0001104659-22-050640 | 20-F | XBRL Viewer

Short-term investments measured at fair value

¥ 5,116

$ 803

¥ 7,026

Restricted cash

2,589

406

3,903

Accounts receivable, net of allowance of RMB41 and RMB50 as of December 31, 2020 and 2021, respectively

521

404

Loan receivables - current, net

218

304

Amounts due from related parties, net

149

178

Inventories

Other current assets, net

847

133

914

Total current assets

9,553

1,499

12,882

Property and equipment, net

7,056

1,107

6,682

Intangible assets, net

5,385

845

5,945

Operating lease right-of-use assets

29,942

4,698

28,980

Finance lease right-of-use assets

2,235

351

2,041

Land use rights, net

206

213

Long-term investments

1,965

308

1,923

Goodwill

5,132

805

4,988

Amounts due from a related party

Loan receivables, net

135

Other assets, net

834

131

743

Deferred tax assets

862

136

623

Total assets

63,269

9,927

65,155

Current liabilities:

Short-term debt

6,232

978

1,142

Accounts payable

968

152

1,241

Amounts due to related parties

197

132

Salary and welfare payables

591

526

Deferred revenue

1,366

214

1,272

Operating lease liabilities, current

3,628

569

3,406

Finance lease liabilities, current

Accrued expenses and other current liabilities

1,838

288

2,440

Income tax payable

418

339

Total current liabilities

15,279

2,397

10,529

Long-term debt

3,565

559

10,856

Operating lease liabilities, non-current

28,012

4,396

27,048

Finance lease liabilities, non-current

2,684

421

2,497

Deferred revenue

785

123

662

Other long-term liabilities

903

142

771

Retirement benefit obligations

144

179

Deferred tax liabilities

853

134

1,181

Total liabilities

52,225

8,195

53,723

Commitments and contingencies (Note 21)

Equity:

Ordinary shares (US$0.00001 par value per share; 80,000,000,000 shares authorized; 3,243,644,440 and 3,255,971,250 shares issued as of December 31, 2020 and 2021, and 3,108,425,680 and 3,120,746,090 shares outstanding as of December 31, 2020 and 2021, respectively)

^[1]

Treasury shares (30,967,640 and 30,974,040 shares as of December 31, 2020 and 2021, respectively)

(107)

(17)

(107)

Additional paid-in capital

9,964

1,563

9,808

Retained earnings

1,037

163

1,502

Accumulated other comprehensive income

127

Total Huazhu Group Limited shareholders' equity

10,935

1,715

11,330

Noncontrolling interest

109

102

Total equity

11,044

1,732

11,432

Total liabilities and equity

¥ 63,269

$ 9,927

¥ 65,155

[1]

In June 2021, the Company effected a share split that each issued and unissued ordinary share of the Company with a par value of US$0.0001 was sub-divided into 10 ordinary shares with a par value of US$0.00001 each. The ratio of ADS to ordinary share was adjusted from one (1) ADS representing one (1) ordinary share to one (1) ADS representing ten (10) ordinary shares. Except otherwise stated, the share split has been retrospectively applied for all periods presented.

CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Millions	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2020 CNY (¥) shares
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance \| ¥	¥ 50	¥ 41
Ordinary shares, shares authorized	80,000,000,000	80,000,000,000
Ordinary shares, shares issued	3,255,971,250	3,243,644,440
Ordinary shares, shares outstanding	3,120,746,090	3,108,425,680
Treasury shares, shares	30,974,040	30,967,640

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares	Dec. 31, 2019 CNY (¥) ¥ / shares shares
Revenues:
Total revenues	¥ 12,785	$ 2,006	¥ 10,196	¥ 11,212
Operating costs and expenses:
Hotel operating costs	11,282	1,770	9,729	7,190
Other operating costs	58	9	52	57
Selling and marketing expenses	641	101	597	426
General and administrative expenses	1,545	242	1,259	1,061
Pre-opening expenses	81	13	288	502
Total operating costs and expenses	13,607	2,135	11,925	9,236
Goodwill impairment loss \| ¥	0		437	0
Other operating income, net	986	155	480	132
Income (loss) from operations	164	26	(1,686)	2,108
Interest income	89	14	119	160
Interest expense	405	64	533	315
Other income (expense), net	157	25	(89)	331
Unrealized gains (losses) from fair value changes of equity securities	(96)	(15)	(265)	316
Foreign exchange (loss) gain	(317)	(50)	175	(35)
Income (loss) before income taxes	(408)	(64)	(2,279)	2,565
Income tax expense (benefit)	12	2	(215)	640
Loss from equity method investments	(60)	(9)	(140)	(164)
Net income (loss)	(480)	(75)	(2,204)	1,761
Less: net loss attributable to noncontrolling interest	(15)	(2)	(12)	(8)
Net income (loss) attributable to Huazhu Group Limited	(465)	(73)	(2,192)	1,769
Other comprehensive income (loss)
Gain (loss) arising from defined benefit plan, net of tax of nil, a loss of RMB 13, and nil for 2019, 2020 and 2021, respectively	13	2	(27)
Foreign currency translation adjustments, net of tax of nil for 2019, 2020 and 2021, respectively	(99)	(16)	203	(7)
Comprehensive income (loss)	(566)	(89)	(2,028)	1,754
Less: comprehensive (loss) income attributable to the noncontrolling interest	(15)	(2)	(12)	(8)
Comprehensive income (loss) attributable to Huazhu Group Limited	¥ (551)	$ (87)	¥ (2,016)	¥ 1,762
Earnings (Losses) per share:
Basic \| (per share)	¥ (0.15)	$ (0.02)	¥ (0.75)	¥ 0.62
Diluted \| (per share)	¥ (0.15)	$ (0.02)	¥ (0.75)	¥ 0.59
Weighted average number of shares used in computation:
Basic (in shares)	3,114,124,244	3,114,124,244	2,927,398,409	2,843,051,378
Diluted (in shares)	3,114,124,244	3,114,124,244	2,927,398,409	3,043,098,899
Leased and owned hotels
Revenues:
Total revenues	¥ 8,118	$ 1,274	¥ 6,908	¥ 7,718
Franchise or manachise agreements
Revenues:
Total revenues	4,404	691	3,136	3,342
Other revenues
Revenues:
Total revenues	¥ 263	$ 41	¥ 152	¥ 152

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Gain arising from defined benefit plan, tax	¥ 4	¥ 13	¥ 0
Foreign currency translation adjustments, tax	¥ 0	¥ 0	¥ 0

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ¥ in Millions	Ordinary Shares Cumulative Effect, Period of Adoption, Adjusted Balance [Member] CNY (¥) shares	Ordinary Shares CNY (¥) shares	Ordinary Shares USD ($) shares	Treasury Shares Cumulative Effect, Period of Adoption, Adjusted Balance [Member] CNY (¥) shares	Treasury Shares CNY (¥) shares	Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjusted Balance [Member] CNY (¥)	Additional Paid-in Capital CNY (¥)	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment [Member] CNY (¥)	Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance [Member] CNY (¥)	Retained Earnings CNY (¥)	Accumulated Other Comprehensive (Loss) Income Cumulative Effect, Period of Adoption, Adjusted Balance [Member] CNY (¥)	Accumulated Other Comprehensive (Loss) Income CNY (¥)	Noncontrolling Interest Cumulative Effect, Period of Adoption, Adjusted Balance [Member] CNY (¥)	Noncontrolling Interest CNY (¥)	Cumulative Effect, Period of Adoption, Adjustment [Member] CNY (¥)	Cumulative Effect, Period of Adoption, Adjusted Balance [Member] CNY (¥)	CNY (¥) shares	USD ($) shares
Balance at Dec. 31, 2018		¥ 0			¥ (107)		¥ 3,713			¥ 2,610		¥ (42)		¥ 145			¥ 6,319
Balance issued (in shares) at Dec. 31, 2018 \| shares		2,965,978,880	2,965,978,880
Balance outstanding (in shares) at Dec. 31, 2018 \| shares		2,830,760,120	2,830,760,120
Treasury shares, balance (in shares) at Dec. 31, 2018 \| shares					30,967,640
Increase (Decrease) in Stockholders' Equity
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		28,265,970	28,265,970
Share-based compensation							110										110
Net income										1,769				(8)			1,761
Cash dividends declared/paid/approved										(678)							(678)
Dividends paid to noncontrolling interest holders														(5)			(5)
Capital contribution from noncontrolling interest holders														22			22
Disposal of noncontrolling interest for deconsolidation														3			3
Acquisition of noncontrolling interest							(3)							(36)			(39)
Foreign currency translation adjustments												(7)					(7)
Balance (ASU 2016-13) at Dec. 31, 2019	¥ 0			¥ (107)		¥ 3,834		¥ (7)	¥ 3,694		¥ (49)		¥ 121		¥ (7)	¥ 7,493
Balance at Dec. 31, 2019		¥ 0			¥ (107)		3,834			3,701		(49)		121			7,500
Balance issued (in shares) (ASU 2016-13) at Dec. 31, 2019 \| shares	2,994,244,850
Balance issued (in shares) at Dec. 31, 2019 \| shares		2,994,244,850	2,994,244,850
Balance outstanding (in shares) (ASU 2016-13) at Dec. 31, 2019 \| shares	2,859,026,090
Balance outstanding (in shares) at Dec. 31, 2019 \| shares		2,859,026,090	2,859,026,090
Treasury shares, balance (in shares) (ASU 2016-13) at Dec. 31, 2019 \| shares				30,967,640
Treasury shares, balance (in shares) at Dec. 31, 2019 \| shares					30,967,640
Increase (Decrease) in Stockholders' Equity
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks		¥ 0					2										2
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks (in shares) \| shares		14,543,070	14,543,070
Share-based compensation							122										122
Issuance of ordinary shares in Hong Kong public offering		¥ 0					5,968										5,968
Issuance of ordinary shares in Hong Kong public offering (in shares) \| shares		234,854,500	234,854,500
Conversion of Convertible Senior Notes due 2022		¥ 0	$ 2,020				0										0
Conversion of Convertible Senior Notes due 2022 (In shares) \| shares		2,020	2,020
Noncontrolling interest recognized from partial disposal														2			2
Noncontrolling interest recognized in connection with acquisitions														3			3
Net income										(2,192)				(12)			(2,204)
Dividends paid to noncontrolling interest holders														(4)			(4)
Capital contribution from noncontrolling interest holders														10			10
Disposal of noncontrolling interest for deconsolidation														0			0
Loss arising from defined benefit plan, net of tax												(27)					(27)
Acquisition of noncontrolling interest							(118)							(18)			(136)
Foreign currency translation adjustments												203					203
Balance at Dec. 31, 2020		¥ 0			¥ (107)		9,808			1,502		127		102			¥ 11,432
Balance issued (in shares) at Dec. 31, 2020 \| shares		3,243,644,440	3,243,644,440														3,243,644,440	3,243,644,440
Balance outstanding (in shares) at Dec. 31, 2020 \| shares		3,108,425,680	3,108,425,680														3,108,425,680	3,108,425,680
Treasury shares, balance (in shares) at Dec. 31, 2020 \| shares					30,967,640												30,967,640	30,967,640
Increase (Decrease) in Stockholders' Equity
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks		¥ 0															¥ 0
Issuance of ordinary shares upon exercise of options and vesting of restricted stocks (in shares) \| shares		12,325,470	12,325,470
Share-based compensation							109										109
Conversion of Convertible Senior Notes due 2022		¥ 0					0										0
Conversion of Convertible Senior Notes due 2022 (In shares) \| shares		1,340	1,340
Noncontrolling interest recognized in connection with acquisitions														21			21
Net income										(465)				(15)			(480)	$ (75,000,000)
Dividends paid to noncontrolling interest holders														(4)			(4)
Capital contribution from noncontrolling interest holders														16			16
Loss arising from defined benefit plan, net of tax												13					13	2,000,000
Acquisition of noncontrolling interest							(3)							(11)			(14)
Repurchase of shares, Value		¥ 0			¥ 0		0										0
Repurchase of shares (in ordinary shares) \| shares		(6,400)	(6,400)
Repurchase of shares (in Treasury Shares) \| shares					6,400
Net settlement on shares repurchased for withholding taxes related to share-based awards							50										50
Foreign currency translation adjustments												(99)					(99)	(16,000,000)
Balance at Dec. 31, 2021		¥ 0			¥ (107)		¥ 9,964			¥ 1,037		¥ 41		¥ 109			¥ 11,044	$ 1,732,000,000
Balance issued (in shares) at Dec. 31, 2021 \| shares		3,255,971,250	3,255,971,250														3,255,971,250	3,255,971,250
Balance outstanding (in shares) at Dec. 31, 2021 \| shares		3,120,746,090	3,120,746,090														3,120,746,090	3,120,746,090
Treasury shares, balance (in shares) at Dec. 31, 2021 \| shares					30,974,040												30,974,040	30,974,040

CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Operating activities:
Net income (loss)	¥ (480)	$ (75)	¥ (2,204)	¥ 1,761
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Share-based compensation	109	17	122	110
Depreciation and amortization	1,503	236	1,362	991
Amortization of issuance cost of convertible senior notes and upfront fee of bank borrowings	60	9	83	28
Deferred taxes	(543)	(85)	(553)	(38)
Credit loss	105	16	65	21
Loss (gain) from disposal of property and equipment	(14)	(2)	1	(10)
Impairment loss	380	60	709	13
Loss from equity method investments, net of dividends	60	9	145	213
Investment loss (income)	67	11	108	(477)
Interest accretion for finance lease	4	1	27
Noncash lease expense	2,306	361	2,063	2,235
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	(113)	(18)	35	(34)
Inventories	2	0	0	(17)
Amounts due from related parties	12	2	(14)	32
Other current assets	6	1	(147)	(80)
Other assets	(64)	(9)	(86)	(175)
Accounts payable	7	1	31	(1)
Amounts due to related parties	(4)	(1)	20	17
Salary and welfare payables	72	11	(46)	(28)
Deferred revenue	224	35	(52)	279
Accrued expenses and other current liabilities	(439)	(69)	445	408
Operating lease liabilities	(2,123)	(333)	(1,640)	(2,036)
Income tax payable	83	13	94	(35)
Other long-term liabilities	122	19	41	116
Net cash provided by operating activities	1,342	210	609	3,293
Investing activities:
Purchases of property and equipment	(1,658)	(260)	(1,745)	(1,527)
Purchases of intangibles	(17)	(3)	(28)	(5)
Purchases of land use rights			(3)	(3)
Amount received as a result of government zoning	33	5		13
Acquisitions, net of cash received	(742)	(116)	(5,060)	(244)
Proceeds from disposal of subsidiary and branch, net of cash disposed	3	1	4	2
Purchases of short term and long term investments	(521)	(82)	(1,702)	(328)
Proceeds from maturity/sale and return of investments	1,494	235	396	2,002
Payment for shareholder loan to equity investees	(5)	(1)	(15)	(87)
Collection of shareholder loan from equity investees	25	4	15	88
Payment for the origination of loan receivables	(176)	(27)	(130)	(454)
Proceeds from collection of loan receivables	162	25	167	258
Net cash used in investing activities	(1,402)	(219)	(8,101)	(285)
Financing activities:
Proceeds from issuance of ordinary shares in Hong Kong public offering			6,018
Payment of ordinary share issuance costs	(19)	(3)	(32)
Net settlement on shares repurchased for withholding taxes related to share-based awards	50	7
Net proceeds from issuance of ordinary shares upon exercise of options	1	0	1	14
Payment of share repurchase	0	0
Proceeds from short-term bank borrowings	2,288	359	1,658	2,214
Repayment of short-term bank borrowings	(2,474)	(389)	(1,993)	(1,902)
Proceeds from long-term bank borrowings	53	8	1,652	13,176
Repayment of long-term bank borrowings	(1,650)	(259)	(9,163)	(6,760)
Funds advanced from noncontrolling interest holders	4	1	14	2
Repayment of funds advanced from noncontrolling interest holders	(1)	0	(9)	(19)
Acquisitions of noncontrolling interest	(29)	(4)	(98)	(39)
Contribution from noncontrolling interest holders	16	3	10	22
Proceeds from long-term finance liabilities (failed sale and leaseback "failed SLB")	38	6	83
Repayment of long-term finance liabilities (failed SLB)	(46)	(7)	(42)
Dividends paid to noncontrolling interest holders	(4)	(1)	(4)	(5)
Dividends paid			(678)	(658)
Repayment of convertible senior notes	0	0
Proceeds from issuance of convertible senior notes			3,499
Direct financing costs paid			(10)
Principal payments of finance lease	(28)	(4)	(23)
Net cash provided by (used in) financing activities	(1,801)	(283)	883	6,045
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(88)	(14)	(300)	62
Net increase (decrease) in cash, cash equivalents and restricted cash	(1,949)	(306)	(6,909)	9,115
Cash, cash equivalents and restricted cash at the beginning of the year	7,090	1,113	13,999	4,884
Cash, cash equivalents and restricted cash at the end of the year	5,141	807	7,090	13,999
Supplemental disclosure of cash flow information:
Cash and cash equivalents	5,116		7,026	3,234
Restricted cash	25		64	10,765
Interest paid, net of amounts capitalized	297	47	476	414
Income taxes paid	477	75	238	712
Cash paid for amounts included in the measurement of operating lease liabilities	3,770	592	3,309	2,905
Cash paid for amounts included in the measurement of finance lease liabilities	92	14	63
Non-cash right-of-use assets obtained in exchange for operating lease liabilities	2,565	403	1,422	4,176
Non-cash right-of-use assets obtained in exchange for finance lease liabilities	501	79	270
Non-cash right-of-use assets obtained in acquisition for operating lease	1,710	268	8,645	22
Non-cash right-of-use assets obtained in acquisition for finance lease			1,794
Non-cash lease liabilities obtained in acquisition for operating lease	1,692	266	8,849
Non-cash lease liabilities obtained in acquisition for finance lease			2,187
Supplemental schedule of non-cash investing and financing activities:
Purchases of property and equipment included in payables	486	76	736	963
Consideration payable for business acquisition	86	13		16
Purchase of intangible assets included in payables	¥ 2	$ 0	5	3
Reimbursement of government zoning included in receivables			¥ 2
Cash dividends declared				¥ 678

ORGANIZATION AND PRINCIPAL ACTIVITIES

12 Months Ended

Dec. 31, 2021

ORGANIZATION AND PRINCIPAL ACTIVITIES

ORGANIZATION AND PRINCIPAL ACTIVITIES

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 consolidated variable interest entities (the “Group”) are to develop leased and owned, manachised and franchised hotels mainly in the People’s Republic of China(“PRC”).

On January 2, 2020, the Group completed the acquisition of 100% equity interest of Steigenberger Hotels Aktiengesellschaft Germany (“Deutsche Hospitality” or “DH”). Deutsche Hospitality was engaged in the business of leasing, franchising, operating and managing hotels under five brands in the midscale and upscale market in Europe, the Middle East and Africa. After the acquisition, “legacy DH” refers to Deutsche Hospitality and its subsidiaries and “legacy Huazhu” refers to the Group excluding Deutsche Hospitality.

The Group completed public offering in Hong Kong in September 2020 with proceeds of RMB6,018 and the trading of ordinary shares on the Hong Kong Stock Exchange commenced on September 22, 2020 under the stock code “1179”.

In June 2021, the Company effected a share split that each issued and unissued ordinary share of the Company with a par value of US$0.0001 was sub-divided into 10 ordinary shares with a par value of US$0.00001 each. The ratio of ADS to ordinary share was adjusted from one (1) ADS representing one (1) ordinary share to one (1) ADS representing ten (10) ordinary shares. Except otherwise stated, the share split has been retrospectively applied for all periods presented.

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.

As of December 31, 2020 and 2021, the Group had 753 and 738 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 for legacy Huazhu and 15 to 20 years for manachised hotels and 10 to 15 years for franchised hotels under legacy DH 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, 2020 and 2021, the Group had 5,746 and 6,824 manachised hotels in operation and 290 and 268 franchised hotels in operation, respectively.

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2021

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 (“U.S. GAAP”).

The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Group’s ability to generate cash flows from operations, and the Group’s ability to arrange adequate financing arrangements, to support its working capital requirements.

The Group’s businesses have been significantly impacted by the global outbreak of COVID-19 and as a result, incurred net losses during the year ended December 31, 2020 and 2021. As of December 31, 2021, the Group’s total current liabilities exceeded its total current assets by RMB5,726 (US$898 million), which mainly attributed to the scheduled repayments of the Group’s Convertible Senior Notes of US$475 million (RMB3,027) due in November 2022, and the outstanding bank borrowing of EUR338 million (RMB2,440) under its long-term bank credit facility of EUR440 million (RMB3,177) due in December 2022. These conditions may raise substantial doubt about the Group’s ability to continue as a going concern within one year after the date that the financial statements are issued. The financial statements do not include any adjustments that might be necessary if the Group is unable to continue as a going concern.

However, the management has evaluated the significance of the conditions and regards the going concern assumption as appropriate based on the following considerations:

●

The Group generated positive cash flow from operations for several consecutive years with a net operating cash inflow of RMB1,342 for the year ended December 31, 2021;

●

The Group has performed a review of its cash flow forecasts for the twelve month period after the date that the financial statements are issued and believes that its operating cash flow will be positive.

Management believes the relevant conditions that raise substantial doubt on going concern are mitigated by the following plans and actions:

●

The Group has the ability to sell its short-term investments that can be readily convertible into cash, the fair value of which was approximately RMB2,589 as of December 31, 2021;

●

As of March 31, 2022, the Group had unused bank credit facilities of approximately RMB2,994. Based on the Group’s historical experience, requests for drawdowns will be approved by the banks provided that the Group submits the required supporting documentation and the amount is within the credit limit granted;

In addition, the Group is in the process to obtain long term credit facilities from commercial banks. While final approval has not been obtained, management of the Group believe it is likely such credit facilities can be obtained to replace its existing long-term bank credit facility of EUR 440 million (RMB3,177) due in December 2022. Based on the above factors, management believes that adequate sources of liquidity exist to fund the Group’s working capital and capital expenditures requirements, and to meet its other liabilities and commitments as they become due for at least twelve months from the issuance of these consolidated financial statements.

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, 2020 and 2021, the Group consolidated eight and seven entities under VIE model, and the impact 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 Note 7 Investments.

Use of estimates

The preparation of financial statements in conformity with U.S. 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, right-of-use assets and intangible assets with definite lives, valuation allowance of deferred tax assets, purchase price allocation, impairment of investment, goodwill and intangible assets without definite lives and incremental borrowing rate used to measure lease 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, deposits restricted due to contract disputes or lawsuit and cash restricted for special purposes.

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.

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. Before the adoption of Accounting Standards Update (“ASU”) 2016-13 (codified as ASC 326), Measurement of Credit Losses on Financial Instruments, the amount of the total impairment related to the credit loss was recognized in the income statement and the amount related to all other factors is recognized in other comprehensive income, net of applicable taxes, and the impairment losses recognized in the income statement cannot be reversed for any future recoveries. After the adoption of ASC 326 on January 1, 2020, credit-related impairment is measured as the difference between the debt security’s amortized cost basis and the present value of expected cash flows and is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings. The allowance should not exceed the amount by which the amortized cost basis exceeds fair value.

As a result of the impairment analysis, the Group recorded an impairment of RMB10, RMB92 and RMB63 in 2019, 2020 and 2021, respectively.

Accounts receivable, loan receivables and other financial assets

Accounts receivable, net

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 or accrued amount less an allowance for credit losses. Before the year 2020, the Group established an allowance for doubtful accounts primarily based on the aging of the receivables and factors surrounding the credit risk of specific customers. After the adoption of ASC 326 Financial instruments- credit losses on January 1, 2020, the accounts receivable balance reflects invoiced and accrued revenue and is presented net of an allowance for credit losses. The Group establishes current expected credit losses (“CECL”) for pools of assets with similar risk characteristics by evaluating historical levels of credit losses, current economic conditions that may affect a customer’s ability to pay, and creditworthiness of significant customers. When specific customers are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. The Group mainly focuses on historical collection experience and considers aging or specific customer circumstance.

