China Lodging Group, Limited Announces Its Preliminary Results for Hotel Operation in the Third Quarter of 2016
SHANGHAI, China, Oct. 18, 2016 (GLOBE NEWSWIRE) -- China Lodging Group, Limited (NASDAQ:HTHT) ("China Lodging Group", "Huazhu", or the "Company"), a leading and fast-growing multi-brand hotel group in China, today announced its preliminary results for the hotel operation in the third quarter ended September 30, 2016.
Operating Metrics
| For the quarter ended | |||||||||
| September 30, | June 30, | September 30, | |||||||
| 2015 | 2016 | 2016 | |||||||
| Occupancy rate (as a percentage) | |||||||||
| Leased and owned hotels | 91 | % | 87 | % | 90 | % | |||
| Manachised hotels | 89 | % | 85 | % | 89 | % | |||
| Franchised hotels | 73 | % | 71 | % | 74 | % | |||
| Blended | 89 | % | 85 | % | 89 | % | |||
| Average daily room rate (1) (in RMB) | |||||||||
| Leased and owned hotels | 207 | 210 | 217 | ||||||
| Manachised hotels | 179 | 175 | 186 | ||||||
| Franchised hotels | 187 | 181 | 194 | ||||||
| Blended | 188 | 184 | 194 | ||||||
| RevPAR (1) (in RMB) | |||||||||
| Leased and owned hotels | 188 | 182 | 195 | ||||||
| Manachised hotels | 159 | 150 | 166 | ||||||
| Franchised hotels | 137 | 128 | 144 | ||||||
| Blended | 167 | 157 | 173 | ||||||
| (1) Value-added tax ("VAT") has been implemented for hospitality industry to replace business tax in China, effective May 1, 2016. The Company's room rates quoted and received from customers are tax-inclusive (business tax or VAT) before and after the implementation of VAT. For comparison purposes, the ADR and RevPAR disclosed in this release are based on the tax-inclusive rates. | |||||||||
| Like-for-like performance for leased and manachised hotels opened for at least 18 months during the current quarter | |||||||||
| As of and for the quarter ended | |||||||||
| September 30, | yoy | ||||||||
| 2015 | 2016 | change | |||||||
| Total | 2,050 | 2,050 | |||||||
| Leased hotels | 588 | 588 | |||||||
| Manachised and franchised hotels | 1,462 | 1,462 | |||||||
| Occupancy rate (as a percentage) | 91 | % | 91 | % | 0.2 | % | |||
| Average daily room rate (in RMB) | 188 | 189 | 0.4 | % | |||||
| RevPAR (in RMB) | 171 | 172 | 0.5 | % | |||||
Hotel Development
| Number of hotels in operation | Number of rooms in operation | ||||||||||
| Opened | Closed (2) | Net added | As of | Net added | As of | ||||||
| in Q3 2016 | in Q3 2016 | in Q3 2016 | September 30, 2016 | in Q3 2016 | September 30, 2016 | ||||||
| Leased and owned hotels | 8 | (10 | ) | (2 | ) | 625 | 35 | 77,158 | |||
| Manachised and franchised hotels | 163 | (77 | ) | 86 | 2,573 | 7,939 | 245,627 | ||||
| Total | 171 | (87 | ) | 84 | 3,198 | 7,974 | 322,785 | ||||
| (2) The hotel closure in Q3 2016 was higher than the previous quarters because: a) In order to increase the product qualities, Huazhu removed 44 of the manachised and franchised hotels related to HanTing, Hi Inn, Elan and Starway from Huazhu's network for incompliances with the brand and operating standards. | |||||||||||
| b) Huazhu removed 15 franchised and 1 manachised hotels under ibis and ibis Styles brands after completion of legal procedures for termination. The financial impact from such removal is not significant because these hotels have not been integrated into Huazhu's operating platform for operation and management fee purposes. | |||||||||||
| Other common reasons for hotel closure including contract expiration, rezoning and others. | |||||||||||
| Number of hotels in pipeline as of September 30, 2016 | |
| Leased hotels | 23 |
| Manachised and franchised hotels | 482 |
| Total(3) | 505 |
| (3) Including 38 hotels under brands of ibis, ibis Styles and Mercure. | |
Business Update by Segment
| Hotel breakdown by segment | ||||
| Number of hotels in operation | ||||
| Net added | As of | |||
| in Q3 2016 | September 30, 2016 | |||
| Economy hotels | 45 | 2,771 | ||
| HanTing Hotel | 44 | 2,149 | ||
| Leased hotels | - | 492 | ||
| Manachised hotels | 43 | 1,656 | ||
| Franchised hotels | 1 | 1 | ||
| Hi Inn | 15 | 373 | ||
| Leased hotels | (1 | ) | 36 | |
| Manachised hotels | 8 | 293 | ||
| Franchised hotels | 8 | 44 | ||
| Elan Hotel | (1 | ) | 179 | |
