Huazhu Group Limited : Announces Preliminary Results for Hotel Operations in the Second Quarter of 2021
July 22, 2021 at 07:31 am EDT
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SHANGHAI, China, July 22, 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 second quarter (“Q2 2021”) ended June 30, 2021.
COVID-19 update For our Legacy-Huazhu business, the RevPAR in 2Q2021 recovered to 102% of 2019, slightly below our previous expectation. RevPAR recovery in June achieved 100%, slowing down from 106% in May. It was mainly due to COVID-19 resurgence in Guangdong Province and traffic control in Beijing for the celebration of centenary of the Communist Party of China since late May. However, if excluding the impact of Guangdong Province and Beijing, our RevPAR recovery was on track. In July, with the COVID-19 resurgence in Guangdong effectively contained and relaxation of travel restriction in Beijing, our RevPAR recovery resumed.
Steigenberger Hotels AG and its subsidiaries (“DH”) saw an initial recovery of hotel demand along with vaccination process in Germany since the first lockdown in November 2020. As of July 16th, 2021, almost 60% of Germans have received at least one shot of vaccine. In July, the recovery continued with occupancy rate reaching 35%. But the recovery is still uncertain given that the recent news shows there is possibly another upcoming wave of delta variant of COVID-19 resurgence in European countries.
Operating Results: Legacy-Huazhu(1)
Number of hotels
Number of rooms
Opened in Q2 2021
Closed (2) in Q2 2021
Net added in Q2 2021
As of June 30, 2021(3)
As of June 30, 2021
Leased and owned hotels
18
(7
)
11
675
91,892
Manachised and franchised hotels
381
(149
)
232
6,329
575,778
Total
399
(156
)
243
7,004
667,670
(1) Legacy-Huazhu refers to Huazhu and its subsidiaries, excluding DH. (2) The reasons for hotel closures mainly include non-compliance with our brand standards, operating losses, and property-related issues. In Q2 2021, we temporarily closed 8 hotels for brand upgrade and business model change purposes. (3) As of June 30, 2021, 32 hotels were requisitioned by governmental authorities.
As of June 30, 2021
Number of hotels
Unopened hotels in pipeline
Economy hotels
4,451
1,295
Leased and owned hotels
417
3
Manachised and franchised hotels
4,034
1,292
Midscale and upscale hotels
2,553
1,401
Leased and owned hotels
258
13
Manachised and franchised hotels
2,295
1,388
Total
7,004
2,696
Operational hotels excluding hotels under requisition
For the quarter ended
June 30,
March 31,
June 30,
yoy
2020
2021
2021
change
Average daily room rate (in RMB)
Leased and owned hotels
205
243
311
51.8%
Manachised and franchised hotels
181
203
246
36.2%
Blended
185
209
255
38.3%
Occupancy rate (as a percentage)
Leased and owned hotels
67.4%
64.0%
81.1%
13.7 p.p.
Manachised and franchised hotels
69.1%
66.6%
82.5%
13.4 p.p.
Blended
68.8%
66.2%
82.3%
13.5 p.p.
RevPAR (in RMB)
Leased and owned hotels
138
156
252
82.7%
Manachised and franchised hotels
125
135
203
62.7%
Blended
127
138
210
65.5%
For the quarter ended
June 30,
June 30,
yoy
2019
2021
change
Average daily room rate (in RMB)
Leased and owned hotels
281
311
10.4%
Manachised and franchised hotels
225
246
9.2%
Blended
236
255
7.9%
Occupancy rate (as a percentage)
Leased and owned hotels
89.4%
81.1%
-8.4p.p.
Manachised and franchised hotels
86.3%
82.5%
-3.8p.p.
Blended
86.9%
82.3%
-4.6p.p.
RevPAR (in RMB)
Leased and owned hotels
252
252
0.1%
Manachised and franchised hotels
194
203
4.4%
Blended
206
210
2.2%
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 June 30,
For the quarter
yoy
For the quarter
yoy
For the quarter
yoy
ended June 30,
change
ended June 30,
change
ended June 30,
change
2020
2021
2020
2021
2020
2021
2020
2021
(p.p.)
Economy hotels
3,017
3,017
107
168
57.7
%
146
196
34.4
%
73.1
%
85.8
%
12.7
Leased and owned hotels
408
408
109
191
75.7
%
154
227
47.6
%
70.8
%
84.2
%
13.5
Manachised and franchised hotels
2,609
2,609
106
163
53.6
%
144
189
31.3
%
73.7
%
86.2
%
12.5
Midscale and upscale hotels
1,520
1,520
172
272
57.8
%
254
336
32.3
%
68.0
%
81.0
%
13.1
Leased and owned hotels
213
213
182
316
73.3
%
285
405
42.3
%
64.0
%
77.9
%
13.9
Manachised and franchised hotels
1,307
1,307
170
262
54.1
%
247
321
29.9
%
68.9
%
81.7
%
12.8
Total
4,537
4,537
133
210
58.1
%
187
250
33.9
%
71.1
%
83.9
%
12.8
Number of hotels
Same-hotel RevPAR
Same-hotel ADR
Same-hotel Occupancy
As of June 30,
For the quarter
yoy
For the quarter
yoy
For the quarter
yoy
ended June 30,
change
ended June 30,
change
ended June 30,
change
2019
2021
2019
2021
2019
2021
2019
2021
(p.p.)
