tranche, 50% vests on the second anniversary of the vesting commencement date with the remaining 50% vesting ratably over the following two years.

The following table summarized the Group’s nonvested restricted stock activity in 2018.


	Number of Restricted	Weighted Average Grant Date
	Stocks	Fair Value
		US$
Nonvested restricted stocks outstanding at January 1, 2018	12,492,570	5.86
Granted	1,708,980	27.51
Forfeited	(253,323)	8.63
Vested	(1,680,939)	5.75
Adjusted for performance conditions	(170,672)	4.89
Nonvested restricted stocks outstanding at December 31, 2018	12,096,616	8.89

As of December 31, 2018, there was RMB621 in unrecognized compensation costs, net of estimated forfeitures, related to unvested restricted stocks, which is expected to be recognized over a weighted-average period of 4.18 years.

The total fair value of nonvested restricted stocks vested in 2016, 2017 and 2018 was RMB123, RMB274 and RMB183, respectively.

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2018

EARNINGS PER SHARE

EARNINGS PER SHARE

14. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share for the years indicated:


	Years Ended December 31,
	2016	2017	2018
Net income attributable to ordinary shareholders — basic	782	1,228	716
Eliminate the dilutive effect of interest expense of convertible senior notes	—	5	40
Net income attributable to ordinary shareholders — diluted	782	1,233	756
Weighted average ordinary shares outstanding — basic	275,139,070	279,272,140	281,717,485
Incremental weighted-average ordinary shares from assumed exercise of share options and nonvested restricted stocks using the treasury stock method	7,750,424	12,202,369	11,463,212
Dilutive effect of convertible senior notes	—	1,599,469	10,425,112
Weighted average ordinary shares outstanding — diluted	282,889,494	293,073,978	303,605,809
Basic earnings per share	2.84	4.40	2.54
Diluted earnings per share	2.76	4.21	2.49

For the years ended December 31, 2016, 2017 and 2018, the Group had securities which could potentially dilute basic earnings per share in the future, but which were excluded from the computation of diluted earnings per share as their effects would have been anti-dilutive. Such outstanding securities consist of the following:

CASH DIVIDEND	12 Months Ended
CASH DIVIDEND	Dec. 31, 2018
CASH DIVIDEND
CASH DIVIDEND	15. Cash Dividend On October 23, 2017, the Group approved and declared a cash dividend of US$0.16 per ordinary share on its outstanding shares as of the close of trading on December 15, 2017. Such dividend of RMB295 was recorded as a reduction against retained earnings, and the dividend of RMB11 attributable to ADS issued under the ADS lending arrangement was recorded as a receivable in other current assets as of December 31, 2017 and had been received in January 2018. On December 13, 2018, the Group approved and declared a cash dividend of US$0.34 per ordinary share on its outstanding shares as of the close of trading on January 2, 2019. Such dividend of RMB658 was recorded as dividends payable as of December 31, 2018, and fully paid in January 2019.

INCOME TAXES

12 Months Ended

Dec. 31, 2018

INCOME TAXES

INCOME TAXES

16. INCOME TAXES

Cayman Islands

Under the current laws of the Cayman Islands, the Company, China Lodging Investment Limited, City Home Group Limited and CLG Special Investments Limited are not subject to tax on income or capital gain.

Hong Kong

China Lodging Holdings (HK) Limited, Starway Hotels (Hong Kong) Limited, IBIS China Investment Limited, ACL Greater China Limited, TAHM Investment Limited, City Home Investment Limited, Orange Hotel Hong Kong Limited, Huazhu Investment I Limited and Huazhu Investment II Limited are subject to Hong Kong profit tax at a rate of 16.5%.

Singapore

China Lodging Holdings Singapore Pte. Ltd. is subject to Singapore corporate income tax at a rate of 17% in 2016, 2017 and 2018. No Singapore profit tax has been provided as the Group has not had assessable profit that was earned in or derived from Singapore during the years presented.

British Virgin Islands

Under the current tax laws of the British Virgin Islands, Crystal Orange Hotel Holdings Limited is not subject to tax on income or capital gain.

Seychelles

Under the current tax laws of Seychelles, Sheen Step Group Limited is not subject to tax on income or capital gain.

PRC

Under the Law of the People’s Republic of China on Enterprise Income Tax (“EIT Law”), which was effective from January 1, 2008, domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%.

Hanting Suzhou was entitled to a reduced tax rate of 15% as it was qualified as high and new tech enterprise. The high and new tech enterprise qualification was expired in September, 2017, resulting Hanting Suzhou subject to a uniform tax rate of 25% in 2017 and 2018.

Jizhu Information and Technology (Shanghai) Co., Ltd. (“Jizhu Shanghai”), which once called Mengguang Information and Technology (Shanghai) Co., Ltd, is a recognized software development entity located in Shanghai of PRC. Jizhu Shanghai is entitled to a two-year exemption and three-year 50% reduction tax holiday starting from the first profit making year after absorbing all prior years’ tax losses, and has entered into the first tax profitable year in 2014. Therefore, it applied tax exemption from 2014 to 2015, and tax rate of 12.5% from 2016 to 2018.

Tax expense (benefit) is comprised of the following:


	Years Ended December 31,
	2016	2017	2018
Current Tax	253	436	660
Deferred Tax	26	(79)	(91)
Total	279	357	569

A reconciliation between the effective income tax rate and the PRC statutory income tax rate is as follows:


	Years Ended December 31,
	2016		2017		2018
PRC statutory tax rate	25	%	25	%	25	%
Tax effect of non-deductible expenses and non-taxable income in determining taxable profit	3	%	1	%	15	%
Effect of different tax rate of group entities operating in other jurisdictions	(1)	%	1	%	4	%
Effect of change in valuation allowance	1	%	—		(1)	%
Effect of tax holiday	(3)	%	(1)	%	(3)	%
Effect of cash dividends	3	%	(1)	%	5	%
Effect of disposal of subsidiary	(1)	%	—		1	%
Effect of excess tax benefit of rewards	—		(3)	%	(5)	%
Effective tax rate	27	%	22	%	41	%

The aggregate amount and per share effect of the tax holidays are as follows:


	Years Ended December 31,
	2016	2017	2018
Aggregate amount	27	24	31
Per share effect—basic	0.10	0.09	0.11
Per share effect—diluted	0.10	0.08	0.10

The principal components of the Group’s deferred income tax assets and liabilities as of December 31, 2017 and 2018 are as follows:


	As of December 31,
	2017	2018
Deferred tax assets:
Net loss carryforward	140	181
Deferred revenue	159	186
Deferred rent	9	5
Long-term assets	130	149
Bad debt provision	4	6
Liabilities related to customer loyalty program	37	37
Accrued payroll	14	16
Other accrued expenses	21	14
Share-based compensation	13	17
Others	2	1
Valuation allowance	(123)	(107)
Total deferred tax assets	406	505
Deferred tax liabilities:
Favorable lease, building and land use rights-fair value adjustment	399	447
Capitalized interest	3	3
Unrealized gain for investment	7	7
Others	13	18
Total deferred tax liabilities	422	475

For the years ended December 31, 2017 and 2018, valuation allowance of RMB60 and RMB36 were provided, respectively, RMB3 and nil were added due to acquisition, respectively, RMB47 and RMB43 were reversed, respectively, and RMB8 and RMB9 were written off, respectively. The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryforward periods, the Group’s experience with tax attributes expiring unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more likely than not threshold. The Group’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carryforward periods provided for in the tax law.

As of December 31, 2018, the Group had tax loss carryforwards of RMB722, which will expire between 2019 and 2023 if not used.

The Group determines whether or not a tax position is “more-likely-than-not” of being sustained upon audit based solely on the technical merits of the position. At December 31, 2017 and 2018, the Group had recorded liabilities for uncertain tax benefit of approximately RMB26 and RMB14 associated with the interests on intercompany loans, respectively. No interest or penalty expense was recorded for the years ended December 31, 2016, 2017 and 2018. The Group does not anticipate any significant changes to its liability for unrecognized tax benefits within the next 12 months.

In accordance with the EIT Law, dividends, which arise from profits of foreign invested enterprises (“FIEs”) earned after January 1, 2008, are subject to a 10% withholding income tax. If there is a favorable tax treaty between mainland China and the jurisdiction of the foreign holding company, the income tax rate may be reduced. For example, holding companies in Hong Kong that are also tax residents in Hong Kong are eligible for a 5% withholding tax on dividends under the Tax Memorandum between China and the Hong Kong Special Administrative Region if the holding company is the beneficial owner of the dividends. Under applicable accounting principles, a deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting basis over tax basis in a domestic subsidiary. In 2018, the Group revised its dividend policy, and going forward the Group plans to maintain a moderate dividend distribution of approximately US$100 million a year from current year net income starting from 2018. In 2018, to facilitate the Company's declaration of a cash dividend, PRC dividend withholding tax of RMB34 was accrued. As of December 31, 2018, the accrued PRC dividend withholding tax liability ending balance was RMB18. Other than these dividends distributions, the Group intends to indefinitely reinvest the remaining undistributed earnings of the Group’s PRC subsidiaries, and therefore, no additional provision for PRC dividend withholding tax was accrued.

According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of income taxes is due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of income tax liability exceeding RMB0.1 is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The Group’s PRC subsidiaries are therefore subject to examination by the PRC tax authorities from 2014 through 2018 on non-transfer pricing matters, and from 2009 through 2018 on transfer pricing matters.

MAINLAND CHINA CONTRIBUTION PLAN	12 Months Ended
MAINLAND CHINA CONTRIBUTION PLAN	Dec. 31, 2018
MAINLAND CHINA CONTRIBUTION PLAN
MAINLAND CHINA CONTRIBUTION PLAN	17. MAINLAND CHINA CONTRIBUTION PLAN Full time employees of the Group in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Group to accrue for these benefits based on a certain percentage of the employees’ salaries. The total contribution for such employee benefits were RMB213, RMB264 and RMB321 for the years ended December 31, 2016, 2017 and 2018, respectively. The Group has no ongoing obligation to its employees subsequent to its contributions to the PRC plan.

RESTRICTED NET ASSETS	12 Months Ended
RESTRICTED NET ASSETS	Dec. 31, 2018
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS	18. RESTRICTED NET ASSETS Pursuant to laws applicable to entities incorporated in the PRC, the subsidiaries of the Group in the PRC must make appropriations from after-tax profit to non-distributable reserve funds. These reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires annual appropriation of 10% of after tax profit (as determined under accounting principles generally accepted in the PRC at each year-end) until the accumulative amount of such reserve fund reaches 50% of their registered capital; the other fund appropriations are at the subsidiaries’ discretion. These reserve funds can only be used for specific purposes of offsetting future losses, enterprise expansion and staff bonus and welfare and are not distributable as cash dividends and amounted to RMB277, RMB379 and RMB502 as of December 31, 2016, 2017 and 2018, respectively. In addition, due to restrictions on the distribution of share capital from the Company’s PRC subsidiaries, the PRC subsidiaries share capital of RMB2,777 at December 31, 2018 is considered restricted. As a result of these PRC laws and regulations, as of December 31, 2018, approximately RMB3,279 is not available for distribution to the Company by its PRC subsidiaries in the form of dividends, loans or advances.

RELATED PARTY TRANSACTIONS AND BALANCES

12 Months Ended

Dec. 31, 2018

RELATED PARTY TRANSACTIONS AND BALANCES

19. RELATED PARTY TRANSACTIONS AND BALANCES

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.

The following entities are considered to be related parties to the Group. The related parties mainly act as service providers and service recipients to the Group. The Group is not obligated to provide any type of financial support to these related parties.


Related Party	Nature of the Party	Relationship with the Group
Ctrip.com International, Ltd. (“Ctrip”)	Online travel services provider	Mr. Qi Ji is a director
Sheen Star Group Limited (“Sheen Star”)	Investment holding company	Equity method investee of the Group, controlled by Mr. Qi Ji
Accor Hotels (“Accor”)	Hotel Group	Shareholder of the Group
China Cjia Group Limited (“Cjia Group”)	Apartment Management Group	Equity method investee of the Group
Shanghai CREATER Industrial Co., Ltd. (“CREATER”)	Staged office space company	Equity method investee of the Group
Shenzhen Hanmo Investment Fund Partnership LLP (“Hanmo”)	Hotel related fund	Equity method investee of the Group
China Hospitality JV, Ltd. (“China Hospitality JV”)	Property management company	Equity method investee of the Group

(a) Related party balances

Amounts due from related parties were mainly comprised of shareholder loans to Sheen Star, CREATER, Cjia Group, and Hanmo, which are short-term in nature and mainly payable on demand, and receivable for service fee from Accor, service fee and room charges withheld by Ctrip.


	As of December 31,
	2017	2018
Sheen Star	39	44
CREATER	27	40
Ctrip	32	34
Cjia Group	15	23
Hanmo	—	22
Accor	2	2
Others	3	11
Total	118	176

Amounts due to related parties were mainly comprised of payables for brand use fee, reservation fee and other service fee to Ctrip, and Accor, and cash received on behalf of Cjia Group and China Hospitality JV, which are short-term in nature and payable on demand.


