UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

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

 

For the month of March 2024

 

Commission File Number: 001-34656

 

H World Group Limited

(Registrant’s name)

 

No. 1299 Fenghua Road

Jiading District

Shanghai
People’s Republic of China
(86) 21 6195-2011
(Address of principal executive office)

 

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

 

Form 20-F x Form 40-F o

 

 

 

EXHIBIT INDEX

 

Number		Description of Document
Exhibit 99.1		H World Group Limited Reports Fourth Quarter and Full Year of 2023 Unaudited Financial Results

 

 

SIGNATURES

 

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

 

		H World Group Limited
		(Registrant)
Date: March 20, 2024	By:	/s/ Qi Ji
	Name:	Qi Ji
	Title:	Executive Chairman of the Board of Directors

 

 

 

Exhibit 99.1

 

 

Contact Information

Investor Relations

Tel: +86 (21) 6195 9561

Email: ir@hworld.com

https://ir.hworld.com

 

H World Group Limited Reports Fourth Quarter and Full Year of 2023 Unaudited Financial Results

 

·

A total of 9,394 hotels or 912,444 hotel rooms in operation as of December 31, 2023.

 

·

Hotel turnover1 increased 55.0% year-over-year to RMB20.4 billion in the fourth quarter of 2023. Excluding Steigenberger Hotels GmbH and its subsidiaries (“DH”, or “Legacy-DH”), hotel turnover increased 60.6% year-over-year in the fourth quarter of 2023 and increased 65.9% year-over-year for the full year of 2023.

 

·

Revenue increased 50.7% year-over-year to RMB5.6 billion (US$786 million)2 in the fourth quarter of 2023, surpassing the revenue guidance previously announced of a 41% to 45% increase compared to the fourth quarter of 2022, and increased 57.9% year-over-year to RMB21.9 billion (US$3.1 billion) for the full year of 2023. Revenue from the Legacy-Huazhu segment in the fourth quarter of 2023 was RMB4.4 billion, which increased 59.0% year-over-year, exceeding the revenue guidance previously announced of a 48% to 52% increase.

 

·

Net income attributable to H World Group Limited was RMB743 million (US$105 million) in the fourth quarter of 2023, compared with a net loss attributable to H World Group Limited of RMB124 million in the fourth quarter of 2022 and a net income attributable to H World Group Limited of RMB1.3 billion in the previous quarter. Net income attributable to H World Group Limited was RMB4.1 billion (US$575 million) for the full year of 2023, compared with a net loss attributable to H World Group Limited of RMB1.8 billion for the full year of 2022. Net income attributable to H World Group Limited from the Legacy-Huazhu segment was RMB827 million in the fourth quarter of 2023, compared with a net loss attributable to H World Group Limited from the Legacy-Huazhu segment of RMB84 million in the fourth quarter of 2022 and a net income attributable to H World Group Limited from the Legacy-Huazhu segment of RMB1.4 billion in the previous quarter. Net income attributable to H World Group Limited from the Legacy-Huazhu segment was RMB4.4 billion for the full year of 2023, compared with a net loss attributable to H World Group Limited from the Legacy-Huazhu segment of RMB1.4 billion for the full year of 2022.

 

1

Hotel turnover refers to total transaction value of room and non-room revenue from H World hotels (i.e., leased and operated, manachised and franchised hotels).

 

2

The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US$1.00=RMB7.0999 on December 29, 2023, as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.

 

 

 

·

EBITDA (non-GAAP) in the fourth quarter of 2023 was RMB1.4 billion (US$191 million), compared with RMB529 million in the fourth quarter of 2022 and RMB2.1 billion in the previous quarter. EBITDA (non-GAAP) for the full year of 2023 was RMB6.8 billion (US$961 million), compared with RMB164 million for the full year of 2022.

 

·

Adjusted EBITDA (non-GAAP), which excluded share-based compensation expenses and gains (losses) from fair value changes of equity securities from EBITDA (non-GAAP), was RMB1.3 billion (US$178 million) in the fourth quarter of 2023, compared with RMB398 million in the fourth quarter of 2022 and RMB2.2 billion in the previous quarter. Adjusted EBITDA (non-GAAP) for the full year of 2023 was RMB6.9 billion (US$966 million), compared with RMB610 million for the full year of 2022.

 

·

Adjusted EBITDA is a segment measure. Adjusted EBITDA from the Legacy-Huazhu segment was RMB1.3 billion in the fourth quarter of 2023, compared with RMB397 million in the fourth quarter of 2022 and RMB2.1 billion in the previous quarter. Adjusted EBITDA from the Legacy-Huazhu segment was RMB6.8 billion for the full year of 2023, compared with RMB728 million for the full year of 2022.

 

·

For the first quarter of 2024, H World expects its revenue growth to be in the range of 12%-16% compared to the first quarter of 2023 or in the range of 11%-15% excluding DH.

 

·

For the full year of 2024, H World expects revenue growth to be in the range of 8%-12% compared to the full year of 2023, or in the range of 8%-12% excluding DH.

 

·

For the full year of 2024, H World expects to open around 1,800 hotels and close around 650 hotels.

 

Singapore/Shanghai, China, March 20, 2024 – H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World”, the “Company”, “we” or “our”), a key player in the global hotel industry, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2023.

 

 

 

As of December 31, 2023, H World’s worldwide hotel network in operation totaled 9,394 hotels and 912,444 rooms, including 131 hotels from DH. During the fourth quarter of 2023, our Legacy-Huazhu business opened 460 hotels, including 4 leased and owned hotels, and 456 manachised and franchised hotels, and closed a total of 225 hotels, including 5 leased and owned hotels and 220 manachised and franchised hotels. As of December 31, 2023, H World had a total of 3,098 unopened hotels in the pipeline, including 3,061 hotels from the Legacy-Huazhu business and 37 hotels from the Legacy-DH business.

 

Legacy-Huazhu – Fourth Quarter and Full Year of 2023 Operational Highlights

 

As of December 31, 2023, Legacy-Huazhu had 9,263 hotels in operation, including 607 leased and owned hotels, and 8,656 manachised and franchised hotels. In addition, as of the same date, Legacy-Huazhu had 885,630 hotel rooms in operation, including 86,691 rooms under the lease and ownership model, and 798,939 rooms under the manachise and franchise models. Legacy-Huazhu also had 3,061 unopened hotels in its pipeline, including 9 leased and owned hotels, and 3,052 manachised and franchised hotels. The following discusses Legacy-Huazhu’s revenue per available room (“RevPAR”), average daily room rate (“ADR”) and occupancy rate for its leased and owned hotels, as well as manachised and franchised hotels for the periods indicated.

 

· The ADR was RMB284 in the fourth quarter of 2023, compared with RMB240 in the fourth quarter of 2022, RMB324 in the previous quarter, and RMB232 in the fourth quarter of 2019.

 

· The occupancy rate for all the Legacy-Huazhu hotels in operation was 80.5% in the fourth quarter of 2023, compared with 66.2% in the fourth quarter of 2022, 85.9% in the previous quarter, and 82.2% in the fourth quarter of 2019.

