Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the Third Quarter of 2021

Wednesday, 27. October 2021 13:30

SHANGHAI, China, Oct. 27, 2021 (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 third quarter (“Q3 2021”) ended September 30, 2021.

COVID-19 update
For our Legacy-Huazhu business, our RevPAR recovery momentum resumed quickly in early July. Since late July, however, the spread of the Delta variant of COVID-19 from Nanjing to several provinces and cities resulted in the relevant governmental authorities imposing a new round of strict travelling restrictions, and the blended RevPAR of Legacy-Huazhu in August dropped significantly to only 54% of the 2019 level. After the Delta variant of COVID-19 in Nanjing became largely contained in early September, the monthly blended RevPAR of Legacy-Huazhu continued to recover, reaching approximately 92% of the 2019 level. However, with the relatively small-scale outbreak occurred in Fujian province in mid-September, the relevant governmental authorities again imposed strict travelling restrictions, especially for students, during the “Golden Week” in celebration of the National Day Holidays. As a result, the blended RevPAR of Legacy-Huazhu during the Golden Week recovered to only approximately 82% of the 2019 level. Nevertheless, RevPAR recovery in the second week of October resumed to close to 90% of the 2019 level, mainly driven by the rebound of business travelling. In addition, despite the uncertainty of the COVID-19 situation, we made significant progress in upscale hotel penetration and signed up over 20 upscale hotels in early October through our joint venture with Sunac.

Steigenberger Hotels AG and its subsidiaries (“DH”) observed continued recovery since the first lockdown in November 2020, along with the rollout of vaccination campaign in Germany. As of October 25th, 2021, approximately 69% of the German population have received at least one dose of vaccine and approximately 66% of the population are fully vaccinated. During the summer holiday season, the recovery of hotel demand was encouraging due to the strong leisure demand. After the summer holiday, the recovery of DH hotels’ RevPAR remained resilient, mainly driven by the business demand. For the third quarter of 2021, the occupancy rate of DH hotels’ reached approximately 49% and blended RevPAR reached approximately 65% of the 2019 level. Meanwhile, DH continued to implement further cost reduction and cash flow management measures, especially regarding personnel and lease costs.

Operating Results: Legacy-Huazhu(1)

 Number of hotels  Number of rooms
 Opened
in Q3 2021

Closed (2)
in Q3 2021

Net added
in Q3 2021

As of
September 30, 2021 (3)

 As of
September 30, 2021

  
Leased and owned hotels2(14)(12)663 91,609
Manachised and franchised hotels479(126)353 6,682 607,059
Total481 (140)341  7,345  698,668
(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 Q3 2021, we temporarily closed 18 hotels for brand upgrade and business model change purposes.
(3)   As of September 30, 2021, 120 hotels were requisitioned by governmental authorities.


  
 As of September 30, 2021
 Number of hotels Unopened hotels in pipeline
Economy hotels4,6211,374
Leased and owned hotels4043
Manachised and franchised hotels4,2171,371
Midscale and upscale hotels2,7241,414
Leased and owned hotels25914
Manachised and franchised hotels2,4651,400
Total7,3452,788


 
Operational hotels excluding hotels under requisition
 For the quarter ended 
 September 30, June 30, September 30, yoy
 2020 2021 2021 change
Average daily room rate (in RMB)   
Leased and owned hotels255 311 296 16.0%
Manachised and franchised hotels211 246 238 12.8%
Blended218 255 246 12.8%
Occupancy Rate (as a percentage)   
Leased and owned hotels82.9%81.1%69.7%-13.1p.p. 
Manachised and franchised hotels81.8%82.5%72.2%-9.6p.p. 
Blended82.0%82.3%71.9%-10.1p.p. 
RevPAR (in RMB)    
Leased and owned hotels211 252 206 -2.4%
Manachised and franchised hotels173 203 172 -0.5%
Blended179 210 177 -1.1%


 For the quarter ended
 September 30, September 30, yoy
 2019 2021 change
Average daily room rate (in RMB)  
Leased and owned hotels288 296 2.7%
Manachised and franchised hotels235 238 1.2%
Blended245 246 0.3%
Occupancy Rate (as a percentage)  
Leased and owned hotels90.0%69.7%-20.3p.p. 
Manachised and franchised hotels87.2%72.2%-15.0p.p. 
Blended87.7%71.9%-15.8p.p. 
RevPAR (in RMB)   
Leased and owned hotels259 206 -20.4%
Manachised and franchised hotels205 172 -16.2%
Blended215 177 -17.8%