Additionally, the Group records an allowance on other forms of financial assets, including other current assets, other assets and amounts due from related parties with the similar approach of accounts receivable.

Loan receivables, net

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 unrelated third-parties with the annual interest rates mostly ranging from 4.8% to 15.0%. 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. Before the year of 2020, 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 credit allowance will be established for the loans unable to collect. The Group adopted ASC 326 on January 1, 2020 utilizing the modified retrospective approach. After the adoption of ASC 326, the Group estimates the CECL based on the expectation of future economic conditions, historical collection experience and a loss-rate approach whereby the allowance is calculated using the probability of default and recovery rates and multiplying it by the asset’s amortized cost at the balance sheet date.

Inventories

Inventories mainly consist of small appliances, bedding and daily consumables, operating supplies, food and beverage inventory items. 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. The renovations, betterments and interest cost incurred during construction are capitalized. Depreciation 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		1-20 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

Intangible assets consist primarily of brand name, master brand agreement, non-compete agreements, franchise or manachise agreements 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 or manachise agreements, favorable lease agreements and other intangible assets acquired from business combination are recognized and measured at fair value upon acquisition.

Non-compete agreements and franchise or manachise agreements are amortized over the expected useful life and remaining franchise contract terms, respectively. Purchased software is stated at cost less accumulated amortization.

The favorable lease agreements in which the Group acts as a lessor were accounted as intangible assets as before, which are amortized over remaining operating lease terms.

Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives over which the assets are expected to contribute directly or indirectly to the future cash flows of the Group. These estimated useful lives are generally as follows:


Franchise or manachise agreements		Remaining contract terms from 10 to 20 years
Non-compete agreements		2 - 10 years based on specified non-compete period
Purchased software		3 - 10 years based on the estimated usage period
Other intangible assets including trademark, licenses and other rights		2 - 15 years based on the contractual term, the length of license agreements and the effective terms of other legal rights

Almost all the brand names acquired by the Group are considered to have indefinite useful lives since there are no legal, regulatory, contractual, competitive, economic or other factors that limit the useful lives of these brands and these brands can be renewed at nominal cost. Master brand agreement, acquired in Accor acquisition, 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 names and master brand agreement with its carrying amount. If the carrying amount of brand names 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 names under the relief-from-royalty method, the master brand agreement under the multi-period excess earnings method. The determination of the fair value requires management to make significant estimates and assumptions related to forecasts of future revenues, operating margin, royalty saving rate and discount rates to estimate the net present value of future cash flows.

Management performs its annual brand names and master brand agreement impairment test on November 30 and when triggering events occurred. As of December 31, 2020 and 2021, the estimated fair value of the indefinite-lives intangible assets of legacy Huazhu significantly exceeded of its carrying value. Therefore, there was no impairment loss recognized for the years ended December 31, 2019, 2020 and 2021. For its indefinite-lives intangible assets of legacy DH, there were 3 brand names acquired in DH acquisition. The estimated fair value of one brand name was lower than its carrying amount, and an impairment of RMB160 was recognized, which reduced the carrying value by 6%. A 5% increase in the discount rate or decrease in royalty saving rate could result in further impairment charges of approximately RMB160 and RMB120, respectively. In addition, the estimated fair value of the other two brand names acquired in DH acquisition exceeded its carrying value by approximately RMB82 and RMB57, which accounted for 13% and 14% of its carrying value, respectively. A 5% increase in the discount rate or decrease in royalty saving rate could reduce the fair value of these two brand names by RMB48 and RMB33, or RMB36 and RMB23, respectively.

Land use rights

The land use rights represent the operating lease prepayments for the rights to use the land in the PRC under ASC 842, which are 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, 2019, 2020 and 2021 amounted to RMB8, RMB7 and RMB7, respectively.

Impairment of long-lived assets

The Group evaluates its long-lived assets including property and equipment, net, right-of-use 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 long-lived assets exceeded the future undiscounted net cash flows, and recognized an impairment loss of RMB3, RMB180 and RMB157 during the years ended December 31, 2019, 2020 and 2021, respectively.

Fair value of the long-lived assets 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. Before the adoption of ASU No. 2017-04, Intangibles-Goodwill and Other, the Group performed 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 an operating segment or one level below an operating segment (also known as a component) for which discrete financial information is available and is regularly reviewed by segment manager. Before the acquisition of Deutsche Hospitality, 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 Group 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. The Group adopted ASU No. 2017-04, Intangibles-Goodwill and Other on January 1, 2020, which requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. Upon the acquisition of Deutsche Hospitality, the Group concludes there are two reporting units, which are legacy Huazhu and legacy DH since the segment manager regularly reviews discrete financial information for legacy Huazhu and legacy DH separately. The goodwill impairment testing was performed at each reporting unit level. If the carrying amount of a reporting unit exceeds its fair value, an impairment amounts to that excess should be recognized in the statement of comprehensive income.

Fair value of the equity value 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.

Management performs its annual goodwill impairment test on November 30 and when triggering events occurred. The Group recorded an impairment of nil, RMB437 and nil for the years ended December 31, 2019, 2020 and 2021. The Group considered assumptions based on the current economic environment in its annual impairment assessment, including the inherent risk and uncertainty due to the stay-in-place measures enacted, consumer confidence levels, and the ongoing impact of the COVID-19 pandemic on the hospitality industry. Based on the analysis, the Group concluded that the goodwill of legacy Huazhu was not impaired for the years ended December 31, 2019, 2020 and 2021 as the estimated fair value of the reporting unit of legacy Huazhu far exceeded its carrying value as of the end of each year. For the goodwill of legacy DH, the Group performed impairment test and recorded an impairment of RMB437 during the year of 2020. The estimated fair value of the reporting unit of legacy DH exceeded its carrying value, as such no impairment charges were recorded for the year ended December 31, 2021.

As of December 31, 2020 and 2021, the estimated fair value of the reporting unit of legacy Huazhu exceeded over 100%of its carrying value. As of December 31, 2020 and 2021, the estimated fair value of the reporting unit of legacy DH exceeded its carrying value by approximately RMB244 and RMB421, which accounted for 6% and 13% of its carrying value. A 5% decline in the underlying projected cash flow or increase in the discount rate could have resulted in goodwill impairment charges of approximately RMB42 and RMB175 in 2020. A 5% decline in the underlying projected cash flows or increase in the discount rate could have reduced the fair value of approximately RMB313 and RMB359 in 2021.

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 manachise and franchise 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 or manachise 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.

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.

Above policies are only applicable to legacy Huazhu. For manachised hotels under Deutsche Hospitality, the franchisees have historically been required to pay Deutsche Hospitality an on-going management fees consisting of a base fee as a percentage of the hotel’s gross revenues and an incentive fee as a percentage of the hotel’s gross adjusted profit. For franchised hotels under Deutsche Hospitality, the franchisees have historically been required to pay Deutsche Hospitality a license fee, a franchise fee and a central service fee. The manachised and franchised hotel revenues of Deutsche Hospitality are recognized over time as services are rendered. The Group is gradually conforming the terms of Deutsche Hospitality’s franchise and management agreements to those of hotels under legacy Huazhu.

Since the COVID-19 outbreak in January 2020, the Group has offered one-time reduction on continuing franchise fees of approximately RMB132 and RMB105 for 2020 and 2021 to help franchisees meet their short-term working capital needs. There is no change to the scope of services or other terms of the agreements. Previously recognized revenue on the original contract was not adjusted.

Other Revenues

Other revenues are derived from activities other than the operation of hotel businesses, which mainly include revenues from the provision of IT products and services and Hua Zhu mall. 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.

Above policies are only applicable to legacy Huazhu. The loyalty program initiated by Deutsche Hospitality has substantially the same rights, nature and redeemable approaches as legacy Huazhu, therefore the accounting treatment is the same. As of December 31, 2021, the contract liabilities related to Deutsche Hospitality were immaterial and the loyalty program of Deutsche Hospitality was in the progress of being migrated to that of legacy Huazhu.

Membership fees from the Group’s customer loyalty program are all from legacy Huazhu, which are earned and recognized on a straight-line basis over the expected membership duration of the different membership levels and also applicable to legacy Huazhu only. 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 RMB224, RMB223 and RMB243 for the years ended December 31, 2019, 2020 and 2021, 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.

Value-Added Taxes and surcharges

The accommodation services of the Group in PRC and Germany are subject to a range from 6% to 19% of Value-Added Taxes, respectively. 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 RMB99, RMB150 and RMB165 for the years ended December 31, 2019, 2020 and 2021, 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 under legacy Huazhu. 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 by legacy Huazhu were RMB148, RMB154 and RMB110 for the years ended December 31, 2019, 2020 and 2021, respectively, which were recorded as other operating income.

Government grants represent cash received by the Group as compensation for COVID-19 impacts in various countries under legacy DH. The grants consist of short term work compensation, fixed costs compensation and revenue based compensation. Short term work compensation recognized by legacy DH was RMB244 and RMB197 for the year ended December 31, 2020 and 2021, which was netted with operating costs and expenses. Other grants recognized by legacy DH were RMB17 and RMB765 for the year ended December 31, 2020 and 2021, which were recorded as other operating income.

Leases

As a lessee

Starting from January 1, 2019, the Group adopted ASU 2016-02, Leases (Topic 842), which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. All of the Group’s leases were classified under ASC Topic 842 as operating leases upon this adoption and there are both capital lease and operating lease under legacy DH since the acquisition of DH. The Group elected the practical expedients under ASU 2016-02 which includes the use of hindsight in determining the lease term and the practical expedient package to not reassess whether any expired or existing contracts are or contain leases, to not reassess the classification of any expired or existing leases, and to not reassess initial direct costs for any existing leases. The adoption of ASU 2016-02 did not materially affect the consolidated statements of income or consolidated statements of cash flows and had no impact on the debt covenant compliance under the current agreements.

The Group recognizes a lease liability for future fixed lease payments and variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date and a ROU asset representing the right to use the underlying asset for the lease term. Lease liabilities are recognized at commencement date based on the present value of fixed lease payments and variable lease payments that depend on an index or a rate (initially measured using the index or rate as at the commencement date) over the lease term using the rate implicit in the lease, if available, or the Group’s incremental borrowing rate. As its leases do not provide an implicit borrowing rate, the Group uses an incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the commencement date. Upon adoption of ASU 2016-02, the Group elected to use the remaining lease term as of January 1, 2019 in the estimation of the applicable discount rate for leases that were in place at adoption. For the initial measurement of the lease liability for leases commencing after January 1, 2019, the Group uses the discount rate as of the commencement date of the lease, incorporating the entire lease term. Current maturities of operating lease liabilities and finance lease liabilities are classified as operating lease liabilities, current and finance lease liabilities, current, respectively, in the Group’s consolidated balance sheets. Long-term portions of operating lease liabilities and finance lease liabilities are classified as operating lease liabilities, non-current and finance lease liabilities, non-current, respectively, in the Group’s consolidated balance sheets. Most leases have initial terms ranging from 10 to 20 years for legacy Huazhu, and from 20 to 25 years for legacy DH. The lease term includes lessee options to extend the lease and periods occurring after a lessee early termination option, only to the extent it is reasonably certain that the Group will exercise such extension options and not exercise such early termination options, respectively. The Group’s lease agreements may include nonlease components, mainly common area maintenance, which are combined with the lease components as the Group elects to account for these components as a single lease component, as permitted. The Group elected the practical expedient of not to separate land components outside PRC from leases of specified property and equipment at the ASC842 transition date. Besides, the Group’s lease payments are generally fixed and certain agreements contain variable lease payments based on the operating performance of the leased property and the changes in the index of consumer pricing index (“CPI”). Almost all the lease agreements with variable lease payments based on the changes in CPI are held by legacy DH. For operating leases, the Group recognizes lease expense on a straight-line basis over the lease term and variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period in which the obligation for those payments is incurred. The operating lease expense is recognized as hotel operating costs, general and administrative expenses and pre-opening expenses in the consolidated statements of comprehensive income. For finance lease, lease expense is generally front-loaded as the finance lease ROU asset is depreciated on a straight-line basis over the shorter of the lease term or useful life of the underlying asset within hotel operating costs in the consolidated statements of comprehensive income, but interest expense on the lease liability is recognized in interest expense in the consolidated statements of comprehensive income using the effective interest method which results in more expense during the early years of the lease. Additionally, the Group elected not to recognize leases with lease terms of 12 months or less at the commencement date. Lease payments on short-term leases are recognized as an expense on a straight-line basis over the lease term, not included in lease liabilities. The Group’s lease agreements do not contain any significant residual value guarantees or restricted covenants.

The ROU assets are measured at the amount of the lease liabilities with adjustments, if applicable, for lease prepayments made prior to or at lease commencement, initial direct costs incurred by the Group, deferred rent and lease incentives, and any off-market terms (that is, favorable or unfavorable terms) present in the lease when the Group acquired leases in a business combination in which the acquiree acts as a lessee. The Group evaluates the carrying value of ROU assets if there are indicators of impairment and reviews the recoverability of the related asset group. The Group excludes the lease obligation from the carrying value of the asset group. Accordingly, the lease payments (both principal and interest) don’t reduce the undiscounted expected future cash flows used to test the asset group for recoverability. If the carrying value of the asset group cannot be recoverable and is in excess of the estimated fair value, the Group records an impairment loss in the consolidated statements of comprehensive income. Noncash lease expense are used as the noncash add-back for the amortization of the operating ROU assets to the operating section of the consolidated statements of cash flow.

The Group reassesses of a contract is or contains a leasing arrangement and re-measures ROU assets and liabilities upon modification of the contract. The Group will derecognize ROU assets and liabilities, with difference recognized in the consolidated statements of comprehensive income on the contract termination.

In April 2020, the FASB released a Q&A which allows lessees and lessors to make an election to either apply the lease modification guidance or the variable rents guidance under ASC 840 and ASC 842 for lease concessions related to COVID-19 as long as the total cash flows as a result of the concession are substantially the same or less than those in the contract before the concession. A preparer can make this election without the need to determine whether a force majeure clause exists in the lease. The Group has elected to account for the lease concessions as variable lease expenses.

The favorable lease agreements and unfavorable lease agreements in which the Group acts as a lessee were reclassified to operating lease right-of-use assets on January 1, 2019, upon adoption of ASC 842, Leases, which are amortized combining with right-of-use assets over remaining operating lease terms. These estimated useful lives are generally as follows:


Favorable lease agreements acquired before the adoption of ASC 842		Remaining lease terms from 1 to 20 years
Unfavorable lease agreements		Remaining lease terms from 3 to 13 years

Sublease

The Group subleases property which are not suitable to operate hotels to third parties under operating leases. In accordance with the provisions of ASC 842, since the Group has not been relieved as the primary obligor of the head lease, the Group cannot net the sublease income against its lease payment to calculate the lease liability and ROU asset. The Group’s practice has been, and will continue to, straight-line the sub-lease income over the term of the sublease, which is consistent with the accounting treatment under ASC840.

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. For a particular tax-paying component of an entity and within a particular tax jurisdiction, all deferred tax liabilities and assets, as well as any related valuation allowance, shall be offset and presented as a single noncurrent amount. However, an entity shall not offset deferred tax liabilities and assets attributable to different tax-paying components of the entity or to different tax jurisdictions.

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$”). Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured in 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 gain (loss) arising from defined benefit plan.

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, other current assets, other assets and accounts receivable. All of the Group’s cash and cash equivalents and restricted cash are held with financial institutions that Group’s 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 credit losses for accounts receivable, loan receivable and financial assets, including other current assets, other assets and amounts due from related parties based on the expectation of future economic conditions, historical collection experience and a loss-rate approach.

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.

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. 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. The carrying amounts of convertible senior notes were RMB3,290, RMB6,318 and RMB6,186 and the corresponding fair value estimated based on quoted market price were RMB3,711, RMB7,747 and RMB6,681, as of December 31, 2019, 2020 and 2021, respectively. The fair value of pension plan assets is discussed in Note 18.

As of December 31, 2020 and 2021, 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
As of			Assets	Observable Inputs	Inputs
December 31,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2020	Equity securities with readily determinable fair value	3,903	3,903	—	—
2020	Available-for-sale debt securities	220	—	220	—
2020	Employee benefit plan assets	6	6	—	—
2021	Equity securities with readily determinable fair value	2,589	2,589	—	—
2021	Available-for-sale debt securities	220	—	220	—
2021	Employee benefit plan assets	5	5	—	—

The following table presents the Group’s assets measured at fair value on a non-recurring basis for the years ended December 31, 2020 and 2021:


			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active	Significant
			Markets for	Other	Significant
		Fair Value for	Identical	Observable	Unobservable	Total
Years Ended		Years Ended	Assets	Inputs	Inputs	Loss for
December 31,	Description	December 31	(Level 1)	(Level 2)	(Level 3)	the Year
2020	Property and equipment	2	—	—	2	41
2020	Operating lease right-of-use assets	71	—	—	71	139
2020	Long-term investment	—	—	—	—	92
2020	Goodwill	2,328	—	—	2,328	437
2021	Property and equipment	33	—	—	33	24
2021	Operating lease right-of-use assets	88	—	—	88	48
2021	Intangible assets	2,556	—	—	2,556	245
2021	Long-term investment	—	—	—	—	63

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 RMB3, RMB43 and RMB57 was not fully recoverable and consequently recorded an impairment charge of RMB3, RMB41 and RMB24 for the years ended December 31, 2019, 2020 and 2021, respectively. The Group also determined that the operating lease right-of-use assets amount with a carrying amount of nil, RMB210 and RMB136 was not fully recoverable and recorded an impairment charge of nil, RMB139 and RMB48 for the years ended December 31, 2019, 2020 and 2021, respectively.

Fair value of the property and equipment and operating lease right-of-use assets impairment testing were 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 ranged between negative 15%and 4%, 8.64% and 20%, respectively, for the years ended December 31, 2019, 2020 and 2021, respectively.

As a result of the impairment assessment, the Group determined that the intangible assets amount with a carrying amount of nil, nil and RMB2,801 exceeded their fair value and recorded an impairment charge of nil, nil and RMB245 for the years ended December 31, 2019, 2020 and 2021, respectively.

As a result of the impairment assessment, the Group determined that the long-term investment amount with a carrying amount of RMB10, RMB92 and RMB63 was fully impaired as a result of the impairment assessment for the years ended December 31, 2019, 2020 and 2021, respectively.

As a result of the impairment assessment, the Group determined that the goodwill amount with a carrying amount of nil, RMB2,768 and nil was impaired and recorded an impairment charge of nil, RMB437 and nil for the years ended December 31, 2019, 2020 and 2021, 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, 2019, 2020 and 2021, the Group recognized share-based compensation expenses of RMB110, RMB122 and RMB109, respectively, which were classified as follows:


	Years Ended December 31,
	2019	2020	2021
Hotel operating costs	35	42	39
Selling and marketing expenses	3	4	4
General and administrative expenses	72	76	66
Total	110	122	109

Earnings (losses) per share

Basic earnings (losses) 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 (losses) 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 (losses) per share calculation unless default of the ADS lending arrangement occurs which the Group considered the possibility is remote.

Segment and geography information

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. Before the acquisition of DH completed on January 2, 2020, 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 Hotel Management has been migrated to the Group’s business, and the Group operates and manages its business as a single segment. After the acquisition of DH, CODM regularly reviews the operating data and EBITDA, which is defined as earnings before interest income, interest expense, income tax expense (benefit) and depreciation and amortization, a financial measure for legacy Huazhu and legacy DH separately to evaluate their performance. Therefore, in January 2020, the Group modified its operating segment structure to be two operating segments which are legacy Huazhu and legacy DH as a result of a change in the way management intends to evaluate results and allocate resources within the Group. In identifying its reportable segments, the Group assesses nature of operating segments and evaluates the operating results of each reporting segments. Both operating segments meet the quantitative thresholds and should be considered as two reportable segments.

The following table provides a summary of the Group’s operating segment results for the years ended December 31, 2020 and 2021. The Group presents segment information after elimination of intercompany transactions.


	Years Ended December 31,
	2020			2021
	Legacy	Legacy		Legacy	Legacy
	Huazhu	DH	Total	Huazhu	DH	Total

Total revenues	8,664	1,532	10,196	11,247	1,538	12,785
Operating costs and expenses	8,978	2,947	11,925	10,549	3,058	13,607
Goodwill impairment loss	—	437	437	—	—	—
Other operating income, net	214	266	480	193	793	986
Interest income	118	1	119	88	1	89
Interest expense	427	106	533	291	114	405
Other (expenses) income, net	(92)	3	(89)	139	18	157
Unrealized (losses) gains from fair value changes of equity securities	(266)	1	(265)	(96)	—	(96)
Foreign exchange gain (loss)	176	(1)	175	(294)	(23)	(317)
(Loss) income before income tax	(591)	(1,688)	(2,279)	437	(845)	(408)
Income tax expense (benefit)	151	(366)	(215)	249	(237)	12
(Loss) from equity method investments	(117)	(23)	(140)	(50)	(10)	(60)
Net loss attributable to noncontrolling interest	(12)	—	(12)	(15)	—	(15)
Net (loss) income attributable to Huazhu Group Limited	(847)	(1,345)	(2,192)	153	(618)	(465)
Income tax expense (benefit)	151	(366)	(215)	249	(237)	12
Interest income	118	1	119	88	1	89
Interest expense	427	106	533	291	114	405
Depreciation and amortization	1,123	239	1,362	1,222	281	1,503
EBITDA	736	(1,367)	(631)	1,827	(461)	1,366

The following table presents total assets for operating segments, reconciled to consolidated amounts:

As of December 31,

2020

2021

Legacy Huazhu

Legacy DH

Total

Legacy Huazhu

Legacy DH

Total

Total assets

46,243

18,912

65,155

45,353

17,916

63,269

The following tables represent revenues and property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill by geographical region.

Revenues:


	Years Ended December 31,
	2020	2021
China	8,647	11,231
Germany	1,212	1,263
All others	337	291
Total	10,196	12,785

Property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill:


	As of December 31,
	2020	2021
China	30,635	33,143
Germany	15,670	13,884
All others	2,544	2,929
Total	48,849	49,956

Other than China and Germany, there were no countries that individually represented more than 10% of the total revenue and certain long lived assets for the years ended and as of December 31, 2020 and 2021.

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, 2020 and 2021, under the repurchase plan, the Company had repurchased an aggregate of 30,967,640 and 30,974,040 ordinary shares on the open market for cash consideration of RMB107 and RMB107, respectively. 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

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20). The amendment modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The revised guidance is effective for financial statements issued for fiscal years beginning after December 15, 2020, with early adoption permitted. The Group adopted the guidance on January 1, 2021, as required. There was no material impact on the Group’s consolidated financial statements and related disclosures as a result of adopting this new standard.

In December 2019, the FASB has issued ASU No. 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. The guidance issued in this update simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities for outside basis differences. This ASU also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Group adopted the guidance on January 1, 2021, as required. There was no material impact on the Group’s consolidated financial statements and related disclosures as a result of adopting this new standard.

In January 2020, the FASB has issued ASU No. 2020-01, Investments — Equity Securities (Topic 321), Investments — Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 — a consensus of the FASB Emerging Issues Task Force. This update addresses the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting. Further, the update addresses scope considerations for forward contracts and purchased options on certain securities. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted the guidance on January 1, 2021, as required. There was no material impact on the Group’s consolidated financial statements and related disclosures as a result of adopting this new standard.