 

· Blended RevPAR was RMB229 in the fourth quarter of 2023, compared with RMB159 in the fourth quarter of 2022, RMB278 in the previous quarter, and RMB191 in the fourth quarter of 2019.

 

· For all the Legacy-Huazhu hotels which had been in operation for at least 18 months, the same-hotel RevPAR was RMB230 in the fourth quarter of 2023, representing a 40.8% increase from RMB164 in the fourth quarter of 2022, with a 16.7% increase in same-hotel ADR and a 13.9 percentage-point increase in same-hotel occupancy rate.

 

 

 

Legacy-DH – Fourth Quarter and Full Year of 2023 Operational Highlights

 

As of December 31, 2023, Legacy-DH had 131 hotels in operation, including 84 leased hotels, and 47 manachised and franchised hotels. In addition, as of the same date, Legacy-DH had 26,814 hotel rooms in operation, including 16,303 rooms under the lease model, and 10,511 rooms under the manachise and franchise models. Legacy-DH also had 37 unopened hotels in the pipeline, including 21 leased hotels and 16 manachised and franchised hotels. The following discusses Legacy-DH’s RevPAR, ADR and occupancy rate for its leased as well as manachised and franchised hotels (excluding hotels temporarily closed) for the periods indicated.

 

· The ADR was EUR115 in the fourth quarter of 2023, compared with EUR122 in the fourth quarter of 2022 and EUR114 in the previous quarter.

 

· The occupancy rate for all Legacy-DH hotels in operation was 63.8% in the fourth quarter of 2023, compared with 59.3% in the fourth quarter of 2022 and 69.0% in the previous quarter.

 

· Blended RevPAR was EUR73 in the fourth quarter of 2023, compared with EUR72 in the fourth quarter of 2022 and EUR79 in the previous quarter.

 

Jin Hui, CEO of H World commented: “We finished the year with robust performance. Our Legacy-Huazhu’s 2023 RevPAR recovered to 122% of the 2019 level, driven by a strong demand for leisure travel and the continued recovery for business travel. While ADR growth was the key driver of the RevPAR recovery in 2023, the recovery of occupancy rate also improved sequentially throughout the year. Our ADR growth primarily reflected a combination of product mix change and product upgrades. Looking ahead, while continuing to execute our ‘Sustainable Growth Strategy' and carry through high-quality network expansion, we will put more emphasis on enhancing service quality and improving the guest experience to achieve 'Service Excellence'.”

 

“Regarding our business outside China, our Legacy-DH recorded 14.5% year-over-year RevPAR increase in 2023. Thanks to the continued business recovery and our cost control efforts, Legacy-DH achieved positive EBITDA for the full year of 2023. Looking into 2024, we aim to transform our Legacy-DH business to a more asset-light model, continue the focus on cost reduction and efficiency improvement, strengthen direct sales via H Reward global loyalty program, and seek growth opportunities in the Asia-Pacific (APAC) and the Middle East.”

 

 

 

Fourth Quarter and Full year of 2023 Unaudited Financial Results

 

(RMB in millions)		Q4 2022				Q3 2023				Q4 2023				2022FY				2023FY
Revenue:
Leased and owned hotels			2,450				3,878				3,453				9,148				13,796
Manachised and franchised hotels			1,158				2,268				2,016				4,405				7,694
Others			98				142				116				309				392
Total revenue			3,706				6,288				5,585				13,862				21,882

 

Revenue in the fourth quarter of 2023 was RMB5.6 billion (US$786 million), representing a 50.7% year-over-year increase and a sequential decrease of 11.2% due to seasonality effects. Revenue from the Legacy-Huazhu segment in the fourth quarter of 2023 was RMB4.4 billion, representing a 59.0% year-over-year increase and a 14.3% sequential decline. The 59.0% year-over-year increase exceeds the previously announced revenue guidance of a 48% to 52% increase, which was mainly supported by our continued product upgrades and operational optimization via our regional headquarters, as well as our enhanced sales capability. Revenue from the Legacy-DH segment in the fourth quarter of 2023 was RMB1.2 billion, representing a 26.6% year-over-year increase and a 2.2% sequential increase.

 

Revenue for the full year of 2023 was RMB21.9 billion (US$3.1 billion), representing an increase of 57.9% over the full year of 2022. Revenue from Legacy-Huazhu for the full year of 2023 was RMB17.4 billion, representing a 63.7% year-over-year increase. Revenue from the Legacy-DH segment for the full year of 2023 was RMB4.4 billion, representing a 38.6% year-over-year increase.

 

Revenue from leased and owned hotels in the fourth quarter of 2023 was RMB3.5 billion (US$486 million), representing a 40.9% year-over-year increase and an 11.0% sequential decrease. Revenue from leased and owned hotels from the Legacy-Huazhu segment in the fourth quarter of 2023 was RMB2.3 billion, representing a 48.9% year-over-year increase. Revenue from leased and owned hotels from the Legacy-DH segment in the fourth quarter of 2023 was RMB1.2 billion, representing a 27.6% year-over-year increase.

 

 

 

For the full year of 2023, revenue from our leased and owned hotels was RMB13.8 billion (US$1.9 billion), representing a 50.8% year-over-year increase. Revenue from our Legacy-Huazhu leased and owned hotels for the full year of 2023 was RMB9.5 billion, representing a 57.1% year-over-year increase. Revenue from our Legacy-DH leased and owned hotels for the full year of 2023 was RMB4.3 billion, representing a 38.5% year-over-year increase.

 

Revenue from manachised and franchised hotels in the fourth quarter of 2023 was RMB2.0 billion (US$284 million), representing a 74.1% year-over-year increase and a 11.1% sequential decline. Revenue from our Legacy-Huazhu segment from manachised and franchised hotels in the fourth quarter of 2023 was RMB2.0 billion, representing a 76.3% year-over-year increase. Revenue from manachised and franchised hotels from the Legacy-DH segment in the fourth quarter of 2023 was RMB24 million, representing a 14.3% year-over-year decrease.

 

For the full year of 2023, revenue from manachised and franchised hotels was RMB7.7 billion (US$1.1 billion), representing a 74.7% year-over-year increase. These hotels accounted for 35.2% of revenue, compared to 31.8% of revenue for the full year of 2022. Revenue from our Legacy-Huazhu manachised and franchised hotels for the full year of 2023 was RMB7.6 billion, representing a 75.7% year-over-year increase.

 

Other revenue represents revenue generated from businesses other than our hotel operations, which mainly includes revenue from the provision of IT products and services and Huazhu Mall™ and other revenue from the Legacy-DH segment, totaling RMB116 million (US$16 million) in the fourth quarter of 2023, compared to RMB98 million in the fourth quarter of 2022 and RMB142 million in the previous quarter.

 

For the full year of 2023, other revenue was RMB392 million (US$55 million), compared to RMB309 million for the full year of 2022.