	As of December 31,
	2017	2018
Ctrip	29	25
China Hospitality JV	—	25
Accor	7	8
Cjia Group	—	7
Others	1	10
Total	37	75

(b) Related party transactions

During the years ended December 31, 2016, 2017 and 2018, significant related party transactions were as follows:


	Years Ended December 31,
	2016	2017	2018
Commission expenses to Ctrip	44	77	61
Lease expenses to Ctrip	—	—	18
Brand use fee, reservation fee and other related service fee to Accor	6	11	18
Marketing and training fee from Ctrip	13	24	12
Service fee from Accor	4	8	14
Service fee from China Hospitality JV	—	—	10
Service fee from Sheen Star	—	—	2
Goods sold and service provided to Cjia Group	0	8	30
Interest income from Sheen Star	2	—	—
Interest income from Hanmo	—	—	7
Interest income from CREATER	—	—	10
Loan payment to Sheen Star	35	—	—
Loan payment to Cjia Group	—	85	—
Loan payment to CREATER	—	27	—
Loan from Cjia Group	—	—	103

In 2016, the Group sold its subsidiary Chengjia Hotel Management Co., Ltd. to Cjia for consideration of RMB10.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2018

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

20. COMMITMENTS AND CONTINGENCIES

(a) Operating lease commitments

The Group has entered into lease agreements for certain hotels which it operates. Such leases are classified as operating leases.

Future minimum lease payments under non-cancellable operating lease agreements at December 31, 2018 were as follows:


Year Ending December 31,
2019		2,854
2020		2,863
2021		2,777
2022		2,661
2023		2,548
Thereafter		15,669
Total		29,372

(b) Purchase Commitments

As of December 31, 2018, the Group’s commitments related to leasehold improvements and installation of equipment for hotel operations was RMB91, which is expected to be incurred within one year.

The Group is subject to periodic legal or administrative proceedings in the ordinary course of our business. As of December 31, 2016, the Group had several cases outstanding, including lease contract terminations and disputes, and construction contract disputes. The Group believed it was probable that settlement liabilities would be involved, and therefore accrued contingencies of RMB66 in other operating expense based on the terms of contract, laws and regulations and latest negotiation result. For the year ended December 31, 2017, the Group had settled several cases and undergoes new cases. Therefore, the Group reversed contingencies of RMB36 and further accrued RMB11 based on latest negotiation or arbitration result with the remaining accrued contingencies of RMB41. For the year ended December 31, 2018, the Group had settled several cases and undergoes new cases. Therefore, the Group reversed contingencies of RMB25 and further accrued RMB4 based on latest negotiation or arbitration result with the remaining accrued contingencies of RMB20. The Group does not believe that any other currently pending legal or administrative proceeding to which the Group is a party will have a material adverse effect on the financial statements.

SCHEDULE I FINANCIAL INFORMATION FOR PARENT COMPANY

12 Months Ended

Dec. 31, 2018

SCHEDULE I FINANCIAL INFORMATION FOR PARENT COMPANY

SCHEDULE I FINANCIAL INFORMATION FOR PARENT COMPANY

ADDITIONAL FINANCIAL INFORMATION — FINANCIAL STATEMENTS SCHEDULE I

HUAZHU GROUP LIMITED

FINANCIAL INFORMATION FOR PARENT COMPANY

BALANCE SHEETS
(Renminbi in millions , except share and per share data , unless otherwise stated)


	As of December 31,
	2017	2018	2018
			US$'million
Assets
Current assets:
Cash and cash equivalents	557	695	101
Short-term investments	130	89	13
Other current assets	37	29	4
Total current assets	724	813	118
Other assets	33	11	2
Investment in subsidiaries	10,062	13,454	1,957
Long-term investments	780	—	—
Total assets	11,599	14,278	2,077
Liabilities and equity
Current liabilities:
Short-term debt	131	—	—
Dividends payable	—	658	96
Amount due to related parties	313	477	69
Accrued expenses and other current liabilities	35	54	8
Total current liabilities	479	1,189	173
Long-term debt	4,922	6,915	1,006
Total liabilities	5,401	8,104	1,179
Equity:
Ordinary shares(US$0.0001 par value per share; 8,000,000,000 shares authorized; 294,040,234 and 296,597,888 shares issued as of December 31, 2017 and 2018, and 280,518,358 and 283,076,012 shares outstanding as of December 31, 2017 and 2018, respectively)	0	0	0
Treasury shares (3,096,764 and 3,096,764 shares as of December 31 2017 and 2018, respectively)	(107)	(107)	(16)
Additional paid-in capital	3,624	3,713	540
Retained earnings	2,513	2,610	380
Accumulated other comprehensive income (loss)	168	(42)	(6)
Total equity	6,198	6,174	898
Total liabilities and equity	11,599	14,278	2,077

ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I

HUAZHU GROUP LIMITED

FINANCIAL INFORMATION FOR PARENT COMPANY

STATEMENTS OF COMPREHENSIVE INCOME
(Renminbi in millions, unless otherwise stated)


	Years Ended December 31,
	2016	2017	2018	2018
				US$'million
Operating costs and expenses:
General and administrative expenses	60	69	89	13
Total operating costs and expenses	60	69	89	13
Loss from operations	(60)	(69)	(89)	(13)
Interest income	0	2	1	0
Interest expense	10	87	198	29
Foreign exchange gain (loss)	15	(14)	17	2
Other income, net	70	7	50	7
Unrealized gain (loss) from fair value changes of equity securities	—	35	(45)	(6)
Income in investment in subsidiaries	767	1,354	980	143
Net income attributable to Huazhu Group Limited	782	1,228	716	104

Other comprehensive income
Unrealized securities holding gains (losses), net of tax of (2), (8) and nil for 2016, 2017 and 2018, respectively	16	1	—	—
Reclassification of realized gains to net income, net of tax	(68)	(5)	—	—
Foreign currency translation adjustments, net of tax of nil for 2016, 2017 and 2018, respectively	(13)	177	(169)	(25)
Comprehensive income	717	1,401	547	79

ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I

HUAZHU GROUP LIMITED

FINANCIAL INFORMATION FOR PARENT COMPANY

STATEMENTS OF CASH FLOWS
(Renminbi in millions , unless otherwise stated)


	Years Ended December 31,
	2016	2017	2018	2018
				US$'million
Operating activities:
Net income	782	1,228	716	104
Adjustments to reconcile net income to net cash used in operating activities:
Share-based compensation	55	66	83	12
Income in investment in subsidiaries	(767)	(1,354)	(980)	(143)
Investment (income) loss	(51)	(41)	46	7
Amortization of issuance cost of convertible notes	—	3	28	4
Changes in operating assets and liabilities:
Other current assets	1	(26)	8	1
Other assets	—	(33)	21	3
Accrued expenses and other current liabilities	(17)	26	18	3
Net cash provided by (used in) operating activities	3	(131)	(60)	(9)
Investing activities:
Investment in subsidiaries	—	(3,250)	—	—
Receipt of investment in subsidiaries	236	—	2,121	309
Purchase of long-term investments	(48)	(760)	(3,782)	(550)
Proceeds from sale of long-term investments	4	58	—	—
Purchase of short-term investments	—	(96)	—	—
Proceeds from sale of short-term investment	337	—	—	—
Net cash provided by (used in) investing activities	529	(4,048)	(1,661)	(241)
Financing activities:
Net proceeds from issuance of ordinary shares upon exercise of option	12	9	14	2
Proceeds of advances from subsidiaries	0	90	149	22
Proceeds from short-term bank borrowings	282	136	—	—
Repayment of short-term bank borrowings	(333)	(294)	(128)	(19)
Proceeds from long-term bank borrowings	—	3,633	2,409	350
Repayment of long-term bank borrowings	—	(1,651)	(786)	(114)
Proceeds from issuance of convertible senior notes, net of issuance cost and capped call option	—	2,925	—	—
Debt financing costs paid	—	(10)	—	—
Proceeds from ADS lending	—	0	—	—
Dividends paid	(276)	(306)	—	—
Net cash (used in) provided by financing activities	(315)	4,532	1,658	241
Effect of exchange rate changes on cash and cash equivalents	36	(170)	201	29
Net increase in cash and cash equivalents, and restricted cash	253	183	138	20
Cash, cash equivalents and restricted cash at the beginning of the year	121	374	557	81
Cash, cash equivalents and restricted cash at the end of the year	374	557	695	101

The accompanying notes are an integral part of these consolidated financial statements

ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I

HUAZHU GROUP LIMITED

FINANCIAL INFORMATION FOR PARENT COMPANY

Note to Schedule I

Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04-(c) of Regulation S-X, which require condensed financial information as to the financial position, change in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year.

The condensed financial information has been prepared using the same accounting policies as set out in the accompanying consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries. Such investments in subsidiaries are presented on the balance sheets as investment in subsidiaries and the profit of the subsidiaries is presented as income in investment in subsidiaries.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the accompanying consolidated financial statements.

As of December 31, 2018, there are no material contingencies, mandatory dividend, and significant provision of long-term obligation or guarantee of the Company, except for those which have separately disclosed in the consolidated financial statements.

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2018

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

ADDITION INFORMATION — FINANCIAL STATEMENTS SCHEDULE II

HUAZHU GROUP LIMITED

This financial information has been prepared in conformity with accounting principles generally accepted in the United States.

VALUATION AND QUALIFYING ACCOUNT S


	Balance at
	Beginning of	Charge to Costs and	Addition Due to	Charge Taken		Balance at
	Year	Expenses	Acquisition	Against Allowance	Write off	End of Year
	(Renminbi in millions)
Allowance for doubtful accounts of accounts receivables and other receivables:
2016	6	1	7	—	(2)	12
2017	12	2	—	—	(3)	11
2018	11	10	4	—	(8)	17
Valuation allowance for deferred tax assets
2016	93	55	12	(17)	(28)	115
2017	115	60	3	(47)	(8)	123
2018	123	36	—	(43)	(9)	107

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2018

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

Basis of presentation

The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”).

Basis of consolidation

Variable Interest Entities

Use of estimates

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less when purchased.

Restricted cash

Restricted cash mainly represents deposits used as security against borrowings and deposits restricted due to contract disputes or lawsuit.

Investments

As a result of the impairment analysis, the Group recorded an impairment of RMB3, nil and nil in 2016, 2017 and 2018, respectively.

Accounts receivable, net of allowance

Loan receivables

Inventories

Property and equipment, net


Leasehold improvements		Shorter of the lease term or their estimated useful lives
Buildings		20-40 years
Furniture, fixtures and equipment		3-10 years
Motor vehicles		5 years

Intangible assets, net and unfavorable lease

Land use rights

Impairment of long-lived assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets less liabilities acquired.

The Group had not recognized any goodwill impairment for years ended December 31, 2016, 2017 and 2018.

Revenue recognition

Leased and owned hotel revenues

Manachised and franchised hotel revenues

The manachised and franchised agreement contains the following promised services:

Intellectual Property ("IP") license grant the right to access the Group’s hotel system IP, including brand names.

System maintenance services include providing standardization hotel property management system (PMS), central reservation system (CRS) and other internet related services.

Hotel management services include providing day-to-day management services of the hotels for the franchisees.

Other Revenues

Loyalty Program

Contract Balances

PRC Value-Added Taxes and surcharges

Starting from May 2016, the accommodation services of the Group are subject to 6% of Value-Added Taxes.

The Group is subject to education surtax and urban maintenance and construction tax, on the services provided in the PRC.

Advertising and promotional expenses

Government grants

Leases

Income taxes

Current income taxes are provided for in accordance with the relevant statutory tax laws and regulations.

Foreign currency translation

The financial records of the Group’s subsidiaries are maintained in local currencies, which are the functional currencies.

Comprehensive income

Concentration of credit risk

Fair value

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active		Significant
			Markets for Identical	Significant Other	Unobservable
Years Ended			Assets	Observable Inputs	Inputs
December 31,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2017	Equity securities with readily determinable fair value	1,037	1,037	—	—
2017	Available-for-sale debt securities	346	—	346	—
2018	Equity securities with readily determinable fair value	4,111	4,111	—	—
2018	Available-for-sale debt securities	320	—	320	—

The following table presents the Group’s assets measured at fair value on a non-recurring basis for the years ended December 31, 2016, 2017 and 2018:


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active	Significant
		Fair Value for	Markets for Identical	Other Observable	Significant Unobservable	Total
Years Ended		Years Ended	Assets	Inputs	Inputs	Loss for
December 31,	Description	December 31	(Level 1)	(Level 2)	(Level 3)	the Year
2016	Property and equipment	21	—	—	21	151
2016	Equity-method investments	—	—	—	—	3
2017	Property and equipment	52	—	—	52	169
2018	Property and equipment	10	—	—	10	35

Share-based compensation


	Years Ended December 31,
	2016	2017	2018
Hotel operating costs	13	20	27
Selling and marketing expenses	1	2	3
General and administrative expenses	41	44	53
Total	55	66	83

Earnings per share

Segment reporting

The Group primarily generates its revenues from customers in the PRC. Substantially all of the Group’s long-lived assets are located in the PRC.