Accounting Standards Not Yet Adopted

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The amendments create an exception to the general recognition and measurement principal in ASC 805, Business Combinations to measure assets and liabilities acquired in a business combination at fair value. Instead, an acquirer in a business combination will be required to apply ASC 606 to recognize and measure contract assets and contract liabilities that result from contracts accounted for under ASC 606 on the acquisition date and will generally result in the acquirer recognizing amounts consistent with those recorded by the acquiree immediately before the acquisition date. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Group does not expect the adoption of this ASU will have a significant impact on the consolidated financial statements.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) — Disclosures by Business Entities about Government Assistance. The amendments in this ASU require disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about (1) the types of transactions, (2) the accounting for the transactions, and (3) the effect of the transactions on an entity’s financial statements. The amendments in this ASU are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021. Early application of the amendments is permitted. The Group does not expect this ASU would have a material impact on the consolidated financial statements.

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 = RMB6.3726, on December 30, 2021, 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 30, 2021, or at any other rate.

ACQUISITIONS

12 Months Ended

Dec. 31, 2021

ACQUISITIONS

ACQUISITIONS

3.ACQUISITIONS

(i) During the years ended December 31, 2019, 2020 and 2021, the Group acquired three, three and three individual companies for total cash consideration of RMB54, RMB26 and RMB51, respectively. The business acquisitions were accounted for under purchase accounting. The assets and liabilities of these hotels and companies acquired in 2019, 2020 and 2021 were immaterial to the consolidated financial statements.

(ii) On January 2, 2020, the Group completed the acquisition of 100% equity interest of Deutsche Hospitality. Deutsche Hospitality was engaged in the business of leasing, franchising, operating and managing hotels under five brands in the midscale and upscale market in Europe, the Middle East and Africa. The aggregated consideration was EUR720 million (equivalent to RMB5,624) which has been fully paid in cash as of January 2, 2020.

The total revenue and net loss of the acquiree included in the consolidated statements of comprehensive income for the year ended December 31, 2020 were RMB1,532 and RMB1,345, respectively.

The following table summarizes unaudited pro forma results of operation for the years ended December 31, 2019 and 2020 assuming that the acquisition occurred as of January 1, 2019. 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, 2019.


	Period Ended December 31,
	2019	2020
Pro forma total revenue	14,995	10,196
Pro forma net income (loss) attributable to Huazhu Group Limited	1,780	(2,204)

The Group incurred transaction cost of RMB70 for the acquisition, which was expensed in 2019. These expenses are non-recurring in nature, and were eliminated from the calculation of pro forma net income above.

The allocation of the purchase price as of the date of acquisition is summarized as follows:


		Amortization Period
Current assets	785
Property and equipment, net	586	2-25 years
Operating lease right-of-use assets	8,616	Remaining lease terms
Financing lease right-of-use assets	1,794	Shorter of estimated useful lives of the assets and the lease terms
Franchise or manachise agreements	270	Remaining contract terms
Brand names	3,873	Indefinite-life
Non-compete agreement	10	2 years
Goodwill	2,694
Deferred tax assets	170
Other non-current assets	280
Operating lease liabilities, current	(296)
Finance lease liabilities, current	(21)
Other current liabilities	(784)
Operating lease liabilities, non-current	(8,553)
Finance lease liabilities, non-current	(2,166)
Other noncurrent liabilities	(330)
Deferred tax liabilities	(1,304)
Total	5,624

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. The goodwill generated from the DH acquisition is allocated to the reporting unit of legacy DH. None of the Goodwill is expected to be deductible for tax purposes.

(iii) On April 30,2021, the Group completed the acquisition of 100% equity interest of CitiGO hotels from Cjia Group, a related party of the Group. CitiGO brand is a light luxury and social hotel brand, which are mainly distributed in first and second-tier cities in China. The aggregated consideration was RMB783 and RMB749 was paid in cash as of December 31, 2021.

The total revenue and net loss of the acquiree included in the consolidated statements of comprehensive income for the year ended December 31, 2021 were RMB184 and RMB34, respectively.

The following table summarizes unaudited pro forma results of operation for the years ended December 31, 2020 and 2021 assuming that the acquisition of CitiGO hotels occurred as of January 1, 2020. The transaction cost incurred was not material. 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, 2020.


	Period Ended December 31,
	2020	2021
Pro forma total revenue	10,346	12,861
Pro forma net loss attributable to Huazhu Group Limited	(2,318)	(480)

The allocation of the purchase price as of the date of acquisition is summarized as follows:


		Amortization Period
Current assets	34
Property and equipment	296	5-12 years
Operating lease right-of-use assets	1,119	Remaining lease terms
Other non-current assets	33
Franchise agreement	61	Remaining contract terms
Brand names	90	Indefinite-life
Goodwill	372
Operating lease liabilities, current	(153)
Other current liabilities	(23)
Operating lease liabilities, non-current	(987)
Other noncurrent liabilities	(5)
Deferred tax liabilities	(33)
Noncontrolling interest	(21)
Total	783

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. All the acquired business has been migrated to the Group’s business. The goodwill generated from the CitiGO acquisition is allocated to the reporting unit of legacy Huazhu. None of the Goodwill is expected to be deductible for tax purposes.

REVENUE FROM CONTRACTS WITH CUSTOMERS

12 Months Ended

Dec. 31, 2021

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

4.REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregated Revenues

The following tables present the Group’s revenues disaggregated by the nature of the product or service:


	Years Ended December 31,
	2019	2020	2021
Room revenues	7,057	5,735	7,024
Food and beverage revenues	351	608	694
Others	310	565	400
Leased and owned hotels revenue	7,718	6,908	8,118
Initial one-time franchise fee	93	110	109
On-going management and service fees	1,228	1,057	1,479
Central reservation system usage fees, other system maintenance and support fees	908	908	1,399
Reimbursements for hotel manager fees	581	657	897
Other fees	532	404	520
Manachised and franchised hotels revenue	3,342	3,136	4,404
Other revenues	152	152	263
Total revenues	11,212	10,196	12,785

Contract Balances

The Group’s contract assets are insignificant at December 31, 2020 and 2021.


	As of December 31,
	2020	2021
Current contract liabilities	1,272	1,366
Long-term contract liabilities	662	785
Total contract liabilities	1,934	2,151

The contract liabilities balances above which are classified as deferred revenue on the consolidated balance sheet, as of December 31, 2020 and 2021 were comprised of the following:


	As of December 31,
	2020	2021
Initial fees received from franchisees owners	924	1,074
Cash received for membership fees and not recognized as revenue	430	519
Advances received from customers	529	505
Deferred revenue related to the loyalty program	51	53
Total	1,934	2,151

The Group classifies initial fees received from franchisees into current liabilities when the hotel has not yet opened. Initial fees received from franchisees for pre-opening hotels are RMB429 and RMB496 as of December 31, 2020 and 2021, respectively. Once the hotel opens, initial one-time franchise fee will be recognized as revenue over the term of the franchise contract and the initial fees received from franchisees that has not been recognized as revenue will be reclassified into current contract liabilities and long-term contract liabilities, respectively.

The Group recognized revenues that were previously deferred as contract liabilities of RMB748 and RMB613 during the years ended December 31, 2020 and 2021, 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, 2021, the Group had RMB53 of deferred revenues related to unsatisfied performance obligations under H Rewards that will be recognized as revenues when the points are redeemed, which the Group estimate will occur over the next two years. The Group had RMB1,074 of deferred revenues related to initial fees received from franchisees owners are expected to be recognized as revenues over the remaining contract periods over generally one to ten years. Additionally, the Group had RMB519 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. The Group also had RMB505 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.

The Group did not estimate revenues expected to be recognized related to the Group’s 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.

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2021

PROPERTY AND EQUIPMENT, NET

5.PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following:


	As of December 31,
	2020	2021
Cost:
Buildings	247	305
Leasehold improvements	9,542	10,467
Furniture, fixtures and equipment	2,008	2,348
Motor vehicles	1	3
	11,798	13,123
Less: Accumulated depreciation	5,764	6,845
	6,034	6,278
Construction in progress	648	778
Property and equipment, net	6,682	7,056

Depreciation expense was RMB967, RMB1,219 and RMB1,352 for the years ended December 31, 2019, 2020 and 2021, 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

12 Months Ended

Dec. 31, 2021

INTANGIBLE ASSETS, NET

INTANGIBLE ASSETS, NET

6.INTANGIBLE ASSETS, NET

Intangible assets, net consist of the following:


	As of December 31,
	2020	2021
Intangible assets with indefinite lives:
Brand names (Note 3)	5,319	5,010
Master brand agreement	192	192
Intangible assets with finite lives:
Franchise or manachise agreements	356	366
Favorable lease agreements from sublease	12	11
Purchased software	108	142
Other intangible assets	70	70
Total	6,057	5,791
Less: Accumulated amortization	112	163
Less: Accumulated impairment loss(Note2)	—	243
Total	5,945	5,385

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.

Amortization expense of intangible assets for the years ended December 31, 2019, 2020 and 2021 amounted to RMB16, RMB62, and RMB65, respectively.

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


		Amortization for Intangible Assets
2022		37
2023		36
2024		32
2025		31
2026		28
Thereafter		180
Total		344

INVESTMENTS

12 Months Ended

Dec. 31, 2021

INVESTMENTS.

INVESTMENTS

7.INVESTMENTS

The investments as of December 31, 2020 and 2021 were as follows:


	As of December 31,
	2020	2021
Equity securities with readily determinable fair values:
Accor	3,849	2,508
Other marketable securities	54	81
Equity securities without readily determinable fair values:
Cjia/Cjia Group	183	168
OYO	66	54
Other equity securities without readily determinable fair values	72	71
Equity-method investments:
AAPC LUB	490	525
Hotel related funds	476	488
China Hospitality JV	103	99
Zleep	88	68
Commerz Real Institute	—	85
Other investments	225	187
Available-for-sale debt securities:
Cjia/Cjia Group	220	220
Total	5,826	4,554

Equity securities with readily determinable fair values:

In 2019, 2020 and 2021, the Group purchased 282,787 and 8,737,987 and 1,180,000 ordinary shares of Accor, respectively,a hotel group listed in Paris stock exchange, from open market. In 2020 and 2021, the Group sold out 1,003,654 and 5,172,458 of these shares with losses of RMB21 and gains of RMB209 realized, respectively. As of December 31, 2021, the Group accumulatively hold 12,212,552 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 2020 and 2021, the Group recognized unrealized losses from fair value changes of Accor of RMB253 and RMB94, respectively.

At December 31, 2020 and 2021, the Group had RMB54 and RMB81, respectively, of other marketable securities, which represent investments in entities in hospitality or related industries where the Group does not have the ability to significantly influence the operations of these entities. In 2019, 2020 and 2021, the Group recognized unrealized losses from fair value changes of other marketable securities of RMB35, RMB12 and RMB2, respectively.

Equity securities without readily determinable fair values:

As of December 31, 2018, the Group had approximately 17% equity interest and US$45 million in preferred shares of China Cjia Group Limited (“Cjia Group”). In addition, the Group had RMB 252 convertible notes in Cjia Group. In 2019, Cjia Group repurchased from the Group part of its ordinary shares and preferred shares and issued new shares to an unrelated investor. As a result, the Group recognized a gain of RMB9 in other income in 2019. As of December 31, 2020 and 2021, the Group had approximately 15% and 16% ordinary shares of Cjia Group, respectively. The Group accounted for the ordinary shares in Cjia Group under equity-method as the Group has the ability to exert significant influence. The convertible notes are recorded as available-for-sale debt securities. The preferred shares are accounted for as equity securities without readily determined fair value as they are not in substance ordinary shares. The Group recognized investment loss of RMB45, RMB49 and RMB15 in income (loss) from equity method investments in 2019, 2020 and 2021, respectively. Loss from equity method investments reduced the cost of equity-method investment to zero and further adjusted the carrying amount of preferred shares and convertible notes.

In September 2017, the Group purchased approximately 1% equity interest of Oravel Stays Private limited (“OYO”), an India leading hospitality company. During the year ended December 31, 2021, the group sold part of equity interest, and recognized investment income of RMB52 in 2021. As of December 31, 2021, the Group owned less than 1% equity interest of OYO. 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.

Other equity securities without readily determinable fair values included several insignificant investments in certain privately-held companies. As a result of the COVID-19 pandemic, the Group recognized an impairment of RMB45 and nil for these equity securities for the year ended December 31, 2020 and 2021, respectively.

Equity-method investments:

In January 2016, the Group acquired approximately 28% equity interest in AAPC LUB. 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 RMB47, RMB21 and RMB35 in income (loss) from equity method investments in 2019, 2020 and 2021, respectively. In 2019, 2020 and 2021, the Group received cash dividend from AAPC LUB of RMB39, nil and nil which was recognized as return on investment.

As of December 31, 2020 and 2021, the Group had RMB476 and RMB488, respectively, of investments in hotel related funds. Those funds were VIEs and were managed by or power shared with unrelated 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 their economic performance. The Group accounted for the investment under equity-method as the Group’s influence over the funds is more than minor. The Group recognized investment income of RMB11, investment loss of RMB16 and RMB55, in income (loss) from equity method investments in 2019, 2020 and 2021, 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 RMB488 that the Group holds as of December 31, 2021.

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, one of which has been converted into office buildings in 2020. 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 RMB2, RMB12, and RMB4 in income (loss) from equity method investments in 2019, 2020 and 2021, respectively.

In February 2019, Deutsche Hospitality acquired 51% of the shares in Zleep Hotels A/S (“Zleep”), a hotel brand in Scandinavia. The Group’s interest in Zleep is accounted for using the equity method in the consolidated financial statements because the Group has joint control only in the business and finance decisions due to voting right restrictions. The Group recognized investment loss of RMB23 and RMB12 in income (loss) from equity method investments in 2020 and 2021.

In 2021, the Group partnered with an unrelated third party investor who acted as a general partner to form Commerz Real Institute, of which the Group holds 34% equity interest as a limited shareholder at the consideration of EUR12 million. Commerz Real Institute was designed as an open-ended investment fund to build a portfolio of hotels in prestigious locations. The Group accounted for the investment in Commerz Real Institute under equity-method as the Group’s significant influence over the funds is more than minor. The Group recognized investment loss of RMB1 in income (loss) from equity method investments in 2021.

Other investments included several insignificant equity investments in certain privately-held companies. As a result of the COVID-19 pandemic, the Group recognized an impairment of RMB47 and RMB63 for these equity investments for the year ended December 31,2020 and 2021.

GOODWILL

12 Months Ended

Dec. 31, 2021

GOODWILL.

GOODWILL

8.GOODWILL

The changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2021 were as follows:


	Legacy Huazhu	Legacy DH	Total
Balance at January 1, 2020
Goodwill	2,661	—	2,661
Accumulated impairment loss	(4)	—	(4)
	2,657	—	2,657
Goodwill acquired during the year (Note 3)	3	2,694	2,697
Impairment loss	—	(437)	(437)
Net foreign exchange-goodwill	—	74	74
Net foreign exchange-impairment loss	—	(3)	(3)
Balance at December 31, 2020
Goodwill	2,664	2,768	5,432
Accumulated impairment loss	(4)	(440)	(444)
	2,660	2,328	4,988
Goodwill acquired during the year (Note 3)	372	6	378
Net foreign exchange-goodwill	—	(278)	(278)
Net foreign exchange-impairment loss	—	44	44
Balance at December 31, 2021
Goodwill	3,036	2,496	5,532
Accumulated impairment loss	(4)	(396)	(400)
	3,032	2,100	5,132

DEBT

12 Months Ended

Dec. 31, 2021

DEBT

DEBT

9.DEBT

The short-term and long-term debt as of December 31, 2020 and 2021 were as follows:


	As of December 31,
	2020	2021
Short-term debt:
Long-term bank borrowings, current portion	251	2,464
Short-term bank borrowings	851	692
Convertible senior notes, current portion	—	3,029
FF&E liability, current portion	40	47
Total	1,142	6,232

Long-term debt:
Long-term bank borrowings, non-current portion	4,384	211
Convertible senior notes, non-current portion	6,318	3,158
FF&E liability, non-current portion	135	180
Others	19	16
Total	10,856	3,565

Bank borrowings

In December 2019, the Group entered into a EUR440 million term facility and US$500 million revolving credit facility agreement with several banks. The US$500 million revolving credit facility is available for 35 months after the date of the agreement. The interest rate on the loan for each interest period is the aggregate of the applicable Margin and LIBOR or EURIBOR in relation to any loan in EUR. The Margin for each loan depends on the applicable leverage range, generally means 2.0% per annum. There are some financial covenants including interest coverage ratio, leverage and book equity related to this facility. On April 17, 2020, the Group obtained an exemption approval for the EUR440 million and US$500 million long-term credit facility, providing that with satisfaction of amended covenants, the original financial covenants will not be applicable until the six-month period ending June 30, 2021. The amended covenants include book equity, borrowings, EBITDA and minimum cash related to this facility. On December 11, 2020, the Group obtained a further waiver, which released certain covenants included in the amended covenants signed on April 17, 2020. The Group was fully in compliance with the further amended covenants for the years ended December 31, 2020 and 2021. The Group had drawn down EUR440 million and US$500 million as of December 31, 2019 under the facility agreement and repaid nil in 2019. The Group had drawn down US$200 million as of December 31, 2020 under the facility agreement and repaid EUR1 million and US$700 million in 2020. The US$500 million revolving credit had been fully paid off as of December 31, 2020. In 2021, the Group did not draw down any revolving credit loan and the available credit facility under this agreement of US$500 million was terminated in August 2021. Regarding the EUR440 million term facility, the Group had repaid EUR101 million in 2021. As of December 31, 2021, the outstanding loan amount was EUR338 million and has been reclassified to long-term bank borrowings, current portion. The weighted average interest rate of borrowings drawn under this agreement was 2.89% and 2.73% for the years ended December 31, 2020 and 2021 respectively.

In March 2019, the Group entered into a five-year RMB1,190 bank loan contract expiring in March 2024. The interest rate resets every six months, and is based on the People’s Bank of China five-year benchmark interest rate on the pricing date. The loan contains certain financial covenants including interest coverage ratio and net tangible assets and the Group was in compliance as of December 31, 2019. In 2020, the Group obtained an exemption approval for the RMB1,190 long-term credit facility, providing that with satisfaction of amended covenants, the original financial covenants of interest coverage ratio will not be applicable until the six-month period ending June 30, 2021. The amended covenants include borrowings, EBITDA and cash dividend distribution limitation related to this facility. The Group was fully in compliance with the amended covenants for the years ended December 31, 2020 and 2021. The Group had repaid RMB179 in 2020 in accordance with the agreed repayment schedule. During the year ended December 31, 2021, the Group had repaid all the bank borrowings. The weighted average interest rate of borrowings drawn under this agreement was 4.75% for the years ended December 31, 2020 and 2021.

In January 2021, the Group entered into a twelve-year RMB650 syndicated loan contract expiring in December 2032. The special loan is used for the construction project of the Group’s headquarters buildings, which was in progress in 2021. The interest rate resets every year, and is based on the People’s Bank of China five-year benchmark LPR minus 24 basis points on the pricing date. The mortgage ratio covenant is related to this facility and the Group was in compliance as of December 31, 2021. As of December 31, 2021, the outstanding loan amount is RMB53. The weighted average interest rate of borrowings drawn under this agreement was 4.41%, which was fully capitalized for the years ended December 31, 2021.

Convertible Senior Notes due 2022

On November 3, 2017, the Company issued US$475 million of Convertible Senior Notes (the “2022 Notes”). The 2022 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. In 2017, proceeds to the Company were RMB3,093 (equivalently US$467 million), net of issuance costs of RMB54 (equivalently US$8 million).

Holders of the 2022 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 2022 Notes can be converted into the Company’s ADSs at an initial conversion rate of 5.4869, before the ADSs split, of the Company’s ADSs per US$1,000 principal amount of the 2022 Notes (equivalent to an initial conversion price of US$182.25 per ADS before the ADSs split effected in May 2018). 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. During the year ended December 31, 2020 and 2021, RMB0.06 and RMB0.04 of the 2022 Notes had been converted into 202 ADSs and 134 ADSs upon the holders’ request, respectively.

The holders were able to require the Company to repurchase all or portion of the 2022 Notes for cash on November 2, 2020, or upon a fundamental change, at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest. During the year ended December 31, 2020 and 2021, RMB0.04 and nil of the 2022 Notes had been repurchased in cash upon the holders’ request.

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 2022 Notes is not required. There is no beneficial conversion feature (“BCF”) attribute to the 2022 Notes as the set conversion prices for the 2022 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 2022 Notes in accordance with ASC 470, as a single instrument. Issuance costs related to the 2022 Notes was recorded in consolidated balance sheet as a direct deduction from the principal amount of the 2022 Notes, and was amortized over the period from November 3, 2017, the date of issuance, to November 1, 2020, the first put date of the 2022 Notes, using the effective interest method. On December 31, 2019, the Group reclassified the 2022 Notes as short-term debt as the 2022 Notes holders have a put option which can be exercised within one year. After November 2, 2020, the Group reclassified the 2022 Notes as long-term debt as the put option was expired. As of December 31, 2021, the Group reclassified the 2022 Notes as short-term debt as the 2022 Notes will mature on November 1, 2022.

ADS Lending Arrangement

Concurrent with the offering of the 2022 Notes, the Company entered into ADS lending agreements with the affiliates of the initial purchasers of the 2022 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 before the ADSs split (“ADS lending arrangement”). The purpose of the ADS lending arrangements is to facilitate privately negotiated transactions in which the ultimate holders of the 2022 Notes may elect to hedge their investment in the related notes. In May 2018, the Company changed the ADS to ordinary share ratio from one ADS representing four ordinary shares to one ADS representing one ordinary share. Therefore, as of December 31, 2019, 2020 and 2021, the outstanding number of Loaned ADSs was 10,425,112.

The Loaned ADSs must be returned to the Company by the earliest of (a) the maturity date of the 2022 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 2022 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, 2021, 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 2022 Notes, the Group 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 Group upon conversion of the 2022 Notes. The cap price of the capped call transactions will initially be US$221.31 per ADS before the ADSs split, subject to adjustment under the terms of the capped call transactions. The total premium paid by the Group 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.

Convertible Senior Notes due 2026

On May 12, 2020, the Company issued US$450 million Convertible Senior Notes (the “2026 Notes”). On May 26, 2020, the Company issued an additional US$50 million in aggregate principal amount of the 2026 Notes pursuant to the exercise in full by the initial purchasers of an option to purchase additional notes. The 2026 Notes will mature on May 1, 2026 and bear interest at a rate of 3.00% per annum, payable in arrears semi-annually on May 1 and November 1 of each year, beginning on November 1, 2020. In 2020, proceeds to the Company were RMB3,499 (equivalently US$493 million), net of issuance costs of RMB49 (equivalently US$7 million).

Holders of the 2026 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 2026 Notes can be converted into the Company’s ADSs at an initial conversion rate of 23.971 of the Company’s ADSs per US$1,000 principal amount of the 2026 Notes (equivalent to an initial conversion price of US$41.72 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 2026 Notes for cash on May 1, 2024, or in the event of certain fundamental changes, at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest.

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 2026 Notes is not required. There is no beneficial conversion feature (“BCF”) attribute to the 2026 Notes as the set conversion prices for the 2026 Notes are greater than the respective fair values of the ordinary share price at date of issuance.

Therefore, the Company accounted for the 2026 Notes in accordance with ASC 470, as a single instrument. Issuance costs related to the 2026 Notes is recorded in consolidated balance sheet as a direct deduction from the principal amount of the 2026 Notes, and is amortized over the period from May 12, 2020, the date of issuance, to May 1, 2024, the first put date of the 2026 Notes, using the effective interest method.

FF&E Liability

The Group entered into several contracts with lessors to install furniture, fixtures and equipment (“FF&E”) in various leased hotels prior to the respective commencement date. Those transactions are classified as “failed” sale and leaseback transactions, as the control of the furniture, fixtures and equipment does not transfer to the lessor. Consequently, the received consideration from the lessor is accounted for as a liability. The current portion and non-current portion of FF&E liability are recorded in short-term debt and long-term debt, respectively.

