UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2020

 

Commission File Number: 001-34656

 

Huazhu Group Limited

(Registrant’s name)

 

No. 699 Wuzhong Road

Minhang District

Shanghai 201103
People’s Republic of China
(86) 21 6195-2011

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F x  Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (7): o

 

 

 


 

EXHIBIT INDEX

 

Exhibit Number

 

Description

Exhibit 99.1

 

Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the Third Quarter of 2020

 

2


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

Huazhu Group Limited

 

 

(Registrant)

 

 

 

 

 

 

Date: November 5, 2020

By:

/s/ Qi Ji

 

Name:

Qi Ji

 

Title:

Executive Chairman of the Board of Directors, Chief Executive Officer

 

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Exhibit 99.1

 

 

Huazhu Group Limited Announces Preliminary Results for Hotel Operations

in the Third Quarter of 2020

 

Shanghai, China, November 5, 2020 — Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the third quarter ended September 30, 2020 (“Q3 2020”).

 

Recovery continued in Q3 2020

 

During Q3 2020, despite some mini-outbreaks in several cities, our occupancy rate recovery continued, thanks to China’s effective control of the COVID-19 pandemic. In addition, our average daily room rate had also recovered gradually along with the occupancy rate. More importantly, leisure traveling was the key driver to lead this recovery, which had resulted in outstanding performance of our upper-midscale and upscale brand hotels.

 

Steigenberger Hotels AG and its subsidiaries (“DH”) operating performances had also recovered steadily from July until mid-September 2020. However, this recovery trend was temporarily paused since late September due to the second wave of COVID-19 outbreak in European countries. To mitigate the effects of this situation, we are taking further cost and cash flow measures, such as deferred rental payments, reducing or eliminating discretionary corporate spending and capital expenditures, etc. As of October 31, 2020, 91% or 107 of DH hotels were in operation.

 

Starting from Q3 2020, we have been evaluating our soft brand hotel portfolio and removing hotels with poor product quality or those that do not fit Huazhu’s long-term development strategy from our portfolio. We believe this will help to improve the hotels’ performance and attract like-minded franchisees to join our network. Accordingly, we are now revising our hotel closure target to 550-600 hotels for 2020, up from our initial expectation of 350-450 hotels.

 

In Q3 2020, Huazhu expects net revenues to increase 0% to 2% year-over-year or to decline 10% to 12% if excluding the addition of DH.

 

1


 

Operating Results: Legacy-Huazhu(1)

 

 

 

 

 

Number of hotels

 

 

 

Number of rooms

 

 

 

Opened
in Q3 2020

 

Closed (2)
in Q3 2020

 

Net added
in Q3 2020

 

As of
September 30,
2020 
(3)

 

As of
September 30,
2020

 

Leased and owned hotels

 

9

 

(12

)

(3

)

687

 

91,218

 

Manachised and franchised hotels

 

511

 

(189

)

322

 

5,703

 

519,547

 

Total

 

520

 

(201

)

319

 

6,390

 

610,765

 

 


(1)    Legacy-Huazhu refers to Huazhu and its subsidiaries, excluding DH.

(2)             The reasons for hotel closures mainly include non-compliance with our brand standards, operating losses, and property-related issues. In Q3 2020, we temporarily closed 17 hotels for brand upgrade and business model change purposes.

(3)    As of September 30, 2020, 83 hotels were requisitioned by governmental authorities.

 

 

 

As of September 30, 2020

 

 

 

Number of hotels

 

Unopened hotels in pipeline

 

Economy hotels

 

4,213

 

1,097

 

Leased and owned hotels

 

446

 

4

 

Manachised and franchised hotels

 

3,767

 

1,093

 

Midscale and upscale hotels

 

2,177

 

1,175

 

Leased and owned hotels

 

241

 

18

 

Manachised and franchised hotels

 

1,936

 

1,157

 

Total

 

6,390

 

2,272

 

 

2


 

Operational hotels (excluding hotels under requisition)

 

 

 

For the quarter ended

 

 

 

 

 

September
30,

 

June 30,

 

September
30,

 

yoy

 

 

 

2019

 

2020

 

2020

 

change

 

Average daily room rate (in RMB)

 

 

 

 

 

 

 

 

 

Leased and owned hotels

 

288

 

205

 

255

 

-11.4

%

Manachised and franchised hotels

 

235

 

181

 

211

 

-10.3

%

Blended

 

245

 

185

 

218

 

-11.1

%

Occupancy rate (as a percentage)

 

 

 

 

 

 

 

 

 

Leased and owned hotels

 

90.0

%

67.4

%

82.9

%

-7.1

p.p.