 

(RMB in millions)		Q4 2022				Q3 2023				Q4 2023				2022FY				2023FY
Operating costs and expenses:
Hotel operating costs			(3,430	)			(3,613	)			(3,996	)			(12,260	)			(14,341	)
Other operating costs			(22	)			(7	)			(10	)			(62	)			(34	)
Selling and marketing expenses			(169	)			(289	)			(326	)			(613	)			(1,072	)
General and administrative expenses			(440	)			(539	)			(644	)			(1,675	)			(2,086	)
Pre-opening expenses			(14	)			(11	)			(3	)			(95	)			(35	)
Total operating costs and expenses			(4,075	)			(4,459	)			(4,979	)			(14,705	)			(17,568	)

 

 

 

Hotel operating costs in the fourth quarter of 2023 were RMB4.0 billion (US$563 million), compared to RMB3.4 billion in the fourth quarter of 2022 and RMB3.6 billion in the previous quarter. The year-over-year cost increase was mainly due to our business recovery, as well as less rental reduction. The quarter-over-quarter cost increase was mainly attributable to an impairment loss of RMB362 million booked in the fourth quarter of 2023, compared to RMB5 million impairment loss in the previous quarter. Hotel operating costs from the Legacy-Huazhu segment in the fourth quarter of 2023 were RMB2.9 billion, which represented 67.0% of revenue, compared to RMB2.4 billion or 88.7% of the revenue in the fourth quarter of 2022 and RMB2.7 billion or 52.0% of revenue for the previous quarter.

 

For the full year of 2023, hotel operating costs were RMB14.3 billion (US$2.0 billion), compared to RMB12.3 billion for the full year of 2022. Hotel operating costs from Legacy-Huazhu for the full year of 2023 were RMB10.5 billion, which represented 60.4% of revenue, compared to 86.1% for the full year of 2022.

 

Selling and marketing expenses in the fourth quarter of 2023 were RMB326 million (US$46 million), compared to RMB169 million in the fourth quarter of 2022 and RMB289 million in the previous quarter. The year-over-year expense increase was mainly due to higher commissions and promotional expenses associated with business recovery. Selling and marketing expenses from the Legacy-Huazhu segment in the fourth quarter of 2023 were RMB202 million, which represented 4.6% of revenue, compared to RMB88 million or 3.2% of revenue in the fourth quarter of 2022, and RMB177 million or 3.5% of revenue in the previous quarter.

 

For the full year of 2023, selling and marketing expenses were RMB1.1 billion (US$151 million), compared to RMB613 million for the full year of 2022. Selling and marketing expenses from Legacy-Huazhu for the full year of 2023 were RMB649 million, which represented 3.7% of revenue, compared to RMB336 million or 3.2% of revenue for the full year of 2022.

 

General and administrative expenses in the fourth quarter of 2023 were RMB644 million (US$91 million), compared to RMB440 million in the fourth quarter of 2022 and RMB539 million in the previous quarter. The year-over-year expense increases were mainly attributable to higher headquarters personnel costs along with our business recovery. General and administrative expenses from the Legacy-Huazhu segment in the fourth quarter of 2023 were RMB484 million, which represented 11.0% of revenue, compared to RMB320 million or 11.6% in the fourth quarter of 2022 and RMB417 million or 8.2% for the previous quarter.

 

 

 

 

For the full year of 2023, general and administrative expenses were RMB2.1 billion (US$294 million), compared to RMB1.7 billion for the full year of 2022. General and administrative expenses from Legacy-Huazhu for the full year of 2023 were RMB1.6 billion, which represented 9.0% of revenue, compared to RMB1.3 billion or 11.8% of revenue for the full year of 2022.

 

Pre-opening expenses in the fourth quarter of 2023 were primarily related to the Legacy-Huazhu segment and totaled RMB3 million, compared to RMB14 million in the fourth quarter of 2022 and RMB11 million in the previous quarter. The decrease was attributable to more selective openings of leased and owned hotels.

 

Pre-opening expenses for the full year of 2023 were RMB35 million (US$5 million), compared to RMB95 million for the full year of 2022. Pre-opening expenses from Legacy-Huazhu as a percentage of revenue were 0.2% for the full year of 2023, compared to 0.9% for the full year of 2022.

 

Other operating income, net in the fourth quarter of 2023 was RMB155 million (US$22 million), compared to RMB276 million in the fourth quarter of 2022 and RMB80 million in the previous quarter.

 

Other operating income, net for the full year of 2023 was RMB404 million (US$57 million), compared to RMB549 million for the full year of 2022.

 

Income from operations in the fourth quarter of 2023 was RMB757 million (US$106 million), compared to losses from operations of RMB93 million in the fourth quarter of 2022 and income from operations of RMB1.9 billion in the previous quarter. Income from operations from the Legacy-Huazhu segment in the fourth quarter of 2023 was RMB821 million, compared to losses from operations of RMB3 million in the fourth quarter of 2022 and income from operations of RMB1.9 billion in the previous quarter. The Legacy-DH segment had losses from operations of RMB64 million in the fourth quarter of 2023, compared to losses from operations of RMB90 million in the fourth quarter of 2022 and income from operations of RMB3 million in the previous quarter.

 

Income from operations for the full year of 2023 was RMB4.7 billion (US$662 million), compared to losses from operation of RMB294 million for the full year of 2022. Income from operations from Legacy-Huazhu for the full year of 2023 was RMB4.9 billion, compared to RMB51 million for the full year of 2022. Loss from operations from Legacy-DH for the full year of 2023 was RMB185 million, compared to losses of RMB345 million for the full year of 2022.

 

Operating margin, defined as income from operations as a percentage of revenue, was 13.6% in the fourth quarter of 2023, compared with a negative 2.5% in the fourth quarter of 2022 and 30.4% for the previous quarter. Operating margin from the Legacy-Huazhu segment in the fourth quarter of 2023 was 18.7%, compared with a negative 0.1% in the fourth quarter of 2022 and 37.3% in the previous quarter.

 

 

Operating margin for the full year of 2023 was 21.5%, compared with a negative 2.1% for the full year of 2022. Operating margin from Legacy-Huazhu for the full year of 2023 was 28.1%, compared with 0.5% for the full year of 2022.

 

Other income, net in the fourth quarter of 2023 was RMB2 million, compared to an expense of RMB65 million in the fourth quarter of 2022 and an income of RMB24 million for the previous quarter.

 

Other income, net for the full year of 2023 was RMB573 million (US$81 million) which was mainly due to gains from selling Accor shares, compared to RMB10 million for the full year of 2022.

 

Gains from fair value changes of equity securities in the fourth quarter of 2023 were RMB124 million (US$18 million), compared to gains of RMB140 million in the fourth quarter of 2022, and losses of RMB9 million in the previous quarter. Gains (losses) from fair value changes of equity securities mainly represent the unrealized gains (losses) from our investment in equity securities with readily determinable fair values.

 

For the full year of 2023, gains from fair value changes of equity securities were RMB109 million (US$15 million), compared to losses of RMB359 million for the full year of 2022, which were mainly due to gains from fair value changes of UBOX in 2023 as well as losses from holding Accor shares in 2022. We sold all of the Company’s holdings of Accor shares in March 2023.

 

Income tax expense in the fourth quarter of 2023 was RMB281 million (US$39 million), compared to RMB203 million in the fourth quarter of 2022 and RMB421 million in the previous quarter.