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
September 30,

For the quarter yoyFor the quarter yoyFor the quarter yoy
 ended
September 30,
changeended
September 30,
changeended
September 30,
change
 2020202120202021 20202021 2020 2021 (p.p.)
Economy hotels3,1573,157147141-3.9%17018710.3%86.6%75.4%-11.2
Leased and owned hotels398398162157-3.4%18721314.2%87.0%73.6%-13.4
Manachised and franchised hotels2,7592,759144138-4.1%1661829.5%86.5%75.8%-10.7
Midscale and upscale hotels1,6461,646244225-7.9%3013237.2%80.9%69.6%-11.3
Leased and owned hotels218218280257-8.3%3583929.5%78.4%65.7%-12.7
Manachised and franchised hotels1,4281,428236217-7.8%2893096.7%81.5%70.4%-11.0
Total4,8034,803187176-5.9%2222418.7%84.2%73.0%-11.3


 
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
September 30,

For the quarter yoyFor the quarter yoyFor the quarter yoy
 ended
September 30,
changeended
September 30,
changeended
September 30,
change
 2019202120192021 20192021 2019 2021 (p.p.)
Economy hotels2,3642,364187141-24.5%201187-6.7%93.2%75.4%-17.8
Leased and owned hotels385385209154-26.2%224210-6.2%93.5%73.5%-19.9
Manachised and franchised hotels1,9791,979181138-24.1%195181-6.9%93.1%75.9%-17.2
Midscale and upscale hotels1,0571,057293219-25.4%340321-5.6%86.4%68.2%-18.1
Leased and owned hotels187187355245-31.0%406379-6.7%87.3%64.5%-22.8
Manachised and franchised hotels870870275211-23.4%320304-4.9%86.1%69.4%-16.7
Total3,4213,421226170-24.8%249234-6.3%90.7%72.7%-17.9

Operating Results: Legacy-DH(4)

 Number of hotels Number of rooms Unopened hotels in pipeline
 Opened
in Q3 2021

Closed
in Q3 2021

Net added
in Q3 2021

As of
September 30, 2021(5)

 

 

As of
September 30,
2021


 

 

As of
September 30,
2021


 
Leased hotels1- 1 75 14,002 28
Manachised and franchised hotels-(2)(2)46 10,313 11
Total1(2)(1)121 24,315 39
(4)    Legacy-DH refers to DH.
(5)   As of September 30, 2021, a total of 4 DH brand hotels were temporarily closed due to COVID-19. 1 hotel is closed for renovation and 1 hotel due to flood damage.


 For the quarter ended 
 September 30, June 30, September 30, yoy
 2020 2021 2021 change
Average daily room rate (in EUR)    
Leased hotels88 85 94 6.8%
Manachised and franchised hotels101 78 104 3.6%
Blended93 81 99 6.1%
Occupancy rate (as a percentage)    
Leased hotels38.2%20.0%48.0%9.8p.p. 
Managed and franchised hotels37.5%30.8%49.4%12.0p.p. 
Blended37.9%24.4%48.6%10.7p.p. 
RevPAR (in EUR)    
Leased hotels34 17 45 34.1%
Managed and franchised hotels38 24 52 36.7%
Blended35 20 48 35.9%

Hotel Portfolio by Brand

 Total
 HotelsRoomsUnopened hotels
 in operationin pipeline
Economy hotels4,635382,3371,386
HanTing Hotel2,937268,347765
Hi Inn43025,069107
Elan Hotel(6)1,04064,757468
Ibis Hotel21422,50334
Zleep Hotels141,66112
Midscale hotels2,288256,1461,099
Ibis Styles Hotel788,29917
Starway Hotel49641,913280
JI Hotel1,294158,008588
Orange Hotel39043,146209
CitiGO Hotel304,7805
Upper midscale hotels42963,959276
Crystal Orange Hotel13718,40667
Manxin Hotel767,41663
Madison Hotel355,24754
Mercure Hotel11920,56152
Novotel Hotel143,72316
IntercityHotel(7)488,60624
Upscale hotels10718,38362
Jaz in the City35871
Joya Hotel91,7600
Blossom House321,57935
Grand Mercure Hotel71,4856
Steigenberger Hotels & Resorts(8)5012,01314
MAXX (9)69596
Others72,1584
Other hotels(10)72,1584
Total7,466722,9832,827

(6)   As of September 30, 2021, 46 Ni Hao Hotels were included in the operational hotel for Elan Hotels and 145 Ni Hao hotels were included in the pipeline for Elan Hotels.
(7)   As of September 30, 2021, 2 operational hotels and 6 pipeline hotels of IntercityHotel were in China.
(8)   As of September 30, 2021, 1 operational hotel and 7 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(9)   As of September 30, 2021, 1 operational hotel and 5 pipeline hotels of MAXX 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 September 30, 2021, Huazhu operated 7,466 hotels with 722,983 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 and CitiGO Hotel. Upon the completion of the acquisition of DH on January 2, 2020, Huazhu added five brands to its portfolio, including Steigenberger Hotels & Resorts, MAXX by Steigenberger, Jaz in the City, IntercityHotel and Zleep 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 September 30, 2021, Huazhu operates 15 percent of its hotel rooms under lease and ownership model, and 85 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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