Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the First Quarter of 2022

28/04/2022

SHANGHAI, China, April 28, 2022 (GLOBE NEWSWIRE) -- Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the first quarter (“Q1 2022”) ended March 31, 2022.

COVID-19 update
For our Legacy-Huazhu business, RevPAR recovery in the first two months of 2022 was on track. Nevertheless, such recovery was significantly interrupted by the large-scale outbreak of the Omicron variant in over 30 provinces in China since early-March 2022. Many cities, such as Shanghai and Jilin, have been subject to lockdown since then, which resulted in a sharp decline of both business and leisure traveling activities. However, such outbreak led to a rise in demand for hotels to serve the quarantine needs of infected persons or those in close contact with infected persons, as well as the accommodation needs of medical teams and delivery riders. As the Omicron variant is highly infectious, there are still uncertainties in terms of the impact on our Legacy-Huazhu business in the near-term. To mitigate risks, we are now implementing several costs and cash flow management measures.

Steigenberger Hotels AG and its subsidiaries (“DH”, or “Legacy-DH”) have been experiencing continuous RevPAR recovery since Germany unfolded its opening-up plan in mid-February 2022. RevPAR in March 2022 recovered to 65% of the 2019 level, as compared to only 47% of the 2019 level in January 2022. However, since RevPAR recovery is still at an early stage, a comprehensive cash flow improvement program remains critical. Therefore, DH will continuously focus on efficiency improvements, negotiation of further lease waivers, and personnel cost optimization.

Operating Results: Legacy-Huazhu(1)

 Number of hotels Number of rooms
 Opened
in Q1 2022
Closed(2)
in Q1 2022
Net added
in Q1 2022
As of
March 31, 2022(3)
 As of
March 31, 2022
  
Leased and owned hotels3(12)(9)653 91,163
Manachised and franchised hotels299(128)171 7,215 649,330
Total302(140)162 7,868 740,493
(1)  Legacy-Huazhu refers to Huazhu and its subsidiaries, excluding DH.
(2)  The reasons for hotel closures mainly included non-compliance with our brand standards, operating losses, and property-related issues. In Q1 2022, we temporarily closed 9 hotels for brand upgrade and business model change purposes.
(3)  As of March 31, 2022,1299 hotels were requisitioned by governmental authorities.


 As of March 31, 2022
 Number of hotelsUnopened hotels in pipeline
Economy hotels4,810937
Leased and owned hotels3874
Manachised and franchised hotels4,423933
Midscale and upscale hotels3,0581,289
Leased and owned hotels26619
Manachised and franchised hotels2,7921,270
Total7,8682,226


Operational hotels excluding hotels under requisition
 For the quarter ended 
 March 31,December 31,March 31,yoy
 2021 2021 2022 change
Average daily room rate (in RMB)   
Leased and owned hotels243 286 263 8.0%
Manachised and franchised hotels203 232 218 7.5%
Blended209 239 224 7.2%
Occupancy Rate (as a percentage)   
Leased and owned hotels64.0%67.4%56.7%-7.3p.p.
Manachised and franchised hotels66.6%68.4%59.6%-7.0p.p.
Blended66.2%68.2%59.2%-7.0p.p.
RevPAR (in RMB)    
Leased and owned hotels156 193 149 -4.4%
Manachised and franchised hotels135 159 130 -3.8%
Blended138 163 132 -4.1%


 For the quarter ended
 March 31,March 31,yoy
 2019 2022 change
Average daily room rate (in RMB)  
Leased and owned hotels258 263 1.9%
Manachised and franchised hotels211 218 3.2%
Blended221 224 1.2%
Occupancy Rate (as a percentage)  
Leased and owned hotels83.6%56.7%-27.0p.p.
Manachised and franchised hotels79.8%59.6%-20.3p.p.
Blended80.6%59.2%-21.4p.p.
RevPAR (in RMB)   
Leased and owned hotels216 149 -31.0%
Manachised and franchised hotels169 130 -23.0%
Blended178 132 -25.7%


Same-hotel operational data by class        
Mature hotels in operation for more than 18 months (excluding hotels under requisition)
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
March 31,
For the quarteryoyFor the quarteryoyFor the quarteryoy
 ended
March 31,
changeended
March 31,
changeended
March 31,
change
 2021202220212022 20212022 2021 2022 (p.p.)
Economy hotels33203320115105-8.5%1611674.0%71.5%62.9%-8.6
Leased and owned hotels380380121114-6.5%1771864.9%68.4%61.0%-7.4
Manachised and franchised hotels29402940114104-8.9%1581643.8%72.0%63.2%-8.8
Midscale and upscale hotels19051905181164-9.4%2812892.7%64.4%56.8%-7.6
Leased and owned hotels229229201187-7.3%3393524.0%59.4%53.0%-6.4
Manachised and franchised hotels16761676177160-9.9%2712772.3%65.5%57.7%-7.8
Total52255225144131-8.9%2102183.5%68.4%60.2%-8.2


