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 October 2021

 

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 ¨

 

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): ¨

 

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): ¨

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit Number   Description
Exhibit 99.1   Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the Third Quarter of 2021

 

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: October 27, 2021 By: /s/ Qi Ji
  Name: Qi Ji
  Title: Executive Chairman of the Board of Directors

  

3 

 

 

Exhibit 99.1

 

 

 

 

Contact Information

Huazhu Investor Relations

Tel: 86 (21) 6195 9561

Email: ir@huazhu.com

http://ir.huazhu.com

 

Huazhu Group Limited Announces Preliminary Results for Hotel Operations

in the Third Quarter of 2021

 

Shanghai, China, October 27, 2021 – Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the third quarter (“Q3 2021”) ended September 30, 2021.

 

COVID-19 update

 

For our Legacy-Huazhu business, our RevPAR recovery momentum resumed quickly in early July. Since late July, however, the spread of the Delta variant of COVID-19 from Nanjing to several provinces and cities resulted in the relevant governmental authorities imposing a new round of strict travelling restrictions, and the blended RevPAR of Legacy-Huazhu in August dropped significantly to only 54% of the 2019 level. After the Delta variant of COVID-19 in Nanjing became largely contained in early September, the monthly blended RevPAR of Legacy-Huazhu continued to recover, reaching approximately 92% of the 2019 level. However, with the relatively small-scale outbreak occurred in Fujian province in mid-September, the relevant governmental authorities again imposed strict travelling restrictions, especially for students, during the “Golden Week” in celebration of the National Day Holidays. As a result, the blended RevPAR of Legacy-Huazhu during the Golden Week recovered to only approximately 82% of the 2019 level. Nevertheless, RevPAR recovery in the second week of October resumed to close to 90% of the 2019 level, mainly driven by the rebound of business travelling. In addition, despite the uncertainty of the COVID-19 situation, we made significant progress in upscale hotel penetration and signed up over 20 upscale hotels in early October through our joint venture with Sunac.

 

Steigenberger Hotels AG and its subsidiaries (“DH”) observed continued recovery since the first lockdown in November 2020, along with the rollout of vaccination campaign in Germany. As of October 25th, 2021, approximately 69% of the German population have received at least one dose of vaccine and approximately 66% of the population are fully vaccinated. During the summer holiday season, the recovery of hotel demand was encouraging due to the strong leisure demand. After the summer holiday, the recovery of DH hotels’ RevPAR remained resilient, mainly driven by the business demand. For the third quarter of 2021, the occupancy rate of DH hotels’ reached approximately 49% and blended RevPAR reached approximately 65% of the 2019 level. Meanwhile, DH continued to implement further cost reduction and cash flow management measures, especially regarding personnel and lease costs.

 

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Operating Results: Legacy-Huazhu(1)

 

   Number of hotels   Number of rooms 
     Opened
in Q3 2021
   Closed (2)
in Q3 2021
   Net added
in Q3 2021
   As of
September 30,
2021 (3)
   As of
September 30,
2021
 
Leased and owned hotels  2   (14)  (12)  663   91,609 
Manachised and franchised hotels  479   (126)  353   6,682   607,059 
Total  481   (140)  341   7,345   698,668 

  

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

 

(2)The reasons for hotel closures mainly included non-compliance with our brand standards, operating losses, and property-related issues. In Q3 2021, we temporarily closed 18 hotels for brand upgrade and business model change purposes.

 

(3)As of September 30, 2021, 120 hotels were requisitioned by governmental authorities.

 

   As of September 30, 2021 
   Number of hotels   Unopened hotels in pipeline 
Economy hotels  4,621   1,374 
Leased and owned hotels  404   3 
Manachised and franchised hotels  4,217   1,371 
Midscale and upscale hotels  2,724   1,414 
Leased and owned hotels  259   14 
Manachised and franchised hotels  2,465   1,400 
Total  7,345   2,788 

 

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Operational hotels excluding hotels under requisition
   For the quarter ended     
   September 30,   June 30,   September 30,    
   2020   2021   2021   yoy
change
 