 

For the full year of 2023, income tax expense was RMB1.2 billion (US$168 million), compared to RMB207 million for the full year of 2022.

 

Net income attributable to H World Group Limited in the fourth quarter of 2023 was RMB743 million (US$105 million), compared with a net loss attributable to H World Group Limited of RMB124 million in the fourth quarter of 2022 and net income attributable to H World Group Limited of RMB1.3 billion in the previous quarter. Net income attributable to H World Group Limited from the Legacy-Huazhu segment was RMB827 million in the fourth quarter of 2023, compared with a net loss attributable to H World Group Limited from the Legacy-Huazhu segment of RMB84 million in the fourth quarter of 2022 and net income attributable to H World Group Limited from the Legacy-Huazhu segment of RMB1.4 billion in the previous quarter.

 

Net income attributable to H World Group Limited for the full year of 2023 was RMB4.1 billion (US$575 million), compared with a net loss attributable to H World Group Limited of RMB1.8 billion for the full year of 2022. Net income attributable to H World Group Limited from Legacy-Huazhu for the full year of 2023 was RMB4.4 billion, compared to a net loss attributable to H World Group Limited of RMB1.4 billion for the full year of 2022.

 

EBITDA (non-GAAP) in the fourth quarter of 2023 was RMB1.4 billion (US$191 million), compared with RMB529 million in the fourth quarter of 2022 and RMB2.1 billion in the previous quarter. Adjusted EBITDA (non-GAAP), which excluded share-based compensation expenses and gains (losses) from fair value changes of equity securities from EBITDA (non-GAAP), was RMB1.3 billion (US$178 million) in the fourth quarter of 2023, compared with RMB398 million in the fourth quarter of 2022 and RMB2.2 billion in the previous quarter. Adjusted EBITDA from the Legacy-Huazhu segment, which is a segment measure, was RMB1.3 billion in the fourth quarter of 2023, compared with RMB397 million in the fourth quarter of 2022 and RMB2.1 billion in the previous quarter.

 

 

 

EBITDA (non-GAAP) for the full year of 2023 was RMB6.8 billion (US$961 million), compared to RMB164 million for the full year of 2022. Excluding share-based compensation expenses and gains (losses) from fair value changes of equity securities, adjusted EBITDA (non-GAAP) for the full year of 2023 was RMB6.9 billion (US$966 million), compared with RMB610 million for the full year of 2022. The adjusted EBITDA from Legacy-Huazhu for the full year of 2023 was RMB6.8 billion, compared with RMB728 million for the full year of 2022.

 

Cash flow. Operating cash inflow in the fourth quarter of 2023 was RMB2.4 billion (US$339 million). Investing cash outflow in the fourth quarter of 2023 was RMB277 million (US$38 million). Financing cash outflow in the fourth quarter of 2023 was RMB744 million (US$105 million).

 

Operating cash inflow for the full year of 2023 was RMB7.7 billion (US$1.1 billion), compared to RMB1.6 billion for the full year of 2022. Investing cash outflow for the full year of 2023 was RMB1.5 billion (US$207 million), compared to RMB522 million for the full year of 2022. Financing cash outflow for the full year of 2023 was RMB3.7 billion (US$523 million), compared to RMB1.4 billion for the full year of 2022.

 

Cash, cash equivalents and restricted cash. As of December 31, 2023, the Company had a total balance of cash and cash equivalents of RMB6.9 billion (US$978 million) and restricted cash of RMB764 million (US$108 million).

 

Debt financing. As of December 31, 2023, the Company had a total debt and net cash balance of RMB5.3 billion (US$749 million) and RMB2.4 billion (US$337 million), respectively; the unutilized credit facility available to the Company was RMB2.8 billion.

 

Guidance

 

For the first quarter of 2024, H World expects its revenue growth to be in the range of 12%-16% compared to the first quarter of 2023, or in the range of 11%-15% excluding DH.

 

For the full year of 2024, H World expects revenue growth to be in the range of 8%-12% compared to the full year of 2023, or in the range of 8%-12% excluding DH.

 

 

 

For the full year of 2024, H World expects to open around 1,800 hotels and close around 650 hotels.

 

The above forecast reflects the Company’s current and preliminary view, which is subject to change.

 

Conference Call

 

H World’s management will host a conference call at 9 p.m. U.S. Eastern time on Wednesday, March 20, 2024 (9 a.m. Hong Kong time on Thursday, March 21, 2024) following the announcement.

 

To join by phone, all participants must pre-register this conference call using the Participant Registration link of https://register.vevent.com/register/BI6c40e138e35f49faab0334b5e7db2048. Upon registration, each participant will receive details for the conference call, including dial-in numbers, conference call passcode and a unique access PIN.

 

A live webcast of the call can be accessed at https://edge.media-server.com/mmc/p/55zwtf8m or the Company’s website at https://ir.hworld.com/news-and-events/events-calendar.

 

A replay of the conference call will be available for twelve months from the date of the conference at the Company’s website, https://ir.hworld.com/news-and-events/events-calendar.

 

Use of Non-GAAP Financial Measures

 

To supplement the Company’s unaudited consolidated financial results presented in accordance with U.S. Generally-Accepted Accounting Principles (“GAAP”), the Company uses the following non-GAAP measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission (“SEC”): adjusted net income (loss) attributable to H World Group Limited excluding share-based compensation expenses and gains (losses) from fair value changes of equity securities; adjusted basic and diluted earnings (losses) per share/ADS excluding share-based compensation expenses and gains (losses) from fair value changes of equity securities; EBITDA; adjusted EBITDA excluding share-based compensation expenses and gains (losses) from fair value changes of equity securities. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Unaudited Reconciliations of GAAP and non-GAAP Results” set forth at the end of this release. The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding Company performance by excluding share-based compensation expenses and gains (losses) from fair value changes of equity securities that may not be indicative of Company operating performance. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing Company performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to the Company’s historical performance. The Company believes these non-GAAP financial measures are also useful to investors in allowing for greater transparency with respect to supplemental information used regularly by Company management in financial and operational decision-making. A limitation of using non-GAAP financial measures excluding share-based compensation expenses and gains (losses) from fair value changes of equity securities is that share-based compensation expenses and gains (losses) from fair value changes of equity securities have been and may continue to be significant and recurring in the Company’s business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

 

 

 

The Company believes that EBITDA is a useful financial metric to assess the operating and financial performance before the impact of investing and financing transactions and income taxes, given the significant investments that the Company has made in leasehold improvements, depreciation and amortization expense that comprise a significant portion of the Company’s cost structure. In addition, the Company believes that EBITDA is widely used by other companies in the lodging industry and may be used by investors as a measure of financial performance. The Company believes that EBITDA information provides investors with a useful tool for comparability between periods because it excludes depreciation and amortization expense attributable to capital expenditures. The Company also uses adjusted EBITDA to assess operating results of its hotels in operation. The Company believes that the exclusion of share-based compensation expenses and gains (losses) from fair value changes of equity securities helps facilitate year-over-year comparisons of the results of operations as the share-based compensation expenses and gains (losses) from fair value changes of equity securities may not be indicative of Company operating performance.

 

The Company believes that gains and losses from changes in fair value of equity securities are generally less significant in understanding the Company’s reported results or evaluating the economic performance of its businesses. These gains and losses have caused and may continue to cause significant volatility in reported periodic earnings.

 

Therefore, the Company believes adjusted EBITDA more closely reflects the financial performance capability of our hotels. The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that the Company’s future results will be unaffected by other charges and gains considered to be outside the ordinary course of business.

 

The use of EBITDA and adjusted EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets (including land use rights), income tax, interest expense and interest income have been and will be incurred and are not reflected in the presentation of EBITDA. Share-based compensation expenses and gains (losses) from fair value changes of equity securities have been and will be incurred and are not reflected in the presentation of adjusted EBITDA. Each of these items should also be considered in the overall evaluation of the results. The Company compensates for these limitations by providing the relevant disclosure of depreciation and amortization, interest income, interest expense, income tax expense, share-based compensation expenses, and gains (losses) from fair value changes of equity securities and other relevant items both in the reconciliations to the U.S. GAAP financial measures and in the consolidated financial statements, all of which should be considered when evaluating the performance of the Company.

 

The terms EBITDA and adjusted EBITDA are not defined under U.S. GAAP, and neither EBITDA nor adjusted EBITDA is a measure of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing the operating and financial performance, investors should not consider these data in isolation or as a substitute for the Company’s net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, the Company’s EBITDA or adjusted EBITDA may not be comparable to EBITDA or adjusted EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA or adjusted EBITDA in the same manner as the Company does.

 

Reconciliations of the Company’s non-GAAP financial measures, including EBITDA and adjusted EBITDA, to the consolidated statement of operations information are included at the end of this press release.

 

 

 

About H World Group Limited

 

Originated in China, H World Group Limited is a key player in the global hotel industry. As of December 31, 2023, H World operated 9,394 hotels with 912,444 rooms in operation in 18 countries. H World’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels. In addition, H World also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.

 

H World’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, H World directly operates hotels typically located on leased or owned properties. Under the manachise model, H World manages manachised hotels through the on-site hotel managers that H World appoints, and H World collects fees from franchisees. Under the franchise model, H World provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. H World applies a consistent standard and platform across all of its hotels. As of December 31, 2023, H World operates 11 percent of its hotel rooms under the lease and ownership model, and 89 percent under the manachise and franchise model.

 

For more information, please visit H World’s website: https://ir.hworld.com.

 

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

 

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

 

—Financial Tables and Operational Data Follow—

 

 

 

H World Group Limited

 

Unaudited Condensed Consolidated Balance Sheets

 

		December 31, 2022				December 31, 2023
		RMB				RMB				US$3
		(in millions)
ASSETS
Current assets:
Cash and cash equivalents			3,583				6,946				978
Restricted cash			1,503				764				108
Short-term investments			1,788				2,189				308
Accounts receivable, net			1,113				755				106
Loan receivables - current, net			134				184				26
Amounts due from related parties, current			178				210				30
Inventories			70				59				8
Other current assets, net			809				949				134
Total current assets			9,178				12,056				1,698
Property and equipment, net			6,784				6,097				859
Intangible assets, net			5,278				5,280				744
Operating lease right-of-use assets			28,970				25,658				3,614
Finance lease right-of-use assets			2,047				2,171				306
Land use rights, net			199				181				25
Long-term investments			1,945				2,564				361
Goodwill			5,195				5,318				749
Amounts due from related parties, non-current			6				25				3
Loan receivables, net			124				163				23
Other assets, net			688				663				93
Deferred tax assets			1,093				1,043				147
Assets held for sale			-				2,313				326
Total assets			61,507				63,532				8,948
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt			3,288				4,049				570
Accounts payable			1,171				1,019				143
Amounts due to related parties			71				77				11
Salary and welfare payables			657				1,067				150
Deferred revenue			1,308				1,637				231
Operating lease liabilities, current			3,773				3,609				508
Finance lease liabilities, current			41				45				6
Accrued expenses and other current liabilities			2,337				3,261				459
Dividends payable			-				2,085				294
Income tax payable			500				562				78
Total current liabilities			13,146				17,411				2,450
Long-term debt			6,635				1,265				179
Operating lease liabilities, non-current			27,637				24,215				3,411
Finance lease liabilities, non-current			2,513				2,697				380
Deferred revenue			828				1,072				151
Other long-term liabilities			977				1,118				157
Deferred tax liabilities			858				845				119
Retirement benefit obligations			110				124				18
Liabilities held for sale			-				2,536				358
Total liabilities			52,704				51,283				7,223
Equity:
Ordinary shares			0				0				0
Treasury shares			(441	)			(906	)			(128	)
Additional paid-in capital			10,138				11,861				1,671
Retained earnings			(1,200	)			794				112
Accumulated other comprehensive income			232				386				54
Total H World Group Limited shareholders' equity			8,729				12,135				1,709
Noncontrolling interest			74				114				16
Total equity			8,803				12,249				1,725
Total liabilities and equity			61,507				63,532				8,948

 

³ The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US$1.00=RMB7.0999 on December 29, 2023, as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.

 

 

 

 

 

H World Group Limited

 

Unaudited Condensed Consolidated Statements of Comprehensive Income

 