Debt Maturities

The contractual maturities of the Group’s debt as of December 31, 2021 were as follows:


Year Ending December 31,		Principle Amounts
2022		6,232
2023		111
2024		3,314
2025		71
2026		23
Thereafter		76
Total		9,827

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
-Paragraph 1C
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

12 Months Ended

Dec. 31, 2021

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

10.ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES


	As of December 31,
	2020	2021
Payable to franchisees	1,349	710
Other payables	535	535
Accrued rental, utilities and other accrued expenses	245	209
Liabilities related to customer loyalty program	111	135
Value-added tax, other tax and surcharge payables	124	132
Payable to noncontrolling interest holders	76	117
Total	2,440	1,838

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

HOTEL OPERATING COSTS

12 Months Ended

Dec. 31, 2021

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,
	2019	2020	2021
Rents	2,624	3,485	3,900
Utilities	404	478	507
Personnel costs	1,854	2,501	3,022
Depreciation and amortization	960	1,316	1,413
Consumable, food and beverage	793	885	969
Others	555	1,064	1,471
Total	7,190	9,729	11,282

PRE-OPENING EXPENSES

12 Months Ended

Dec. 31, 2021

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,
	2019	2020	2021
Rents	460	251	68
Personnel costs	14	15	5
Others	28	22	8
Total	502	288	81

SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2021

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 100,000,000 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 30,000,000 ordinary shares. In October 2008, the Group increased the maximum number of incentive awards available under the 2008 Global Share Plan to 70,000,000. 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 30,000,000 ordinary shares. In August 2010, the Group increased the maximum number of incentive awards available under the 2009 Share Incentive Plan to 150,000,000. In March 2015, the Group increased the maximum number of incentive awards available under the 2009 Share Incentive Plan to 430,000,000. 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, 2021, the Group had granted 245,776,690 options and 243,059,070 nonvested restricted stocks, which were subject to adjustment on performance condition.

Share options

No share options were granted during the years 2019, 2020 and 2021.

As of December 31, 2021, total unrecognized compensation expense related to the option arrangements was nil.

During the years ended December 31, 2019, 2020 and 2021, 10,883,580, 466,320 and nil options were exercised with an aggregate intrinsic value of RMB255, RMB11 and nil, 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 2019, 2020 and 2021, the Group granted 2,217,120, nil and nil 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 activities in 2021.


		Weighted Average Grant
	Number of Restricted	Date
	Stocks	Fair Value
		US$
Nonvested restricted stocks outstanding at January 1, 2021	70,954,080	1.18
Granted	2,163,420	4.20
Forfeited	(4,607,340)	1.64
Vested	(12,325,470)	1.58
Adjusted for performance conditions	(2,488,200)	0.61
Nonvested restricted stocks outstanding at December 31, 2021	53,696,490	1.20

As of December 31, 2021, there was RMB355 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 3.30 years.

The total fair value of nonvested restricted stocks vested in 2019, 2020 and 2021 was RMB443, RMB368 and RMB389, respectively.

EARNINGS (LOSSES) PER SHARE

12 Months Ended

Dec. 31, 2021

EARNINGS (LOSSES) PER SHARE

EARNINGS (LOSSES) PER SHARE

14.EARNINGS (LOSSES) PER SHARE

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


	Years Ended December 31,
	2019	2020	2021
Net income (loss) attributable to ordinary shareholders — basic	1,769	(2,192)	(465)
Eliminate the dilutive effect of interest expense of convertible senior notes	40	—	—
Net income attributable to ordinary shareholders — diluted	1,809	(2,192)	(465)
Weighted average ordinary shares outstanding — basic	2,843,051,378	2,927,398,409	3,114,124,244
Incremental weighted-average ordinary shares from assumed exercise of share options and nonvested restricted stocks using the treasury stock method	93,975,271	—	—
Dilutive effect of convertible senior notes	106,072,250	—	—
Weighted average ordinary shares outstanding — diluted	3,043,098,899	2,927,398,409	3,114,124,244
Basic earnings (losses) per share	0.62	(0.75)	(0.15)
Diluted earnings (losses) per share	0.59	(0.75)	(0.15)

For the years ended December 31, 2019, 2020 and 2021, 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 at non-weighted basis:


	As of December 31,
	2019	2020	2021
Outstanding employee options and nonvested restricted stocks	—	70,954,080	53,696,490
Shares of convertible senior notes	—	226,827,410	226,827,410
Total	—	297,781,490	280,523,900

Cash Dividend

12 Months Ended

Dec. 31, 2021

Cash Dividend

Cash Dividend

15.Cash Dividend

In November 2019, the Group approved a cash dividend in the total amount of approximately US$100 million on its outstanding shares as of the close of trading on January 10, 2020. Such dividend of RMB678 was recorded as dividends payable as of December 31, 2019, and fully paid in February 2020.

The Group did not declare cash dividend to its shareholders in 2020 and 2021.

On March 03, 2022, the Group approved and declared a cash dividend of US$0.021 per ordinary share on its outstanding shares as of the close of trading on March 24, 2022. Such dividend of US$68 million was fully paid in April 2022.

LEASES

12 Months Ended

Dec. 31, 2021

LEASES

LEASES

16.LEASES

The Group’s leases mainly related to building and the rights to use the land. The total expense related to short-term leases were insignificant for period of 2019, 2020 and 2021, and sublease income of the Group which is recognized in revenues in the consolidated statements of comprehensive income were RMB121, RMB112 and RMB134 for the years ended December 31, 2019, 2020 and 2021, respectively. The Group recognizes a negative lease expense of RMB250 and RMB88 for 2020 and 2021 under the relief as the Group elects using the variable lease expense approach.

A summary of supplemental information related to operating leases in 2020 and 2021 is as follows:


	Years Ended December 31,
	2020		2021
Lease cost:
Operating fixed lease cost	3,964		4,074
Finance lease cost
— Amortization of ROU assets	74		79
— Interest on lease liabilities	90		96
Short term lease cost	0		0
Operating variable lease cost	(171)		(25)
Total lease cost	3,957		4,224

Other information:
Weighted average remaining lease term
Operating leases	14 years		13 years
Finance leases	29 years		28 years
Weighted average discount rate
Operating leases	6.23	%	6.31	%
Finance leases	3.96	%	3.97	%

Lease expense for all the Group’s leases (including fixed lease cost, variable lease cost and short-term lease cost) for the year ended December 31, 2019 were RMB3,104.

As of December 31, 2021, the maturities of lease liabilities in accordance with ASC 842 in each of the next five years and thereafter are as follows:


Year Ending December 31,	Total Operating Leases	Total Finance Leases
2022	4,055	140
2023	4,066	155
2024	4,037	157
2025	3,871	157
2026	3,655	158
Thereafter	26,035	3,824

Total minimum lease payments	45,719	4,591

Less: amount representing interest	14,079	1,866

Present value of minimum lease payments	31,640	2,725

As of December 31, 2021, the Group has entered 32 lease contracts that the Group expects to account for as operating or finance leases, the future undiscounted lease payments for these non-cancellable lease contracts are RMB8,732, which is not reflected in the consolidated balance sheets.

As of December 31, 2020, the maturities of lease liabilities in accordance with ASC 842 in each of the next five years and thereafter were as follows:


Year Ending December 31,	Total Operating Leases	Total Finance Leases
2021	3,858	129
2022	3,826	144
2023	3,733	146
2024	3,660	147
2025	3,466	147
Thereafter	25,730	3,575

Total minimum lease payments	44,273	4,288

Less: amount representing interest	13,819	1,760

Present value of minimum lease payments	30,454	2,528

As of December 31, 2020, the Group has entered 31 lease contracts that the Group expects to account for as operating or finance leases, the future undiscounted lease payments for these non-cancellable lease contracts are RMB8,511, which is not reflected in the consolidated balance sheets.

INCOME TAXES

12 Months Ended

Dec. 31, 2021

INCOME TAXES

INCOME TAXES

17.INCOME TAXES

The Group is subject to different income tax rates in various countries and jurisdictions under laws and relevant interpretations depending on the place of formation. Under the current laws of Germany, companies are subject to income tax at a standard rate of 15% (15.825% including solidarity surcharge), plus municipal trade tax of 7%-17%. The income tax rates in other countries and jurisdictions are of little effect on the financial statements. In other major jurisdictions, including Austria, Netherlands and Belgium, the Group is subject to a range from 9% to 25% of the statutory income tax rate, respectively.

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%, and the industries and projects that are encouraged and supported by the State may enjoy tax preferential treatment. 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. In November 2018, Jizhu Shanghai was qualified as high and new tech enterprise, resulting Jizhu Shanghai subject to a reduced tax rate of 15% in 2018, 2019 and 2020. In December 2021, Jizhu Shanghai was qualified as high and new tech enterprise, resulting Jizhu Shanghai subject to a reduced tax rate of 15% in 2021, 2022 and 2023. H-World Information and Technology Co., Ltd. is qualified as high and new tech enterprise, resulting H-World Information and Technology Co., Ltd. subject to a reduced tax rate of 15% in 2019, 2020 and 2021. Pursuant to the relevant regulations applicable to small and micro businesses, from January 1, 2019 to December 31, 2021, several PRC subsidiaries enjoy a preferential tax rate of 20% with a discount to taxable income. For taxable income less than RMB1, 75% of the taxable income would be exempted in tax computation, and for taxable income over RMB1 but less than RMB3, the discount would be 50%. Entities qualified as small and micro businesses shall be engaged in industries not restricted or prohibited by the state, which simultaneously meet the following three conditions: annual taxable income does not exceed RMB3, the number of employees does not exceed 300, and the total assets does not exceed RMB50.

Income (loss) before income taxes consists of:


	Years Ended December 31,
	2019	2020	2021
PRC including Hong Kong and Taiwan	2,334	(392)	617
Germany	—	(1,606)	(632)
Other	231	(281)	(393)
Total	2,565	(2,279)	(408)

Income tax expense (benefit) is comprised of the following:


	Years Ended December 31,
	2019	2020	2021
Current Tax	678	338	555
Deferred Tax	(38)	(553)	(543)
Total	640	(215)	12

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


	Years Ended December 31,
	2019		2020		2021
PRC statutory tax rate	25	%	25	%	25	%
Tax effect of non-deductible expenses and non-taxable income in determining taxable profit	(3)	%	(6)	%	(6)	%
Effect of different tax rate of group entities operating in other jurisdictions	1	%	(2)	%	(6)	%
Effect of change in valuation allowance	2	%	(10)	%	(24)	%
Effect of tax holiday	(2)	%	1	%	9	%
Effect of cash dividends	4	%	0	%	(8)	%
Effect of excess tax benefit of share-based rewards	(2)	%	1	%	7	%
Effective tax rate	25	%	9	%	(3)	%

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


	Years Ended December 31,
	2019	2020	2021
Aggregate amount	45	31	37
Per share effect—basic	0.02	0.01	0.01
Per share effect—diluted	0.01	0.01	0.01

The principal components of the Group’s deferred income tax assets and liabilities as of December 31, 2020 and 2021 are as follows:


	As of December 31,
	2020	2021
Deferred tax assets:
Net loss carryforward	888	1,271
Deferred revenue	283	326
Long-term assets	388	238
Bad debt provision	18	40
Accrued payroll	69	45
Other accrued expenses	3	3
Share-based compensation	31	29
Others	12	150
Valuation allowance	(369)	(466)
Total deferred tax assets, net of valuation allowance	1,323	1,636
Deferred tax liabilities:
Fair value adjustment for Building, land use rights and identified intangible assets due to acquisition	1,782	1,596
Others	99	31
Total deferred tax liabilities	1,881	1,627
Net deferred tax (liabilities) assets	(558)	9
Analysis as:
Deferred tax assets	623	862
Deferred tax liabilities	1,181	853
Net deferred tax (liabilities) assets	(558)	9

Deferred tax assets and liabilities have been offset where the Group has a legally enforceable right to do so, and intends to settle on a net basis.

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. Movement of the valuation allowance is as follows:


	Years Ended December 31,
	2019	2020	2021
Balance at the beginning of the year	(107)	(152)	(369)
Provided	(79)	(249)	(151)
Reversed	24	32	37
Written off	10	—	17
Balance at the end of the year	(152)	(369)	(466)

As of December 31, 2021, the Group’s PRC subsidiaries had tax loss carryforwards of RMB2,115, which will expire between 2022 and 2026 if not used, and RMB1,532, which will expire between 2022 and 2028 if not used. The Germany Companies had tax loss carry forwards of RMB1,192, which can be offset in the future without anytime restriction.

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, 2020 and 2021, the Group had recorded liabilities for uncertain tax benefit of approximately RMB50 and RMB60 mainly associated with the interests on intercompany loans and other permanent differences related to Corporate Income and Trade Taxes, respectively. No interest or penalty expense was recorded for the years ended December 31, 2019, 2020 and 2021. In 2022, the Group will decrease its income tax liability by RMB 0.1 for unrecognized tax benefits previously recorded in 2012 as the statute of limitations for the tax liabilities of certain tax positions will expire under the PRC Tax Administration and Collection Law.

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 and holds more than 25% of the PRC company. 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 that it may make a moderate dividend distribution every year with the range of 0.5% to 2.0% of its market capitalization from current year net income starting from 2018. The Group’s board of directors has complete discretion in deciding whether to distribute dividends and the dividend amounts within the approved range. The Group was restricted from distributing cash dividends until June 30, 2021 pursuant to the waiver from certain financial covenants that the Group obtained on April 17, 2020 for the syndicated bank loans and therefore did not accrue PRC dividend withholding tax in 2020. In March 2022, the Group announced that its board of directors declared a cash dividend of approximately US$68 million. To facilitate this dividend distribution and meet the oversea treasury demand, certain amount of dividends from the Group’s PRC subsidiaries to its oversea subsidiaries was planned. PRC dividend withholding tax of RMB32 was accrued as of December 31, 2021. Other than these dividends distributions, the Group intends to indefinitely reinvest the remaining undistributed earnings of RMB3,763 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 2017 through 2021 on non-transfer pricing matters, and from 2012 through 2021 on transfer pricing matters. Generally, the statute of limitations for the assessment and collection of taxes is four years. The four-year period usually starts at the end of the year in which the tax return is filed. If no tax return is filed, the statute of limitations starts with the end of the third year following the year in which the tax arose. Extended limitations of 5 and 10 years will apply in the event of tax evasion or tax fraud. The statute of limitations may be suspended for a variety of reasons, for example, appeal of assessment by taxpayers, announcement or start of a tax audit, obvious mistake in tax assessment, etc.

According to the German General Fiscal Code, the statute of limitations for the assessment and collection of taxes is four years. The four-year period usually starts at the end of the year in which the tax return is filed. If no tax return is filed, the statute of limitations starts with the end of the third year following the year in which the tax arose. Extended limitations of 5 and 10 years will apply in the event of tax evasion or tax fraud. The statute of limitations may be suspended for a variety of reasons, for example, appeal of assessment by taxpayers, announcement or start of a tax audit, obvious mistake in tax assessment, etc.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2021

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

18.EMPLOYEE BENEFIT PLANS

a. Defined Benefit Plans

Retirement benefit obligation result all from the German pension plan after the completion of the acquisition of DH as this pension plan is the most significant defined benefit plan in the Group.

The Group is required to recognize the funded status of the pension plan, which is the difference between the fair value of plan assets and projected benefit obligations, in the consolidated balance sheets and make corresponding adjustments for changes in the value through accumulated other comprehensive income(loss), net of taxes.

The following table presents the projected benefit obligation, fair value of plan assets, funded status and accumulated benefit obligation for the plans during the years ended December 31, 2020 and 2021:


	Year Ended December 31,
Change in Projected Benefit Obligation:	2020	2021
Begin of the year	147	193
Current service cost	5	5
Interest cost	1	0
Contributions by plan participants	1	1
Actuarial loss (gain)	38	(14)
Foreign currency translation	3	(19)
Benefits paid	(7)	(9)
Settlements	(1)	—
Administrative Expenses, Taxes and Premiums Paid	0	0
Curtailments	(1)	—
Acquisitions	—	0
Effect of other economic events	7	—
End of the year	193	157


	Year Ended December 31,
	2020	2021
Change in Plan Assets:
Begin of the year	32	6
Actual return (loss) on plan assets	(2)	0
Foreign currency translation	1	(0)
Employer contributions	9	1
Employee contributions	1	0
Benefits paid	(8)	(2)
Acquisitions	—	0
Other economic events	(27)	—
End of the year	6	5
Excess of defined benefit obligation over the fair value of plan assets	187	152
Accumulated benefit obligation	193	157

Amounts recognized in the consolidated balance sheets consisted of the following:


	As of December 31,
	2020	2021
Salary and welfare payables	8	8
Retirement benefit obligation	179	144
Liability in the balance sheet	187	152

The net amount recognized in accumulated other comprehensive gain or loss was RMB27 loss and RMB13 gain for the year ended December 31, 2020 and 2021, respectively.

The net periodic pension cost (credit) and the estimated unrecognized prior service cost and net loss that will be amortized into net periodic pension cost (credit) during the years ended December 31,2020 and 2021 is immaterial.

The principal actuarial assumptions used were as follows:


	As of December 31,
	2020		2021
Discount rate- Germany	0.33	%	0.89	%
Discount rate- other	0.12	%	0.39	%
Inflation rate	1.00	%	1.00	%
Future salary increases	1.50	%	2.17	%
Future pension increases	1.80	%	1.69	%

The investment objectives for the various plans are preservation of capital, current income and long-term growth of capital. All plan assets are managed by outside investment managers. Asset allocations are reviewed periodically by the investment managers.

Expected long-term returns on plan assets are determined using historical performance for debt and equity securities held by the Group’s plans, actual performance of plan assets and current and expected market conditions. Expected returns are formulated based on the target asset allocation. The target asset allocation for the plan, as a percentage of total plan assets, as of December 31, 2021 was 26 percent in funds that invest in equity securities and 29 percent in funds that invest in debt securities.

The following tables present the fair value hierarchy of total plan assets measured at fair value by asset category as of December 31, 2020 and 2021:


	As of December 31,
	2020	2021
Level 1
Equity funds	1	1
Bond funds	2	2
Property	2	1
Other	1	1
Total	6	5

The Group expect to contribute approximately RMB1 to the plan in 2022.

As of December 31, 2021, the benefits expected to be paid in the year ended December 31, 2022 are RMB9.

b. Defined Contribution Plans

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 RMB413, RMB283 and RMB544 for the years ended December 31, 2019, 2020 and 2021, respectively. The Group has no ongoing obligation to its employees subsequent to its contribution to the PRC plan. In an attempt to mitigate the adverse financial effects of the COVID-19 pandemic on employers, the Chinese Government had announced temporary reductions in, and exemptions from, the payment of contributions in 2020. The supportive policies have been gradually reduced in 2021.

Furthermore, the Group pays contribution to governmental and private pension insurance organizations based on legal regulations in some countries out of China. The contributions are recognized as expense and amount RMB129 and RMB55 for the years ended December 31, 2020 and 2021.

The entire disclosure for retirement benefits.

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RELATED PARTY TRANSACTIONS AND BALANCES

RESTRICTED NET ASSETS

12 Months Ended

Dec. 31, 2021

RESTRICTED NET ASSETS

RESTRICTED NET ASSETS

19.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 RMB604, RMB771 and RMB826 as of December 31, 2019, 2020 and 2021, respectively. In addition, due to restrictions on the distribution of share capital from the Group’s PRC subsidiaries, the PRC subsidiaries share capital of RMB2,852 at December 31, 2021 is considered restricted. As a result of these PRC laws and regulations, as of December 31, 2021, approximately RMB3,678 is not available for distribution to the Group by its PRC subsidiaries in the form of dividends, loans or advances.

Pursuant to laws applicable to entities incorporated in the Europe, certain subsidiaries of the Group must make appropriations from after-tax profit to non-distributable reserve funds. These reserve funds include general reserve which is not distributable as cash dividends or other cash disbursements and amounted to RMB11 as of December 31, 2021. In addition, due to restrictions on the distribution of share capital from the Deutsche Hospitality and its subsidiaries, the share capital of RMB4 at December 31, 2021 is considered restricted.

RELATED PARTY TRANSACTIONS AND BALANCES

12 Months Ended

Dec. 31, 2021

20.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
Trip.com Group Limited (“Trip.com”)	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
Shanghai Zhuchuang Enterprise Management Co., Ltd. (“Zhuchuang”)	Staged office space company	Equity method investee of the Group
China Hospitality JV, Ltd. (“China Hospitality JV”)	Property management company	Equity method investee of the Group
Smart Lodging Group (Cayman) Limited(“Smart Lodging”)	Hotel chain	Equity method investee of the Group
Shanghai Lianquan Hotel Management Co., Ltd. (“Lianquan”)	Hotel management company	Equity method investee of the Group
Suzhou Huali Jinshi Construction Decoration Co., Ltd. (“Huali Jinshi”)	Building decoration company	Equity method investee of the Group
Shenzhen Hitone Investment Fund Partnership (LLP) ( “Hitone”)	Fund	Equity method investee of the Group

CREATER ceased to be related parties of the Group from August 2019.

Accor ceased to be related parties of the Group from December 2021.

(a) Related party balances

Amounts due from related parties were mainly comprised of shareholder loans to Sheen Star, Cjia Group, Zhuchuang and Lianquan, which are short-term in nature and mainly payable on demand, service fee and room charges withheld by Trip.com. As the Group adopted ASU 2016-13 on January 1, 2020 utilizing the modified retrospective approach, the Group recorded credit losses of RMB18 and RMB17 for the years ended December 31, 2020 and 2021.


	As of December 31,
	2020	2021
Sheen Star	52	33
Zhuchuang	27	27
Trip.com	22	17
Cjia Group	22	29
Accor	1	—
Lianquan	58	49
Others	14	12
Allowance for expected credit losses	(18)	(17)
Total	178	150

Amounts due to related parties were mainly comprised of payables for brand use fee, reservation fee and other service fee to Trip.com and Accor, acquisition consideration, consultation fee to and cash received on behalf of Cjia Group and payables for construction service fee to Huali Jinshi, which are short-term in nature and payable on demand.


	As of December 31,
	2020	2021
Trip.com	48	44
Accor	8	—
Cjia Group	42	101
Huali Jinshi	29	47
Others	5	5
Total	132	197

(b) Related party transactions

During the years ended December 31, 2019, 2020 and 2021, significant related party transactions were as follows:


	Years Ended December 31,
	2019	2020	2021
Commission expenses to Trip.com	72	78	99
Lease expenses to Trip.com	18	18	19
Lease expenses to Cjia Group	—	—	12
Service fee to Huali Jinshi	99	41	42
Service fee to Cjia Group	6	17	—
Brand use fee, reservation fee and other related service fee to Accor	28	17	22
Goods sold and service provided to Cjia Group	21	18	11
Early termination compensation of sublease to Cjia Group	—	8	—
Loan payment to Smart Lodging	30	—	—
Loan payment to Lianquan	32	—	—
Loan payment to Hitone	—	—	5
Service fee from Trip.com	41	66	62
Service fee from Accor	9	3	3
Service fee from China Hospitality JV	6	1	2
Service fee from Sheen Star	4	4	5
Sublease income from Lianquan	7	12	10
Sublease income from Cjia Group	14	9	6
Early termination compensation of franchise agreement from China Hospitality JV	—	26	—
Purchase of property and equipment from Cjia Group	—	11	—
Interest income from Sheen Star	8	1	0
Interest income from CREATER	6	—	—
Business acquisition of CitiGO from Cjia Group	—	—	783
Business acquisition of one individual company from Cjia Group	—	—	51

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2021

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

21.	COMMITMENTS AND CONTINGENCIES

(a) Commitments

As of December 31, 2021, the Group’s commitments related to leasehold improvements and installation of equipment for hotel operations was RMB413, which is expected to be incurred within one year.