Economy hotels
2,308
2,308
179
168
-5.9
%
193
195
1.2
%
92.5
%
86.0
%
-6.5
Leased and owned hotels
392
392
202
187
-7.2
%
217
223
2.9
%
93.3
%
84.1
%
-9.2
Manachised and franchised hotels
1,916
1,916
172
163
-5.6
%
187
188
0.8
%
92.3
%
86.5
%
-5.8
Midscale and upscale hotels
931
931
285
269
-5.7
%
337
338
0.1
%
84.6
%
79.7
%
-4.9
Leased and owned hotels
184
184
350
311
-11.1
%
406
401
-1.4
%
86.1
%
77.7
%
-8.5
Manachised and franchised hotels
747
747
264
255
-3.3
%
314
317
1.1
%
84.1
%
80.4
%
-3.7
Total
3,239
3,239
216
203
-5.7
%
240
243
1.0
%
89.7
%
83.8
%
-6.0
Operating Results: Legacy-DH(4)
Number of hotels
Number of rooms
Unopened hotels in pipeline
Opened in Q2 2021
Closed in Q2 2021
Net added in Q2 2021
As of June 30, 2021(5)
As of June 30, 2021
As of June 30, 2021
Leased hotels
1
-
1
74
13,839
27
Manachised and franchised hotels
1
-
1
48
10,775
11
Total
2
-
2
122
24,614
38
(4) Legacy-DH refers to DH. (5) As of June 30, 2021, a total of 5 DH brand hotels were temporarily closed due to COVID-19, and 1 hotel was closed for renovation.
For the quarter ended
June 30,
March 31,
June 30,
yoy
2020
2021
2021
change
Average daily room rate (in EUR)
Leased hotels
82.4
77.9
85.2
3.4
%
Manachised and franchised hotels
96.5
59.0
77.9
-19.3
%
Blended
86.5
68.5
81.5
-5.8
%
Occupancy rate (as a percentage)
Leased hotels
18.7
%
14.6
%
20.0
%
1.3
%
Managed and franchised hotels
17.3
%
26.5
%
30.8
%
13.5
%
Blended
18.3
%
18.8
%
24.4
%
6.1
%
RevPAR (in EUR)
Leased hotels
15.4
11.4
17.04
10.7
%
Managed and franchised hotels
16.7
15.6
24.01
43.5
%
Blended
15.8
12.9
19.85
25.6
%
Hotel Portfolio by Brand
Total
Hotels
Rooms
Unopened hotels
in operation
in pipeline
Economy hotels
4,465
370,297
1,307
HanTing Hotel
2,834
260,252
740
Hi Inn
430
25,419
83
Elan Hotel(6)
976
60,645
431
Ibis Hotel
211
22,320
41
Zleep Hotels
14
1,661
12
Midscale hotels
2,146
241,370
1,121
Ibis Styles Hotel
78
9,046
19
Starway Hotel
477
39,524
279
JI Hotel
1,203
148,008
616
Orange Hotel
360
40,285
202
CitiGO Hotel(7)
28
4,507
5
Upper midscale hotels
408
61,350
250
Crystal Orange Hotel
129
17,517
60
Manxin Hotel
68
6,764
54
Madison Hotel
31
4,745
40
Mercure Hotel
117
19,786
57
Novotel Hotel
13
3,579
17
IntercityHotel(8)
48
8,535
20
Upscale hotels
101
17,681
54
Joya Hotel
9
1,760
0
Blossom House
29
1,420
30
Grand Mercure Hotel
7
1,485
6
Steigenberger Hotels & Resorts(9)
51
12,239
12
MAXX (10)
5
777
6
Jaz in the City
2
424
2
Others
6
1,586
2
Other hotels(11)
6
1,586
2
Total
7,126
692,284
2,734
(6) As of June 30, 2021, 17 Ni Hao Hotels were included in the operational hotel for Elan Hotels and 111 Ni Hao hotels were included in the pipeline for Elan Hotels. (7) We completed CitiGO acquisition in May 2021. (8) As of June 30, 2021, 2 operational hotels and 4 pipeline hotels of IntercityHotel were in China. (9) As of June 30, 2021, 1 operational hotel and 5 pipeline hotels of Steigenberger Hotels & Resorts were in China. (10) As of June 30, 2021, 5 pipeline hotels of MAXX were in China. (11) 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 June 30, 2021, Huazhu operated 7,126 hotels with 692,284 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 June 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.
H World Group Limited, formerly Huazhu Group Limited, is a China-based investment holding company. The Company's main businesses include the operation of develop leased and owned, manachised and franchised hotels. The Company is mainly engaged in multi-brand hotel operation, covering the full spectrum of market segments with a portfolio of over 20 distinct hotel brands. The Company mainly conducts its businesses in the Chinese domestic market and the German market.