		Quarter Ended																Year Ended
		December 31, 2022				September 30, 2023				December 31, 2023								December 31, 2022				December 31, 2023
		RMB				RMB				RMB				US$				RMB				RMB				US$
		(in millions, except shares, per share and per ADS data)
Revenue:
Leased and owned hotels			2,450				3,878				3,453				486				9,148				13,796				1,943
Manachised and franchised hotels			1,158				2,268				2,016				284				4,405				7,694				1,084
Others			98				142				116				16				309				392				55
Total revenue			3,706				6,288				5,585				786				13,862				21,882				3,082
Operating costs and expenses:
Hotel operating costs:
Rents			(956	)			(1,118	)			(1,033	)			(146	)			(3,927	)			(4,290	)			(604	)
Utilities			(162	)			(185	)			(160	)			(23	)			(603	)			(685	)			(97	)
Personnel costs			(981	)			(1,186	)			(1,331	)			(187	)			(3,683	)			(4,684	)			(660	)
Depreciation and amortization			(351	)			(330	)			(320	)			(45	)			(1,414	)			(1,329	)			(187	)
Consumables, food and beverage			(289	)			(353	)			(361	)			(51	)			(1,026	)			(1,327	)			(187	)
Others			(691	)			(441	)			(791	)			(111	)			(1,607	)			(2,026	)			(286	)
Total hotel operating costs			(3,430	)			(3,613	)			(3,996	)			(563	)			(12,260	)			(14,341	)			(2,021	)
Other operating costs			(22	)			(7	)			(10	)			(1	)			(62	)			(34	)			(5	)
Selling and marketing expenses			(169	)			(289	)			(326	)			(46	)			(613	)			(1,072	)			(151	)
General and administrative expenses			(440	)			(539	)			(644	)			(91	)			(1,675	)			(2,086	)			(294	)
Pre-opening expenses			(14	)			(11	)			(3	)			(0	)			(95	)			(35	)			(5	)
Total operating costs and expenses			(4,075	)			(4,459	)			(4,979	)			(701	)			(14,705	)			(17,568	)			(2,476	)
Goodwill impairment loss			-				-				(4	)			(1	)			-				(4	)			(1	)
Other operating income (expense), net			276				80				155				22				549				404				57
Income (loss) from operations			(93	)			1,909				757				106				(294	)			4,714				662
Interest income			27				62				85				12				87				248				35
Interest expense			(117	)			(85	)			(76	)			(11	)			(409	)			(385	)			(54	)
Other income (expense), net			(65	)			24				2				0				10				573				81
Gains (losses) from fair value changes of equity securities			140				(9	)			124				18				(359	)			109				15
Foreign exchange gains (losses)			181				(148	)			140				20				(641	)			90				13
Income (loss) before income taxes			73				1,753				1,032				145				(1,606	)			5,349				752
Income tax (expense) benefit			(203	)			(421	)			(281	)			(39	)			(207	)			(1,204	)			(168	)
Income (Loss) from equity method investments			3				20				(8	)			(1	)			(36	)			(14	)			(2	)
Net income (loss)			(127	)			1,352				743				105				(1,849	)			4,131				582
Net (income) loss attributable to noncontrolling interest			3				(15	)			(0	)			(0	)			28				(46	)			(7	)
Net income (loss) attributable to H World Group Limited			(124	)			1,337				743				105				(1,821	)			4,085				575
Gains (losses) arising from defined benefit plan, net of tax			22				-				(9	)			(1	)			22				(9	)			(1	)
Gains(losses) from fair value changes of debt securities, net of tax			57				-				(31	)			(4	)			57				(12	)			(2	)
Foreign currency translation adjustments, net of tax			82				(24	)			(23	)			(3	)			112				175				25
Comprehensive income (loss)			34				1,328				680				97				(1,658	)			4,285				604
Comprehensive (income) loss attributable to noncontrolling interest			3				(15	)			(0	)			(0	)			28				(46	)			(7	)
Comprehensive income (loss) attributable to H World Group Limited			37				1,313				680				97				(1,630	)			4,239				597
Earnings (Losses) per share:
Basic			(0.04	)			0.42				0.23				0.03				(0.59	)			1.28				0.18
Diluted			(0.04	)			0.41				0.23				0.03				(0.59	)			1.25				0.18
Earnings (Losses) per ADS:
Basic			(0.40	)			4.19				2.33				0.33				(5.85	)			12.83				1.81
Diluted			(0.40	)			4.07				2.31				0.33				(5.85	)			12.55				1.77
Weighted average number of shares used in computation:
Basic			3,109,528,097				3,188,274,127				3,182,802,226				3,182,802,226				3,111,196,757				3,183,163,131				3,183,163,131
Diluted			3,109,528,097				3,355,586,429				3,217,737,686				3,217,737,686				3,111,196,757				3,351,421,211				3,351,421,211

 

 

 

H World Group Limited

 

Unaudited Condensed Consolidated Statements of Cash Flows

 

		Quarter Ended																Year Ended
		December 31, 2022				September 30, 2023				December 31, 2023								December 31, 2022				December 31, 2023
		RMB				RMB				RMB				US$				RMB				RMB				US$
		(in millions)
Operating activities:
Net income (loss)			(127	)			1,352				743				105				(1,849	)			4,131				582
Share-based compensation			9				44				38				5				87				143				20
Depreciation and amortization, and other			369				358				346				49				1,513				1,448				204
Impairment loss			390				5				430				61				491				516				73
Loss (income) from equity method investments, net of dividends			(3	)			(18	)			8				1				85				72				10
Investment (income) loss and foreign exchange (gain) loss			(362	)			167				(452	)			(64	)			662				(925	)			(130	)
Changes in operating assets and liabilities			1,008				(583	)			1,359				191				166				2,508				352
Other			(242	)			(144	)			(61	)			(9	)			409				(219	)			(31	)
Net cash provided by (used in) operating activities			1,042				1,181				2,411				339				1,564				7,674				1,080
Investing activities:
Capital expenditures			(229	)			(196	)			(313	)			(44	)			(1,053	)			(901	)			(127	)
Acquisitions, net of cash received			2				-				(0	)			(0	)			(57	)			(0	)			(0	)
Purchase of investments			(23	)			(1,846	)			(700	)			(99	)			(401	)			(3,509	)			(494	)
Proceeds from maturity/sale and return of investments			370				-				771				109				937				2,972				419
Loan advances			(30	)			(48	)			(140	)			(20	)			(182	)			(262	)			(37	)
Loan collections			52				39				36				5				224				147				21
Other			7				2				69				11				10				76				11
Net cash provided by (used in) investing activities			149				(2,049	)			(277	)			(38	)			(522	)			(1,477	)			(207	)
Financing activities:
Net proceeds from issuance of ordinary shares			-				-				-				-				-				1,973				278
Payment of share repurchase			-				-				(848	)			(119	)			(334	)			(848	)			(119	)
Proceeds from debt			2,288				71				370				52				7,101				1,169				165
Repayment of debt			(3,670	)			(666	)			(204	)			(29	)			(7,781	)			(5,862	)			(826	)
Dividend paid			-				-				-				-				(416	)			-				-
Other			(19	)			(18	)			(62	)			(9	)			36				(152	)			(21	)
Net cash provided by (used in) financing activities			(1,401	)			(613	)			(744	)			(105	)			(1,394	)			(3,720	)			(523	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			79				(59	)			41				6				297				164				22
Net increase (decrease) in cash, cash equivalents and restricted cash, including cash classified within assets held for sale			(131	)			(1,540	)			1,431				202				(55	)			2,641				372
Less: net increase (decrease) in cash and cash equivalents classified within assets held for sale			-				-				17				2				-				17				2
Cash, cash equivalents and restricted cash at the beginning of the period			5,217				7,836				6,296				886				5,141				5,086				716
Cash, cash equivalents and restricted cash at the end of the period			5,086				6,296				7,710				1,086				5,086				7,710				1,086

 

 

 

H World Group Limited

 

Unaudited Reconciliation of GAAP and Non-GAAP Results

 

		Quarter Ended																Year Ended
		December 31, 2022				September 30, 2023				December 31, 2023								December 31, 2022				December 31, 2023
		RMB				RMB				RMB				US$				RMB				RMB				US$
		(in millions, except shares, per share and per ADS data)
Net income (loss) attributable to H World Group Limited (GAAP)			(124	)			1,337				743				105				(1,821	)			4,085				575
Share-based compensation expenses			9				44				38				5				87				143				20
(Gains) losses from fair value changes of equity securities			(140	)			9				(124	)			(18	)			359				(109	)			(15	)
Adjusted net income (loss) attributable to H World Group Limited (non-GAAP)			(255	)			1,390				657				92				(1,375	)			4,119				580
Adjusted earnings (losses) per share (non-GAAP)
Basic			(0.08	)			0.44				0.21				0.03				(0.44	)			1.29				0.18
Diluted			(0.08	)			0.42				0.20				0.03				(0.44	)			1.26				0.18
Adjusted earnings (losses) per ADS (non-GAAP)
Basic			(0.82	)			4.36				2.06				0.29				(4.42	)			12.94				1.82
Diluted			(0.82	)			4.23				2.04				0.29				(4.42	)			12.65				1.78
Weighted average number of shares used in computation
Basic			3,109,528,097				3,188,274,127				3,182,802,226				3,182,802,226				3,111,196,757				3,183,163,131				3,183,163,131
Diluted			3,109,528,097				3,355,586,429				3,217,737,686				3,217,737,686				3,111,196,757				3,351,421,211				3,351,421,211

 

		Quarter Ended																Year Ended
		December 31, 2022				September 30, 2023				December 31, 2023								December 31, 2022				December 31, 2023
		RMB				RMB				RMB				US$				RMB				RMB				US$
		(in millions, except per share and per ADS data)
Net income (loss) attributable to H World Group Limited (GAAP)			(124	)			1,337				743				105				(1,821	)			4,085				575
Interest income			(27	)			(62	)			(85	)			(12	)			(87	)			(248	)			(35	)
Interest expense			117				85				76				11				409				385				54
Income tax expense			203				421				281				39				207				1,204				168
Depreciation and amortization			360				352				341				48				1,456				1,414				199
EBITDA (non-GAAP)			529				2,133				1,356				191				164				6,840				961
Share-based compensation			9				44				38				5				87				143				20
(Gains) losses from fair value changes of equity securities			(140	)			9				(124	)			(18	)			359				(109	)			(15	)
Adjusted EBITDA (non-GAAP)			398				2,186				1,270				178				610				6,874				966

 

 

 

H World Group Limited

 

Segment Financial Summary

 

		Quarter Ended December 31, 2022								Quarter Ended September 30, 2023								Quarter Ended December 31, 2023
		Legacy- Huazhu				Legacy- DH				Legacy- Huazhu				Legacy- DH				Legacy- Huazhu				Legacy- DH
		RMB				RMB				RMB				RMB				RMB				RMB
		(in millions)								(in millions)								(in millions)
Leased and owned hotels			1,537				913				2,748				1,130				2,288				1,165
Manachised and franchised hotels			1,130				28				2,238				30				1,992				24
Others			90				8				127				15				104				12
Revenue			2,757				949				5,113				1,175				4,384				1,201
Depreciation and amortization			295				65				286				66				282				59
Adjusted EBITDA			397				1				2,131				55				1,270				0

 

 

 

 

H World Group Limited

 

Segment Financial Summary

 

		Year Ended December 31, 2022								Year Ended December 31, 2023
		Legacy- Huazhu				Legacy- DH				Legacy- Huazhu				Legacy- DH
		RMB				RMB				RMB				RMB
		(in millions)								(in millions)
Leased and owned hotels			6,062				3,086				9,522				4,274
Manachised and franchised hotels			4,324				81				7,596				98
Others			269				40				320				72
Revenue			10,655				3,207				17,438				4,444
Depreciation and amortization			1,212				244				1,166				248
Adjusted EBITDA			728				(118	)			6,787				87

 

 

 

Operating Results: Legacy-Huazhu⁽¹⁾

 

		Number of hotels																Number of rooms
		Opened in Q4 2023				Closed (2) in Q4 2023				Net added in Q4 2023				As of December 31, 2023				As of December 31, 2023
Leased and owned hotels			4				(5	)			(1	)			607				86,691
Manachised and franchised hotels			456				(220	)			236				8,656				798,939
Total			460				(225	)			235				9,263				885,630

 

 

(1)	Legacy-Huazhu refers to H World and its subsidiaries, excluding DH.
(2)	The reasons for hotel closures mainly included non-compliance with our brand standards, operating losses, and property-related issues. In Q4 2023, we temporarily closed 18 hotels for brand upgrade and business model change purposes.

 

		As of December 31, 2023
		Number of hotels				Unopened hotels in pipeline
Economy hotels			4,968				1,106
Leased and owned hotels			329				0
Manachised and franchised hotels			4,639				1,106
Midscale, upper-midscale hotels and others			4,295				1,955
Leased and owned hotels			278				9
Manachised and franchised hotels			4,017				1,946
Total			9,263				3,061

 

 

 

Operational hotels excluding hotels under requisition

 

		For the quarter ended
		December 31,				September 30,				December 31,				yoy
		2022				2023				2023				change
Average daily room rate (in RMB)
Leased and owned hotels			279				406				356				27.7	%
Manachised and franchised hotels			236				314				276				17.1	%
Blended			240				324				284				18.3	%
Occupancy rate (as a percentage)
Leased and owned hotels			63.1	%			87.8	%			83.7	%			+20.6 p.p.
Manachised and franchised hotels			66.6	%			85.7	%			80.1	%			+13.5 p.p.
Blended			66.2	%			85.9	%			80.5	%			+14.3 p.p.
RevPAR (in RMB)
Leased and owned hotels			176				356				298				69.4	%
Manachised and franchised hotels			157				269				221				40.9	%
Blended			159				278				229				43.8	%

 

 

 

		For the quarter ended
		December 31,				December 31,				yoy
		2019				2023				change
Average daily room rate (in RMB)
Leased and owned hotels			277				356				28.4	%
Manachised and franchised hotels			223				276				24.1	%
Blended			232				284				22.5	%
Occupancy rate (as a percentage)
Leased and owned hotels			84.7	%			83.7	%			-1.1 p.p.
Manachised and franchised hotels			81.6	%			80.1	%			-1.5 p.p.
Blended			82.2	%			80.5	%			-1.7 p.p.
RevPAR (in RMB)
Leased and owned hotels			235				298				26.8	%
Manachised and franchised hotels			182				221				21.8	%
Blended			191				229				20.0	%

 

 

 

Operational hotels excluding hotels under requisition

 

		For full year ended
		December 31,				December 31,				yoy
		2022				2023				change
Average daily room rate (in RMB)
Leased and owned hotels			272				372				36.9	%
Manachised and franchised hotels			231				290				25.3	%
Blended			236				299				26.6	%
Occupancy rate (as a percentage)
Leased and owned hotels			63.9	%			82.8	%			+18.9 p.p.
Manachised and franchised hotels			67.1	%			80.8	%			+13.8 p.p.
Blended			66.7	%			81.1	%			+14.4 p.p.
RevPAR (in RMB)
Leased and owned hotels			174				308				77.4	%
Manachised and franchised hotels			155				234				51.0	%
Blended			157				242				53.9	%

 

 

 

		For full year ended
		December 31,				December 31,				yoy
		2019				2023				change
Average daily room rate (in RMB)
Leased and owned hotels			276				372				34.5	%
Manachised and franchised hotels			224				290				29.1	%
Blended			234				299				27.4	%
Occupancy rate (as a percentage)
Leased and owned hotels			87.0	%			82.8	%			-4.1p.p.
Manachised and franchised hotels			83.8	%			80.8	%			-2.9p.p.
Blended			84.4	%			81.1	%			-3.3p.p.
RevPAR (in RMB)
Leased and owned hotels			240				308				28.1	%
Manachised and franchised hotels			188				234				24.6	%
Blended			198				242				22.4	%

