Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the First Quarter of 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 hotels | 3 | (12 | ) | (9 | ) | 653 | 91,163 | |
| Manachised and franchised hotels | 299 | (128 | ) | 171 | 7,215 | 649,330 | ||
| Total | 302 | (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 hotels | Unopened hotels in pipeline | |
| Economy hotels | 4,810 | 937 |
| Leased and owned hotels | 387 | 4 |
| Manachised and franchised hotels | 4,423 | 933 |
| Midscale and upscale hotels | 3,058 | 1,289 |
| Leased and owned hotels | 266 | 19 |
| Manachised and franchised hotels | 2,792 | 1,270 |
| Total | 7,868 | 2,226 |
| 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 hotels | 243 | 286 | 263 | 8.0 | % | |||
| Manachised and franchised hotels | 203 | 232 | 218 | 7.5 | % | |||
| Blended | 209 | 239 | 224 | 7.2 | % | |||
| Occupancy Rate (as a percentage) | ||||||||
| Leased and owned hotels | 64.0 | % | 67.4 | % | 56.7 | % | -7.3p.p. | |
| Manachised and franchised hotels | 66.6 | % | 68.4 | % | 59.6 | % | -7.0p.p. | |
| Blended | 66.2 | % | 68.2 | % | 59.2 | % | -7.0p.p. | |
| RevPAR (in RMB) | ||||||||
| Leased and owned hotels | 156 | 193 | 149 | -4.4 | % | |||
| Manachised and franchised hotels | 135 | 159 | 130 | -3.8 | % | |||
| Blended | 138 | 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 hotels | 258 | 263 | 1.9 | % | ||
| Manachised and franchised hotels | 211 | 218 | 3.2 | % | ||
| Blended | 221 | 224 | 1.2 | % | ||
| Occupancy Rate (as a percentage) | ||||||
| Leased and owned hotels | 83.6 | % | 56.7 | % | -27.0p.p. | |
| Manachised and franchised hotels | 79.8 | % | 59.6 | % | -20.3p.p. | |
| Blended | 80.6 | % | 59.2 | % | -21.4p.p. | |
| RevPAR (in RMB) | ||||||
| Leased and owned hotels | 216 | 149 | -31.0 | % | ||
| Manachised and franchised hotels | 169 | 130 | -23.0 | % | ||
| Blended | 178 | 132 | -25.7 | % | ||
| 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 March 31, | For the quarter | yoy | For the quarter | yoy | For the quarter | yoy | |||||||||
| ended March 31, | change | ended March 31, | change | ended March 31, | change | ||||||||||
| 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | (p.p.) | |||||||
| Economy hotels | 3320 | 3320 | 115 | 105 | -8.5 | % | 161 | 167 | 4.0 | % | 71.5 | % | 62.9 | % | -8.6 |
| Leased and owned hotels | 380 | 380 | 121 | 114 | -6.5 | % | 177 | 186 | 4.9 | % | 68.4 | % | 61.0 | % | -7.4 |
| Manachised and franchised hotels | 2940 | 2940 | 114 | 104 | -8.9 | % | 158 | 164 | 3.8 | % | 72.0 | % | 63.2 | % | -8.8 |
| Midscale and upscale hotels | 1905 | 1905 | 181 | 164 | -9.4 | % | 281 | 289 | 2.7 | % | 64.4 | % | 56.8 | % | -7.6 |
| Leased and owned hotels | 229 | 229 | 201 | 187 | -7.3 | % | 339 | 352 | 4.0 | % | 59.4 | % | 53.0 | % | -6.4 |
| Manachised and franchised hotels | 1676 | 1676 | 177 | 160 | -9.9 | % | 271 | 277 | 2.3 | % | 65.5 | % | 57.7 | % | -7.8 |
| Total | 5225 | 5225 | 144 | 131 | -8.9 | % | 210 | 218 | 3.5 | % | 68.4 | % | 60.2 | % | -8.2 |
| Number of hotels | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | ||||||||||||
| As of March 31, | For the quarter | yoy | For the quarter | yoy | For the quarter | yoy | |||||||||