Average daily room rate (in RMB)            
Leased and owned hotels  255   311   296   16.0%
Manachised and franchised hotels  211   246   238   12.8%
Blended  218   255   246   12.8%
Occupancy Rate (as a percentage)                
Leased and owned hotels  82.9%  81.1%  69.7%  -13.1p.p. 
Manachised and franchised hotels  81.8%  82.5%  72.2%  -9.6p.p. 
Blended  82.0%  82.3%  71.9%  -10.1p.p. 
RevPAR (in RMB)                
Leased and owned hotels  211   252   206   -2.4%
Manachised and franchised hotels  173   203   172   -0.5%
Blended  179   210   177   -1.1%

 

   For the quarter ended       
   September 30,
2019
   September 30,
2021
   yoy
change
 
Average daily room rate (in RMB)        
Leased and owned hotels  288   296   2.7%
Manachised and franchised hotels  235   238   1.2%
Blended  245   246   0.3%
Occupancy Rate (as a percentage)            
Leased and owned hotels  90.0%  69.7%  -20.3p.p. 
Manachised and franchised hotels  87.2%  72.2%  -15.0p.p. 
Blended  87.7%  71.9%  -15.8p.p. 
RevPAR (in RMB)            
Leased and owned hotels  259   206   -20.4%
Manachised and franchised hotels  205   172   -16.2%
Blended  215   177   -17.8%

 

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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
     For the quarter     For the quarter     For the quarter  
   As of
September 30,
  ended
September 30,
  yoy
change
   ended
September 30,
  yoy
change
   ended
September 30,
   yoy
change
   2020  2021  2020  2021     2020  2021     2020   2021   (p.p.)
Economy hotels  3,157  3,157  147  141  -3.9%  170  187  10.3%  86.6%  75.4%  -11.2
Leased and owned hotels  398  398  162  157  -3.4%  187  213  14.2%  87.0%  73.6%  -13.4
Manachised and franchised hotels  2,759  2,759  144  138  -4.1%  166  182  9.5%  86.5%  75.8%  -10.7
Midscale and upscale hotels  1,646  1,646  244  225  -7.9%  301  323  7.2%  80.9%  69.6%  -11.3
Leased and owned hotels  218  218  280  257  -8.3%  358  392  9.5%  78.4%  65.7%  -12.7
Manachised and franchised hotels  1,428  1,428  236  217  -7.8%  289  309  6.7%  81.5%  70.4%  -11.0
Total  4,803  4,803  187  176  -5.9%  222  241  8.7%  84.2%  73.0%  -11.3

 

   Number of hotels  Same-hotel RevPAR   Same-hotel ADR   Same-hotel Occupancy
     For the quarter     For the quarter     For the quarter  
   As of
September 30,
  ended
September 30,
  yoy
change
   ended
September 30,
  yoy
change
   ended
September 30,
   yoy
change
   2019  2021  2019  2021     2019  2021     2019   2021   (p.p.)
Economy hotels  2,364  2,364  187  141  -24.5%  201  187  -6.7%  93.2%  75.4%  -17.8
Leased and owned hotels  385  385  209  154  -26.2%  224  210  -6.2%  93.5%  73.5%  -19.9
Manachised and franchised hotels  1,979  1,979  181  138  -24.1%  195  181  -6.9%  93.1%  75.9%  -17.2
Midscale and upscale hotels  1,057  1,057  293  219  -25.4%  340  321  -5.6%  86.4%  68.2%  -18.1
Leased and owned hotels  187  187  355  245  -31.0%  406  379  -6.7%  87.3%  64.5%  -22.8
Manachised and franchised hotels  870  870  275  211  -23.4%  320  304  -4.9%  86.1%  69.4%  -16.7
Total  3,421  3,421  226  170  -24.8%  249  234  -6.3%  90.7%  72.7%  -17.9

  

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Operating Results: Legacy-DH(4)

 

    Number of hotels     Number of
rooms
    Unopened hotels
in pipeline
 
    Opened
in Q3 2021
    Closed
in Q3 2021
    Net added
in Q3 2021
    As of
September
30, 2021(5)
    As of
September 
30, 2021
    As of
September 
30, 2021
 
Leased hotels     1       -       1       75       14,002       28  
Manachised and franchised hotels     -       (2 )     (2 )     46       10,313       11  
Total     1       (2 )     (1 )     121       24,315       39  

 

(4)Legacy-DH refers to DH.
  
(5)As of September 30, 2021, a total of 4 DH brand hotels were temporarily closed due to COVID-19. 1 hotel is closed for renovation and 1 hotel due to flood damage.

 

   For the quarter ended     
   September
30,
   June 30,   September
30,
   yoy 
   2020   2021   2021   change 
Average daily room rate  (in EUR)                    
Leased hotels   88    85    94    6.8%
Manachised and franchised hotels   101    78    104    3.6%
Blended   93    81    99    6.1%
Occupancy rate (as a percentage)                    
Leased hotels   38.2%   20.0%   48.0%   9.8p.p. 
Managed and franchised hotels   37.5%   30.8%   49.4%   12.0p.p. 
Blended   37.9%   24.4%   48.6%   10.7p.p. 
RevPAR  (in EUR)                    
Leased hotels   34    17    45    34.1%
Managed and franchised hotels   38    24    52    36.7%
Blended   35    20    48    35.9%

 

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Hotel Portfolio by Brand

 

   Total 
   Hotels   Rooms   Unopened hotels 
             
   in operation   in pipeline 
Economy hotels   4,635    382,337    1,386 
HanTing Hotel   2,937    268,347    765 
Hi Inn   430    25,069    107 
Elan Hotel(6)   1,040    64,757    468 
Ibis Hotel   214    22,503    34 
Zleep Hotels   14    1,661    12 
Midscale hotels   2,288    256,146    1,099 
Ibis Styles Hotel   78    8,299    17 
Starway Hotel   496    41,913    280 
JI Hotel   1,294    158,008    588 
Orange Hotel   390    43,146    209 
CitiGO Hotel   30    4,780    5 
Upper midscale hotels   429    63,959    276 
Crystal Orange Hotel   137    18,406    67 
Manxin Hotel   76    7,416    63 
Madison Hotel   35    5,247    54 
Mercure Hotel   119    20,561    52 
Novotel Hotel   14    3,723    16 
IntercityHotel(7)   48    8,606    24 
Upscale hotels   107    18,383    62 
Jaz in the City   3    587    1 
Joya Hotel   9    1,760    0 
Blossom House   32    1,579    35 
Grand Mercure Hotel   7    1,485    6 
Steigenberger Hotels & Resorts(8)   50    12,013    14 
MAXX (9)   6    959    6 
Others   7    2,158    4 
Other hotels(10)   7    2,158    4 
Total   7,466    722,983    2,827 

 

(6)As of September 30, 2021, 46 Ni Hao Hotels were included in the operational hotel for Elan Hotels and 145 Ni Hao hotels were included in the pipeline for Elan Hotels.
  
(7)As of September 30, 2021, 2 operational hotels and 6 pipeline hotels of IntercityHotel were in China.
  
(8)As of September 30, 2021, 1 operational hotel and 7 pipeline hotels of Steigenberger Hotels & Resorts were in China.
  
(9)As of September 30, 2021, 1 operational hotel and 5 pipeline hotels of MAXX were in China.
  
(10)Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).

 

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About Huazhu Group Limited

 

Originated in China, Huazhu Group Limited is a world-leading hotel group. As of September 30, 2021, Huazhu operated 7,466 hotels with 722,983 rooms in operation in 17 countries. Huazhu’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel and CitiGO Hotel. Upon the completion of the acquisition of DH on January 2, 2020, Huazhu added five brands to its portfolio, including Steigenberger Hotels & Resorts, MAXX by Steigenberger, Jaz in the City, IntercityHotel and Zleep Hotels. In addition, Huazhu also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.

 

Huazhu’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, Huazhu directly operates hotels typically located on leased or owned properties. Under the manachise model, Huazhu manages manachised hotels through the on-site hotel managers that Huazhu appoints, and Huazhu collects fees from franchisees. Under the franchise model, Huazhu provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. Huazhu applies a consistent standard and platform across all of its hotels. As of September 30, 2021, Huazhu operates 15 percent of its hotel rooms under lease and ownership model, and 85 percent under manachise and franchise models.

 

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

 

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

 

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

 

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