Manachised and franchised hotels

 

87.2

%

69.1

%

81.8

%

-5.3

p.p.

Blended

 

87.7

%

68.8

%

82.0

%

-5.7

p.p.

RevPAR (in RMB)

 

 

 

 

 

 

 

 

 

Leased and owned hotels

 

259

 

138

 

211

 

-18.5

%

Manachised and franchised hotels

 

205

 

125

 

173

 

-15.8

%

Blended

 

215

 

127

 

179

 

-16.9

%

 

3


 

Same-hotel operational data by class

 

Mature hotels in operation for more than 18 months (excluding hotels under requisition)

 

 

 

Number of hotels

 

Same-hotel RevPAR

 

Same-hotel ADR

 

Same-hotel Occupancy

 

 

 

As of
September 30,

 

For the quarter
ended
September 30,

 

yoy
change

 

For the quarter
ended
September 30,

 

yoy
change

 

For the quarter
ended
September 30,

 

yoy
change

 

 

 

2019

 

2020

 

2019

 

2020

 

 

 

2019

 

2020

 

 

 

2019

 

2020

 

(p.p.)

 

Economy hotels

 

2,604

 

2,604

 

185

 

144

 

-21.9

%

199

 

168

 

-15.7

%

92.7

%

85.9

%

-6.8

 

Leased and owned hotels

 

421

 

421

 

207

 

159

 

-23.0

%

222

 

184

 

-17.2

%

93.4

%

86.9

%

-6.6

 

Manachised and franchised hotels

 

2,183

 

2,183

 

179

 

140

 

-21.6

%

193

 

164

 

-15.3

%

92.6

%

85.7

%

-6.9

 

Midscale and upscale hotels

 

1,108

 

1,108

 

289

 

238

 

-17.4

%

335

 

298

 

-11.2

%

86.1

%

80.1

%

-6.0

 

Leased and owned hotels

 

188

 

188

 

352

 

269

 

-23.5

%

402

 

345

 

-14.2

%

87.4

%

78.0

%

-9.4

 

Manachised and franchised hotels

 

920

 

920

 

271

 

230

 

-15.2

%

316

 

284

 

-9.9

%

85.8

%

80.7

%

-5.0

 

Total

 

3,712

 

3,712

 

222

 

178

 

-19.8

%

245

 

212

 

-13.5

%

90.4

%

83.8

%

-6.5

 

 

4


 

 

Operating Results: Legacy-DH(4)

 

 

 

 

 

Number of

 

Unopened hotels

 

 

 

Number of hotels

 

rooms

 

in pipeline

 

 

 

 

 

 

 

 

 

As of

 

As of

 

As of

 

 

 

Opened

 

Closed

 

Net added

 

September

 

September 30,

 

September 30,

 

 

 

in Q3 2020

 

in Q3 2020

 

in Q3 2020

 

30, 2020(5)

 

2020

 

2020

 

Leased hotels

 

2

 

 

2

 

70

 

12,820

 

28

 

Manachised and franchised hotels

 

1

 

(2

)

(1

)

47

 

10,502

 

13

 

Total

 

3

 

(2

)

1

 

117

 

23,322

 

41

 

 


(4)   Legacy-DH refers to DH.

(5)         As of September 30, 2020, a total of 12 DH brand hotels were temporarily closed due to COVID-19.

 

 

 

For the quarter ended

 

 

 

 

 

September 30,

 

June 30,

 

September 30,

 

yoy

 

 

 

2019

 

2020

 

2020

 

change

 

Average daily room rate (in EUR)

 

 

 

 

 

 

 

 

 

Leased hotels

 

100

 

82

 

88

 

-11.8

%

Manachised and franchised hotels

 

94

 

97

 

101

 

6.9

%

Blended

 

98

 

87

 

93

 

-4.7

%

Occupancy rate (as a percentage)

 

 

 

 

 

 

 

 

 

Leased hotels

 

78.7

%

18.7

%

38.2

%

-51.4

p.p.