| ended March 31, | change | ended March 31, | change | ended March 31, | change | ||||||||||
| 2019 | 2022 | 2019 | 2022 | 2019 | 2022 | 2019 | 2022 | (p.p.) | |||||||
| Economy hotels | 2024 | 2024 | 160 | 104 | -34.9 | % | 183 | 167 | -8.7 | % | 87.5 | % | 62.4 | % | -25.1 |
| Leased and owned hotels | 358 | 358 | 177 | 111 | -37.4 | % | 200 | 182 | -9.0 | % | 88.2 | % | 60.7 | % | -27.5 |
| Manachised and franchised hotels | 1666 | 1666 | 155 | 102 | -34.1 | % | 178 | 162 | -8.6 | % | 87.3 | % | 62.9 | % | -24.4 |
| Midscale and upscale hotels | 795 | 795 | 251 | 155 | -38.1 | % | 324 | 288 | -11.1 | % | 77.3 | % | 53.8 | % | -23.5 |
| Leased and owned hotels | 170 | 170 | 304 | 171 | -43.9 | % | 383 | 332 | -13.1 | % | 79.4 | % | 51.3 | % | -28.1 |
| Manachised and franchised hotels | 625 | 625 | 231 | 149 | -35.4 | % | 302 | 273 | -9.7 | % | 76.5 | % | 54.7 | % | -21.8 |
| Total | 2819 | 2819 | 191 | 122 | -36.2 | % | 227 | 205 | -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 hotels | 1 | - | 1 | 77 | 14,472 | 29 | ||||
| Manachised and franchised hotels | - | (5 | ) | (5 | ) | 43 | 9,894 | 16 | ||
| Total | 1 | (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 hotels | 77.9 | 95.4 | 90.0 | 15.6 | % | |||
| Manachised and franchised hotels | 59.0 | 92.8 | 85.5 | 44.9 | % | |||
| Blended | 68.5 | 94.2 | 88.0 | 28.4 | % | |||
| Occupancy rate (as a percentage) | ||||||||
| Leased hotels | 14.6 | % | 42.8 | % | 34.1 | % | +19.5 p.p. | |
| Managed and franchised hotels | 26.5 | % | 50.7 | % | 44.0 | % | +17.5 p.p. | |
| Blended | 18.8 | % | 46.1 | % | 38.0 | % | +19.2 p.p. | |
| RevPAR (in EUR) | ||||||||
| Leased hotels | 11.4 | 40.9 | 30.7 | 169.6 | % | |||
| Managed and franchised hotels | 15.6 | 47.1 | 37.6 | 141.0 | % | |||
| Blended | 12.9 | 43.4 | 33.4 | 158.8 | % | |||
Hotel Portfolio by Brand
| As of March 31, 2022 | |||
| Hotels | Rooms | Unopened hotels | |
| in operation | in pipeline | ||
| Economy hotels | 4,824 | 388,174 | 951 |
| HanTing Hotel | 3,096 | 277,885 | 608 |
| Hi Inn | 447 | 24,682 | 117 |
| Ni Hao Hotel | 83 | 5,772 | 178 |
| Elan Hotel | 965 | 55,421 | 2 |
| Ibis Hotel | 219 | 22,751 | 32 |
| Zleep Hotels | 14 | 1,663 | 14 |
| Midscale hotels | 2,554 | 281,168 | 977 |
| Ibis Styles Hotel | 82 | 8,522 | 17 |
| Starway Hotel | 544 | 44,740 | 202 |
| JI Hotel | 1,449 | 173,866 | 534 |
| Orange Hotel | 449 | 49,231 | 216 |
| CitiGO Hotel | 30 | 4,809 | 8 |
| Upper midscale hotels | 472 | 69,267 | 270 |
| Crystal Orange Hotel | 148 | 19,793 | 65 |
| Manxin Hotel | 91 | 8,705 | 54 |
| Madison Hotel | 41 | 6,164 | 56 |
| Mercure Hotel | 128 | 21,697 | 53 |
| Novotel Hotel | 15 | 4,032 | 16 |
| IntercityHotel(6) | 49 | 8,876 | 26 |
| Upscale hotels | 115 | 20,691 | 62 |
| Jaz in the City | 3 | 587 | 1 |
| Joya Hotel | 9 | 1,760 | - |
| Blossom House | 36 | 1,793 | 34 |
| Grand Mercure Hotel | 7 | 1,485 | 6 |
| Steigenberger Hotels & Resorts(7) | 53 | 13,889 | 13 |
| MAXX(8) | 7 | 1,177 | 8 |
| Luxury hotels | 15 | 2,327 | 4 |
| Steigenberger Icon(9) | 9 | 1,848 | 2 |
| Song Hotels | 6 | 479 | 2 |
| Others | 8 | 3,232 | 7 |
| Other hotels(10) | 8 | 3,232 | 7 |
| Total | 7,988 | 764,859 | 2,271 |
(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