Treasury shares

Recently Issued Accounting Pronouncements

Adopted Accounting Standards


	Years Ended December 31,
	2016			2017
		Effect of the			Effect of the
		Adoption of			Adoption of
		New Revenue	As		New Revenue
	As Reported	Standards	Adjusted	As Reported	Standards	As Adjusted
Revenues:
Leased and owned hotels	5,212	27	5,239	6,343	(5)	6,338
Manachised and franchised hotels	1,412	7	1,419	1,787	64	1,851
Total revenues	6,655	34	6,689	8,170	59	8,229
Net revenues	6,539	34	6,573	8,170	59	8,229
Operating costs and expenses:
Hotel operating costs	4,932	2	4,934	5,674	1	5,675
Selling and marketing expenses	146	63	209	215	70	285
Total operating costs and expenses	5,650	65	5,715	6,803	71	6,874
Income from operations	872	(31)	841	1,438	(12)	1,426
Income before income taxes	1,078	(31)	1,047	1,609	(12)	1,597
Income tax expense	287	(8)	279	360	(3)	357
Net income	797	(23)	774	1,237	(9)	1,228
Net income attributable to Huazhu Group Limited	805	(23)	782	1,237	(9)	1,228

Earnings per share:
Basic	2.92		2.84	4.43		4.40
Diluted	2.84		2.76	4.24		4.21


	December 31, 2017
		Effect of the
		Adoption of
		New Revenue
	As Reported	Standards	As Adjusted
Deferred tax assets	326	80	406
Total assets	17,428	80	17,508
Deferred revenue – current	832	111	943
Accrued expenses and other current liabilities	1,265	(16)	1,249
Deferred revenue - noncurrent	172	226	398
Total liabilities	10,953	321	11,274
Retained earnings	2,754	(241)	2,513
Total equity	6,475	(241)	6,234
Total liabilities and equity	17,428	80	17,508

Accounting Standards Not Yet Adopted

Translation into United States Dollars

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2018

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

Schedule of expected useful lives of property and equipment


Leasehold improvements		Shorter of the lease term or their estimated useful lives
Buildings		20-40 years
Furniture, fixtures and equipment		3-10 years
Motor vehicles		5 years

Schedule of information about inputs into the fair value measurements of the assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active		Significant
			Markets for Identical	Significant Other	Unobservable
Years Ended			Assets	Observable Inputs	Inputs
December 31,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2017	Equity securities with readily determinable fair value	1,037	1,037	—	—
2017	Available-for-sale debt securities	346	—	346	—
2018	Equity securities with readily determinable fair value	4,111	4,111	—	—
2018	Available-for-sale debt securities	320	—	320	—

Schedule of assets measured at fair value on a non-recurring basis


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active	Significant
		Fair Value for	Markets for Identical	Other Observable	Significant Unobservable	Total
Years Ended		Years Ended	Assets	Inputs	Inputs	Loss for
December 31,	Description	December 31	(Level 1)	(Level 2)	(Level 3)	the Year
2016	Property and equipment	21	—	—	21	151
2016	Equity-method investments	—	—	—	—	3
2017	Property and equipment	52	—	—	52	169
2018	Property and equipment	10	—	—	10	35

Schedule of share-based compensation expense recognized


	Years Ended December 31,
	2016	2017	2018
Hotel operating costs	13	20	27
Selling and marketing expenses	1	2	3
General and administrative expenses	41	44	53
Total	55	66	83

Schedule of changes made to consolidated financial statements as a result of the adoption of new revenue standards


	Years Ended December 31,
	2016			2017
		Effect of the			Effect of the
		Adoption of			Adoption of
		New Revenue	As		New Revenue
	As Reported	Standards	Adjusted	As Reported	Standards	As Adjusted
Revenues:
Leased and owned hotels	5,212	27	5,239	6,343	(5)	6,338
Manachised and franchised hotels	1,412	7	1,419	1,787	64	1,851
Total revenues	6,655	34	6,689	8,170	59	8,229
Net revenues	6,539	34	6,573	8,170	59	8,229
Operating costs and expenses:
Hotel operating costs	4,932	2	4,934	5,674	1	5,675
Selling and marketing expenses	146	63	209	215	70	285
Total operating costs and expenses	5,650	65	5,715	6,803	71	6,874
Income from operations	872	(31)	841	1,438	(12)	1,426
Income before income taxes	1,078	(31)	1,047	1,609	(12)	1,597
Income tax expense	287	(8)	279	360	(3)	357
Net income	797	(23)	774	1,237	(9)	1,228
Net income attributable to Huazhu Group Limited	805	(23)	782	1,237	(9)	1,228

Earnings per share:
Basic	2.92		2.84	4.43		4.40
Diluted	2.84		2.76	4.24		4.21


	December 31, 2017
		Effect of the
		Adoption of
		New Revenue
	As Reported	Standards	As Adjusted
Deferred tax assets	326	80	406
Total assets	17,428	80	17,508
Deferred revenue – current	832	111	943
Accrued expenses and other current liabilities	1,265	(16)	1,249
Deferred revenue - noncurrent	172	226	398
Total liabilities	10,953	321	11,274
Retained earnings	2,754	(241)	2,513
Total equity	6,475	(241)	6,234
Total liabilities and equity	17,428	80	17,508

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2018

Accor

Acquisitions

Summary of fair values of the assets acquired and liabilities assumed


	2016	Amortization Period
Current assets	207
Property and equipment	311	5-30 years
Favorable leases	3	remaining lease terms
Master brand agreement	192
Land use rights	150	remaining contracts terms
Long-term investments	418
Goodwill	63
Other noncurrent assets	2
Current liabilities	(39)
Deferred tax liabilities	(43)
Total	1,264

Crystal Orange

Acquisitions

Summary of pro forma information


	Years Ended December 31,
	2016	2017
Pro forma net revenue	7,508	8,630
Pro forma net income	835	1,267

Summary of fair values of the assets acquired and liabilities assumed


	2017	Amortization Period
Current assets	137
Property and equipment	842	3-20 years
Favorable leases	91	remaining lease terms
Franchise agreement	58	remaining contract terms
Brand Name	1,142	indefinite life
Goodwill	2,093
Other noncurrent assets	131
Current liabilities	(222)
Noncurrent liabilities	(180)
Deferred tax liabilities	(323)
Noncontrolling interest	(4)
Total	3,765

Blossom Hill

Acquisitions

Summary of pro forma information


	Years Ended December 31,
	2017	2018
Pro forma net revenue	8,331	10,124
Pro forma net income	1,214	701

Summary of fair values of the assets acquired and liabilities assumed


	2018	Amortization Period
Current assets	84
Property and equipment	187	3-20 years
Favorable leases	7	remaining lease terms
Unfavorable leases	(1)	remaining lease terms
Franchise agreement	25	remaining contract terms
Brand name	170	indefinite life
Goodwill	365
Land use rights	10
Deferred tax assets	12
Current liabilities	(105)
Noncurrent liabilities	(18)
Deferred tax liabilities	(50)
Noncontrolling interest	(150)
Total	536

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

12 Months Ended

Dec. 31, 2018

REVENUE FROM CONTRACT WITH CUSTOMERS

Schedule of disaggregated revenues


	Years Ended December 31,
	2016	2017	2018
Room revenues	4,781	5,842	6,894
Food and beverage revenues	218	249	304
Others	240	247	272
Leased and owned hotels revenue	5,239	6,338	7,470
Initial one-time franchise fee	56	59	79
On-going management and service fees	589	759	983
Central reservation system usage fees, other system maintenance and support fees	308	436	630
Reimbursements for hotel manager fees	321	371	455
Other fees	145	226	380
Manachised and franchised hotels revenue	1,419	1,851	2,527
Other revenues	31	40	66
Total revenues	6,689	8,229	10,063

Schedule of contract balances

Our contract assets are insignificant at December 31, 2017 and December 31, 2018.


	As of December 31,
	2017	2018
Current contract liabilities	943	1,005
Long-term contract liabilities	398	458
Total contract liabilities	1,341	1,463

The contract liabilities balances above, as of December 31, 2017 and 2018 were comprised of the following:


	As of December 31,
	2017	2018
Initial fees received from franchisees owners	553	674
Cash received for membership fees and not recognized as revenue	305	357
Advances received from customers	425	374
Deferred revenue related to the loyalty program	58	58
Total	1,341	1,463

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2018

PROPERTY AND EQUIPMENT, NET

Schedule of property and equipment, net


	As of December 31,
	2017	2018
Cost:
Buildings	247	247
Leasehold improvements	6,453	7,389
Furniture, fixtures and equipment	1,034	1,162
Motor vehicles	1	1
	7,735	8,799
Less: Accumulated depreciation	(3,707)	(4,344)
	4,028	4,455
Construction in progress	495	563
Property and equipment, net	4,523	5,018

INTANGIBLE ASSETS, NET AND UNFAVORABLE LEASE (Tables)

12 Months Ended

Dec. 31, 2018

INTANGIBLE ASSETS, NET AND UNFAVORABLE LEASE

Schedule of intangible assets, net


	As of December 31,
	2017	2018
Intangible assets with indefinite life:
Brand name (Note 3)	1,170	1,340
Master brand agreement (Note 3)	192	192
Intangible assets with definite life:
Franchise agreements	70	95
Non-compete agreement	0	0
Favorable lease agreements	256	278
Purchased software	65	69
Total	1,753	1,974
Less: Accumulated amortization	(109)	(140)
Total	1,644	1,834

Schedule of unfavorable lease


	As of December 31,
	2017	2018
Unfavorable lease agreements	4	3
Less: Accumulated amortization	(3)	(2)
Unfavorable lease agreements, net	1	1

Schedule of annual estimated amortization expense for intangible assets and unfavorable lease excluding brand name and master brand agreement


	Amortization for	Amortization for
	Intangible Assets	Unfavorable Lease	Net Amortization
2019	37	0	37
2020	35	0	35
2021	34	0	34
2022	32	0	32
2023	30	0	30
Thereafter	134	1	133
Total	302	1	301

INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2018

INVESTMENTS.

Schedule of investments


	As of December 31,
	2017	2018

Equity securities with readily determinable fair values:
Accor	780	3,816
Other marketable securities	257	295
Equity securities without readily determinable fair values:
OYO	66	66
Mobike	67	—
BJ GOOAGOO/GOOAGOO	60	—
Blossom Hill (Note 3)	60	—
Other equity securities without readily determinable fair values	103	113
Equity-method investments:
AAPC LUB	478	461
Hotel related funds	56	503
Shared office management entities	148	111
China Young	41	34
Cjia/Cjia Group	—	298
China Hospitality JV	—	117
BJ GOOAGOO/GOOAGOO	—	52
Other investments	30	55
Available-for-sale debt securities:
Cjia/Cjia Group	246	220
CREATER	100	100
Total	2,492	6,241

GOODWILL (Tables)

12 Months Ended

Dec. 31, 2018

GOODWILL.

Schedule of changes in the carrying amount of goodwill


	Gross	Accumulated	Net
	Amount	Impairment Loss	Amount
Balance at January 1, 2016	113	(4)	109
Increase in goodwill related to acquisitions	63	—	63
Balance at December 31, 2016	176	(4)	172
Increase in goodwill related to acquisitions	2,093	—	2,093
Balance at December 31, 2017	2,269	(4)	2,265
Increase in goodwill related to acquisitions	365	—	365
Balance at December 31, 2018	2,634	(4)	2,630

DEBT (Tables)

12 Months Ended

Dec. 31, 2018

DEBT

Schedule of short-term and long-term debt


	As of December 31,
	2017	2018
Short-term debt:
Long-term bank borrowings, current portion	0	0
Short-term bank borrowings	131	948
Total	131	948

Long-term debt:
Long-term bank borrowings, non-current portion	1,895	5,603
Convertible senior notes	3,027	3,209
Total	4,922	8,812

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2018

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities


	As of December 31,
	2017	2018
Payable for business acquisitions	118	39
Liabilites related to customer loyalty program	138	154
Payable to noncontrolling interest holders	87	107
Payable to franchisees	418	698
Other payables	264	351
Accrued rental, utilities and other accrued expenses	174	187
Deferred rent, current	50	71
Total	1,249	1,607

HOTEL OPERATING COSTS (Tables)

12 Months Ended

Dec. 31, 2018

HOTEL OPERATING COSTS.