(b) Contingencies

The Group is subject to periodic legal or administrative proceedings in the ordinary course of the Group’s business, including lease contract terminations and disputes, and management agreement disputes. The Group does not believe that any currently pending legal or administrative proceeding to which the Group is a party will have a material adverse effect on the financial statements. As of December 31, 2021, the accrued contingent liability was RMB54.

SCHEDULE I FINANCIAL INFORMATION FOR PARENT COMPANY

12 Months Ended

Dec. 31, 2021

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,
	2020	2021	2021
			US$’million
			(Note 2)
Assets
Current assets:
Cash and cash equivalents	1,892	581	91
Short-term investments	51	81	13
Other current assets	16	1	0
Total current assets	1,959	663	104
Investment in subsidiaries	16,103	16,928	2,656
Total assets	18,062	17,591	2,760
Liabilities and equity
Current liabilities:
Short-term debt	—	3,028	475
Amount due to subsidiaries	273	257	40
Accrued expenses and other current liabilities	141	213	34
Total current liabilities	414	3,498	549
Long-term debt	6,318	3,158	496
Total liabilities	6,732	6,656	1,045
Equity:
Ordinary shares (US$0.00001 par value per share; 80,000,000,000 shares authorized; 3,243,644,440 and 3,255,971,250 shares issued as of December 31, 2020 and 2021, and 3,108,425,680 and 3,120,746,090 shares outstanding as of December 31, 2020 and 2021, respectively)	0	0	0
Treasury shares (30,967,640 and 30,974,040 shares as of December 31, 2020 and 2021, respectively)	(107)	(107)	(17)
Additional paid-in capital	9,808	9,964	1,563
Retained earnings	1,502	1,037	163
Accumulated other comprehensive income	127	41	6
Total equity	11,330	10,935	1,715
Total liabilities and equity	18,062	17,591	2,760

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,
	2019	2020	2021	2021
				US$’million
				(Note 2)
Operating costs and expenses:
General and administrative expenses	115	155	110	17
Total operating costs and expenses	115	155	110	17
Loss from operations	(115)	(155)	(110)	(17)
Interest income	10	2	8	1
Interest expense	201	154	128	20
Foreign exchange gain (loss)	5	(8)	(3)	(0)
Other income, net	30	32	15	2
Unrealized loss from fair value changes of equity securities	(27)	(10)	(2)	(0)
Income (loss) in investment in subsidiaries	2,067	(1,899)	(245)	(39)
Net income (loss) attributable to Huazhu Group Limited	1,769	(2,192)	(465)	(73)

Other comprehensive (loss) income, net of tax	(7)	176	(86)	(14)
Comprehensive income (loss)	1,762	(2,016)	(551)	(87)

ADDITIONAL FINANCIAL INFORMATION — FINANCIAL STATEMENTS SCHEDULE I

HUAZHU GROUP LIMITED

FINANCIAL INFORMATION FOR PARENT COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Renminbi in millions, unless otherwise stated)


	Years Ended December 31,
	2019	2020		2021	2021
					US$’million
					(Note 2)
Net cash (used in) provided by operating activities	(212)	49		9	2
Investing activities:
Investment in subsidiaries	(1,039)	(6,267)		(1,050)	(165)
Receipt of investment in subsidiaries	9	—		—	—
Purchase of short-term investments	—	—		(34)	(5)
Net cash used in investing activities	(1,030)	(6,267)		(1,084)	(170)
Financing activities:
Proceeds from issuance of ordinary shares in Hong Kong public offering	—	6,018		—	—
Payment of ordinary share issuance costs	—	(10)		(15)	(2)
Net settlement on shares repurchased for withholding taxes related to share-based awards	—	—		50	7
Payment of share repurchase	—	—		(0)	(0)
Net proceeds from issuance of ordinary shares upon exercise of option	14	1		1	0
Proceeds of advances from subsidiaries	109	—		0	0
Proceeds from short-term bank borrowings	1,265	—		—	—
Repayment of short-term bank borrowings	—	(282)	A	—	—
Proceeds from long-term bank borrowings	5,206	—		—	—
Repayment of long-term bank borrowings	(5,169)	—		—	—
Proceeds from issuance of convertible senior notes	—	3,499		—	—
Repayment of convertible senior notes	—	(0)		(0)	(0)
Debt financing costs paid	—	(9)		—	—
Dividends paid	(658)	(678)		—	—
Net cash provided by financing activities	767	8,539		36	5
Effect of exchange rate changes on cash and cash equivalents	141	(790)		(272)	(43)
Net (decrease) increase in cash and cash equivalents	(334)	1,531		(1,311)	(206)
Cash, cash equivalents at the beginning of the year	695	361		1,892	297
Cash, cash equivalents at the end of the year	361	1,892		581	91

A—In 2020, Except for repayment of short-term bank borrowings by cash, short-term bank borrowings of RMB 4,628 was settled by investment in subsidiaries.

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, 2021, 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, 2021

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 ACCOUNTS


	Balance at
	Beginning of	Charge to Costs and	Charge to Other	Addition Due to	Charge Taken		Balance at
	Year	Expenses	Accounts	Acquisition	Against Allowance	Write off	End of Year

	(Renminbi in millions)
Allowance for accounts receivable, loan receivables and other financial assets:
2019	17	21	—	—	—	(16)	22
2020	22	65	7	—	—	(7)	87
2021	87	105	—	—	—	(64)	128
Valuation allowance for deferred tax assets

2019	107	79	—	—	(24)	(10)	152
2020	152	249	—	—	(32)	—	369
2021	369	151	—	—	(37)	(17)	466

******

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2021

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 (“U.S. GAAP”).

However, the management has evaluated the significance of the conditions and regards the going concern assumption as appropriate based on the following considerations:

●

The Group generated positive cash flow from operations for several consecutive years with a net operating cash inflow of RMB1,342 for the year ended December 31, 2021;

●

Management believes the relevant conditions that raise substantial doubt on going concern are mitigated by the following plans and actions:

●

The Group has the ability to sell its short-term investments that can be readily convertible into cash, the fair value of which was approximately RMB2,589 as of December 31, 2021;

●

Basis of consolidation

Variable Interest Entities

Use of estimates

Property and equipment, net

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, deposits restricted due to contract disputes or lawsuit and cash restricted for special purposes.

Investments

As a result of the impairment analysis, the Group recorded an impairment of RMB10, RMB92 and RMB63 in 2019, 2020 and 2021, respectively.

Accounts receivable, net

Accounts receivable, net

Loan receivables, net

Loan receivables, net

Inventories


Leasehold improvements		Shorter of the lease term or their estimated useful lives
Buildings		20-40 years
Furniture, fixtures and equipment		1-20 years
Motor vehicles		5 years

Intangible assets, net

The favorable lease agreements in which the Group acts as a lessor were accounted as intangible assets as before, which are amortized over remaining operating lease terms.


Franchise or manachise agreements		Remaining contract terms from 10 to 20 years
Non-compete agreements		2 - 10 years based on specified non-compete period
Purchased software		3 - 10 years based on the estimated usage period
Other intangible assets including trademark, licenses and other rights		2 - 15 years based on the contractual term, the length of license agreements and the effective terms of other legal rights

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.

Revenue recognition

Leased and owned hotel revenues

Manachised and franchised hotel revenues

The manachise and franchise 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

Value-Added Taxes and surcharges

Advertising and promotional expenses

Government grants

Leases

As a lessee


Favorable lease agreements acquired before the adoption of ASC 842		Remaining lease terms from 1 to 20 years
Unfavorable lease agreements		Remaining lease terms from 3 to 13 years

Sublease

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
As of			Assets	Observable Inputs	Inputs
December 31,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2020	Equity securities with readily determinable fair value	3,903	3,903	—	—
2020	Available-for-sale debt securities	220	—	220	—
2020	Employee benefit plan assets	6	6	—	—
2021	Equity securities with readily determinable fair value	2,589	2,589	—	—
2021	Available-for-sale debt securities	220	—	220	—
2021	Employee benefit plan assets	5	5	—	—

The following table presents the Group’s assets measured at fair value on a non-recurring basis for the years ended December 31, 2020 and 2021:


			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active	Significant
			Markets for	Other	Significant
		Fair Value for	Identical	Observable	Unobservable	Total
Years Ended		Years Ended	Assets	Inputs	Inputs	Loss for
December 31,	Description	December 31	(Level 1)	(Level 2)	(Level 3)	the Year
2020	Property and equipment	2	—	—	2	41
2020	Operating lease right-of-use assets	71	—	—	71	139
2020	Long-term investment	—	—	—	—	92
2020	Goodwill	2,328	—	—	2,328	437
2021	Property and equipment	33	—	—	33	24
2021	Operating lease right-of-use assets	88	—	—	88	48
2021	Intangible assets	2,556	—	—	2,556	245
2021	Long-term investment	—	—	—	—	63

Share-based compensation


	Years Ended December 31,
	2019	2020	2021
Hotel operating costs	35	42	39
Selling and marketing expenses	3	4	4
General and administrative expenses	72	76	66
Total	110	122	109

Earnings (losses) per share

Segment and geography information


	Years Ended December 31,
	2020			2021
	Legacy	Legacy		Legacy	Legacy
	Huazhu	DH	Total	Huazhu	DH	Total

Total revenues	8,664	1,532	10,196	11,247	1,538	12,785
Operating costs and expenses	8,978	2,947	11,925	10,549	3,058	13,607
Goodwill impairment loss	—	437	437	—	—	—
Other operating income, net	214	266	480	193	793	986
Interest income	118	1	119	88	1	89
Interest expense	427	106	533	291	114	405
Other (expenses) income, net	(92)	3	(89)	139	18	157
Unrealized (losses) gains from fair value changes of equity securities	(266)	1	(265)	(96)	—	(96)
Foreign exchange gain (loss)	176	(1)	175	(294)	(23)	(317)
(Loss) income before income tax	(591)	(1,688)	(2,279)	437	(845)	(408)
Income tax expense (benefit)	151	(366)	(215)	249	(237)	12
(Loss) from equity method investments	(117)	(23)	(140)	(50)	(10)	(60)
Net loss attributable to noncontrolling interest	(12)	—	(12)	(15)	—	(15)
Net (loss) income attributable to Huazhu Group Limited	(847)	(1,345)	(2,192)	153	(618)	(465)
Income tax expense (benefit)	151	(366)	(215)	249	(237)	12
Interest income	118	1	119	88	1	89
Interest expense	427	106	533	291	114	405
Depreciation and amortization	1,123	239	1,362	1,222	281	1,503
EBITDA	736	(1,367)	(631)	1,827	(461)	1,366

The following table presents total assets for operating segments, reconciled to consolidated amounts:

As of December 31,

2020

2021

Legacy Huazhu

Legacy DH

Total

Legacy Huazhu

Legacy DH

Total

Total assets

46,243

18,912

65,155

45,353

17,916

63,269

The following tables represent revenues and property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill by geographical region.

Revenues:


	Years Ended December 31,
	2020	2021
China	8,647	11,231
Germany	1,212	1,263
All others	337	291
Total	10,196	12,785

Property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill:


	As of December 31,
	2020	2021
China	30,635	33,143
Germany	15,670	13,884
All others	2,544	2,929
Total	48,849	49,956

Treasury shares

Recently Issued Accounting Pronouncements

Adopted Accounting Standards

Accounting Standards Not Yet Adopted

Translation into United States Dollars

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2021

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		1-20 years
Motor vehicles		5 years

Schedule of estimated useful lives of intangible assets


Franchise or manachise agreements		Remaining contract terms from 10 to 20 years
Non-compete agreements		2 - 10 years based on specified non-compete period
Purchased software		3 - 10 years based on the estimated usage period
Other intangible assets including trademark, licenses and other rights		2 - 15 years based on the contractual term, the length of license agreements and the effective terms of other legal rights

Schedule of estimated useful life of lease agreements


Favorable lease agreements acquired before the adoption of ASC 842		Remaining lease terms from 1 to 20 years
Unfavorable lease agreements		Remaining lease terms from 3 to 13 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
As of			Assets	Observable Inputs	Inputs
December 31,	Description	Fair Value	(Level 1)	(Level 2)	(Level 3)
2020	Equity securities with readily determinable fair value	3,903	3,903	—	—
2020	Available-for-sale debt securities	220	—	220	—
2020	Employee benefit plan assets	6	6	—	—
2021	Equity securities with readily determinable fair value	2,589	2,589	—	—
2021	Available-for-sale debt securities	220	—	220	—
2021	Employee benefit plan assets	5	5	—	—

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


			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active	Significant
			Markets for	Other	Significant
		Fair Value for	Identical	Observable	Unobservable	Total
Years Ended		Years Ended	Assets	Inputs	Inputs	Loss for
December 31,	Description	December 31	(Level 1)	(Level 2)	(Level 3)	the Year
2020	Property and equipment	2	—	—	2	41
2020	Operating lease right-of-use assets	71	—	—	71	139
2020	Long-term investment	—	—	—	—	92
2020	Goodwill	2,328	—	—	2,328	437
2021	Property and equipment	33	—	—	33	24
2021	Operating lease right-of-use assets	88	—	—	88	48
2021	Intangible assets	2,556	—	—	2,556	245
2021	Long-term investment	—	—	—	—	63

Schedule of share-based compensation expense recognized


	Years Ended December 31,
	2019	2020	2021
Hotel operating costs	35	42	39
Selling and marketing expenses	3	4	4
General and administrative expenses	72	76	66
Total	110	122	109

Summary of operating segment results


	Years Ended December 31,
	2020			2021
	Legacy	Legacy		Legacy	Legacy
	Huazhu	DH	Total	Huazhu	DH	Total

Total revenues	8,664	1,532	10,196	11,247	1,538	12,785
Operating costs and expenses	8,978	2,947	11,925	10,549	3,058	13,607
Goodwill impairment loss	—	437	437	—	—	—
Other operating income, net	214	266	480	193	793	986
Interest income	118	1	119	88	1	89
Interest expense	427	106	533	291	114	405
Other (expenses) income, net	(92)	3	(89)	139	18	157
Unrealized (losses) gains from fair value changes of equity securities	(266)	1	(265)	(96)	—	(96)
Foreign exchange gain (loss)	176	(1)	175	(294)	(23)	(317)
(Loss) income before income tax	(591)	(1,688)	(2,279)	437	(845)	(408)
Income tax expense (benefit)	151	(366)	(215)	249	(237)	12
(Loss) from equity method investments	(117)	(23)	(140)	(50)	(10)	(60)
Net loss attributable to noncontrolling interest	(12)	—	(12)	(15)	—	(15)
Net (loss) income attributable to Huazhu Group Limited	(847)	(1,345)	(2,192)	153	(618)	(465)
Income tax expense (benefit)	151	(366)	(215)	249	(237)	12
Interest income	118	1	119	88	1	89
Interest expense	427	106	533	291	114	405
Depreciation and amortization	1,123	239	1,362	1,222	281	1,503
EBITDA	736	(1,367)	(631)	1,827	(461)	1,366

Summary of total assets for operating segments, reconciled to consolidated amounts

As of December 31,

2020

2021

Legacy Huazhu

Legacy DH

Total

Legacy Huazhu

Legacy DH

Total

Total assets

46,243

18,912

65,155

45,353

17,916

63,269

Summary of revenues and property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill by geographical region

The following tables represent revenues and property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill by geographical region.

Revenues:


	Years Ended December 31,
	2020	2021
China	8,647	11,231
Germany	1,212	1,263
All others	337	291
Total	10,196	12,785

Property and equipment, net, intangible assets, net, right-of-use assets, land use rights, net and goodwill:


	As of December 31,
	2020	2021
China	30,635	33,143
Germany	15,670	13,884
All others	2,544	2,929
Total	48,849	49,956

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2021

CitiGo Hotels

Business Acquisition [Line Items]

Summary of unaudited pro forma results of operation


	Period Ended December 31,
	2020	2021
Pro forma total revenue	10,346	12,861
Pro forma net loss attributable to Huazhu Group Limited	(2,318)	(480)

Schedule of allocation of the purchase price as of the date of acquisition

The allocation of the purchase price as of the date of acquisition is summarized as follows:


		Amortization Period
Current assets	34
Property and equipment	296	5-12 years
Operating lease right-of-use assets	1,119	Remaining lease terms
Other non-current assets	33
Franchise agreement	61	Remaining contract terms
Brand names	90	Indefinite-life
Goodwill	372
Operating lease liabilities, current	(153)
Other current liabilities	(23)
Operating lease liabilities, non-current	(987)
Other noncurrent liabilities	(5)
Deferred tax liabilities	(33)
Noncontrolling interest	(21)
Total	783

Deutsche Hospitality.

Business Acquisition [Line Items]

Summary of unaudited pro forma results of operation


	Period Ended December 31,
	2019	2020
Pro forma total revenue	14,995	10,196
Pro forma net income (loss) attributable to Huazhu Group Limited	1,780	(2,204)

Schedule of allocation of the purchase price as of the date of acquisition

The allocation of the purchase price as of the date of acquisition is summarized as follows:


		Amortization Period
Current assets	785
Property and equipment, net	586	2-25 years
Operating lease right-of-use assets	8,616	Remaining lease terms
Financing lease right-of-use assets	1,794	Shorter of estimated useful lives of the assets and the lease terms
Franchise or manachise agreements	270	Remaining contract terms
Brand names	3,873	Indefinite-life
Non-compete agreement	10	2 years
Goodwill	2,694
Deferred tax assets	170
Other non-current assets	280
Operating lease liabilities, current	(296)
Finance lease liabilities, current	(21)
Other current liabilities	(784)
Operating lease liabilities, non-current	(8,553)
Finance lease liabilities, non-current	(2,166)
Other noncurrent liabilities	(330)
Deferred tax liabilities	(1,304)
Total	5,624

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

12 Months Ended

Dec. 31, 2021

REVENUE FROM CONTRACTS WITH CUSTOMERS

Schedule of disaggregated revenues

The following tables present the Group’s revenues disaggregated by the nature of the product or service:


	Years Ended December 31,
	2019	2020	2021
Room revenues	7,057	5,735	7,024
Food and beverage revenues	351	608	694
Others	310	565	400
Leased and owned hotels revenue	7,718	6,908	8,118
Initial one-time franchise fee	93	110	109
On-going management and service fees	1,228	1,057	1,479
Central reservation system usage fees, other system maintenance and support fees	908	908	1,399
Reimbursements for hotel manager fees	581	657	897
Other fees	532	404	520
Manachised and franchised hotels revenue	3,342	3,136	4,404
Other revenues	152	152	263
Total revenues	11,212	10,196	12,785

Schedule of contract balances

The Group’s contract assets are insignificant at December 31, 2020 and 2021.


	As of December 31,
	2020	2021
Current contract liabilities	1,272	1,366
Long-term contract liabilities	662	785
Total contract liabilities	1,934	2,151

The contract liabilities balances above which are classified as deferred revenue on the consolidated balance sheet, as of December 31, 2020 and 2021 were comprised of the following:


	As of December 31,
	2020	2021
Initial fees received from franchisees owners	924	1,074
Cash received for membership fees and not recognized as revenue	430	519
Advances received from customers	529	505
Deferred revenue related to the loyalty program	51	53
Total	1,934	2,151

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2021

PROPERTY AND EQUIPMENT, NET

Schedule of property and equipment, net

Property and equipment, net consist of the following:


	As of December 31,
	2020	2021
Cost:
Buildings	247	305
Leasehold improvements	9,542	10,467
Furniture, fixtures and equipment	2,008	2,348
Motor vehicles	1	3
	11,798	13,123
Less: Accumulated depreciation	5,764	6,845
	6,034	6,278
Construction in progress	648	778
Property and equipment, net	6,682	7,056

INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2021

INTANGIBLE ASSETS, NET

Schedule of intangible assets with indefinite life

Intangible assets, net consist of the following:


	As of December 31,
	2020	2021
Intangible assets with indefinite lives:
Brand names (Note 3)	5,319	5,010
Master brand agreement	192	192
Intangible assets with finite lives:
Franchise or manachise agreements	356	366
Favorable lease agreements from sublease	12	11
Purchased software	108	142
Other intangible assets	70	70
Total	6,057	5,791
Less: Accumulated amortization	112	163
Less: Accumulated impairment loss(Note2)	—	243
Total	5,945	5,385

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

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


		Amortization for Intangible Assets
2022		37
2023		36
2024		32
2025		31
2026		28
Thereafter		180
Total		344

INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2021

INVESTMENTS.

Schedule of investments


	As of December 31,
	2020	2021
Equity securities with readily determinable fair values:
Accor	3,849	2,508
Other marketable securities	54	81
Equity securities without readily determinable fair values:
Cjia/Cjia Group	183	168
OYO	66	54
Other equity securities without readily determinable fair values	72	71
Equity-method investments:
AAPC LUB	490	525
Hotel related funds	476	488
China Hospitality JV	103	99
Zleep	88	68
Commerz Real Institute	—	85
Other investments	225	187
Available-for-sale debt securities:
Cjia/Cjia Group	220	220
Total	5,826	4,554

GOODWILL (Tables)

12 Months Ended

Dec. 31, 2021

GOODWILL.

Schedule of changes in the carrying amount of goodwill


	Legacy Huazhu	Legacy DH	Total
Balance at January 1, 2020
Goodwill	2,661	—	2,661
Accumulated impairment loss	(4)	—	(4)
	2,657	—	2,657
Goodwill acquired during the year (Note 3)	3	2,694	2,697
Impairment loss	—	(437)	(437)
Net foreign exchange-goodwill	—	74	74
Net foreign exchange-impairment loss	—	(3)	(3)
Balance at December 31, 2020
Goodwill	2,664	2,768	5,432
Accumulated impairment loss	(4)	(440)	(444)
	2,660	2,328	4,988
Goodwill acquired during the year (Note 3)	372	6	378
Net foreign exchange-goodwill	—	(278)	(278)
Net foreign exchange-impairment loss	—	44	44
Balance at December 31, 2021
Goodwill	3,036	2,496	5,532
Accumulated impairment loss	(4)	(396)	(400)
	3,032	2,100	5,132

DEBT (Tables)

12 Months Ended

Dec. 31, 2021

DEBT

Schedule of short-term and long-term debt

The short-term and long-term debt as of December 31, 2020 and 2021 were as follows:


	As of December 31,
	2020	2021
Short-term debt:
Long-term bank borrowings, current portion	251	2,464
Short-term bank borrowings	851	692
Convertible senior notes, current portion	—	3,029
FF&E liability, current portion	40	47
Total	1,142	6,232

Long-term debt:
Long-term bank borrowings, non-current portion	4,384	211
Convertible senior notes, non-current portion	6,318	3,158
FF&E liability, non-current portion	135	180
Others	19	16
Total	10,856	3,565

Schedule of contractual maturities of the group's long-term debt

The contractual maturities of the Group’s debt as of December 31, 2021 were as follows:


Year Ending December 31,		Principle Amounts
2022		6,232
2023		111
2024		3,314
2025		71
2026		23
Thereafter		76
Total		9,827

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2021

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities


	As of December 31,
	2020	2021
Payable to franchisees	1,349	710
Other payables	535	535
Accrued rental, utilities and other accrued expenses	245	209
Liabilities related to customer loyalty program	111	135
Value-added tax, other tax and surcharge payables	124	132
Payable to noncontrolling interest holders	76	117
Total	2,440	1,838

HOTEL OPERATING COSTS (Tables)

12 Months Ended

Dec. 31, 2021

HOTEL OPERATING COSTS.