| Manachised hotels | (3 | ) | 146 | |
| Franchised hotels | 2 | 33 | ||
| ibis Hotel | (13 | ) | 70 | |
| Leased hotels | - | 13 | ||
| Manachised hotels | 1 | 14 | ||
| Franchised hotels | (14 | ) | 43 | |
| Midscale and upscale hotels | 39 | 427 | ||
| JI Hotel | 27 | 256 | ||
| Leased hotels | - | 78 | ||
| Manachised hotels | 27 | 176 | ||
| Franchised hotels | - | 2 | ||
| Starway Hotel | 5 | 141 | ||
| Leased hotels | (1 | ) | 2 | |
| Manachised hotels | 10 | 94 | ||
| Franchised hotels | (4 | ) | 45 | |
| Joya Hotel | - | 5 | ||
| Leased hotels | - | 2 | ||
| Manachised hotels | - | 3 | ||
| Manxin Hotels & Resorts | 1 | 3 | ||
| Leased hotels | (1 | ) | - | |
| Manachised hotels | 2 | 3 | ||
| ibis Styles Hotel | 2 | 8 | ||
| Manachised hotels | 3 | 5 | ||
| Franchised hotels | (1 | ) | 3 | |
| Mercure Hotel | 3 | 11 | ||
| Leased hotels | 1 | 2 | ||
| Manachised hotels | 2 | 8 | ||
| Franchised hotels | - | 1 | ||
| Novotel Hotel | 1 | 2 | ||
| Manachised hotels | - | 1 | ||
| Franchised hotels | 1 | 1 | ||
| Grand Mercure | - | 1 | ||
| Franchised hotels | - | 1 | ||
| Total | 84 | 3,198 | ||
| Same-hotel operational data by segment | |||||||||||||||||||||
| Number of hotels in operation | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | ||||||||||||||||||
| As of | For the quarter ended | For the quarter ended | For the quarter ended | ||||||||||||||||||
| September 30, | September 30, | yoy change | September 30, | yoy change | September 30, | yoy change | |||||||||||||||
| 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | ||||||||||||||
| Economy hotels | 1,868 | 1,868 | 161 | 160 | -0.8 | % | 177 | 175 | -0.8 | % | 91 | % | 91 | % | 0.0 | % | |||||
| Leased hotels | 518 | 518 | 167 | 165 | -0.9 | % | 184 | 183 | -0.5 | % | 91 | % | 90 | % | -0.3 | % | |||||
| Manachised and franchised hotels | 1,350 | 1,350 | 159 | 157 | -0.8 | % | 173 | 171 | -0.9 | % | 92 | % | 92 | % | 0.1 | % | |||||
| Midscale and upscale hotels | 182 | 182 | 245 | 263 | 7.5 | % | 284 | 299 | 5.5 | % | 86 | % | 88 | % | 1.6 | % | |||||
| Leased hotels | 70 | 70 | 285 | 311 | 8.9 | % | 317 | 339 | 6.9 | % | 90 | % | 92 | % | 1.6 | % | |||||
| Manachised and franchised hotels | 112 | 112 | 207 | 218 | 5.7 | % | 250 | 259 | 3.7 | % | 83 | % | 84 | % | 1.6 | % | |||||
| Total | 2,050 | 2,050 | 171 | 172 | 0.5 | % | 188 | 189 | 0.4 | % | 91 | % | 91 | % | 0.2 | % | |||||
About China Lodging Group, Limited
China Lodging Group, Limited is a leading hotel operator and franchisor in China under 12 brand names. As of September 30, 2016, the Company had 3,198 hotels or 322,785 rooms in operation in 365 cities. With a primary focus on economy and midscale hotel segments, China Lodging Group's brands include Hi Inn, HanTing Hotel, Elan Hotel, JI Hotel, Starway Hotel, Joya Hotel, and Manxin Hotels & Resorts. The Company also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in Pan-China region.
The Company's business includes leased, manachised and franchised models. Under the lease model, the Company directly operates hotels typically located on leased properties. Under the manachise model, the Company manages manachised hotels through the on-site hotel managers it appoints and collects fees from franchisees. Under the franchise model, the Company provides training, reservation and support services to the franchised hotels and collects fees from franchisees but does not appoint on-site hotel managers. The Company applies a consistent standard and platform across all of its hotels. As of September 30, 2016, China Lodging Group operates 24 percent of its hotel rooms under lease model, 76 percent under manachise and franchise models.
For more information, please visit the Company's website: http://ir.huazhu.com.
Safe Harbor Statement Under the 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; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; the expected growth of the lodging market in China; and other factors and risks detailed in our filings with the 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.
The Company 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 Ida Yu Sr. Manager of Investor Relations Tel: 86 (21) 6195 9561 Email: ir@huazhu.com http://ir.huazhu.com