Schedule of hotel operating costs


	Years Ended December 31,
	2016	2017	2018
Rents	1,871	2,059	2,406
Utilities	346	366	399
Personnel costs	1,089	1,388	1,663
Depreciation and amortization	677	773	869
Consumable, food and beverage	495	551	673
Others	456	538	466
Total	4,934	5,675	6,476

PRE-OPENING EXPENSES (Tables)

12 Months Ended

Dec. 31, 2018

PRE-OPENING EXPENSES

Schedule of pre-opening expenses incurred during the hotel pre-opening period


	Years Ended December 31,
	2016	2017	2018
Rents	67	192	221
Personnel costs	2	6	18
Others	3	8	16
Total	72	206	255

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2018

SHARE-BASED COMPENSATION

Summary of the Group's share option activity under the option plans


			Weighted Average
	Number of	Weighted Average	Remaining	Aggregate Intrinsic
	Options	Exercise Price	Contractual Life	Value
		US$	Years	US$'million
Share options outstanding at January 1, 2018	2,044,724	2.12
Forfeited	(32,019)	1.75
Exercised	(876,715)	2.42
Share options outstanding at December 31, 2018	1,135,990	1.89	0.91	30
Share options vested or expected to vest at December 31, 2018	1,125,336	1.87	0.89	30
Share options exercisable at December 31, 2018	1,099,720	1.81	0.83	29

Summary of the Group's nonvested restricted stock activity


	Number of Restricted	Weighted Average Grant Date
	Stocks	Fair Value
		US$
Nonvested restricted stocks outstanding at January 1, 2018	12,492,570	5.86
Granted	1,708,980	27.51
Forfeited	(253,323)	8.63
Vested	(1,680,939)	5.75
Adjusted for performance conditions	(170,672)	4.89
Nonvested restricted stocks outstanding at December 31, 2018	12,096,616	8.89

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2018

EARNINGS PER SHARE

Schedule of computation of basic and diluted earnings per share


	Years Ended December 31,
	2016	2017	2018
Net income attributable to ordinary shareholders — basic	782	1,228	716
Eliminate the dilutive effect of interest expense of convertible senior notes	—	5	40
Net income attributable to ordinary shareholders — diluted	782	1,233	756
Weighted average ordinary shares outstanding — basic	275,139,070	279,272,140	281,717,485
Incremental weighted-average ordinary shares from assumed exercise of share options and nonvested restricted stocks using the treasury stock method	7,750,424	12,202,369	11,463,212
Dilutive effect of convertible senior notes	—	1,599,469	10,425,112
Weighted average ordinary shares outstanding — diluted	282,889,494	293,073,978	303,605,809
Basic earnings per share	2.84	4.40	2.54
Diluted earnings per share	2.76	4.21	2.49

Schedule of outstanding securities excluded from the computation of diluted earnings per share

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

INCOME TAXES

Schedule of tax expense (benefit)


	Years Ended December 31,
	2016	2017	2018
Current Tax	253	436	660
Deferred Tax	26	(79)	(91)
Total	279	357	569

Schedule of a reconciliation between the effective income tax rate and PRC statutory income tax rate


	Years Ended December 31,
	2016		2017		2018
PRC statutory tax rate	25	%	25	%	25	%
Tax effect of non-deductible expenses and non-taxable income in determining taxable profit	3	%	1	%	15	%
Effect of different tax rate of group entities operating in other jurisdictions	(1)	%	1	%	4	%
Effect of change in valuation allowance	1	%	—		(1)	%
Effect of tax holiday	(3)	%	(1)	%	(3)	%
Effect of cash dividends	3	%	(1)	%	5	%
Effect of disposal of subsidiary	(1)	%	—		1	%
Effect of excess tax benefit of rewards	—		(3)	%	(5)	%
Effective tax rate	27	%	22	%	41	%

Schedule of the aggregate amount and per share effect of the tax holidays


	Years Ended December 31,
	2016	2017	2018
Aggregate amount	27	24	31
Per share effect—basic	0.10	0.09	0.11
Per share effect—diluted	0.10	0.08	0.10

Schedule of the principal components of the Group's deferred income tax assets and liabilities


	As of December 31,
	2017	2018
Deferred tax assets:
Net loss carryforward	140	181
Deferred revenue	159	186
Deferred rent	9	5
Long-term assets	130	149
Bad debt provision	4	6
Liabilities related to customer loyalty program	37	37
Accrued payroll	14	16
Other accrued expenses	21	14
Share-based compensation	13	17
Others	2	1
Valuation allowance	(123)	(107)
Total deferred tax assets	406	505
Deferred tax liabilities:
Favorable lease, building and land use rights-fair value adjustment	399	447
Capitalized interest	3	3
Unrealized gain for investment	7	7
Others	13	18
Total deferred tax liabilities	422	475

Schedule of unrecognized tax benefits

RELATED PARTY TRANSACTIONS AND BALANCES (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of related parties


Related Party	Nature of the Party	Relationship with the Group
Ctrip.com International, Ltd. (“Ctrip”)	Online travel services provider	Mr. Qi Ji is a director
Sheen Star Group Limited (“Sheen Star”)	Investment holding company	Equity method investee of the Group, controlled by Mr. Qi Ji
Accor Hotels (“Accor”)	Hotel Group	Shareholder of the Group
China Cjia Group Limited (“Cjia Group”)	Apartment Management Group	Equity method investee of the Group
Shanghai CREATER Industrial Co., Ltd. (“CREATER”)	Staged office space company	Equity method investee of the Group
Shenzhen Hanmo Investment Fund Partnership LLP (“Hanmo”)	Hotel related fund	Equity method investee of the Group
China Hospitality JV, Ltd. (“China Hospitality JV”)	Property management company	Equity method investee of the Group

Schedule of amounts due from related parties


	As of December 31,
	2017	2018
Sheen Star	39	44
CREATER	27	40
Ctrip	32	34
Cjia Group	15	23
Hanmo	—	22
Accor	2	2
Others	3	11
Total	118	176

Schedule of amounts due to related party


	As of December 31,
	2017	2018
Ctrip	29	25
China Hospitality JV	—	25
Accor	7	8
Cjia Group	—	7
Others	1	10
Total	37	75

Schedule of significant related party transactions


	Years Ended December 31,
	2016	2017	2018
Commission expenses to Ctrip	44	77	61
Lease expenses to Ctrip	—	—	18
Brand use fee, reservation fee and other related service fee to Accor	6	11	18
Marketing and training fee from Ctrip	13	24	12
Service fee from Accor	4	8	14
Service fee from China Hospitality JV	—	—	10
Service fee from Sheen Star	—	—	2
Goods sold and service provided to Cjia Group	0	8	30
Interest income from Sheen Star	2	—	—
Interest income from Hanmo	—	—	7
Interest income from CREATER	—	—	10
Loan payment to Sheen Star	35	—	—
Loan payment to Cjia Group	—	85	—
Loan payment to CREATER	—	27	—
Loan from Cjia Group	—	—	103

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2018

COMMITMENTS AND CONTINGENCIES.

Schedule of future minimum lease payments under operating lease agreements

Future minimum lease payments under non-cancellable operating lease agreements at December 31, 2018 were as follows:


Year Ending December 31,
2019		2,854
2020		2,863
2021		2,777
2022		2,661
2023		2,548
Thereafter		15,669
Total		29,372

ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) - item	12 Months Ended
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) - item	Dec. 31, 2018	Dec. 31, 2017
Leased and owned hotels
Organization and presentation activities
Number of hotels	699	671
Manachised hotels
Organization and presentation activities
Number of hotels	3,309	2,874
Franchised hotels
Organization and presentation activities
Number of hotels	222	201
Minimum
Organization and presentation activities
Term of franchise and management agreement	8 years
Minimum \| Leased and owned hotels
Organization and presentation activities
Period of rental holiday	2 months
Fixed escalation in rent (as a percent)	3.00%
Period before rent escalations	3 years
Maximum
Organization and presentation activities
Term of franchise and management agreement	10 years
Maximum \| Leased and owned hotels
Organization and presentation activities
Period of rental holiday	6 months
Fixed escalation in rent (as a percent)	5.00%
Period before rent escalations	5 years

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Variable Interest Entities (Details) - item	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
VIEs
Variable Interest Entities
Number of entities consolidated	6	2

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Investments, Loan receivables and Inventories (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Investments
Impairment loss	¥ 0	¥ 0	¥ 3
Loan receivables
Valuation allowance for uncollectible loans	¥ 0	¥ 0	¥ 0
Inventories
Estimated useful life of small appliances and bedding	1 year
Minimum \| Certain franchisees
Loan receivables
Term of loan agreement	2 years
Interest rate (as a percent)	8.00%
Minimum \| Un-related third-parties
Loan receivables
Interest rate (as a percent)	6.00%
Maximum \| Certain franchisees
Loan receivables
Term of loan agreement	3 years
Interest rate (as a percent)	8.50%
Maximum \| Un-related third-parties
Loan receivables
Interest rate (as a percent)	12.00%

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Property and equipment, net (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Leasehold improvements
Property and equipment, net
Property and equipment, estimated useful life	Shorter of the lease term or their estimated useful lives	Shorter of the lease term or their estimated useful lives	Shorter of the lease term or their estimated useful lives
Buildings \| Minimum
Property and equipment, net
Property and equipment, estimated useful life	20 years	20 years	20 years
Buildings \| Maximum
Property and equipment, net
Property and equipment, estimated useful life	40 years	40 years	40 years
Furniture, fixtures and equipment \| Minimum
Property and equipment, net
Property and equipment, estimated useful life	3 years	3 years	3 years
Furniture, fixtures and equipment \| Maximum
Property and equipment, net
Property and equipment, estimated useful life	10 years	10 years	10 years
Motor vehicles
Property and equipment, net
Property and equipment, estimated useful life	5 years	5 years	5 years

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($) item	Dec. 31, 2018 CNY (¥) item	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2018 CNY (¥)
Accounting policies
Amortization expense		¥ 39	¥ 31	¥ 17
Long-lived asset impairment loss		¥ 35	169	151
Number of reporting units \| item	1	1
Net revenues	$ 1,464	¥ 10,063	8,229	6,573
VAT (as a percent)	6.00%				6.00%
Advertising related expenses		103	91	65
Unrestricted government subsidies from local governmental agencies		106	55	83
Deferred rent current			50		¥ 71
Deferred rent long-term	$ 219		1,380		¥ 1,507
Loyalty program
Accounting policies
Net revenues		192	160	145
Land use rights
Accounting policies
Amortization expense		¥ 5	¥ 5	¥ 4
Master brand agreement
Accounting policies
Initial term	70 years	70 years
Minimum
Accounting policies
Estimated membership duration	2 years	2 years
Minimum \| Land use rights
Accounting policies
Remaining contractual term	30 years	30 years
Maximum
Accounting policies
Estimated membership duration	5 years	5 years
Maximum \| Land use rights
Accounting policies
Remaining contractual term	50 years	50 years

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Fair value (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)
Fair value
Equity securities with readily determinable fair value		¥ 130		$ 13	¥ 89
Equity-method investment impairment			¥ 3
Long-lived asset impairment loss	¥ 35	¥ 169	¥ 151
Revenue growth rate
Fair value
Measurement input		4	4	4	4
Discount rate
Fair value
Measurement input		20	20	20	20
Recurring basis \| Fair value
Fair value
Equity securities with readily determinable fair value		¥ 1,037			¥ 4,111
Available-for-sale debt securities		346			320
Recurring basis \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair value
Equity securities with readily determinable fair value		1,037			4,111
Recurring basis \| Significant Other Observable Inputs (Level 2)
Fair value
Available-for-sale debt securities		346			320
Non-recurring basis
Fair value
Property and equipment		52	¥ 21		10
Non-recurring basis \| Carrying value
Fair value
Property and equipment		221	172		45
Long-term investments		0	3		0
Non-recurring basis \| Significant Unobservable Inputs (Level 3)
Fair value
Property and equipment		¥ 52	¥ 21		¥ 10

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Share-based compensation and Treasury shares (Details) ¥ in Millions	12 Months Ended
	Dec. 31, 2018 CNY (¥) segment shares	Dec. 31, 2017 CNY (¥) shares	Dec. 31, 2016 CNY (¥)
Share-based compensation
Recognized share-based compensation expenses	¥ 83	¥ 66	¥ 55
Number of operating segments \| segment	1
Treasury shares
Repurchase of ordinary shares (in shares) \| shares	3,096,764	3,096,764
Cash consideration paid for ordinary shares repurchased	¥ 107
Hotel operating costs
Share-based compensation
Recognized share-based compensation expenses	27	¥ 20	13
Selling and marketing expenses
Share-based compensation
Recognized share-based compensation expenses	3	2	1
General and administrative expenses
Share-based compensation
Recognized share-based compensation expenses	¥ 53	¥ 44	¥ 41

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Recently Issued Accounting Pronouncements (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($) $ / shares ¥ / $	Dec. 31, 2018 CNY (¥) ¥ / shares	Dec. 31, 2017 CNY (¥) ¥ / shares	Dec. 31, 2016 CNY (¥) ¥ / shares	Jan. 01, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥) ¥ / $	Jan. 01, 2018 CNY (¥)	Dec. 31, 2015 CNY (¥)
Revenues:
Total revenues	$ 1,464	¥ 10,063	¥ 8,229	¥ 6,689
Net revenues	1,464	10,063	8,229	6,573
Operating costs and expenses:
Hotel operating costs	942	6,476	5,675	4,934
Selling and marketing expenses	50	348	285	209
Total operating costs and expenses	1,155	7,945	6,874	5,715
Income from operations	341	2,344	1,426	841
Income before income taxes	203	1,393	1,597	1,047
Income tax expense	83	569	357	279
Net income	106	727	1,228	774
Net income attributable to Huazhu Group Limited	$ 104	¥ 716	¥ 1,228	¥ 782
Earnings per share:
Basic (in RMB and dollars per share) \| (per share)	$ 0.37	¥ 2.54	¥ 4.40	¥ 2.84
Diluted (in RMB and dollars per share) \| (per share)	$ 0.36	¥ 2.49	¥ 4.21	¥ 2.76
Deferred tax assets	$ 73		¥ 406			¥ 505
Total assets	3,490		17,508			23,993
Deferred revenue	146		943			1,005
Accrued expenses and other current liabilities	233		1,249			1,607
Deferred revenue	67		398			458
Total liabilities	2,571		11,274			17,674
Total equity	919		6,234	¥ 5,184		6,319		¥ 3,441
Total liabilities and equity	3,490		17,508			23,993
Retained earnings (Accumulated deficit)	380		2,513			2,610
Accumulated other comprehensive income (loss)	(6)		168			(42)
Restricted cash	$ 91		481			¥ 622
Translation into United States Dollars
Foreign exchange rate used to translate amounts denominated in RMB to US dollar \| ¥ / $	6.8755					6.8755
ASU 2014-09 \| As Reported
Revenues:
Total revenues			8,170	6,655
Net revenues			8,170	6,539
Operating costs and expenses:
Hotel operating costs			5,674	4,932
Selling and marketing expenses			215	146
Total operating costs and expenses			6,803	5,650
Income from operations			1,438	872
Income before income taxes			1,609	1,078
Income tax expense			360	287
Net income			1,237	797
Net income attributable to Huazhu Group Limited			¥ 1,237	¥ 805
Earnings per share:
Basic (in RMB and dollars per share) \| ¥ / shares			¥ 4.43	¥ 2.92
Diluted (in RMB and dollars per share) \| ¥ / shares			¥ 4.24	¥ 2.84
Deferred tax assets			¥ 326
Total assets			17,428
Deferred revenue			832
Accrued expenses and other current liabilities			1,265
Deferred revenue			172
Total liabilities			10,953
Total equity			6,475
Total liabilities and equity			17,428
Retained earnings (Accumulated deficit)			2,754
ASU 2014-09 \| Effect of the Adoption of New Revenue Standards
Revenues:
Total revenues			59	¥ 34
Net revenues			59	34
Operating costs and expenses:
Hotel operating costs			1	2
Selling and marketing expenses			70	63
Total operating costs and expenses			71	65
Income from operations			(12)	(31)
Income before income taxes			(12)	(31)
Income tax expense			(3)	(8)
Net income			(9)	(23)
Net income attributable to Huazhu Group Limited			(9)	(23)
Earnings per share:
Deferred tax assets			80
Total assets			80
Deferred revenue			111
Accrued expenses and other current liabilities			(16)
Deferred revenue			226
Total liabilities			321
Total equity			(241)
Total liabilities and equity			80
Retained earnings (Accumulated deficit)			(241)
ASU 2016-01 \| Adjustment
Earnings per share:
Retained earnings (Accumulated deficit)							¥ 41
Accumulated other comprehensive income (loss)							¥ (41)
ASU 2016-18
Earnings per share:
Restricted cash			481	1				¥ 361
ASU 2016-02 \| Forecast
Earnings per share:
Net to right-to-use lease assets					¥ 1,000
Minimum \| ASU 2016-02 \| Forecast
Earnings per share:
Right-to-use assets					19,000
Lease liabilities					20,000
Maximum \| ASU 2016-02 \| Forecast
Earnings per share:
Right-to-use assets					22,000
Lease liabilities					¥ 23,000
Leased and owned hotels
Revenues:
Total revenues	$ 1,087	¥ 7,470	6,338	5,239
Leased and owned hotels \| ASU 2014-09 \| As Reported
Revenues:
Total revenues			6,343	5,212
Leased and owned hotels \| ASU 2014-09 \| Effect of the Adoption of New Revenue Standards
Revenues:
Total revenues			(5)	27
Manachised and franchised hotels
Revenues:
Total revenues	$ 368	¥ 2,527	1,851	1,419
Manachised and franchised hotels \| ASU 2014-09 \| As Reported
Revenues:
Total revenues			1,787	1,412
Manachised and franchised hotels \| ASU 2014-09 \| Effect of the Adoption of New Revenue Standards
Revenues:
Total revenues			¥ 64	¥ 7

ACQUISITIONS - AccorHotels (Details) ¥ in Millions, $ in Millions	1 Months Ended	12 Months Ended
	Jan. 31, 2016 CNY (¥) shares	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2015 CNY (¥)
Acquisitions
Issuance of ordinary shares for acquisition of AccorHotels (Note 3)					¥ 1,144
Net revenues		$ 1,464	¥ 10,063	¥ 8,229	6,573
Net income		104	¥ 716	1,228	782
Fair values of assets acquired and liabilities assumed:
Goodwill		$ 383		¥ 2,265	172	¥ 2,630	¥ 109
AAPC LUB
Acquisitions
Noncontrolling interest (as a percent)	28.00%
Accor
Acquisitions
Percentage of ownership interest acquired	100.00%
Issuance of ordinary shares for acquisition of AccorHotels (Note 3)	¥ 1,144
Cash consideration	¥ 120
Number of shares issued as share consideration \| shares	24,895,543
Net revenues					153
Net income					64
Fair values of assets acquired and liabilities assumed:
Current assets					207
Property and equipment					311
Long-term investments					418
Goodwill					63
Other noncurrent assets					2
Current liabilities					(39)
Deferred tax liabilities					(43)
Total					¥ 1,264
Accor \| Minimum
Fair values of assets acquired and liabilities assumed:
Amortization period of property and equipment					5 years
Accor \| Maximum
Fair values of assets acquired and liabilities assumed:
Amortization period of property and equipment					30 years
Accor \| Master brand agreement
Fair values of assets acquired and liabilities assumed:
Intangible assets					¥ 192
Accor \| Favorable lease agreements
Fair values of assets acquired and liabilities assumed:
Intangible assets					3
Accor \| Land use rights
Fair values of assets acquired and liabilities assumed:
Intangible assets					¥ 150

ACQUISITIONS - Crystal Orange & Blossom Hill (Details) ¥ in Millions, $ in Millions		1 Months Ended	12 Months Ended
	May 25, 2017 CNY (¥)	Aug. 31, 2018 CNY (¥)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2015 CNY (¥)
Acquisitions
Net revenues			$ 1,464	¥ 10,063.0	¥ 8,229.0	¥ 6,573.0
Net income			104	716.0	1,228.0	782.0
Summary of the fair values of the assets acquired and liabilities assumed
Goodwill			383		2,265.0	172.0	¥ 2,630.0	¥ 109.0
Cash consideration to noncontrolling interests			$ 12	84.0	4.0	4.0
Crystal Orange
Acquisitions
Percentage of ownership interest acquired	100.00%
Cash consideration	¥ 3,765.0
Net revenues					777.0
Net income					100.0
Business acquisition, pro forma information
Pro forma net revenue					8,630.0	7,508.0
Pro forma net income					1,267.0	¥ 835.0
Summary of the fair values of the assets acquired and liabilities assumed
Current assets					137.0
Property and equipment					842.0
Goodwill					2,093.0
Other noncurrent assets					131.0
Current liabilities					(222.0)
Noncurrent liabilities					(180.0)
Deferred tax liabilities					(323.0)
Noncontrolling interest					(4.0)
Total					3,765.0
Business combination cost related to consultation services agreements and option cancellation agreement	¥ 256.0
Transaction costs					¥ 46.0
Crystal Orange \| Minimum
Summary of the fair values of the assets acquired and liabilities assumed
Amortization period of property and equipment					3 years
Crystal Orange \| Maximum
Summary of the fair values of the assets acquired and liabilities assumed
Amortization period of property and equipment					20 years
Crystal Orange \| Favorable lease agreements
Summary of the fair values of the assets acquired and liabilities assumed
Intangible assets					¥ 91.0
Crystal Orange \| Franchise agreement
Summary of the fair values of the assets acquired and liabilities assumed
Intangible assets					58.0
Blossom Hill
Acquisitions
Percentage of ownership interest acquired		83.00%	94.00%				94.00%
Aggregated consideration		¥ 536.0
Cash consideration		463.0
Implied fair value of equity interests		¥ 73.0
Percentage of equity interests transferred		11.00%
Gain on remeasurement		¥ 13.0
Net revenues				30.0
Net income				(15.0)
Business acquisition, pro forma information
Pro forma net revenue				10,124.0	8,331.0
Pro forma net income				¥ 701.0	1,214.0
Summary of the fair values of the assets acquired and liabilities assumed
Current assets							¥ 84.0
Property and equipment							187.0
Goodwill							365.0
Deferred tax assets							12.0
Current liabilities							(105.0)
Noncurrent liabilities							(18.0)
Deferred tax liabilities							(50.0)
Noncontrolling interest							(150.0)
Total							536.0
Percentage of noncontrolling interest acquired		11.00%
Cash consideration to noncontrolling interests		¥ 73.0
Blossom Hill \| Minimum
Summary of the fair values of the assets acquired and liabilities assumed
Amortization period of property and equipment			3 years	3 years
Blossom Hill \| Maximum
Summary of the fair values of the assets acquired and liabilities assumed
Amortization period of property and equipment			20 years	20 years
Blossom Hill \| Favorable lease agreements
Summary of the fair values of the assets acquired and liabilities assumed
Intangible assets							7.0
Blossom Hill \| Unfavorable leases
Summary of the fair values of the assets acquired and liabilities assumed
Intangible assets							1.0
Blossom Hill \| Franchise agreement
Summary of the fair values of the assets acquired and liabilities assumed
Intangible assets							25.0
Blossom Hill \| Land use rights
Summary of the fair values of the assets acquired and liabilities assumed
Intangible assets							10.0
Brand name \| Crystal Orange
Summary of the fair values of the assets acquired and liabilities assumed
Intangible assets					¥ 1,142.0
Brand name \| Blossom Hill
Summary of the fair values of the assets acquired and liabilities assumed
Intangible assets							¥ 170.0

ACQUISITIONS - Hotels (Details) ¥ in Millions	12 Months Ended
ACQUISITIONS - Hotels (Details) ¥ in Millions	Dec. 31, 2018 CNY (¥) item	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
Acquisitions
Number of reporting units \| item	1
Two individual hotels acquired in 2016
Acquisitions
Cash consideration			¥ 3
Two individual hotels acquired in 2017
Acquisitions
Cash consideration		¥ 0
Two individual hotels acquired in 2018
Acquisitions
Cash consideration	¥ 7

REVENUE FROM CONTRACT WITH CUSTOMERS - Disaggregated Revenues (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
Disaggregated Revenues
Total revenues	$ 1,464	¥ 10,063	¥ 8,229	¥ 6,689
Leased and owned hotels
Disaggregated Revenues
Total revenues	1,087	7,470	6,338	5,239
Room Revenues
Disaggregated Revenues
Total revenues		6,894	5,842	4,781
Food and Beverage Revenues
Disaggregated Revenues
Total revenues		304	249	218
Others
Disaggregated Revenues
Total revenues		272	247	240
Manachised and franchised hotels
Disaggregated Revenues
Total revenues	368	2,527	1,851	1,419
Initial one-time franchise fee
Disaggregated Revenues
Total revenues		79	59	56
On-going management and service fees
Disaggregated Revenues
Total revenues		983	759	589
Central reservation system usage fees, other system maintenance and support fees
Disaggregated Revenues
Total revenues		630	436	308
Reimbursements for hotel manager fees
Disaggregated Revenues
Total revenues		455	371	321
Other fees
Disaggregated Revenues
Total revenues		380	226	145
Other revenues
Disaggregated Revenues
Total revenues	$ 9	¥ 66	¥ 40	¥ 31

REVENUE FROM CONTRACT WITH CUSTOMERS - Contract Balances (Details) ¥ in Millions, $ in Millions	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
Contract with Customer, Liability [Abstract]
Current contract liabilities	$ 146	¥ 1,005	¥ 943
Long-term contract liabilities	$ 67	458	398
Total contract liabilities		¥ 1,463	¥ 1,341

REVENUE FROM CONTRACT WITH CUSTOMERS - Contract Balances - Contract liabilities (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Contract with Customer, Liability [Abstract]
Initial fees received from franchise owners	¥ 674	¥ 553
Cash received for membership fees and not recognized as revenue	357	305
Advances received from customers	374	425
Deferred revenue related to the loyalty program	58	58
Total contract liabilities	1,463	1,341
Revenue recognized	¥ 468	¥ 445

REVENUE FROM CONTRACT WITH CUSTOMERS - Contract Balances - Unsatisfied performance obligations (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenues related to unsatisfied performance obligations of loyalty program	¥ 58	¥ 58
Deferred revenue related to initial fees	674	553
Deferred revenue related to membership fees	357	305
Deferred revenues related to advances received from customers, expected to recognize revenue in future periods	¥ 374	¥ 425
Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining contract period	1 year
Remaining membership life	1 year
Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining contract period	10 years
Remaining membership life	5 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenues related to unsatisfied performance obligations of loyalty program	¥ 58
Deferred revenue, recognized as revenue, estimated period	2 years

PROPERTY AND EQUIPMENT, NET - Schedule (Details) ¥ in Millions, $ in Millions	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
Cost:
Property and equipment, gross		¥ 8,799	¥ 7,735
Less: Accumulated depreciation		(4,344)	(3,707)
Property and equipment net excluding construction in process		4,455	4,028
Construction in progress		563	495
Property and equipment, net	$ 730	5,018	4,523
Buildings
Cost:
Property and equipment, gross		247	247
Leasehold improvements
Cost:
Property and equipment, gross		7,389	6,453
Furniture, fixtures and equipment
Cost:
Property and equipment, gross		1,162	1,034
Motor vehicles
Cost:
Property and equipment, gross		¥ 1	¥ 1

PROPERTY AND EQUIPMENT, NET - Narrative (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
PROPERTY AND EQUIPMENT, NET
Depreciation expense	¥ 847	¥ 753	¥ 674

INTANGIBLE ASSETS, NET AND UNFAVORABLE LEASE - Schedule (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)
Intangible assets, net
Intangible assets, gross		¥ 1,753			¥ 1,974
Less: Accumulated amortization		(109)			(140)
Total		1,644		$ 267	1,834
Unfavorable lease
Unfavorable lease agreements		4			3
Less: Accumulated amortization		(3)			(2)
Unfavorable lease agreements, net		1			1
Amortization expense of intangible assets	¥ 39	31	¥ 17
Franchise agreement
Intangible assets, net
Intangible assets, gross		70			95
Non-compete agreement
Intangible assets, net
Intangible assets, gross		0			0
Favorable lease agreements
Intangible assets, net
Intangible assets, gross		256			278
Purchased software
Intangible assets, net
Intangible assets, gross		65			69
Brand name
Intangible assets, net
Intangible assets, gross		1,170			1,340
Master brand agreement
Intangible assets, net
Intangible assets, gross		¥ 192			¥ 192

INTANGIBLE ASSETS, NET AND UNFAVORABLE LEASE - Amortization (Details) - CNY (¥) ¥ in Millions	Dec. 31, 2018	Dec. 31, 2017
Amortization for Intangible Assets
2019	¥ 37
2020	35
2021	34
2022	32
2023	30
Thereafter	134
Amortization for Intangible Assets, Total	302
Amortization for Unfavorable Lease
2019	0
2020	0
2021	0
2022	0
2023	0
Thereafter	1
Unfavorable lease agreements, net	1	¥ 1
Net Amortization
2019	37
2020	35
2021	34
2022	32
2023	30
Thereafter	133
Net Amortization, Total	¥ 301

INVESTMENTS - Schedule (Details) ¥ in Millions, $ in Millions	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
Equity Securities, FV-NI	$ 13	¥ 89	¥ 130
Investments		6,241	2,492
Accor
Equity Securities, FV-NI		3,816	780
Other marketable securities
Equity Securities, FV-NI		295	257
OYO
Equity Securities without Readily Determinable Fair Value, Amount		66	66
Mobike
Equity Securities without Readily Determinable Fair Value, Amount			67
BJ GOOAGOO/GOOAGOO
Equity Securities without Readily Determinable Fair Value, Amount			60
Blossom Hill
Equity Securities without Readily Determinable Fair Value, Amount			60
Other equity securities
Equity Securities without Readily Determinable Fair Value, Amount		113	103
Hotel related funds
Equity Method Investments		503	56
Equity-method investments \| BJ GOOAGOO/GOOAGOO
Equity Method Investments		52
Equity-method investments \| AAPC LUB
Equity Method Investments		461	478
Equity-method investments \| Hotel related funds
Equity Method Investments		503	56
Equity-method investments \| Shared office management entities
Equity Method Investments		111	148
Equity-method investments \| China Young
Equity Method Investments		34	41
Equity-method investments \| Cjia
Equity Method Investments		298
Equity-method investments \| China Hospitality JV
Equity Method Investments		117
Equity-method investments \| Other investments
Equity Method Investments		55	30
Available-for-sale debt securities \| Cjia
Available-for-sale debt securities		220	246
Available-for-sale debt securities \| CREATER
Available-for-sale debt securities		¥ 100	¥ 100

INVESTMENTS - Equity securities with readily determinable fair values (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 CNY (¥) shares	Dec. 31, 2017 CNY (¥) shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2018 CNY (¥) shares
Equity securities with readily determinable fair values
Equity Securities, FV-NI		¥ 130	$ 13	¥ 89
Accor
Equity securities with readily determinable fair values
Number of ordinary shares acquired \| shares	10,782,131	2,309,981
Accumulated number of shares acquired in investment \| shares			13,092,112	13,092,112
Equity Securities, FV-NI		¥ 780		¥ 3,816
Unrealized losses from fair value	¥ 794
Accor \| Maximum
Equity securities with readily determinable fair values
Investment in equity securities (in percentage)			5.00%	5.00%
Other marketable securities
Equity securities with readily determinable fair values
Equity Securities, FV-NI		¥ 257		¥ 295
Unrealized losses from fair value	¥ 120

INVESTMENTS - Equity securities without readily determinable fair values (Details) ¥ in Millions, $ in Millions	1 Months Ended	12 Months Ended
	Jan. 31, 2017 USD ($) shares	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017	Sep. 30, 2017
OYO
Equity interest owned (as a percent)				1.00%
Mobike \| Maximum
Equity interest owned (as a percent)			1.00%
Mobike \| Preferred shares
Shares purchased (in shares) \| shares	1,316,205
Amount of investments \| $	$ 5.0
Recognized gain on disposal of equity-method investment \| ¥		¥ 55
Mobike \| Convertible notes
Interest rate	8.00%

INVESTMENTS - Equity-method investments (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)	Jan. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Equity-method investments
Investment income (loss)	$ (14)	¥ (97)	¥ (12)	¥ 6
Consideration for purchase of investments	721	4,959	1,328	293
AAPC LUB
Equity-method investments
Equity-method investments ownership percentage					28.00%
Investment income (loss)		43	31
Proceeds from Dividends Received		60
Hotel related funds
Equity-method investments
Investment income (loss)		(28)	0
Equity Method Investments		503	56
Maximum potential loss, in loss of value of interests in investments		¥ 503
Cjia Group
Equity-method investments
Equity-method investments ownership percentage		17.00%
Investment income (loss)		¥ (38)	¥ (33)	¥ (25)
Consideration for purchase of investments \| $	$ 45
China Hospitality JV
Equity-method investments
Equity-method investments ownership percentage		20.00%
Investment income (loss)		¥ (11)
Percentage of equity interest acquired	20.00%	20.00%
BJ GOOAGOO/GOOAGOO
Equity-method investments
Equity-method investments ownership percentage		41.00%	19.00%	19.00%		19.00%	8.00%
Investment income (loss)		¥ (14)
Cjia
Equity-method investments
Equity-method investments ownership percentage			17.00%	23.00%
Amount of gain (loss) on sale or disposal of equity in securities of subsidiaries				¥ 50
Convertible notes term				60 months
Amount invested in convertible note			¥ 200
Gain recognized on deemed disposal			40
Original value of convertible notes invested			¥ 252	¥ 52

INVESTMENTS - Available-for-sale debt securities (Details) - CREATER ¥ in Millions	1 Months Ended
	Sep. 30, 2017 CNY (¥)
Available-for-sale debt securities
Convertible notes term	2 years
Amount invested in convertible note	¥ 100
Interest rate	10.00%

GOODWILL (Details) ¥ in Millions, $ in Millions	12 Months Ended
GOODWILL (Details) ¥ in Millions, $ in Millions	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
Changes in carrying amount of goodwill
Balance at the beginning of the period, Gross Amount		¥ 2,269	¥ 176	¥ 113
Balance at the beginning of the period, Accumulated Impairment Loss		(4)	(4)	(4)
Balance at the beginning of the period, Net Amount		2,265	172	109
Increase in goodwill related to acquisitions		365	2,093	63
Balance at the end of the period, Gross Amount		2,634	2,269	176
Balance at the end of the period, Accumulated Impairment Loss		(4)	(4)	(4)
Balance at the end of the period, Net Amount	$ 383	¥ 2,630	¥ 2,265	¥ 172

DEBT - Components (Details) ¥ in Millions, $ in Millions	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
Debt
Short-term Debt	$ 138	¥ 948	¥ 131
Total		948	131
Long-term bank borrowings, non-current portion	$ 1,282	8,812	4,922
Long-term debt		8,812	4,922
Bank borrowings
Debt
Long-term bank borrowings, current portion		0	0
Short-term Debt		948	131
Bank borrowings
Debt
Long-term bank borrowings, non-current portion		5,603	1,895
Convertible senior notes
Debt
Long-term bank borrowings, non-current portion		¥ 3,209	¥ 3,027

DEBT - Bank borrowings (Details) € in Millions, $ in Millions		1 Months Ended			12 Months Ended
	Feb. 28, 2018 EUR (€)	Feb. 28, 2018 EUR (€) shares	Nov. 30, 2017 USD ($)	May 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Term facility
Debt
Maximum borrowing amount				$ 250
Line of credit draw down amount						$ 250
Repayment of line of credit facility					$ 0	$ 0
Weighted average interest rate (as a percent)					3.93%	3.04%
Revolving bank credit facility
Debt
Term of debt instrument				35 months
Maximum borrowing amount				$ 250
Line of credit draw down amount				$ 250	$ 370
Repayment of line of credit facility			$ 250		$ 120
Revolving bank credit facility \| Libor
Debt
Percentage points added to the reference rate				1.75%
Three-year term facility
Debt
Maximum borrowing amount \| €	€ 260	€ 260
Period to obtain loan amount	30 days
Shares pledged \| shares		13,092,112
Weighted average interest rate (as a percent)					1.70%
Three-year term facility \| EURIBOR
Debt
Term of debt instrument		3 years
Percentage points added to the reference rate	1.70%

DEBT - Convertible Senior Notes due 2022 (Details) - Convertible senior notes - The Notes $ / shares in Units, ¥ in Millions	Nov. 03, 2017 USD ($) $ / shares	Nov. 03, 2017 CNY (¥)	Nov. 03, 2017 CNY (¥)
Debt Instrument [Line Items]
Aggregate principal amount	$ 475,000,000
Fixed interest rate (as a percent)	0.375%		0.375%
Initial conversion rate per ADS	5.4869	5.4869
Increment used for debt conversion	$ 1,000
Initial conversion price \| $ / shares	$ 182.25
Repurchase price as a percentage of principal amount	100.00%	100.00%
Proceeds from issuance of debt	$ 467,000,000	¥ 3,093
Debt issuance costs	$ 8,000,000		¥ 54

DEBT - ADS Lending Arrangement (Details) - ADS Lending Arrangement $ / shares in Units, ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2018 CNY (¥) shares	Dec. 31, 2017 shares
Debt Instrument [Line Items]
Number of Loaned ADS lent	2,606,278
ADS par value per share \| $ / shares	$ 0.0004
ADS outstanding	2,606,278	2,606,278	2,606,278
Debt issuance costs	$ 4	¥ 26

DEBT - Capped Call Options (Details) - Call Option ¥ in Millions, $ in Millions		12 Months Ended
	Oct. 26, 2017 USD ($)	Dec. 31, 2018 CNY (¥) $ / item
Debt Instrument [Line Items]
Cap price of the capped call transactions per ADS		221.31
Premium paid for capped call transactions	$ 27	¥ 177

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Payable for business acquisitions		¥ 39	¥ 118
Accrual for customer loyalty program		154	138
Payable to noncontrolling interest holders		107	87
Payable to franchisees		698	418
Other payables		351	264
Accrued rental, utilities and other accrued expenses		187	174
Deferred rental, current		71	50
Total	$ 233	¥ 1,607	¥ 1,249
Additional disclosures
Payable to franchisees, term (in years)	1 year

HOTEL OPERATING COSTS (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
HOTEL OPERATING COSTS.
Rents		¥ 2,406	¥ 2,059	¥ 1,871
Utilities		399	366	346
Personnel costs		1,663	1,388	1,089
Depreciation and amortization		869	773	677
Consumable, food and beverage		673	551	495
Others		466	538	456
Total	$ 942	¥ 6,476	¥ 5,675	¥ 4,934

PRE-OPENING EXPENSES (Details) ¥ in Millions, $ in Millions	12 Months Ended
PRE-OPENING EXPENSES (Details) ¥ in Millions, $ in Millions	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
PRE-OPENING EXPENSES
Rents		¥ 221	¥ 192	¥ 67
Personnel costs		18	6	2
Others		16	8	3
Total	$ 37	¥ 255	¥ 206	¥ 72

SHARE-BASED COMPENSATION - Plan (Details) - shares	12 Months Ended
SHARE-BASED COMPENSATION - Plan (Details) - shares	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2015	Aug. 31, 2010	Sep. 30, 2009	Oct. 31, 2008	Jun. 30, 2007	Feb. 28, 2007
Share options
Share based compensation
Granted (in shares)	0	0	0
Incentive Award Plans
Share based compensation
Vesting period	10 years
Incentive Award Plans \| Maximum
Share based compensation
Share-based payment award, contractual term	10 years
Incentive Award Plans \| Share options
Share based compensation
Share-based payment award, option granted (in shares)	24,577,669
Incentive Award Plans \| Restricted stocks
Share based compensation
Share-based payment award, nonvested restricted stocks (in shares)	23,795,090
Incentive Award Plans \| Second anniversary of the stated vesting commencement date
Share based compensation
Share-based payment award, vesting percentage	50.00%
Incentive Award Plans \| Vesting ratably over the following two years
Share based compensation
Share-based payment award, vesting percentage	50.00%
Vesting period	2 years
2007 Global Share Plan
Share based compensation
Share-based payment award, maximum number of incentive award available (in shares)									10,000,000
2008 Global Share Plan
Share based compensation
Share-based payment award, maximum number of incentive award available (in shares)							7,000,000	3,000,000
2009 Share Incentive Plan
Share based compensation
Share-based payment award, maximum number of incentive award available (in shares)				43,000,000	15,000,000	3,000,000