Schedule of hotel operating costs


	Years Ended December 31,
	2019	2020	2021
Rents	2,624	3,485	3,900
Utilities	404	478	507
Personnel costs	1,854	2,501	3,022
Depreciation and amortization	960	1,316	1,413
Consumable, food and beverage	793	885	969
Others	555	1,064	1,471
Total	7,190	9,729	11,282

PRE-OPENING EXPENSES (Tables)

12 Months Ended

Dec. 31, 2021

PRE-OPENING EXPENSES

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


	Years Ended December 31,
	2019	2020	2021
Rents	460	251	68
Personnel costs	14	15	5
Others	28	22	8
Total	502	288	81

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2021

SHARE-BASED COMPENSATION

Summary of the Group's nonvested restricted stock activity


		Weighted Average Grant
	Number of Restricted	Date
	Stocks	Fair Value
		US$
Nonvested restricted stocks outstanding at January 1, 2021	70,954,080	1.18
Granted	2,163,420	4.20
Forfeited	(4,607,340)	1.64
Vested	(12,325,470)	1.58
Adjusted for performance conditions	(2,488,200)	0.61
Nonvested restricted stocks outstanding at December 31, 2021	53,696,490	1.20

EARNINGS (LOSSES) PER SHARE (Tables)

12 Months Ended

Dec. 31, 2021

EARNINGS (LOSSES) PER SHARE

Schedule of computation of basic and diluted earnings per share


	Years Ended December 31,
	2019	2020	2021
Net income (loss) attributable to ordinary shareholders — basic	1,769	(2,192)	(465)
Eliminate the dilutive effect of interest expense of convertible senior notes	40	—	—
Net income attributable to ordinary shareholders — diluted	1,809	(2,192)	(465)
Weighted average ordinary shares outstanding — basic	2,843,051,378	2,927,398,409	3,114,124,244
Incremental weighted-average ordinary shares from assumed exercise of share options and nonvested restricted stocks using the treasury stock method	93,975,271	—	—
Dilutive effect of convertible senior notes	106,072,250	—	—
Weighted average ordinary shares outstanding — diluted	3,043,098,899	2,927,398,409	3,114,124,244
Basic earnings (losses) per share	0.62	(0.75)	(0.15)
Diluted earnings (losses) per share	0.59	(0.75)	(0.15)

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


	As of December 31,
	2019	2020	2021
Outstanding employee options and nonvested restricted stocks	—	70,954,080	53,696,490
Shares of convertible senior notes	—	226,827,410	226,827,410
Total	—	297,781,490	280,523,900

LEASES (Tables)

12 Months Ended

Dec. 31, 2021

LEASES

Summary of supplemental information related to operating leases


	Years Ended December 31,
	2020		2021
Lease cost:
Operating fixed lease cost	3,964		4,074
Finance lease cost
— Amortization of ROU assets	74		79
— Interest on lease liabilities	90		96
Short term lease cost	0		0
Operating variable lease cost	(171)		(25)
Total lease cost	3,957		4,224

Other information:
Weighted average remaining lease term
Operating leases	14 years		13 years
Finance leases	29 years		28 years
Weighted average discount rate
Operating leases	6.23	%	6.31	%
Finance leases	3.96	%	3.97	%

Schedule of maturities of operating lease liabilities

As of December 31, 2021, the maturities of lease liabilities in accordance with ASC 842 in each of the next five years and thereafter are as follows:


Year Ending December 31,	Total Operating Leases	Total Finance Leases
2022	4,055	140
2023	4,066	155
2024	4,037	157
2025	3,871	157
2026	3,655	158
Thereafter	26,035	3,824

Total minimum lease payments	45,719	4,591

Less: amount representing interest	14,079	1,866

Present value of minimum lease payments	31,640	2,725

As of December 31, 2020, the maturities of lease liabilities in accordance with ASC 842 in each of the next five years and thereafter were as follows:


Year Ending December 31,	Total Operating Leases	Total Finance Leases
2021	3,858	129
2022	3,826	144
2023	3,733	146
2024	3,660	147
2025	3,466	147
Thereafter	25,730	3,575

Total minimum lease payments	44,273	4,288

Less: amount representing interest	13,819	1,760

Present value of minimum lease payments	30,454	2,528

Schedule of maturities of finance lease liabilities


Year Ending December 31,	Total Operating Leases	Total Finance Leases
2022	4,055	140
2023	4,066	155
2024	4,037	157
2025	3,871	157
2026	3,655	158
Thereafter	26,035	3,824

Total minimum lease payments	45,719	4,591

Less: amount representing interest	14,079	1,866

Present value of minimum lease payments	31,640	2,725


Year Ending December 31,	Total Operating Leases	Total Finance Leases
2021	3,858	129
2022	3,826	144
2023	3,733	146
2024	3,660	147
2025	3,466	147
Thereafter	25,730	3,575

Total minimum lease payments	44,273	4,288

Less: amount representing interest	13,819	1,760

Present value of minimum lease payments	30,454	2,528

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

INCOME TAXES

Summary of income (loss) before income taxes


	Years Ended December 31,
	2019	2020	2021
PRC including Hong Kong and Taiwan	2,334	(392)	617
Germany	—	(1,606)	(632)
Other	231	(281)	(393)
Total	2,565	(2,279)	(408)

Schedule of tax expense (benefit)


	Years Ended December 31,
	2019	2020	2021
Current Tax	678	338	555
Deferred Tax	(38)	(553)	(543)
Total	640	(215)	12

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


	Years Ended December 31,
	2019		2020		2021
PRC statutory tax rate	25	%	25	%	25	%
Tax effect of non-deductible expenses and non-taxable income in determining taxable profit	(3)	%	(6)	%	(6)	%
Effect of different tax rate of group entities operating in other jurisdictions	1	%	(2)	%	(6)	%
Effect of change in valuation allowance	2	%	(10)	%	(24)	%
Effect of tax holiday	(2)	%	1	%	9	%
Effect of cash dividends	4	%	0	%	(8)	%
Effect of excess tax benefit of share-based rewards	(2)	%	1	%	7	%
Effective tax rate	25	%	9	%	(3)	%

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


	Years Ended December 31,
	2019	2020	2021
Aggregate amount	45	31	37
Per share effect—basic	0.02	0.01	0.01
Per share effect—diluted	0.01	0.01	0.01

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


	As of December 31,
	2020	2021
Deferred tax assets:
Net loss carryforward	888	1,271
Deferred revenue	283	326
Long-term assets	388	238
Bad debt provision	18	40
Accrued payroll	69	45
Other accrued expenses	3	3
Share-based compensation	31	29
Others	12	150
Valuation allowance	(369)	(466)
Total deferred tax assets, net of valuation allowance	1,323	1,636
Deferred tax liabilities:
Fair value adjustment for Building, land use rights and identified intangible assets due to acquisition	1,782	1,596
Others	99	31
Total deferred tax liabilities	1,881	1,627
Net deferred tax (liabilities) assets	(558)	9
Analysis as:
Deferred tax assets	623	862
Deferred tax liabilities	1,181	853
Net deferred tax (liabilities) assets	(558)	9

Summary of movement of the valuation allowance


	Years Ended December 31,
	2019	2020	2021
Balance at the beginning of the year	(107)	(152)	(369)
Provided	(79)	(249)	(151)
Reversed	24	32	37
Written off	10	—	17
Balance at the end of the year	(152)	(369)	(466)

Schedule of unrecognized tax benefits

EMPLOYEE BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2021

EMPLOYEE BENEFIT PLANS

Schedule of projected benefit obligation, fair value of plan assets, funded status and accumulated benefit obligation for the plans


	Year Ended December 31,
Change in Projected Benefit Obligation:	2020	2021
Begin of the year	147	193
Current service cost	5	5
Interest cost	1	0
Contributions by plan participants	1	1
Actuarial loss (gain)	38	(14)
Foreign currency translation	3	(19)
Benefits paid	(7)	(9)
Settlements	(1)	—
Administrative Expenses, Taxes and Premiums Paid	0	0
Curtailments	(1)	—
Acquisitions	—	0
Effect of other economic events	7	—
End of the year	193	157


	Year Ended December 31,
	2020	2021
Change in Plan Assets:
Begin of the year	32	6
Actual return (loss) on plan assets	(2)	0
Foreign currency translation	1	(0)
Employer contributions	9	1
Employee contributions	1	0
Benefits paid	(8)	(2)
Acquisitions	—	0
Other economic events	(27)	—
End of the year	6	5
Excess of defined benefit obligation over the fair value of plan assets	187	152
Accumulated benefit obligation	193	157

Schedule of amounts recognized in the consolidated balance sheets


	As of December 31,
	2020	2021
Salary and welfare payables	8	8
Retirement benefit obligation	179	144
Liability in the balance sheet	187	152

Schedule of principal actuarial assumptions


	As of December 31,
	2020		2021
Discount rate- Germany	0.33	%	0.89	%
Discount rate- other	0.12	%	0.39	%
Inflation rate	1.00	%	1.00	%
Future salary increases	1.50	%	2.17	%
Future pension increases	1.80	%	1.69	%

Schedule of fair value hierarchy of total plan assets measured at fair value by asset category


	As of December 31,
	2020	2021
Level 1
Equity funds	1	1
Bond funds	2	2
Property	2	1
Other	1	1
Total	6	5

RELATED PARTY TRANSACTIONS AND BALANCES (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of related parties


Related Party	Nature of the Party	Relationship with the Group
Trip.com Group Limited (“Trip.com”)	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
Shanghai Zhuchuang Enterprise Management Co., Ltd. (“Zhuchuang”)	Staged office space company	Equity method investee of the Group
China Hospitality JV, Ltd. (“China Hospitality JV”)	Property management company	Equity method investee of the Group
Smart Lodging Group (Cayman) Limited(“Smart Lodging”)	Hotel chain	Equity method investee of the Group
Shanghai Lianquan Hotel Management Co., Ltd. (“Lianquan”)	Hotel management company	Equity method investee of the Group
Suzhou Huali Jinshi Construction Decoration Co., Ltd. (“Huali Jinshi”)	Building decoration company	Equity method investee of the Group
Shenzhen Hitone Investment Fund Partnership (LLP) ( “Hitone”)	Fund	Equity method investee of the Group

Schedule of amounts due from related parties


	As of December 31,
	2020	2021
Sheen Star	52	33
Zhuchuang	27	27
Trip.com	22	17
Cjia Group	22	29
Accor	1	—
Lianquan	58	49
Others	14	12
Allowance for expected credit losses	(18)	(17)
Total	178	150

Schedule of amounts due to related party


	As of December 31,
	2020	2021
Trip.com	48	44
Accor	8	—
Cjia Group	42	101
Huali Jinshi	29	47
Others	5	5
Total	132	197

Schedule of significant related party transactions


	Years Ended December 31,
	2019	2020	2021
Commission expenses to Trip.com	72	78	99
Lease expenses to Trip.com	18	18	19
Lease expenses to Cjia Group	—	—	12
Service fee to Huali Jinshi	99	41	42
Service fee to Cjia Group	6	17	—
Brand use fee, reservation fee and other related service fee to Accor	28	17	22
Goods sold and service provided to Cjia Group	21	18	11
Early termination compensation of sublease to Cjia Group	—	8	—
Loan payment to Smart Lodging	30	—	—
Loan payment to Lianquan	32	—	—
Loan payment to Hitone	—	—	5
Service fee from Trip.com	41	66	62
Service fee from Accor	9	3	3
Service fee from China Hospitality JV	6	1	2
Service fee from Sheen Star	4	4	5
Sublease income from Lianquan	7	12	10
Sublease income from Cjia Group	14	9	6
Early termination compensation of franchise agreement from China Hospitality JV	—	26	—
Purchase of property and equipment from Cjia Group	—	11	—
Interest income from Sheen Star	8	1	0
Interest income from CREATER	6	—	—
Business acquisition of CitiGO from Cjia Group	—	—	783
Business acquisition of one individual company from Cjia Group	—	—	51

ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) ¥ in Millions	1 Months Ended		12 Months Ended
	Jun. 30, 2021 $ / shares	Sep. 30, 2020 CNY (¥)	Dec. 31, 2021 item $ / shares	May 31, 2021 $ / shares	Dec. 31, 2020 item $ / shares	Jan. 02, 2020
Organization and presentation activities
Ordinary shares, par value (in dollars per share) \| $ / shares	$ 0.00001		$ 0.00001	$ 0.0001	$ 0.00001
Share split conversion ratio	10
Proceeds from issuance of ordinary shares \| ¥		¥ 6,018
Legacy Huazhu [Member] \| Minimum
Organization and presentation activities
Term of franchise and management agreement			8 years
Legacy Huazhu [Member] \| Maximum
Organization and presentation activities
Term of franchise and management agreement			10 years
Leased and owned hotels
Organization and presentation activities
Number of hotels			738		753
Manachised hotels
Organization and presentation activities
Number of hotels			6,824		5,746
Manachised hotels \| Legacy DH [member] \| Minimum
Organization and presentation activities
Term of franchise and management agreement			15 years
Manachised hotels \| Legacy DH [member] \| Maximum
Organization and presentation activities
Term of franchise and management agreement			20 years
Franchised hotels
Organization and presentation activities
Number of hotels			268		290
Franchised hotels \| Legacy DH [member] \| Minimum
Organization and presentation activities
Term of franchise and management agreement			10 years
Franchised hotels \| Legacy DH [member] \| Maximum
Organization and presentation activities
Term of franchise and management agreement			15 years
Deutsche Hospitality
Organization and presentation activities
Percent of ownership acquired (as percent)						100.00%

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Basis of presentation- Debt (Details) € in Millions, ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Mar. 31, 2022 CNY (¥)	Dec. 31, 2021 EUR (€)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Nov. 03, 2017 USD ($)
Debt Instrument [Line Items]
Working capital deficit							¥ 5,726	$ 898
Outstanding balance of long-term debt			¥ 10,856				3,565
Unused facilities					¥ 2,994
Net Cash Provided by (Used in) Operating Activities	¥ 1,342	$ 210	609	¥ 3,293
Equity securities with readily determinable fair value			¥ 3,903				2,589	406
Term Facility Expiring December 2022
Debt Instrument [Line Items]
Outstanding balance of long-term debt						€ 338	2,440
Term Facility Expiring December 2022 \| Credit Facility
Debt Instrument [Line Items]
Aggregate principal amount						€ 440	3,177
Convertible senior notes \| 2022 Notes
Debt Instrument [Line Items]
Aggregate principal amount							¥ 3,027	$ 475	$ 475

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Variable Interest Entities (Details) - item	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
VIEs
Variable Interest Entities
Number of entities consolidated	7	8

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Investments, Loan receivables and Inventories (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Investments
Impairment loss	¥ 63	¥ 92	¥ 10
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)	4.80%
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)	15.00%

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Property and equipment, net (Details)	12 Months Ended
	Dec. 31, 2021
Leasehold improvements
Property and equipment, net
Property and equipment, estimated useful life	Shorter of the lease term or their estimated useful lives
Buildings \| Minimum
Property and equipment, net
Property and equipment, estimated useful life	20 years
Buildings \| Maximum
Property and equipment, net
Property and equipment, estimated useful life	40 years
Furniture, fixtures and equipment \| Minimum
Property and equipment, net
Property and equipment, estimated useful life	1 year
Furniture, fixtures and equipment \| Maximum
Property and equipment, net
Property and equipment, estimated useful life	20 years
Motor vehicles
Property and equipment, net
Property and equipment, estimated useful life	5 years

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Intangible assets (Details) ¥ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥) item	Dec. 31, 2020 CNY (¥)
Finite-Lived Intangible Assets [Line Items]
Franchise fee reduction offered to franchisee to since the COVID-19 outbreak	¥ 105	¥ 132
Legacy Huazhu [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of fair value exceeded the carrying value	100.00%	100.00%
Legacy DH [member]
Finite-Lived Intangible Assets [Line Items]
Fair value exceeded carrying value	¥ 421	¥ 244
Percentage of fair value exceeded the carrying value	13.00%	6.00%
Hypothetical decline in projected cash flow (as a percent)	5.00%	5.00%
Short term work compensation	¥ 197	¥ 244
Other Operating Income \| Legacy DH [member]
Finite-Lived Intangible Assets [Line Items]
Other grants recognized	¥ 765	17
Master brand agreement
Finite-Lived Intangible Assets [Line Items]
Initial term	70 years
Deutsche Hospitality
Finite-Lived Intangible Assets [Line Items]
Percentage of fair value exceeded the carrying value	6.00%
Deutsche Hospitality \| Legacy DH [member]
Finite-Lived Intangible Assets [Line Items]
Hypothetical goodwill impairment in 5% decline in projected cash flow	¥ 313	42
Hypothetical goodwill impairment in 5% increase in discount rate	¥ 359	¥ 175
Deutsche Hospitality \| Brand names
Finite-Lived Intangible Assets [Line Items]
Number of brand names acquired \| item	2
Deutsche Hospitality \| Brand name, one
Finite-Lived Intangible Assets [Line Items]
Fair value exceeded carrying value	¥ 82
Percentage of fair value exceeded the carrying value	13.00%
Hypothetical indefinite life intangible asset impairment in 5% increase in discount rate	¥ 48
Hypothetical indefinite life intangible asset impairment in 5% decrease in royalty saving rate	36
Deutsche Hospitality \| Brand name, two
Finite-Lived Intangible Assets [Line Items]
Fair value exceeded carrying value	¥ 57
Percentage of fair value exceeded the carrying value	14.00%
Hypothetical increase in discount rate	5.00%
Hypothetical decrease in royalty saving rate	5.00%
Hypothetical indefinite life intangible asset impairment in 5% increase in discount rate	¥ 33
Hypothetical indefinite life intangible asset impairment in 5% decrease in royalty saving rate	¥ 23
Deutsche Hospitality \| Trademarks
Finite-Lived Intangible Assets [Line Items]
Hypothetical increase in discount rate	5.00%
Hypothetical decrease in royalty saving rate	5.00%
Hypothetical indefinite life intangible asset impairment in 5% increase in discount rate	¥ 160
Hypothetical indefinite life intangible asset impairment in 5% decrease in royalty saving rate	120
Impairment loss recognized	¥ 160
Minimum \| Franchise or manachise agreements
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	10 years
Minimum \| Non-compete agreement
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	2 years
Minimum \| Favorable lease agreements
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	1 year
Minimum \| Purchased software
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	3 years
Minimum \| Unfavorable lease agreements
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	3 years
Minimum \| Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	2 years
Maximum \| Franchise or manachise agreements
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	20 years
Maximum \| Non-compete agreement
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	10 years
Maximum \| Favorable lease agreements
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	20 years
Maximum \| Purchased software
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	10 years
Maximum \| Unfavorable lease agreements
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	13 years
Maximum \| Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Remaining contract terms	15 years

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Land use rights (Details) € in Millions, ¥ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥) item	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥) item	Apr. 17, 2020 EUR (€)	Dec. 31, 2019 EUR (€)
Accounting policies
Amortization expense	¥ 65	¥ 62	¥ 16
Long-lived asset impairment loss	¥ 157	180	¥ 3
Number of reporting units \| item	2		1
Contract liabilities	¥ 2,151	1,934
Net revenues	12,785	10,196	¥ 11,212
Advertising related expenses	165	150	99
Other Operating Income \| Legacy Huazhu [Member]
Accounting policies
Unrestricted government subsidies from local governmental agencies	110	154	148
Hotel related funds
Accounting policies
Investments in funds	488	476
Term Facility Expiring December 2022
Accounting policies
Line of Credit Facility, Maximum Borrowing Capacity \| €				€ 440	€ 440
Loyalty program
Accounting policies
Net revenues	243	223	224
Land use rights
Accounting policies
Amortization expense	¥ 7	¥ 7	¥ 8
Minimum
Accounting policies
Estimated membership duration	2 years
VAT (as a percent)	6.00%
Minimum \| Legacy Huazhu [Member]
Accounting policies
Initial lease term	10 years
Minimum \| Legacy DH [member]
Accounting policies
Initial lease term	20 years
Minimum \| Land use rights
Accounting policies
Remaining contractual term	30 years
Minimum \| Favorable lease agreements
Accounting policies
Estimated useful life of intangible assets	1 year
Minimum \| Unfavorable lease agreements
Accounting policies
Estimated useful life of intangible assets	3 years
Maximum
Accounting policies
Estimated membership duration	5 years
VAT (as a percent)	19.00%
Maximum \| Legacy Huazhu [Member]
Accounting policies
Initial lease term	20 years
Maximum \| Legacy DH [member]
Accounting policies
Initial lease term	25 years
Maximum \| Land use rights
Accounting policies
Remaining contractual term	50 years
Maximum \| Favorable lease agreements
Accounting policies
Estimated useful life of intangible assets	20 years
Maximum \| Unfavorable lease agreements
Accounting policies
Estimated useful life of intangible assets	13 years

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Fair value (Details) ¥ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2021 USD ($)
Fair value
Equity securities with readily determinable fair value	¥ 2,589,000	¥ 3,903,000		$ 406
Retirement benefit obligation	144,000	179,000		23
Property and equipment - Total Loss for the Year	157,000	180,000	¥ 3,000
Operating lease right-of-use assets	29,942,000	28,980,000		4,698
Goodwill	5,132,000	4,988,000	2,657,000	$ 805
Intangible assets carrying value	2,801	0	0
Impairment charge of intangible assets	245,000	0	0
Goodwill, Impairment Loss	0	437,000	0
Property and equipment, impairment loss	24,000	41,000
Long-term investment, impairment loss	63,000	92,000	10,000
Operating lease right-of-use assets, impairment loss	48,000	139,000
Long-lived asset impairment loss	157,000	180,000	3,000
Operating lease, impairment loss	48,000	139,000	0
Leased hotels
Fair value
Property and equipment - Total Loss for the Year	24,000		3,000
Property and equipment, impairment loss		41,000
Long-lived asset impairment loss	24,000		3,000
Convertible senior notes
Fair value
Long-term bank borrowings, current portion	3,029,000
Carrying amounts of convertible senior notes	6,186,000	6,318,000	3,290,000
Fair value of convertible senior notes	6,681,000	7,747,000	¥ 3,711,000
Recurring basis \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair value
Equity securities with readily determinable fair value	2,589,000	3,903,000
Retirement benefit obligation	5,000	6,000
Recurring basis \| Significant Other Observable Inputs (Level 2)
Fair value
Available-for-sale debt securities	220,000	220,000
Non-recurring basis
Fair value
Property and equipment	33,000	2,000
Intangible assets	2,556,000
Operating lease right-of-use assets	88,000	71,000
Goodwill		2,328,000
Non-recurring basis \| Significant Unobservable Inputs (Level 3)
Fair value
Property and equipment	33,000	2,000
Intangible assets	2,556,000
Operating lease right-of-use assets	¥ 88,000	71,000
Goodwill		¥ 2,328,000
Revenue growth rate \| Minimum
Fair value
Measurement input	(15)	(15)	(15)	(15)
Revenue growth rate \| Maximum
Fair value
Measurement input	4	4	4	4
Discount rate \| Minimum
Fair value
Measurement input	8.64	8.64	8.64	8.64
Discount rate \| Maximum
Fair value
Measurement input	20	20	20	20
Fair value \| Recurring basis
Fair value
Equity securities with readily determinable fair value	¥ 2,589,000	¥ 3,903,000
Available-for-sale debt securities	220,000	220,000
Retirement benefit obligation	5,000	6,000
Carrying value \| Non-recurring basis
Fair value
Long-term investments	63,000	92,000	¥ 10,000
Operating lease right-of-use assets	136,000	210,000	0
Goodwill	0	2,768,000	0
Carrying value \| Non-recurring basis \| Leased hotels
Fair value
Property and equipment	¥ 57,000	¥ 43,000	¥ 3,000