 
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
March 31,

For the quarteryoyFor the quarteryoyFor the quarteryoy
 ended
March 31,
changeended
March 31,
changeended
March 31,
change
 2019202220192022 20192022 2019 2022 (p.p.)
Economy hotels20242024160104-34.9%183167-8.7%87.5%62.4%-25.1
Leased and owned hotels358358177111-37.4%200182-9.0%88.2%60.7%-27.5
Manachised and franchised hotels16661666155102-34.1%178162-8.6%87.3%62.9%-24.4
Midscale and upscale hotels795795251155-38.1%324288-11.1%77.3%53.8%-23.5
Leased and owned hotels170170304171-43.9%383332-13.1%79.4%51.3%-28.1
Manachised and franchised hotels625625231149-35.4%302273-9.7%76.5%54.7%-21.8
Total28192819191122-36.2%227205-9.9%84.0%59.4%-24.6


Operating Results: Legacy-DH
(4)

 Number of hotels Number of
rooms
 Unopened hotels
in pipeline
 Opened
in Q1 2022

Closed
in Q1 2022

Net added
in Q1 2022

As of
March 31, 2022(5)

 As of
March 31,2022

 As of
March 31,2022

 
Leased hotels1- 1 77 14,472 29
Manachised and franchised hotels-(5)(5)43 9,894 16
Total1(5)(4)120 24,366 45
(4)  Legacy-DH refers to DH.
(5)  As of March 31, 2022, a total of 3 hotels were temporarily closed. 1 hotel was closed for renovation and 1 hotel was closed due to flood damage. Additionally, 1 hotel was temporarily closed due to low demand.


 For the quarter ended 
 March 31,December 31,March 31,yoy
 2021 2021 2022 change
Average daily room rate (in EUR)    
Leased hotels77.9 95.4 90.0 15.6%
Manachised and franchised hotels59.0 92.8 85.5 44.9%
Blended68.5 94.2 88.0 28.4%
Occupancy rate (as a percentage)    
Leased hotels14.6%42.8%34.1%+19.5 p.p.
Managed and franchised hotels26.5%50.7%44.0%+17.5 p.p.
Blended18.8%46.1%38.0%+19.2 p.p.
RevPAR (in EUR)    
Leased hotels11.4 40.9 30.7 169.6%
Managed and franchised hotels15.6 47.1 37.6 141.0%
Blended12.9 43.4 33.4 158.8%


Hotel Portfolio by Brand

 As of March 31, 2022
 HotelsRoomsUnopened hotels
 in operationin pipeline
Economy hotels4,824388,174951
HanTing Hotel3,096277,885608
Hi Inn44724,682117
Ni Hao Hotel835,772178
Elan Hotel96555,4212
Ibis Hotel21922,75132
Zleep Hotels141,66314
Midscale hotels2,554281,168977
Ibis Styles Hotel828,52217
Starway Hotel54444,740202
JI Hotel1,449173,866534
Orange Hotel44949,231216
CitiGO Hotel304,8098
Upper midscale hotels47269,267270
Crystal Orange Hotel14819,79365
Manxin Hotel918,70554
Madison Hotel416,16456
Mercure Hotel12821,69753
Novotel Hotel154,03216
IntercityHotel(6)498,87626
Upscale hotels11520,69162
Jaz in the City35871
Joya Hotel91,760-
Blossom House361,79334
Grand Mercure Hotel71,4856
Steigenberger Hotels & Resorts(7)5313,88913
MAXX(8)71,1778
Luxury hotels152,3274
Steigenberger Icon(9)91,8482
Song Hotels64792
Others83,2327
Other hotels(10)83,2327
Total7,988764,8592,271

(6)  As of March 31, 2022, 2 operational hotels and 9 pipeline hotels of IntercityHotel were in China.
(7)  As of March 31, 2022, 11 operational hotels and 5 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(8)  As of March 31, 2022, 2 operational hotels and 7 pipeline hotels of MAXX were in China.
(9)  As of March 31, 2022, 3 operational hotels and 1 pipeline hotel of Steigenberger Icon were in China.
(10)  Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).

About Huazhu Group Limited
Originated in China, Huazhu Group Limited is a world-leading hotel group. As of March 31, 2022, Huazhu operated 7,988 hotels with 764,859 rooms in operation in 17 countries. Huazhu’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels. In addition, Huazhu also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.

Huazhu’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, Huazhu directly operates hotels typically located on leased or owned properties. Under the manachise model, Huazhu manages manachised hotels through the on-site hotel managers that Huazhu appoints, and Huazhu collects fees from franchisees. Under the franchise model, Huazhu provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. Huazhu applies a consistent standard and platform across all of its hotels. As of March 31, 2022, Huazhu operates 14 percent of its hotel rooms under lease and ownership model, and 86 percent under manachise and franchise models.

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

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

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

Contact Information
Huazhu Investor Relations
Tel: 86 (21) 6195 9561
Email: ir@huazhu.com
http://ir.huazhu.com


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