Manachised and franchised hotels

 

72.3

%

17.3

%

37.5

%

-48.2

p.p.

Blended

 

75.7

%

18.3

%

37.9

%

-49.9

p.p.

RevPAR (in EUR)

 

 

 

 

 

 

 

 

 

Leased hotels

 

79

 

15

 

34

 

-57.1

%

Manachised and franchised hotels

 

68

 

17

 

38

 

-44.6

%

Blended

 

74

 

16

 

35

 

-52.2

%

 

5


 

Hotel Portfolio by Brand

 

 

 

As of September 30, 2020

 

 

 

Hotels

 

Rooms

 

Unopened hotels

 

 

 

in operation

 

in pipeline

 

Economy hotels

 

4,226

 

355,402

 

1,107

 

HanTing Hotel

 

2,722

 

253,155

 

477

 

Hi Inn

 

443

 

25,946

 

103

 

Elan Hotel(6)

 

849

 

53,471

 

461

 

Ibis Hotel

 

199

 

21,323

 

56

 

Zleep Hotel

 

13

 

1,507

 

10

 

Midscale and upscale hotels

 

2,281

 

278,685

 

1,206

 

Ibis Styles Hotel

 

63

 

7,470

 

28

 

Starway Hotel

 

428

 

37,137

 

307

 

JI Hotel

 

1,033

 

128,994

 

453

 

Orange Hotel

 

308

 

35,101

 

171

 

Crystal Orange Hotel

 

110

 

14,896

 

50

 

Manxin Hotel

 

59

 

5,854

 

34

 

Madison Hotel

 

23

 

2,953

 

24

 

Mercure Hotel

 

98

 

16,685

 

60

 

Novotel Hotel

 

12

 

3,387

 

13

 

Joya Hotel

 

10

 

1,926

 

1

 

Blossom House

 

26

 

978

 

25

 

Grand Mercure Hotel

 

7

 

1,489

 

8

 

Steigenberger Hotels & Resorts

 

49

 

11,556

 

8

 

IntercityHotel

 

44

 

7,827

 

20

 

Maxx by Steigenberger

 

5

 

777

 

1

 

Jaz in the City

 

2

 

424

 

2

 

Other partner hotels

 

4

 

1,231

 

1

 

Total

 

6,507

 

634,087

 

2,313

 

 


(6)    As of September 30, 2020, 4 Ni Hao hotels were included in the operational hotel total for Elan Hotels and 27 Ni Hao hotels were included in the pipeline total for Elan Hotels.

 

6


 

About Huazhu Group Limited

 

Originated in China, Huazhu Group Limited is a world-leading hotel group. As of September 30, 2020, Huazhu operated 6,507 hotels with 634,087 rooms in operation in 16 countries. Huazhu’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, and Ni Hao Hotel. Upon the completion of the acquisition of DH on January 2, 2020, Huazhu added five brands to its portfolio, including Steigenberger Hotels & Resorts, Maxx by Steigenberger, Jaz in the City, IntercityHotel and Zleep Hotel. In addition, Huazhu also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.

 

Huazhu’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, Huazhu directly operates hotels typically located on leased or owned properties. Under the manachise model, Huazhu manages manachised hotels through the on-site hotel managers that Huazhu appoints, and Huazhu collects fees from franchisees. Under the franchise model, Huazhu provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. Huazhu applies a consistent standard and platform across all of its hotels. As of September 30, 2020, Huazhu operates 16 percent of its hotel rooms under lease and ownership model, and 84 percent under manachise and franchise models.

 

For more information, please visit Huazhu’s website: http://ir.huazhu.com.

 

Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; economic conditions; the regulatory environment; our ability to attract and retain customers and leverage our brands; trends and competition in the lodging industry; the expected growth of demand for lodging; and other factors and risks detailed in our filings with the U.S. Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results.

 

Huazhu undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

 

Contact Information

Huazhu Investor Relations

Tel: 86 (21) 6195 9561

Email: ir@huazhu.com

http://ir.huazhu.com

 

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