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Share-based compensation and Treasury shares (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥) segment shares	Dec. 31, 2020 CNY (¥) shares	Dec. 31, 2019 CNY (¥)	Dec. 31, 2021 USD ($) shares
Share-based compensation
Recognized share-based compensation expenses	¥ 109	¥ 122	¥ 110
Number of operating segments \| segment	2
Treasury shares
Aggregate treasury shares (in shares) \| shares	30,974,040	30,967,640		30,974,040
Cash consideration paid for ordinary shares repurchased	¥ 107	¥ 107		$ 17
Hotel operating costs
Share-based compensation
Recognized share-based compensation expenses	39	42	35
Selling and marketing expenses
Share-based compensation
Recognized share-based compensation expenses	4	4	3
General and administrative expenses
Share-based compensation
Recognized share-based compensation expenses	¥ 66	¥ 76	¥ 72

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Earnings (losses) per share, Segment and geography information (Details) ¥ in Millions, $ in Millions	3 Months Ended	12 Months Ended
	Sep. 30, 2020 CNY (¥)	Dec. 31, 2021 CNY (¥) segment	Dec. 31, 2021 USD ($) segment	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Segment Reporting, Revenue Reconciling Item [Line Items]
Number of operating segments \| segment		2	2
Number of reportable segments \| segment		2	2
Total revenues		¥ 12,785	$ 2,006	¥ 10,196	¥ 11,212
Operating costs and expenses		13,607	2,135	11,925	9,236
Goodwill impairment loss		0		437	0
Other operating income, net		986	155	480	132
Interest income		89	14	119	160
Interest expense		405	64	533	315
Other income (expense), net		157	25	(89)	331
Unrealized loss from fair value changes of equity securities		(96)	(15)	(265)	316
Foreign exchange gain (loss)		(317)	(50)	175	(35)
Income (loss) before income taxes		(408)	(64)	(2,279)	2,565
Income tax expense (benefit)		12	2	(215)	640
Loss from equity method investments		(60)	(9)	(140)	(164)
Net loss attributable to noncontrolling interest		(15)	(2)	(12)	(8)
Net income (loss) attributable to Huazhu Group Limited		(465)	(73)	(2,192)	1,769
Income tax expense (benefit)		12	2	(215)	640
Interest expense		405	64	533	315
Depreciation and amortization		1,503	$ 236	1,362	¥ 991
EBITDA		1,366		(631)
Legacy Huazhu [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total revenues		11,247		8,664
Operating costs and expenses		10,549		8,978
Other operating income, net		193		214
Interest income		88		118
Interest expense		291		427
Other income (expense), net		139		(92)
Unrealized loss from fair value changes of equity securities		(96)		(266)
Foreign exchange gain (loss)		(294)		176
Income (loss) before income taxes		437		(591)
Income tax expense (benefit)		249		151
Loss from equity method investments		(50)		(117)
Net loss attributable to noncontrolling interest		(15)		(12)
Net income (loss) attributable to Huazhu Group Limited		153		(847)
Income tax expense (benefit)		249		151
Interest expense		291		427
Depreciation and amortization		1,222		1,123
EBITDA		1,827		736
Legacy DH [member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total revenues		1,538		1,532
Operating costs and expenses		3,058		2,947
Goodwill impairment loss	¥ 437			437
Other operating income, net		793		266
Interest income		1		1
Interest expense		114		106
Other income (expense), net		18		3
Unrealized loss from fair value changes of equity securities				1
Foreign exchange gain (loss)		(23)		(1)
Income (loss) before income taxes		(845)		(1,688)
Income tax expense (benefit)		(237)		(366)
Loss from equity method investments		(10)		(23)
Net income (loss) attributable to Huazhu Group Limited		(618)		(1,345)
Income tax expense (benefit)		(237)		(366)
Interest expense		114		106
Depreciation and amortization		281		239
EBITDA		¥ (461)		¥ (1,367)

SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Segment and geography information -2 (Details) ¥ in Millions, $ in Millions	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Segment Reporting Information [Line Items]
Total assets	¥ 63,269	$ 9,927	¥ 65,155
Legacy Huazhu
Segment Reporting Information [Line Items]
Total assets	45,353		46,243
Legacy DH
Segment Reporting Information [Line Items]
Total assets	¥ 17,916		¥ 18,912

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 2: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Segment and geography information -3 (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	¥ 12,785	$ 2,006	¥ 10,196	¥ 11,212
Long-Lived Assets	49,956		48,849
China
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	11,231		8,647
Long-Lived Assets	33,143		30,635
GERMANY
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	1,263		1,212
Long-Lived Assets	13,884		15,670
Others
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	291		337
Long-Lived Assets	¥ 2,929		¥ 2,544

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

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SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Recently Issued Accounting Pronouncements (Details) ¥ in Millions, $ in Millions	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 30, 2021 $ / ¥	Dec. 31, 2020 CNY (¥)
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
Adjustment to retained earnings	¥ 1,037	$ 163		¥ 1,502
Translation into United States Dollars
Foreign exchange rate used to translate amounts denominated in RMB to US dollar			6.3726

The cumulative amount of the reporting entity's undistributed earnings or deficit.

+ References + Details

ACQUISITIONS - Hotels and Companies (Details) - Series of Individually Immaterial Business Acquisitions [Member] ¥ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥) item	Dec. 31, 2020 CNY (¥) item	Dec. 31, 2019 CNY (¥) item
Acquisitions
Cash consideration \| ¥	¥ 51	¥ 26	¥ 54
Number of hotels acquired \| item	3	3	3

ACQUISITIONS - Deutsche Hospitality (Details) - Deutsche Hospitality. € in Millions, ¥ in Millions			12 Months Ended
	Jan. 02, 2020 EUR (€) item	Jan. 02, 2020 CNY (¥) item	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Business Acquisition [Line Items]
Percentage of ownership interest acquired	100.00%	100.00%
Number of brands in which entity is operating \| item	5	5
Aggregated consideration	€ 720	¥ 5,624
Net revenue of the acquiree included in the consolidated statements of comprehensive income			¥ 184	¥ 1,532
Net loss of the acquiree included in the consolidated statements of comprehensive income			¥ 34	¥ 1,345

ACQUISITIONS - Deutsche Hospitality, Unaudited proforma results of operations (Details) - Deutsche Hospitality. - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Pro forma results of operation
Pro forma total revenue	¥ 10,196	¥ 14,995
Pro forma net income (loss) attributable to Huazhu Group Limited	¥ (2,204)	1,780
Transaction cost		¥ 70

ACQUISITIONS - Deutsche Hospitality, allocation of purchase price (Details) ¥ in Millions, $ in Millions		12 Months Ended
	Jan. 02, 2020 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2019 CNY (¥)
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Goodwill		¥ 5,132	¥ 4,988	$ 805	¥ 2,657
Franchise or manachise agreements \| Minimum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of intangible assets		10 years
Franchise or manachise agreements \| Maximum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of intangible assets		20 years
Non-compete agreement \| Minimum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of intangible assets		2 years
Non-compete agreement \| Maximum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of intangible assets		10 years
Deutsche Hospitality.
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Current assets	¥ 785
Property and equipment, net	586
Operating lease right-of-use assets	8,616
Other non-current assets	280
Goodwill	2,694
Operating lease liabilities, current	(296)
Other current liabilities	(784)
Operating lease liabilities, non-current	(8,553)
Other noncurrent liabilities	(330)
Deferred tax liabilities	(1,304)
Financing lease right-of-use assets	1,794
Deferred tax assets	170
Finance lease liabilities, current	(21)
Finance lease liabilities, non-current	(2,166)
Total	5,624
Deutsche Hospitality. \| Minimum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of property, plant and equipment			2 years
Deutsche Hospitality. \| Maximum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of property, plant and equipment			25 years
Deutsche Hospitality. \| Franchise or manachise agreements
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets, finite life	270
Deutsche Hospitality. \| Non-compete agreement
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets, finite life	¥ 10
Estimated useful life of intangible assets	2 years
Deutsche Hospitality. \| Brand names
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets, Indefinite life	¥ 3,873

ACQUISITIONS - CitiGo Hotels (Details) - CitiGo Hotels - CNY (¥) ¥ in Millions		12 Months Ended
	Apr. 30, 2021	Dec. 31, 2021
Acquisitions
Percentage of ownership interest acquired	100.00%
Aggregated consideration	¥ 783
Cash consideration		¥ 749

ACQUISITIONS - CitiGo Hotels, Unaudited proforma results of operations (Details) - CitiGo Hotels - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Pro forma results of operation
Pro forma total revenue	¥ 12,861	¥ 10,346
Pro forma net income (loss) attributable to Huazhu Group Limited	¥ (480)	¥ (2,318)

ACQUISITIONS - CitiGo Hotels, allocation of purchase price (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Apr. 30, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Goodwill	¥ 5,132	$ 805		¥ 4,988	¥ 2,657
Franchise or manachise agreements \| Minimum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of intangible assets	10 years
Franchise or manachise agreements \| Maximum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of intangible assets	20 years
Non-compete agreement \| Minimum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of intangible assets	2 years
Non-compete agreement \| Maximum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of intangible assets	10 years
CitiGo Hotels
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Current assets			¥ 34
Property and equipment, net			296
Operating lease right-of-use assets			1,119
Other non-current assets			33
Goodwill			372
Operating lease liabilities, current			(153)
Other current liabilities			(23)
Operating lease liabilities, non-current			(987)
Other noncurrent liabilities			(5)
Deferred tax liabilities			(33)
Noncontrolling interest			(21)
Total			783
CitiGo Hotels \| Minimum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of property, plant and equipment	5 years
CitiGo Hotels \| Maximum
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Estimated useful life of property, plant and equipment	12 years
CitiGo Hotels \| Franchise agreement
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets, finite life			61
CitiGo Hotels \| Brand names
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Intangible assets, Indefinite life			¥ 90

REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregated Revenues (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Disaggregated Revenues
Total revenues	¥ 12,785	¥ 10,196	¥ 11,212
Leased and owned hotels
Disaggregated Revenues
Total revenues	8,118	6,908	7,718
Room Revenues
Disaggregated Revenues
Total revenues	7,024	5,735	7,057
Food and Beverage Revenues
Disaggregated Revenues
Total revenues	694	608	351
Others
Disaggregated Revenues
Total revenues	400	565	310
Franchise or manachise agreements
Disaggregated Revenues
Total revenues	4,404	3,136	3,342
Initial one-time franchise fee
Disaggregated Revenues
Total revenues	109	110	93
On-going management and service fees
Disaggregated Revenues
Total revenues	1,479	1,057	1,228
Central reservation system usage fees, other system maintenance and support fees
Disaggregated Revenues
Total revenues	1,399	908	908
Reimbursements for hotel manager fees
Disaggregated Revenues
Total revenues	897	657	581
Other fees
Disaggregated Revenues
Total revenues	520	404	532
Other revenues
Disaggregated Revenues
Total revenues	¥ 263	¥ 152	¥ 152

REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Balances (Details) ¥ in Millions, $ in Millions	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Contract with Customer, Liability [Abstract]
Current contract liabilities	¥ 1,366	$ 214	¥ 1,272
Long-term contract liabilities	785	$ 123	662
Total contract liabilities	¥ 2,151		¥ 1,934

REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Balances - Contract liabilities (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Contract with Customer, Liability
Initial fees received from franchisees owners	¥ 1,074	¥ 924
Cash received for membership fees and not recognized as revenue	519	430
Advances received from customers	505	529
Deferred revenue related to the loyalty program	53	51
Total contract liabilities	2,151	1,934
Initial fee on pre opening hotels received as current liabilities	496	429
Revenue recognized	¥ 613	¥ 748

REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Balances - Unsatisfied performance obligations (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenues related to unsatisfied performance obligations of loyalty program	¥ 53	¥ 51
Deferred revenue related to initial fees	1,074	924
Deferred revenue related to membership fees	519	430
Deferred revenues related to advances received from customers, expected to recognize revenue in future periods	¥ 505	¥ 529
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	¥ 53
Deferred revenue, recognized as revenue, estimated period	2 years

PROPERTY AND EQUIPMENT, NET - Schedule (Details) ¥ in Millions, $ in Millions	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Cost:
Property and equipment, gross	¥ 13,123		¥ 11,798
Less: Accumulated depreciation	6,845		5,764
Property and equipment net excluding construction in process	6,278		6,034
Construction in progress	778		648
Property and equipment, net	7,056	$ 1,107	6,682
Buildings
Cost:
Property and equipment, gross	305		247
Leasehold improvements
Cost:
Property and equipment, gross	10,467		9,542
Furniture, fixtures and equipment
Cost:
Property and equipment, gross	2,348		2,008
Motor vehicles
Cost:
Property and equipment, gross	¥ 3		¥ 1

PROPERTY AND EQUIPMENT, NET - Narrative (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
PROPERTY AND EQUIPMENT, NET
Depreciation expense	¥ 1,352	¥ 1,219	¥ 967

INTANGIBLE ASSETS, NET - Schedule (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2021 USD ($)
Intangible assets, net
Intangible assets, gross	¥ 5,791	¥ 6,057
Less: Accumulated amortization	163	112
Less: Accumulated impairment loss(Note2)	243
Total	5,385	5,945		$ 845
Unfavorable lease
Amortization expense of intangible assets	65	62	¥ 16
Franchise or manachise agreements
Intangible assets, net
Intangible assets, gross	366	356
Favorable lease agreements
Intangible assets, net
Intangible assets, gross	11	12
Purchased software
Intangible assets, net
Intangible assets, gross	142	108
Other intangible assets
Intangible assets, net
Intangible assets, gross	70	70
Brand names
Intangible assets, net
Intangible assets, gross	5,010	5,319
Master brand agreement
Intangible assets, net
Intangible assets, gross	¥ 192	¥ 192

INTANGIBLE ASSETS, NET - Amortization (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Amortization for Intangible Assets
Total	¥ 2,801	¥ 0	¥ 0
Intangible assets excluding brand names and master brand agreement
Amortization for Intangible Assets
2022	37,000
2023	36,000
2024	32,000
2025	31,000
2026	28,000
Thereafter	180,000
Total	¥ 344,000

INVESTMENTS - Schedule (Details) ¥ in Millions, $ in Millions	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Equity securities with readily determinable fair values:	¥ 2,589	$ 406	¥ 3,903
Investments	4,554		5,826
Accor
Equity securities with readily determinable fair values:	2,508		3,849
Other marketable securities
Equity securities with readily determinable fair values:	81		54
OYO
Equity securities without readily determinable fair values:	54		66
Other equity securities
Equity securities without readily determinable fair values:	71		72
Cjia Group
Equity securities without readily determinable fair values:	168		183
Equity-method investments:	0
Available-for-sale debt securities:	220		220
AAPC LUB
Equity-method investments:	525		490
Hotel related funds
Equity-method investments:	488		476
China Hospitality JV
Equity-method investments:	99		103
Zleep
Equity-method investments:	68		88
Commerz
Equity-method investments:	85
Other investments
Equity-method investments:	¥ 187		¥ 225

INVESTMENTS - Equity securities with readily determinable fair values (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2020 CNY (¥) shares	Dec. 31, 2019 CNY (¥) shares	Dec. 31, 2021 USD ($) shares
Equity securities with readily determinable fair values
Equity securities with readily determinable fair value	¥ 2,589	¥ 3,903		$ 406
Accor.
Equity securities with readily determinable fair values
Number of ordinary shares acquired \| shares	1,180,000	8,737,987	282,787
Number of ordinary shares sold \| shares	5,172,458	1,003,654
Gain (loss) realized	¥ 209	¥ (21)
Number of shares held in investment \| shares	12,212,552			12,212,552
Investment in equity securities (in percentage)	5.00%			5.00%
Unrealized losses from fair value	¥ 94	253
Equity securities with readily determinable fair value	2,508	3,849
Other marketable securities
Equity securities with readily determinable fair values
Unrealized losses from fair value	2	12	¥ 35
Equity securities with readily determinable fair value	¥ 81	¥ 54

INVESTMENTS - Equity securities without readily determinable fair values (Details) ¥ in Millions, $ in Millions	1 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2018 USD ($)
Investment income (loss)		¥ (60)	$ (9)	¥ (140)	¥ (164)
Investment income recognized		(67)	$ (11)	(108)	477
Impairment of equity securities with out readily determinable fair value		¥ 0		¥ 45
Cjia Group
Equity interest owned (as a percent)		16.00%		15.00%			17.00%
Amount invested in convertible note						¥ 252
Gain recognized on deemed disposal					9
Investment income (loss)		¥ (15)		¥ 49	¥ (45)
Equity Method Investments		0
Equity securities without readily determinable fair values:		168		183
Cjia Group \| Preferred Stock
Equity securities without readily determinable fair values: \| $							$ 45
OYO
Percentage of equity interest acquired	1.00%
Investment income recognized		¥ 52
Equity interest owned (as a percent)		1.00%
Equity securities without readily determinable fair values:		¥ 54		¥ 66

INVESTMENTS - Equity-method investments (Details) € in Millions, ¥ in Millions, $ in Millions	1 Months Ended		12 Months Ended
	Feb. 28, 2019	Jan. 31, 2016	Dec. 31, 2021 EUR (€)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018
Equity-method investments
Investment income (loss)				¥ (60)	$ (9)	¥ (140)	¥ (164)
Long-term investment, impairment loss				63		92	10
Covid 19 \| Equity-method investments
Equity-method investments
Long-term investment, impairment loss				63		47
AAPC LUB
Equity-method investments
Investment income (loss)				35		21	47
Proceeds from Dividends Received				0		0	39
Equity Method Investments				525		490
Percentage of equity interest acquired		28.00%
Hotel related funds
Equity-method investments
Investment income (loss)				55		(16)	11
Equity Method Investments				488		476
Maximum potential loss, in loss of value of interests in investments				488
China Hospitality JV
Equity-method investments
Investment income (loss)				4		(12)	¥ (2)
Equity Method Investments				99		103
Percentage of equity interest acquired								20.00%
Zleep
Equity-method investments
Investment income (loss)				12		(23)
Equity Method Investments				¥ 68		¥ 88
Percentage of equity interest acquired	51.00%
Commerz
Equity-method investments
Equity-method investments ownership percentage				34.00%
Investment income (loss)				¥ 1
Equity Method Investments				¥ 85
Consideration for purchase of investments \| €			€ 12

GOODWILL - Changes in carrying amount (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥) item	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥) item	Dec. 31, 2021 USD ($)
Goodwill [Line Items]
Gross carrying values	¥ 5,532	¥ 5,432	¥ 2,661
Accumulated impairment losses	(400)	(444)	(4)
Goodwill	¥ 5,132	4,988	2,657	$ 805
Goodwill acquired during the year (Note 3)		378	2,697
Impairment loss			(437)
Net foreign exchange-goodwill		(278)	74
Net foreign exchange-impairment loss		44	¥ (3)
Number of reporting units \| item	2		1
Legacy Huazhu [Member]
Goodwill [Line Items]
Gross carrying values	¥ 3,036	2,664	¥ 2,661
Accumulated impairment losses	(4)	(4)	(4)
Goodwill	3,032	2,660	2,657
Goodwill acquired during the year (Note 3)		372	3
Legacy DH [member]
Goodwill [Line Items]
Gross carrying values	2,496	2,768
Accumulated impairment losses	(396)	(440)
Goodwill	¥ 2,100	2,328
Goodwill acquired during the year (Note 3)		6	2,694
Impairment loss			(437)
Net foreign exchange-goodwill		(278)	74
Net foreign exchange-impairment loss		¥ 44	¥ (3)

DEBT - Components (Details) ¥ in Millions, $ in Millions	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
DEBT
Short-term Debt	¥ 6,232	$ 978	¥ 1,142
Total	6,232		1,142
Long-term debt, non-current portion	3,565	$ 559	10,856
Long-term debt	3,565		10,856
Bank borrowings
DEBT
Long-term debt, current portion	2,464		251
Long-term debt, non-current portion	211		4,384
Convertible senior notes
DEBT
Long-term debt, current portion	3,029
Long-term debt, non-current portion	3,158		6,318
FF&E liability
DEBT
Long-term debt, current portion	47		40
Long-term debt, non-current portion	180		135
Others
DEBT
Long-term debt	16		19
Bank borrowings
DEBT
Short-term Debt	¥ 692		¥ 851

DEBT - Bank borrowings (Details) € in Millions, ¥ in Millions	1 Months Ended			12 Months Ended
	Jan. 31, 2021 CNY (¥)	Dec. 31, 2019 EUR (€)	Mar. 31, 2019 CNY (¥)	Dec. 31, 2021 EUR (€)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 EUR (€)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 EUR (€)	Dec. 31, 2019 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Apr. 17, 2020 EUR (€)	Apr. 17, 2020 USD ($)	Dec. 31, 2019 USD ($)
Debt
Repayment of line of credit facility \| $										$ 0
Revolving credit loan and the available credit facility terminated \| $					$ 500,000,000
Long-term debt \| ¥							¥ 10,856				¥ 3,565
Term facility and revolving credit facility
Debt
Percentage points added to the reference rate									2.00%	2.00%
Weighted average interest rate (as a percent)				2.73%	2.73%	2.89%	2.89%	2.89%
Term Facility Expiring December 2022
Debt
Maximum borrowing amount \| €		€ 440							€ 440				€ 440
Credit facility drawn down amount \| €						€ 1			€ 440
Repayment of line of credit facility \| €				€ 101
Long-term debt				€ 338							2,440
Revolving Credit Facility Expiring December 2022
Debt
Term of debt instrument		35 months
Maximum borrowing amount \| $														$ 500,000,000	$ 500,000,000
Credit facility drawn down amount							¥ 200	$ 700,000,000		$ 500,000,000
Repayment of line of credit facility \| $								$ 500,000,000
Available credit facility \| $												$ 500,000,000
Five Year Term Facility
Debt
Term of debt instrument			5 years
Maximum borrowing amount \| ¥			¥ 1,190				1,190
Repayment of line of credit facility \| ¥							¥ 179
Weighted average interest rate (as a percent)				4.75%	4.75%	4.75%	4.75%	4.75%
Syndicated Loan Facility Expiring in December 2032
Debt
Term of debt instrument	12 years
Maximum borrowing amount \| ¥	¥ 650
Long-term debt \| ¥											¥ 53
Weighted average interest rate (as a percent)				4.41%	4.41%
Syndicated Loan Facility Expiring in December 2032 \| Prime Rate
Debt
Percentage points added to the reference rate	0.24%

DEBT - Convertible Senior Notes (Details)					12 Months Ended
DEBT - Convertible Senior Notes (Details)	May 12, 2020 CNY (¥)	May 12, 2020 USD ($)	Nov. 03, 2017 CNY (¥)	Nov. 03, 2017 USD ($)	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 CNY (¥) shares	Dec. 31, 2021 USD ($)	May 12, 2020 USD ($) $ / shares	Nov. 03, 2017 USD ($) $ / shares
Debt Instrument [Line Items]
Amount converted					¥ 0		¥ 0
Note repurchased					0	$ 0
Convertible senior notes \| 2022 Notes
Debt Instrument [Line Items]
Aggregate principal amount					3,027,000,000			$ 475,000,000		$ 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			¥ 3,093,000,000	$ 467,000,000
Debt issuance costs			¥ 54,000,000							$ 8,000,000
Amount converted					¥ 40,000.00		¥ 60,000.00
Number of shares converted \| shares					134	134	202
Note repurchased					¥ 0		¥ 40,000.00
Beneficial conversion feature					¥ 0
Convertible senior notes \| 2026 Notes
Debt Instrument [Line Items]
Aggregate principal amount \| $									$ 450,000,000
Additional aggregate maximum amount of notes to purchase \| $									$ 50,000,000
Fixed interest rate (as a percent)	3.00%								3.00%
Initial conversion rate per ADS	41.72	41.72
Increment used for debt conversion \| $		$ 1,000
Initial conversion price \| $ / shares									$ 23.971
Repurchase price as a percentage of principal amount	100.00%	100.00%
Proceeds from issuance of debt	¥ 3,499,000,000	$ 493,000,000
Debt issuance costs	49,000,000								$ 7,000,000
Beneficial conversion feature	¥ 0