SHARE-BASED COMPENSATION - Option assumptions and Activity (Details) - Share options $ / shares in Units, ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2018 CNY (¥) shares	Dec. 31, 2017 CNY (¥) shares	Dec. 31, 2016 CNY (¥) shares
Number of Options
Share options outstanding at the beginning of the period (in shares) \| shares		2,044,724
Forfeited (in shares) \| shares		(32,019)
Exercised (in shares) \| shares		(876,715)	(609,224)	(684,632)
Share options outstanding at the end of the period (in shares) \| shares		1,135,990	2,044,724
Share options vested or expected to vest (in shares) \| shares	1,125,336
Share options exercisable (in shares) \| shares	1,099,720
Weighted Average Exercise Price
Share options outstanding at the beginning of the period (in dollars per shares) \| $ / shares	$ 2.12
Forfeited (in dollars per shares) \| $ / shares	1.75
Exercised (in dollars per shares) \| $ / shares	2.42
Share options outstanding at the end of the period (in dollars per shares) \| $ / shares	1.89
Share options vested or expected to vest (in dollars per shares) \| $ / shares	1.87
Share options exercisable (in dollars per shares) \| $ / shares	$ 1.81
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value
Share options outstanding, Weighted average remaining contractual life		10 months 28 days
Share options vested or expected to vest, Weighted average remaining contractual life		10 months 21 days
Share options exercisable, Weighted average remaining contractual life		9 months 29 days
Share options outstanding, Aggregate intrinsic value \| $	$ 30
Share options vested or expected to vest, Aggregate intrinsic value \| $	30
Share options exercisable, Aggregate intrinsic value \| $	$ 29
Weighted-average period for recognition of unrecognized compensation costs		1 year 1 month 6 days
Aggregate intrinsic value of options exercised \| ¥		¥ 194	¥ 77	¥ 41

SHARE-BASED COMPENSATION - Nonvested restricted stocks (Details) ¥ in Millions	12 Months Ended
	Dec. 31, 2018 CNY (¥) $ / shares	Dec. 31, 2018 CNY (¥) tranche shares	Dec. 31, 2017 CNY (¥) shares	Dec. 31, 2016 CNY (¥) tranche shares
Share based compensation
Number of tranche \| tranche		10		10
Restricted stocks
Number of Restricted Stocks
Nonvested restricted stocks outstanding at the beginning of the period (in shares)		12,492,570
Granted (in shares)		1,708,980
Forfeited (in shares)		(253,323)
Vested (in shares)		(1,680,939)
Adjusted (in shares)		(170,672)
Nonvested restricted stocks outstanding at the end of the period (in shares)		12,096,616	12,492,570
Weighted Average Grant Date Fair Value
Nonvested restricted stocks outstanding at the beginning of the period (in dollars per shares) \| $ / shares	$ 5.86
Granted (in dollars per shares) \| $ / shares	27.51
Forfeited (in dollars per shares) \| $ / shares	8.63
Vested (in dollars per shares) \| $ / shares	5.75
Adjusted for performance conditions (in dollars per share) \| $ / shares	4.89
Nonvested restricted stocks outstanding at the end of the period (in dollars per shares) \| $ / shares	$ 8.89
Total unrecognized compensation expense \| ¥	$ 621	¥ 621
Weighted-average period for recognition of unrecognized compensation costs		4 years 2 months 5 days
Total fair value of nonvested restricted stocks, vested \| ¥		¥ 183	¥ 274	¥ 123
Restricted stocks \| Performance Condition
Number of Restricted Stocks
Granted (in shares)		661,973		1,876,975
Restricted stocks \| Performance Condition \| Second anniversary of the stated vesting commencement date
Share based compensation
Share-based payment award, vesting percentage		50.00%
Restricted stocks \| Performance Condition \| Vesting ratably over the following two years
Share based compensation
Share-based payment award, vesting percentage		50.00%
Period for remaining percentage vested		2 years

EARNINGS PER SHARE (Details) ¥ / shares in Units, ¥ in Millions	12 Months Ended
	Dec. 31, 2018 $ / shares	Dec. 31, 2018 CNY (¥) ¥ / shares shares	Dec. 31, 2017 CNY (¥) ¥ / shares shares	Dec. 31, 2016 CNY (¥) ¥ / shares shares
EARNINGS PER SHARE
Net income attributable to ordinary shareholders - basic \| ¥		¥ 716	¥ 1,228	¥ 782
Eliminate the dilutive effect of interest expense of convertible senior notes \| ¥		40	5
Net income attributable to ordinary shareholders - diluted \| ¥		¥ 756	¥ 1,233	¥ 782
Weighted average ordinary shares outstanding - basic		281,717,485	279,272,140	275,139,070
Incremental weighted-average ordinary shares from assumed exercise of share options and nonvested restricted stocks using the treasury stock method		11,463,212	12,202,369	7,750,424
Dilutive effect of convertible senior notes		10,425,112	1,599,469
Weighted average ordinary shares outstanding - diluted		303,605,809	293,073,978	282,889,494
Basic earnings per share (in RMB and USD per share) \| (per share)	$ 0.37	¥ 2.54	¥ 4.40	¥ 2.84
Diluted earnings per share (in RMB and USD per share) \| (per share)	$ 0.36	¥ 2.49	¥ 4.21	¥ 2.76
Outstanding employee options and nonvested restricted stocks (in shares)		530,009

Cash Dividend (Details) $ / shares in Units, ¥ in Millions, $ in Millions			12 Months Ended
	Dec. 13, 2018 $ / shares	Oct. 23, 2017 $ / shares	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)
CASH DIVIDEND
Cash dividends declared (Per share) \| $ / shares	$ 0.34	$ 0.16
Cash dividends recorded as a reduction against retained earnings			¥ 660	¥ 295
Cash dividends recorded as a receivable in other current assets				¥ 11
Dividends payable					$ 96	¥ 658

INCOME TAXES (Details) ¥ in Millions, $ in Millions	9 Months Ended	12 Months Ended
INCOME TAXES (Details) ¥ in Millions, $ in Millions	Sep. 30, 2017	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Income tax
Effective tax rate (as a percent)		25.00%	25.00%	25.00%	25.00%
Profit tax		$ 83	¥ 569	¥ 357	¥ 279
PRC
Income tax
Effective tax rate (as a percent)		25.00%	25.00%	25.00%	25.00%	25.00%	25.00%	25.00%	25.00%	25.00%	25.00%	25.00%	25.00%
China Lodging Holdings (HK) Limited \| Hong Kong
Income tax
Effective tax rate (as a percent)		16.50%	16.50%
Starway \| Hong Kong
Income tax
Effective tax rate (as a percent)		16.50%	16.50%
IBIS China Investment Limited \| Hong Kong
Income tax
Effective tax rate (as a percent)		16.50%	16.50%
ACL Greater China Limited \| Hong Kong
Income tax
Effective tax rate (as a percent)		16.50%	16.50%
TAHM Investment Limited \| Hong Kong
Income tax
Effective tax rate (as a percent)		16.50%	16.50%
City Home Investment Limited \| Hong Kong
Income tax
Effective tax rate (as a percent)		16.50%	16.50%
Orange Hotel HongKong Limited \| Hong Kong
Income tax
Effective tax rate (as a percent)		16.50%	16.50%
Huazhu Investment I Limited \| Hong Kong
Income tax
Effective tax rate (as a percent)		16.50%	16.50%
Huazhu Investment II Limited \| Hong Kong
Income tax
Effective tax rate (as a percent)		16.50%	16.50%
China Lodging Holdings Singapore Pte. Ltd. \| Singapore
Income tax
Effective tax rate (as a percent)		17.00%	17.00%	17.00%	17.00%
Profit tax			¥ 0	¥ 0	¥ 0
Hanting Suzhou \| PRC
Income tax
Effective tax rate (as a percent)	15.00%	25.00%	25.00%	25.00%
Jizhu Shanghai \| PRC
Income tax
Effective tax rate (as a percent)		12.50%	12.50%	12.50%	12.50%
Income tax exemption period		2 years	2 years
Period of income tax rate reduction		3 years	3 years
Percentage of tax reduction		50.00%	50.00%

INCOME TAXES - Reconciliation (Details) ¥ / shares in Units, ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥) ¥ / shares	Dec. 31, 2017 CNY (¥) ¥ / shares	Dec. 31, 2016 CNY (¥) ¥ / shares
Tax expense (benefit)
Current Tax \| ¥		¥ 660	¥ 436	¥ 253
Deferred Tax	$ (13)	(91)	(79)	26
Total	$ 83	¥ 569	¥ 357	¥ 279
Reconciliation between the effective income tax rate and the PRC statutory income tax rate
PRC statutory tax rate	25.00%	25.00%	25.00%	25.00%
Tax effect of non-deductible expenses and non-taxable income in determining taxable profit	15.00%	15.00%	1.00%	3.00%
Effect of different tax rate of group entities operating in other jurisdictions	4.00%	4.00%	1.00%	(1.00%)
Effect of change in valuation allowance	(1.00%)	(1.00%)		1.00%
Effect of tax holiday	(3.00%)	(3.00%)	(1.00%)	(3.00%)
Effect of cash dividends	5.00%	5.00%	(1.00%)	3.00%
Effect of disposal of subsidiary	1.00%	1.00%		(1.00%)
Effect of excess tax benefit of rewards	(5.00%)	(5.00%)	(3.00%)
Effective tax rate	41.00%	41.00%	22.00%	27.00%
Aggregate amount and per share effect of the tax holidays
Aggregate amount \| ¥		¥ 31	¥ 24	¥ 27
Per share effect - basic (in RMB per share) \| ¥ / shares		¥ 0.11	¥ 0.09	¥ 0.10
Per share effect - diluted (in RMB per share) \| ¥ / shares		¥ 0.10	¥ 0.08	¥ 0.10

INCOME TAXES - Deferred income tax assets and liabilities (Details) - CNY (¥) ¥ in Millions	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Net loss carryforward	¥ 181	¥ 140
Deferred revenue	186	159
Deferred rent	5	9
Long-term assets	149	130
Bad debt provision	6	4
Liabilities related to customer loyalty program	37	37
Accrued payroll	16	14
Other accrued expenses	14	21
Share-based compensation	17	13
Others	1	2
Valuation allowance	(107)	(123)
Total deferred tax assets	505	406
Deferred tax liabilities:
Favorable lease, building and land use rights-fair value adjustment	447	399
Capitalized interest	3	3
Unrealized gain for investment	7	7
Others	18	13
Total deferred tax liabilities	¥ 475	¥ 422

INCOME TAXES - Valuation allowance (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
Valuation allowance
Valuation allowance additions due to acquisition		¥ 0.0	¥ 3.0
Loss carryforwards		722.0
Uncertain tax benefits
Interest or penalty expense		0.0	0.0	¥ 0.0
Roll-forward of the unrecognized tax benefits
Beginning balance		26.0	20.0	15.0
Addition for tax positions		(12.0)	6.0	5.0
Ending balance		¥ 14.0	26.0	20.0
Withholding income tax rate (as a percentage)	10.00%	10.00%
Withholding income tax rate with Hong Kong as holding company (as a percentage)	5.00%	5.00%
PRC dividend withholding tax accrued		¥ 34.0
PRC dividend withholding tax liability		18.0
Future annual dividend distribution \| $	$ 100
Additional provision for PRC dividend withholding tax accrued		¥ 0.0
Period of statute of limitations	3 years	3 years
Period of statute of limitations, if the underpayment is more than the specified amount	5 years	5 years
Minimum amount of underpayment of taxes for statute of limitations to be extended to five years		¥ 0.1
Period of statute of limitations for transfer pricing issues	10 years	10 years
Valuation allowance for deferred tax assets
Valuation allowance
Charge to costs and expenses		¥ 36.0	60.0	55.0
Valuation allowance additions due to acquisition			3.0	12.0
Charge taken against allowance		43.0	47.0	17.0
Write off		¥ 9.0	¥ 8.0	¥ 28.0

MAINLAND CHINA CONTRIBUTION PLAN (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
MAINLAND CHINA CONTRIBUTION PLAN
Employee benefit contributions	¥ 321	¥ 264	¥ 213

RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Millions	12 Months Ended
RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
RESTRICTED NET ASSETS
Minimum required percentage of after tax profit appropriated to general reserve fund	10.00%
Threshold percentage of general reserve fund to registered capital	50.00%
Reserve funds not distributed as cash dividends	¥ 502	¥ 379	¥ 277
Restricted share capital of PRC subsidiaries	2,777
Restricted net assets not available for distribution to the Company in the form of dividends, loans or advances	¥ 3,279

RELATED PARTY TRANSACTIONS AND BALANCES (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2018 CNY (¥)
Related party transaction
Amount due from related parties	$ 25		¥ 118.0		¥ 176.0
Due to related party			37.0		75.0
Loan payment	1	¥ 7.0	113.0	¥ 39.0
Loan from related party	$ 15	103.0
Sheen Star
Related party transaction
Amount due from related parties			39.0		44.0
Loan payment				35.0
Sheen Star \| Service fee
Related party transaction
Revenue from related parties		2.0
Sheen Star \| Interest income
Related party transaction
Interest income from related party				2.0
CREATER
Related party transaction
Amount due from related parties			27.0		40.0
Loan payment			27.0
CREATER \| Interest income
Related party transaction
Interest income from related party		10.0
Ctrip
Related party transaction
Amount due from related parties			32.0		34.0
Due to related party			29.0		25.0
Ctrip \| Marketing and training fee
Related party transaction
Revenue from related parties		12.0	24.0	13.0
Ctrip \| Commission expenses
Related party transaction
Expenses with related parties		61.0	77.0	44.0
Ctrip \| Lease expenses
Related party transaction
Expenses with related parties		18.0
China Hospitality JV
Related party transaction
Due to related party					25.0
China Hospitality JV \| Service fee
Related party transaction
Revenue from related parties		10.0
Cjia Group
Related party transaction
Amount due from related parties			15.0		23.0
Due to related party					7.0
Loan payment			85.0
Loan from related party		103.0
Cjia Group \| Goods sold and service provided
Related party transaction
Revenue from related parties		30.0	8.0	0.0
Cjia Group \| Chengjia Hotel Management Co., Ltd.
Related party transaction
Consideration from sale of subsidiary				10.0
Hanmo
Related party transaction
Amount due from related parties					22.0
Hanmo \| Interest income
Related party transaction
Interest income from related party		7.0
Accor
Related party transaction
Amount due from related parties			2.0		2.0
Due to related party			7.0		8.0
Accor \| Service fee
Related party transaction
Revenue from related parties		14.0	8.0	4.0
Accor \| Brand use fee, reservation fee and other related service fee
Related party transaction
Expenses with related parties		¥ 18.0	11.0	¥ 6.0
Others
Related party transaction
Amount due from related parties			3.0		11.0
Due to related party			¥ 1.0		¥ 10.0

COMMITMENTS AND CONTINGENCIES - Operating lease and purchase commitments (Details) ¥ in Millions	Dec. 31, 2018 CNY (¥)
Operating lease commitments
2019	¥ 2,854
2020	2,863
2021	2,777
2022	2,661
2023	2,548
Thereafter	15,669
Total	29,372
Purchase commitments
Purchase commitments expected to be incurred within one year related to leasehold improvements and installation of equipment for hotel operations	¥ 91

COMMITMENTS AND CONTINGENCIES - Contingencies (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Contingencies
Accrued contingencies	¥ 20	¥ 41
Reversed contingencies	25	36
Further accrued contingencies	¥ 4	¥ 11
Other operating expense
Contingencies
Accrued contingencies			¥ 66

SCHEDULE I FINANCIAL INFORMATION FOR PARENT COMPANY - BALANCE SHEETS (Details) ¥ in Millions, $ in Millions	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
Current assets:
Cash and Cash Equivalents, at Carrying Value	$ 620	¥ 4,262	¥ 3,475
Other current assets	78	540	329
Total current assets	1,014	6,974	5,761
Other assets	69	471	365
Long-term investments	895	6,152	2,362
Total assets	3,490	23,993	17,508
Current liabilities:
Short-term debt	138	948	131
Dividends payable	96	658
Amount due to related parties	11	75	37
Accrued expenses and other current liabilities	233	1,607	1,249
Total current liabilities	868	5,969	3,771
Long-term debt	1,282	8,812	4,922
Total liabilities	2,571	17,674	11,274
Equity:
Ordinary shares (US$0.0001 par value per share; 8,000,000,000 shares authorized; 294,040,234 and 296,597,888 shares issued as of December 31, 2017 and 2018, and 280,518,358 and 283,076,012 shares outstanding as of December 31, 2017 and 2018, respectively)	0	0	0
Treasury shares (3,096,764 and 3,096,764 shares as of December 31 2017 and 2018, respectively)	(16)	(107)	(107)
Additional paid-in capital	540	3,713	3,624
Retained earnings	380	2,610	2,513
Accumulated other comprehensive income (loss)	(6)	(42)	168
Total equity	898	6,174	6,198
Total liabilities and equity	3,490	23,993	17,508
Parent Company
Current assets:
Cash and Cash Equivalents, at Carrying Value	101	695	557
Short-term investments	13	89	130
Other current assets	4	29	37
Total current assets	118	813	724
Other assets	2	11	33
Investment in subsidiaries	1,957	13,454	10,062
Long-term investments			780
Total assets	2,077	14,278	11,599
Current liabilities:
Short-term debt			131
Dividends payable	96	658
Amount due to related parties	69	477	313
Accrued expenses and other current liabilities	8	54	35
Total current liabilities	173	1,189	479
Long-term debt	1,006	6,915	4,922
Total liabilities	1,179	8,104	5,401
Equity:
Ordinary shares (US$0.0001 par value per share; 8,000,000,000 shares authorized; 294,040,234 and 296,597,888 shares issued as of December 31, 2017 and 2018, and 280,518,358 and 283,076,012 shares outstanding as of December 31, 2017 and 2018, respectively)	0	0	0
Treasury shares (3,096,764 and 3,096,764 shares as of December 31 2017 and 2018, respectively)	(16)	(107)	(107)
Additional paid-in capital	540	3,713	3,624
Retained earnings	380	2,610	2,513
Accumulated other comprehensive income (loss)	(6)	(42)	168
Total equity	898	6,174	6,198
Total liabilities and equity	$ 2,077	¥ 14,278	¥ 11,599

SCHEDULE I FINANCIAL INFORMATION FOR PARENT COMPANY - BALANCE SHEETS (Parenthetical) (Details) - $ / shares	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
BALANCE SHEETS
Ordinary shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Ordinary shares, shares authorized	8,000,000,000	8,000,000,000
Ordinary shares, shares issued	296,597,888	294,040,234
Ordinary shares, shares outstanding	283,076,012	280,518,358	278,282,366	250,881,559
Treasury stock, shares	3,096,764	3,096,764
Parent Company
BALANCE SHEETS
Ordinary shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Ordinary shares, shares authorized	8,000,000,000	8,000,000,000
Ordinary shares, shares issued	296,597,888	294,040,234
Ordinary shares, shares outstanding	283,076,012	280,518,358
Treasury stock, shares	3,096,764	3,096,764

SCHEDULE I FINANCIAL INFORMATION FOR PARENT COMPANY - STATEMENTS OF COMPREHENSIVE INCOME (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
Operating costs and expenses:
General and administrative expenses	$ 124	¥ 851	¥ 691	¥ 492
Total operating costs and expenses	1,155	7,945	6,874	5,715
Loss from operations	341	2,344	1,426	841
Interest income	21	148	113	67
Interest expense	(35)	(244)	(87)	(11)
Foreign exchange gain (loss)	(21)	(144)	(18)	16
Other income, net	30	203	128	134
Unrealized gain (loss) from fair value changes of equity securities	(133)	(914)	35
Net income attributable to Huazhu Group Limited	104	716	1,228	782
Other comprehensive income
Unrealized securities holding gains (losses), net of tax of (2), (8) and nil for 2016, 2017 and 2018, respectively			1	16
Reclassification of realized gains to net income, net of tax			(5)	(68)
Foreign currency translation adjustments, net of tax of nil for 2016, 2017 and 2018, respectively	(25)	(169)	177	(13)
Comprehensive income attributable to Huazhu Group Limited	79	547	1,401	717
Parent Company
Operating costs and expenses:
General and administrative expenses	13	89	69	60
Total operating costs and expenses	13	89	69	60
Loss from operations	(13)	(89)	(69)	(60)
Interest income	0	1	2	0
Interest expense	29	198	87	10
Foreign exchange gain (loss)	2	17	(14)	15
Other income, net	7	50	7	70
Unrealized gain (loss) from fair value changes of equity securities	(6)	(45)	35
Income in investment in subsidiaries	143	980	1,354	767
Net income attributable to Huazhu Group Limited	104	716	1,228	782
Other comprehensive income
Unrealized securities holding gains (losses), net of tax of (2), (8) and nil for 2016, 2017 and 2018, respectively			1	16
Reclassification of realized gains to net income, net of tax			(5)	(68)
Foreign currency translation adjustments, net of tax of nil for 2016, 2017 and 2018, respectively	(25)	(169)	177	(13)
Comprehensive income attributable to Huazhu Group Limited	$ 79	¥ 547	¥ 1,401	¥ 717

SCHEDULE I FINANCIAL INFORMATION FOR PARENT COMPANY - STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
STATEMENTS OF COMPREHENSIVE INCOME
Unrealized securities holding gains, tax	¥ 0	¥ (8)	¥ (2)
Foreign currency translation adjustments, tax	0	0	0
Parent Company
STATEMENTS OF COMPREHENSIVE INCOME
Unrealized securities holding gains, tax	0	(8)	(2)
Foreign currency translation adjustments, tax	¥ 0	¥ 0	¥ 0

SCHEDULE I FINANCIAL INFORMATION FOR PARENT COMPANY - STATEMENTS OF CASH FLOWS (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 CNY (¥)
Operating activities:
Net income	$ 106	¥ 727	¥ 1,228	¥ 774
Adjustments to reconcile net income to net cash used in operating activities:
Share-based compensation	12	83	66	55
Investment (income) loss	147	1,009	(160)	(117)
Amortization of issuance cost of convertible senior notes	4	28	3
Changes in operating assets and liabilities:
Other current assets	(8)	(56)	(76)	(41)
Other assets	(5)	(32)	(54)	(5)
Accrued expenses and other current liabilities	20	140	278	225
Net cash provided by operating activities	444	3,049	2,453	2,066
Investing activities:
Purchase of long-term investments	(721)	(4,959)	(1,328)	(293)
Purchase of short-term investments			(96)
Net cash provided by (used in) investing activities	(923)	(6,345)	(6,235)	(176)
Financing activities:
Net proceeds from issuance of ordinary shares upon exercise of option	2	14	9	12
Proceeds from short-term bank borrowings	135	928	137	282
Repayment of short-term bank borrowings	(19)	(128)	(295)	(333)
Proceeds from long-term bank borrowings	622	4,275	3,633
Repayment of long-term bank borrowings	(116)	(799)	(1,651)
Proceeds from issuance of convertible senior notes, net of issuance cost and capped call option			2,925
Debt financing costs paid			(10)
Proceeds from ADS lending			0
Dividends paid			(306)	(276)
Net cash (used in) provided by financing activities	618	4,248	4,536	(266)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(3)	(24)	(34)	14
Net increase in cash and cash equivalents, and restricted cash	136	928	720	1,638
Cash, cash equivalents and restricted cash at the beginning of the year	575	3,956	3,236	1,598
Cash, cash equivalents and restricted cash at the end of the year	711	4,884	3,956	3,236
Parent Company
Operating activities:
Net income	104	716	1,228	782
Adjustments to reconcile net income to net cash used in operating activities:
Share-based compensation	12	83	66	55
Income in investment in subsidiaries	(143)	(980)	(1,354)	(767)
Investment (income) loss	7	46	(41)	(51)
Amortization of issuance cost of convertible senior notes	4	28	3
Changes in operating assets and liabilities:
Other current assets	1	8	(26)	1
Other assets	3	21	(33)
Accrued expenses and other current liabilities	3	18	26	(17)
Net cash provided by operating activities	(9)	(60)	(131)	3
Investing activities:
Investment in subsidiaries			(3,250)
Receipt of investment in subsidiaries	309	2,121		236
Purchase of long-term investments	(550)	(3,782)	(760)	(48)
Proceeds from sale of long-term investments			58	4
Purchase of short-term investments			(96)
Proceeds from sale of short-term investment				337
Net cash provided by (used in) investing activities	(241)	(1,661)	(4,048)	529
Financing activities:
Net proceeds from issuance of ordinary shares upon exercise of option	2	14	9	12
Proceeds of advances from subsidiaries	22	149	90	0
Proceeds from short-term bank borrowings			136	282
Repayment of short-term bank borrowings	(19)	(128)	(294)	(333)
Proceeds from long-term bank borrowings	350	2,409	3,633
Repayment of long-term bank borrowings	(114)	(786)	(1,651)
Proceeds from issuance of convertible senior notes, net of issuance cost and capped call option			2,925
Debt financing costs paid			(10)
Proceeds from ADS lending			0
Dividends paid			(306)	(276)
Net cash (used in) provided by financing activities	241	1,658	4,532	(315)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	29	201	(170)	36
Net increase in cash and cash equivalents, and restricted cash	20	138	183	253
Cash, cash equivalents and restricted cash at the beginning of the year	81	557	374	121
Cash, cash equivalents and restricted cash at the end of the year	$ 101	¥ 695	¥ 557	¥ 374

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Valuation And Qualifying Accounts
Addition Due to Acquisition	¥ 0	¥ 3
Allowance for doubtful accounts of accounts receivables and other receivables:
Valuation And Qualifying Accounts
Balance at Beginning of Year	11	12	¥ 6
Charge to Costs and Expenses	10	2	1
Addition Due to Acquisition	4		7
Write off	(8)	(3)	(2)
Balance at End of Year	17	11	12
Valuation allowance for deferred tax assets
Valuation And Qualifying Accounts
Balance at Beginning of Year	123	115	93
Charge to Costs and Expenses	36	60	55
Addition Due to Acquisition		3	12
Charge Taken Against Allowance	(43)	(47)	(17)
Write off	(9)	(8)	(28)
Balance at End of Year	¥ 107	¥ 123	¥ 115