 

 

 

Same-hotel operational data by class

 

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

 

		Number of hotels								Same-hotel RevPAR												Same-hotel ADR												Same-hotel Occupancy
		As of								For the quarter								yoy				For the quarter								yoy				For the quarter								yoy
		December 31,								ended December 31,								change				ended December 31,								change				ended December 31,								change
		2022				2023				2022				2023								2022				2023								2022				2023				(p.p.)
Economy hotels			3,641				3,641				129				173				34.5	%			184				212				14.9	%			69.8	%			81.7	%			+11.9
Leased and owned hotels			318				318				134				209				56.6	%			200				248				24.1	%			66.8	%			84.3	%			+17.5
Manachised and franchised hotels			3,323				3,323				128				168				31.3	%			182				206				13.3	%			70.2	%			81.3	%			+11.1
Midscale, upper-midscale hotels and others			2,898				2,898				197				283				44.2	%			302				351				16.0	%			65.0	%			80.8	%			+15.8
Leased and owned hotels			250				250				223				370				66.0	%			364				445				22.2	%			61.3	%			83.2	%			+22.0
Manachised and franchised hotels			2,648				2,648				193				271				40.5	%			294				337				14.4	%			65.5	%			80.5	%			+14.9
Total			6,539				6,539				164				230				40.8	%			243				283				16.7	%			67.3	%			81.2	%			+13.9

 

 

 

Same-hotel operational data by class

 

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

 

		Number of hotels								Same-hotel RevPAR												Same-hotel ADR												Same-hotel Occupancy
		As of December 31,								For the year ended December 31,								yoy change				For the year ended December 31,								yoy change				For the year ended December 31,								yoy change
		2022				2023				2022				2023								2022				2023								2022				2023				(p.p.)
Economy hotels			3,641				3,641				129				186				44.4	%			180				225				25.1	%			71.5	%			82.5	%			+11.0
Leased and owned hotels			318				318				135				225				65.9	%			196				266				36.0	%			69.2	%			84.3	%			+15.2
Manachised and franchised hotels			3,323				3,323				128				180				41.0	%			178				219				23.2	%			71.8	%			82.2	%			+10.4
Midscale, upper-midscale hotels and others			2,898				2,898				198				301				51.9	%			304				369				21.7	%			65.2	%			81.4	%			+16.2
Leased and owned hotels			250				250				219				381				74.0	%			365				465				27.5	%			60.1	%			82.0	%			+21.9
Manachised and franchised hotels			2,648				2,648				195				288				48.0	%			295				354				20.1	%			66.0	%			81.3	%			+15.3
Total			6,539				6,539				163				244				49.4	%			239				298				24.6	%			68.3	%			81.9	%			+13.6

 

 

 

Operating Results: Legacy-DH⁽³⁾

 

		Number of hotels																Number of rooms				Unopened hotels in pipeline
		Opened in Q4 2023				Closed in Q4 2023				Net added in Q4 2023				As of December 31, 2023(4)				As of December 31, 2023				As of December 31, 2023
Leased hotels			2				-				2				84				16,303				21
Manachised and franchised hotels			-				-				-				47				10,511				16
Total			2				-				2				131				26,814				37

 

(3) Legacy-DH refers to DH.

(4) As of December 31, 2023, a total of 2 hotels were temporarily closed due to repair work.

 

 

 

		For the quarter ended
		December 31,				September 30,				December 31,				yoy
		2022				2023				2023				change
Average daily room rate (in EUR)
Leased hotels			114				113				118				3.1	%
Manachised and franchised hotels			134				116				111				-17.3	%
Blended			122				114				115				-5.9	%
Occupancy rate (as a percentage)
Leased hotels			60.0	%			71.4	%			64.7	%			+4.7 p.p.
Manachised and franchised hotels			58.3	%			65.5	%			62.6	%			+4.3 p.p.
Blended			59.3	%			69.0	%			63.8	%			+4.5 p.p.
RevPAR (in EUR)
Leased hotels			68				81				76				11.2	%
Manachised and franchised hotels			78				76				69				-11.2	%
Blended			72				79				73				1.3	%

 

 

 

		For full year ended
		December 31,				December 31,				yoy
		2022				2023				change
Average daily room rate (in EUR)
Leased and owned hotels			110				115				4.6	%
Manachised and franchised hotels			113				110				-3.2	%
Blended			111				113				1.4	%
Occupancy Rate (as a percentage)
Leased and owned hotels			56.0	%			64.7	%			+8.7 p.p.
Manachised and franchised hotels			56.4	%			61.6	%			+5.1 p.p.
Blended			56.2	%			63.4	%			+7.2 p.p.
RevPAR (in EUR)
Leased and owned hotels			61				74				20.9	%
Manachised and franchised hotels			64				67				5.6	%
Blended			62				71				14.5	%

 

 

 

Hotel Portfolio by Brand

 

		As of December 31, 2023
		Hotels				Rooms				Unopened hotels
		in operation								in pipeline
Economy hotels			4,984				407,657				1,121
HanTing Hotel			3,598				317,647				731
Hi Inn			471				24,431				180
Ni Hao Hotel			269				20,009				177
Elan Hotel			404				21,012				1
Ibis Hotel			226				22,659				17
Zleep Hotels			16				1,899				15
Midscale hotels			3,543				379,614				1,503
Ibis Styles Hotel			105				10,607				24
Starway Hotel			670				55,786				228
JI Hotel			2,116				244,175				936
Orange Hotel			652				69,046				315
Upper midscale hotels			704				98,508				397
Crystal Orange Hotel			183				23,664				119
CitiGO Hotel			35				5,308				4
Manxin Hotel			137				12,678				69
Madison Hotel			90				11,704				64
Mercure Hotel			164				25,803				58
Novotel Hotel			23				5,763				17
IntercityHotel(5)			63				12,219				64
MAXX(6)			9				1,369				2
Upscale hotels			137				21,046				69
Jaz in the City			3				587				1
Joya Hotel			7				1,234				-
Blossom House			63				2,791				56
Grand Mercure Hotel			10				2,039				2
Steigenberger Hotels & Resorts(7)			54				14,395				10
Luxury hotels			16				2,360				2
Steigenberger Icon(8)			9				1,847				2
Song Hotels			7				513				-
Others			10				3,259				6
Other hotels(9)			10				3,259				6
Total			9,394				912,444				3,098

 

 

(5)

As of December 31, 2023, 9 operational hotels and 53 pipeline hotels of IntercityHotel were in China.

(6)

As of December 31, 2023, 4 operational hotels and 2 pipeline hotels of MAXX were in China.

(7)

As of December 31, 2023, 11 operational hotels and 3 pipeline hotels of Steigenberger Hotels & Resorts were in China.

(8)

As of December 31, 2023, 3 operational hotels and 1 pipeline hotel of Steigenberger Icon were in China.

(9)

Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).