DEBT - ADS Lending Arrangement (Details) $ / shares in Units, ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2017 CNY (¥) shares	Dec. 31, 2021 shares	Dec. 31, 2020 shares	Dec. 31, 2019 shares	May 31, 2018 shares	Dec. 31, 2017 USD ($) $ / shares
Debt Instrument [Line Items]
ADS to ordinary share ratio					1
ADS Lending Arrangement
Debt Instrument [Line Items]
Number of Loaned ADS lent	2,606,278
ADS par value per share \| $ / shares						$ 0.0004
ADS to ordinary share ratio					4
Loand ADS outstanding		10,425,112	10,425,112	10,425,112
Debt issuance costs	¥ 26					$ 4

DEBT - Capped Call Options (Details) - Call Option ¥ in Millions, $ in Millions	Nov. 03, 2017 CNY (¥) $ / item	Nov. 03, 2017 USD ($) $ / item
Debt Instrument [Line Items]
Cap price of the capped call transactions per ADS	221.31	221.31
Premium paid for capped call transactions	¥ 177	$ 27

DEBT - Schedule of contractual maturities of the group's long-term debt (Details) ¥ in Millions	Dec. 31, 2021 CNY (¥)
Contractual maturities
2022	¥ 6,232
2023	111
2024	3,314
2025	71
2026	23
Thereafter	76
Total	¥ 9,827

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Payable to franchisees	¥ 710		¥ 1,349
Other payables	535		535
Accrued rental, utilities and other accrued expenses	209		245
Liabilities related to customer loyalty program	135		111
Value-added tax, other tax and surcharge payables	132		124
Payable to noncontrolling interest holders	117		76
Total	¥ 1,838	$ 288	¥ 2,440
Additional disclosures
Payable to franchisees, term (in years)	1 year
Payable to noncontrolling interest holders, term (in years)	1 year

HOTEL OPERATING COSTS (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
HOTEL OPERATING COSTS.
Rents	¥ 3,900		¥ 3,485	¥ 2,624
Utilities	507		478	404
Personnel costs	3,022		2,501	1,854
Depreciation and amortization	1,413		1,316	960
Consumable, food and beverage	969		885	793
Others	1,471		1,064	555
Total	¥ 11,282	$ 1,770	¥ 9,729	¥ 7,190

PRE-OPENING EXPENSES (Details) ¥ in Millions, $ in Millions	12 Months Ended
PRE-OPENING EXPENSES (Details) ¥ in Millions, $ in Millions	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
PRE-OPENING EXPENSES
Rents	¥ 68		¥ 251	¥ 460
Personnel costs	5		15	14
Others	8		22	28
Total	¥ 81	$ 13	¥ 288	¥ 502

SHARE-BASED COMPENSATION - Plan (Details) - shares	12 Months Ended
SHARE-BASED COMPENSATION - Plan (Details) - shares	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	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)	245,776,690
Incentive Award Plans \| Restricted stocks
Share based compensation
Share-based payment award, nonvested restricted stocks (in shares)	243,059,070
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)									100,000,000
2008 Global Share Plan
Share based compensation
Share-based payment award, maximum number of incentive award available (in shares)							70,000,000	30,000,000
2009 Global Share Plan
Share based compensation
Share-based payment award, maximum number of incentive award available (in shares)				430,000,000	150,000,000	30,000,000

SHARE-BASED COMPENSATION - Option assumptions and Activity (Details) - Share options - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Number of Options
Exercised (in shares)	0	(466,320)	(10,883,580)
Aggregate intrinsic value of options exercised	¥ 0	¥ 11	¥ 255

SHARE-BASED COMPENSATION - Nonvested restricted stocks (Details) ¥ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥) tranche shares	Dec. 31, 2021 CNY (¥) $ / shares	Dec. 31, 2020 CNY (¥) tranche shares	Dec. 31, 2019 CNY (¥) tranche shares
Restricted stocks
Number of Restricted Stocks
Nonvested restricted stocks outstanding at the beginning of the period (in shares)	70,954,080
Granted (in shares)	2,163,420
Forfeited (in shares)	(4,607,340)
Vested (in shares)	(12,325,470)
Adjusted for performance conditions (in shares)	(2,488,200)
Nonvested restricted stocks outstanding at the end of the period (in shares)	53,696,490		70,954,080
Weighted Average Grant Date Fair Value
Nonvested restricted stocks outstanding at the beginning of the period (in dollars per shares) \| $ / shares		$ 1.18
Granted (in dollars per shares) \| $ / shares		4.20
Forfeited (in dollars per shares) \| $ / shares		1.64
Vested (in dollars per shares) \| $ / shares		1.58
Adjusted for performance conditions (in dollars per share) \| $ / shares		0.61
Nonvested restricted stocks outstanding at the end of the period (in dollars per shares) \| $ / shares		$ 1.20
Total unrecognized compensation expense \| ¥	¥ 355	$ 355
Weighted-average period for recognition of unrecognized compensation costs	3 years 3 months 18 days
Total fair value of nonvested restricted stocks, vested \| ¥	¥ 389		¥ 368	¥ 443
Restricted stocks \| Performance Condition
Share based compensation
Number of tranche \| tranche	10		10	10
Number of Restricted Stocks
Granted (in shares)	0		0	2,217,120
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
Share options
Weighted Average Grant Date Fair Value
Total unrecognized compensation expense \| ¥	¥ 0	$ 0

EARNINGS (LOSSES) PER SHARE (Details) ¥ / shares in Units, ¥ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2021 $ / shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares	Dec. 31, 2019 CNY (¥) ¥ / shares shares
EARNINGS (LOSSES) PER SHARE
Net income (loss) attributable to ordinary shareholders - basic \| ¥	¥ (465)		¥ (2,192)	¥ 1,769
Eliminate the dilutive effect of interest expense of convertible senior notes \| ¥				40
Net income attributable to ordinary shareholders - diluted \| ¥	¥ (465)		¥ (2,192)	¥ 1,809
Weighted average ordinary shares outstanding - basic	3,114,124,244		2,927,398,409	2,843,051,378
Incremental weighted-average ordinary shares from assumed exercise of share options and nonvested restricted stocks using the treasury stock method				93,975,271
Dilutive effect of convertible senior notes				106,072,250
Weighted average ordinary shares outstanding - diluted	3,114,124,244		2,927,398,409	3,043,098,899
Basic earnings (losses) per share \| (per share)	¥ (0.15)	$ (0.02)	¥ (0.75)	¥ 0.62
Diluted earnings (losses) per share \| (per share)	¥ (0.15)	$ (0.02)	¥ (0.75)	¥ 0.59

EARNINGS (LOSSES) PER SHARE - Computation of diluted earnings (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities which could potentially dilute basic earnings per share which were excluded from the computation of diluted earnings per share	280,523,900	297,781,490
Outstanding employee options and nonvested restricted stocks
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities which could potentially dilute basic earnings per share which were excluded from the computation of diluted earnings per share	53,696,490	70,954,080
Shares of convertible senior notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities which could potentially dilute basic earnings per share which were excluded from the computation of diluted earnings per share	226,827,410	226,827,410

Cash Dividend (Details) $ / shares in Units, ¥ in Millions, $ in Millions	Mar. 03, 2022 USD ($) $ / shares	Dec. 31, 2019 CNY (¥)	Nov. 30, 2019 USD ($)
Cash Dividend
Cash dividends declared (Per share)	$ 0.021
Dividends payable	$ 68	¥ 678	$ 100

LEASES - Supplemental Information Related to Operating Leases (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Lease cost:
Operating fixed lease cost	¥ 4,074	¥ 3,964
- Amortization of ROU assets	79	74
- Interest on lease liabilities	96	90
Short term lease cost	0	0
Operating variable lease cost	(25)	(171)
Total lease cost	¥ 4,224	¥ 3,957
Other information:
Weighted average remaining lease term, Operating leases	13 years	14 years
Weighted average remaining lease term, Finance leases	28 years	29 years
Weighted average discount rate, Operating leases	6.31%	6.23%
Weighted average discount rate, Finance leases	3.97%	3.96%

LEASES - Schedule Of Maturities Of Lease Liabilities (Details) - CNY (¥) ¥ in Millions	Dec. 31, 2021	Dec. 31, 2020
Total Operating Leases
2022	¥ 4,055	¥ 3,858
2023	4,066	3,826
2024	4,037	3,733
2025	3,871	3,660
2026	3,655	3,466
Thereafter	26,035	25,730
Total minimum lease payments	45,719	44,273
Less: amount representing interest	14,079	13,819
Present value of minimum lease payments	31,640	30,454
Total Finance Leases
2022	140	129
2023	155	144
2024	157	146
2025	157	147
2026	158	147
Thereafter	3,824	3,575
Total minimum lease payments	4,591	4,288
Less: amount representing interest	1,866	1,760
Present value of minimum lease payments	¥ 2,725	¥ 2,528

LEASES - Schedule Of Future Minimum Payments (Details) - CNY (¥) ¥ in Millions	Dec. 31, 2021	Dec. 31, 2020
Total Operating Leases
2021	¥ 4,055	¥ 3,858
2022	4,066	3,826
2023	4,037	3,733
2024	3,871	3,660
2025	3,655	3,466
Thereafter	26,035	25,730
Total minimum lease payments	45,719	44,273
Less: amount representing interest	14,079	13,819
Present value of minimum lease payments	31,640	30,454
Total Finance Leases
2021	140	129
2022	155	144
2023	157	146
2024	157	147
2025	158	147
Thereafter	3,824	3,575
Total minimum lease payments	4,591	4,288
Less: amount representing interest	1,866	1,760
Present value of minimum lease payments	¥ 2,725	¥ 2,528

LEASES - Narrative (Details) ¥ in Thousands	12 Months Ended
LEASES - Narrative (Details) ¥ in Thousands	Dec. 31, 2021 CNY (¥) contract	Dec. 31, 2020 CNY (¥) contract	Dec. 31, 2019 CNY (¥)
LEASES
Sublease Income	¥ 134,000	¥ 112,000	¥ 121,000
Negative lease expense recognized under the relief using variable lease expense approach	¥ 88,000	¥ 250,000
Lease expense			¥ 3,104,000
Number of lease contracts \| contract	32	31
Non-cancellable lease contracts not reflected in consolidate balance sheets	¥ 8,732	¥ 8,511,000

INCOME TAXES (Details) - CNY (¥) ¥ in Millions	12 Months Ended
INCOME TAXES (Details) - CNY (¥) ¥ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	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%
Percentage holding of the PRC company			25
Cash dividends paid					¥ 678
Income (loss) before income taxes
Total			¥ (408)	¥ (2,279)	¥ 2,565
Minimum
Income tax
Extended limitation tax evasion period			5 years
Maximum
Income tax
Extended limitation tax evasion period			10 years
China
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%	25.00%	25.00%
Preferential income tax rate (as a percent)			20.00%	20.00%	20.00%
Percentage of reduction for the first RMB 1 million of taxable income			75.00%	75.00%	75.00%
Percentage of reduction for annual taxable income between RMB 1 million and 3 million			50.00%	50.00%	50.00%
Income (loss) before income taxes
PRC including Hong Kong and Taiwan			¥ 617	¥ (392)	¥ 2,334
GERMANY
Income tax
Effective tax rate (as a percent)			15.00%
Effective income tax rate including solidarity surcharge			15.825%
Income (loss) before income taxes
Income taxes foreign			¥ (632)	(1,606)
GERMANY \| Minimum
Income tax
Municipal Trade Tax			7.00%
GERMANY \| Maximum
Income tax
Municipal Trade Tax			17.00%
Others
Income (loss) before income taxes
Income taxes foreign			¥ (393)	¥ (281)	¥ 231
Others \| Minimum
Income tax
Effective tax rate (as a percent)			9.00%
Others \| Maximum
Income tax
Effective tax rate (as a percent)			25.00%
Jizhu Shanghai \| China
Income tax
Effective tax rate (as a percent)	15.00%	15.00%	15.00%	15.00%	15.00%	15.00%
Jiangsu Mengguang \| China
Income tax
Effective tax rate (as a percent)			15.00%	15.00%	15.00%

INCOME TAXES - Reconciliation (Details) ¥ / shares in Units, ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥) ¥ / shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥) ¥ / shares	Dec. 31, 2019 CNY (¥) ¥ / shares
Tax expense (benefit)
Current Tax \| ¥	¥ 555		¥ 338	¥ 678
Deferred Tax	(543)	$ (85)	(553)	(38)
Total	¥ 12	$ 2	¥ (215)	¥ 640
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	(6.00%)	(6.00%)	(6.00%)	(3.00%)
Effect of different tax rate of group entities operating in other jurisdictions	(6.00%)	(6.00%)	(2.00%)	1.00%
Effect of change in valuation allowance	(24.00%)	(24.00%)	(10.00%)	2.00%
Effect of tax holiday	9.00%	9.00%	1.00%	(2.00%)
Effect of cash dividends	(8.00%)	(8.00%)	0.00%	4.00%
Effect of excess tax benefit of share based rewards	7.00%	7.00%	1.00%	(2.00%)
Effective tax rate	(3.00%)	(3.00%)	9.00%	25.00%
Aggregate amount and per share effect of the tax holidays
Aggregate amount \| ¥	¥ 37		¥ 31	¥ 45
Per share effect-basic \| ¥ / shares	¥ 0.01		¥ 0.01	¥ 0.02
Per share effect-diluted \| ¥ / shares	¥ 0.01		¥ 0.01	¥ 0.01

INCOME TAXES - Deferred income tax assets and liabilities (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Net loss carryforward	¥ 1,271	¥ 888
Deferred revenue	326	283
Long-term assets	238	388
Bad debt provision	40	18
Accrued payroll	45	69
Other accrued expenses	3	3
Share-based compensation	29	31
Others	150	12
Valuation allowance	(466)	(369)	¥ (152)
Total deferred tax assets	1,636	1,323
Deferred tax liabilities:
Favorable lease, building and land use rights-fair value adjustment	1,596	1,782
Others	31	99
Total deferred tax liabilities	1,627	1,881
Net deferred tax (liabilities) assets	9	(558)
Analysis as:
Deferred tax assets	862	623
Deferred tax liabilities	853	1,181
Net deferred tax (liabilities) assets	9	(558)
Movement of the valuation allowance
Balance at the beginning of the year	(369)	(152)	(107)
Provided	(151)	(249)	(79)
Reversed	37	32	24
Written off	17		10
Balance at the end of the year	¥ (466)	¥ (369)	¥ (152)

INCOME TAXES - Valuation allowance (Details) ¥ in Millions, $ in Millions	1 Months Ended	12 Months Ended
	Mar. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Uncertain tax benefits
Interest or penalty expense			¥ 0.0	¥ 0.0	¥ 0.0
Roll-forward of the unrecognized tax benefits
Beginning balance		¥ 60.0	50.0	18.0	14.0
Addition for tax positions			10.0	32.0	4.0
Ending balance			¥ 60.0	¥ 50.0	18.0
Withholding income tax rate (as a percentage)			10.00%
Withholding income tax rate with Hong Kong as holding company (as a percentage)			5.00%
PRC dividend withholding tax accrued			¥ 32.0
Additional provision for PRC dividend withholding tax accrued			¥ 0.0
Period of statute of limitations			3 years
Period of statute of limitations, if the underpayment is more than the specified amount			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
Tax liability reduction due to unrecognized tax benefits		¥ 0.1
Cash dividends declared	$ 68				¥ 678.0
Undistributed Earnings			¥ 3,763.0
GERMANY
Valuation allowance
Tax loss carryforwards			1,192.0
China
Valuation allowance
Tax loss carryforwards, expire between 2022 and 2026			2,115.0
Tax loss carryforwards, expire between 2022 and 2028			¥ 1,532.0
Maximum
Uncertain tax benefits
Market capitalization percent			2.00%
Minimum
Uncertain tax benefits
Market capitalization percent			0.50%

EMPLOYEE BENEFIT PLANS _ Change in Projected Benefit Obligations and Change in Plan Assets (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Change in Projected Benefit Obligation
Begin of the year	¥ 193	¥ 147
Current service cost	5	5
Interest cost	0	1
Contributions by plan participants	1	1
Actuarial loss (gain)	(14)	38
Foreign currency translation	(19)	3
Benefits paid	(9)	(7)
Settlements		(1)
Administrative Expenses, Taxes and Premiums Paid	0	0
Curtailments		(1)
Acquisitions	0
Effect of other economic events		7
End of the year	157	193
Change in Plan Assets
Begin of the year	6	32
Actual return on plan assets	0	(2)
Foreign currency translation	0	1
Employer contributions	1	9
Employee contributions	0	1
Benefits paid	(2)	(8)
Acquisitions	0
Other economic events		(27)
End of the year	5	6
Excess of defined benefit obligation over the fair value of plan assets	152	187
Accumulated benefit obligation	¥ 157	¥ 193

EMPLOYEE BENEFIT PLANS - Amounts recognized in the consolidated balance sheets (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2021 USD ($)
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract]
Salary and welfare payables	¥ 8		¥ 8
Retirement benefit obligation	144		179	$ 23
Liability in the balance sheet	152		187
Net amount recognized in accumulated other comprehensive loss	¥ (13)	$ (2)	¥ 27

EMPLOYEE BENEFIT PLANS - Principal actuarial assumptions (Details) - CNY (¥) ¥ in Millions	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Principal actuarial assumptions
Inflation rate	1.00%	1.00%
Future salary increases	2.17%	1.50%
Future pension increases	1.69%	1.80%
Fair value hierarchy of total plan assets measured at fair value by asset	¥ 5	¥ 6	¥ 32
Expect to contribute	1
Benefits expected to be paid in 2022	¥ 9
Germany
Principal actuarial assumptions
Discount rate	0.89%	0.33%
Other
Principal actuarial assumptions
Discount rate	0.39%	0.12%
Equity securities
Principal actuarial assumptions
Target asset allocation for the plan, as a percentage of total plan assets	26.00%
Debt securities
Principal actuarial assumptions
Target asset allocation for the plan, as a percentage of total plan assets	29.00%
Quoted Prices in Active Markets for Identical Assets (Level 1)
Principal actuarial assumptions
Fair value hierarchy of total plan assets measured at fair value by asset	¥ 5	¥ 6
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Equity funds
Principal actuarial assumptions
Fair value hierarchy of total plan assets measured at fair value by asset	1	1
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Bond funds
Principal actuarial assumptions
Fair value hierarchy of total plan assets measured at fair value by asset	2	2
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Property
Principal actuarial assumptions
Fair value hierarchy of total plan assets measured at fair value by asset	1	2
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Other
Principal actuarial assumptions
Fair value hierarchy of total plan assets measured at fair value by asset	¥ 1	¥ 1

EMPLOYEE BENEFIT PLANS - Defined Contribution Plans (Details) - CNY (¥) ¥ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
EMPLOYEE BENEFIT PLANS
Total contribution for employee benefits	¥ 544	¥ 283	¥ 413
Contributions recognized as expense	¥ 55	¥ 129

RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Millions	12 Months Ended
RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Millions	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
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	¥ 826	¥ 771	¥ 604
Restricted share capital	2,852
Restricted net assets not available for distribution to the Company in the form of dividends, loans or advances	3,678
General reserve not distributable as cash dividends or other cash disbursements	11
Deutsche Hospitality
Restricted share capital	¥ 4

RELATED PARTY TRANSACTIONS AND BALANCES (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Related party transaction
Allowance for expected credit losses	¥ (17)		¥ (18)
Total	150		178
Due to related party	197		132
Loan payment	5	$ 1	15	¥ 87
Sheen Star
Related party transaction
Amounts due from related parties	33		52
Sheen Star \| Service fee
Related party transaction
Revenue from related parties	5		4	4
Sheen Star \| Interest income
Related party transaction
Interest income from related party	0		1	8
CREATER \| Interest income
Related party transaction
Interest income from related party				6
Zhuchuang
Related party transaction
Amounts due from related parties	27		27
Trip.com
Related party transaction
Amounts due from related parties	17		22
Due to related party	44		48
Trip.com \| Service fee
Related party transaction
Revenue from related parties	62		66	41
Trip.com \| Commission expenses
Related party transaction
Expenses with related parties	99		78	72
Trip.com \| Lease expenses
Related party transaction
Expenses with related parties	19		18	18
China Hospitality JV. \| Service fee
Related party transaction
Revenue from related parties	2		1	6
China Hospitality JV. \| Early termination compensation
Related party transaction
Expenses with related parties			26
Cjia Group
Related party transaction
Amounts due from related parties	29		22
Due to related party	101		42
Cjia Group \| Service fee
Related party transaction
Expenses with related parties			17	6
Cjia Group \| Lease expenses
Related party transaction
Expenses with related parties	12
Cjia Group \| Goods sold and service provided
Related party transaction
Revenue from related parties	11		18	21
Cjia Group \| Sublease Income
Related party transaction
Revenue from related parties	6		9	14
Cjia Group \| Early termination compensation
Related party transaction
Expenses with related parties			8
Cjia Group \| Purchase of property, plant and equipment
Related party transaction
Expenses with related parties			11
Cjia Group \| Business Acquisition Of CitiGo [Member]
Related party transaction
Expenses with related parties	783
Cjia Group \| Business acquisition
Related party transaction
Expenses with related parties	51
Huali Jinshi
Related party transaction
Due to related party	47		29
Huali Jinshi \| Service fee
Related party transaction
Expenses with related parties	42		41	99
Accor
Related party transaction
Amounts due from related parties			1
Due to related party			8
Accor \| Service fee
Related party transaction
Revenue from related parties	3		3	9
Accor \| Brand use fee, reservation fee and other related service fee
Related party transaction
Expenses with related parties	22		17	28
Lianquan
Related party transaction
Amounts due from related parties	49		58
Loan payment				32
Lianquan \| Sublease Income
Related party transaction
Revenue from related parties	10		12	7
Others
Related party transaction
Amounts due from related parties	12		14
Due to related party	5		5
Smart Lodging
Related party transaction
Loan payment				¥ 30
Hitone
Related party transaction
Loan payment	5
ASU 2016-13
Related party transaction
Credit allowance	¥ 17		¥ 18

COMMITMENTS AND CONTINGENCIES (Details) ¥ in Millions	Dec. 31, 2021 CNY (¥)
COMMITMENTS AND CONTINGENCIES.
Purchase commitments expected to be incurred within one year related to leasehold improvements and installation of equipment for hotel operations	¥ 413
Accrued contingencies	¥ 54

SCHEDULE I FINANCIAL INFORMATION FOR PARENT COMPANY - BALANCE SHEETS (Details)
¥ in Millions, $ in Millions

Mar. 03, 2022

USD ($)

Dec. 31, 2021

CNY (¥)

Dec. 31, 2021

USD ($)

Dec. 31, 2020

CNY (¥)

Dec. 31, 2019

CNY (¥)

Nov. 30, 2019

USD ($)

Current assets:

Other current assets, net

¥ 5,116

$ 803

¥ 7,026

¥ 3,234

847

133

914

Total current assets

9,553

1,499

12,882

Other assets, net

834

131

743

Total assets

63,269

9,927

65,155

Current liabilities:

Short-term debt

6,232

978

1,142

Dividends payable

$ 68

¥ 678

$ 100

Amount due to subsidiaries

197

132

Accrued expenses and other current liabilities

1,838

288

2,440

Total current liabilities

15,279

2,397

10,529

Long-term debt

3,565

559

10,856

Total liabilities

52,225

8,195

53,723

Equity:

^[1]

Treasury shares (30,967,640 and 30,974,040 shares as of December 31, 2020 and 2021, respectively)

(107)

(17)

(107)

Additional paid-in capital

9,964

1,563

9,808

Retained earnings

1,037

163

1,502

Accumulated other comprehensive income

127

Total equity

10,935

1,715

11,330

Total liabilities and equity

63,269

9,927

65,155

Parent Company

Current assets: