Huazhu Group Limited Announces Preliminary Results for Hotel Operations

in the Third Quarter of 2021

Shanghai, China, October 27, 2021 - 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.

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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 hotels 2 (14 ) (12 ) 663 91,609
Manachised and franchised hotels 479 (126 ) 353 6,682 607,059
Total 481 (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 hotels 4,621 1,374
Leased and owned hotels 404 3
Manachised and franchised hotels 4,217 1,371
Midscale and upscale hotels 2,724 1,414
Leased and owned hotels 259 14
Manachised and franchised hotels 2,465 1,400
Total 7,345 2,788

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Operational hotels excluding hotels under requisition
For the quarter ended
September 30, June 30, September 30,
2020 2021 2021 yoy
change
Average daily room rate (in RMB)
Leased and owned hotels 255 311 296 16.0 %
Manachised and franchised hotels 211 246 238 12.8 %
Blended 218 255 246 12.8 %
Occupancy Rate (as a percentage)
Leased and owned hotels 82.9 % 81.1 % 69.7 % -13.1p.p.
Manachised and franchised hotels 81.8 % 82.5 % 72.2 % -9.6p.p.
Blended 82.0 % 82.3 % 71.9 % -10.1p.p.
RevPAR (in RMB)
Leased and owned hotels 211 252 206 -2.4 %
Manachised and franchised hotels 173 203 172 -0.5 %
Blended 179 210 177 -1.1 %
For the quarter ended
September 30,
2019 		September 30,
2021 		yoy
change
Average daily room rate (in RMB)
Leased and owned hotels 288 296 2.7 %
Manachised and franchised hotels 235 238 1.2 %
Blended 245 246 0.3 %
Occupancy Rate (as a percentage)
Leased and owned hotels 90.0 % 69.7 % -20.3p.p.
Manachised and franchised hotels 87.2 % 72.2 % -15.0p.p.
Blended 87.7 % 71.9 % -15.8p.p.
RevPAR (in RMB)
Leased and owned hotels 259 206 -20.4 %
Manachised and franchised hotels 205 172 -16.2 %
Blended 215 177 -17.8 %

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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
For the quarter For the quarter For the quarter
As of
September 30, 		ended
September 30, 		yoy
change		 ended
September 30, 		yoy
change		 ended
September 30, 		yoy
change
2020 2021 2020 2021 2020 2021 2020 2021 (p.p.)
Economy hotels 3,157 3,157 147 141 -3.9 % 170 187 10.3 % 86.6 % 75.4 % -11.2
Leased and owned hotels 398 398 162 157 -3.4 % 187 213 14.2 % 87.0 % 73.6 % -13.4
Manachised and franchised hotels 2,759 2,759 144 138 -4.1 % 166 182 9.5 % 86.5 % 75.8 % -10.7
Midscale and upscale hotels 1,646 1,646 244 225 -7.9 % 301 323 7.2 % 80.9 % 69.6 % -11.3
Leased and owned hotels 218 218 280 257 -8.3 % 358 392 9.5 % 78.4 % 65.7 % -12.7
Manachised and franchised hotels 1,428 1,428 236 217 -7.8 % 289 309 6.7 % 81.5 % 70.4 % -11.0
Total 4,803 4,803 187 176 -5.9 % 222 241 8.7 % 84.2 % 73.0 % -11.3
Number of hotels Same-hotel RevPAR Same-hotel ADR Same-hotel Occupancy
For the quarter For the quarter For the quarter
As of
September 30, 		ended
September 30, 		yoy
change 		ended
September 30, 		yoy
change		 ended
September 30, 		yoy
change
2019 2021 2019 2021 2019 2021 2019 2021 (p.p.)
Economy hotels 2,364 2,364 187 141 -24.5 % 201 187 -6.7 % 93.2 % 75.4 % -17.8
Leased and owned hotels 385 385 209 154 -26.2 % 224 210 -6.2 % 93.5 % 73.5 % -19.9
Manachised and franchised hotels 1,979 1,979 181 138 -24.1 % 195 181 -6.9 % 93.1 % 75.9 % -17.2
Midscale and upscale hotels 1,057 1,057 293 219 -25.4 % 340 321 -5.6 % 86.4 % 68.2 % -18.1
Leased and owned hotels 187 187 355 245 -31.0 % 406 379 -6.7 % 87.3 % 64.5 % -22.8
Manachised and franchised hotels 870 870 275 211 -23.4 % 320 304 -4.9 % 86.1 % 69.4 % -16.7
Total 3,421 3,421 226 170 -24.8 % 249 234 -6.3 % 90.7 % 72.7 % -17.9

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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 hotels 1 - 1 75 14,002 28
Manachised and franchised hotels - (2 ) (2 ) 46 10,313 11
Total 1 (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 hotels 88 85 94 6.8 %
Manachised and franchised hotels 101 78 104 3.6 %
Blended 93 81 99 6.1 %
Occupancy rate (as a percentage)
Leased hotels 38.2 % 20.0 % 48.0 % 9.8p.p.
Managed and franchised hotels 37.5 % 30.8 % 49.4 % 12.0p.p.
Blended 37.9 % 24.4 % 48.6 % 10.7p.p.
RevPAR (in EUR)
Leased hotels 34 17 45 34.1 %
Managed and franchised hotels 38 24 52 36.7 %
Blended 35 20 48 35.9 %

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Hotel Portfolio by Brand

Total
Hotels Rooms Unopened hotels
in operation in pipeline
Economy hotels 4,635 382,337 1,386
HanTing Hotel 2,937 268,347 765
Hi Inn 430 25,069 107
Elan Hotel(6) 1,040 64,757 468
Ibis Hotel 214 22,503 34
Zleep Hotels 14 1,661 12
Midscale hotels 2,288 256,146 1,099
Ibis Styles Hotel 78 8,299 17
Starway Hotel 496 41,913 280
JI Hotel 1,294 158,008 588
Orange Hotel 390 43,146 209
CitiGO Hotel 30 4,780 5
Upper midscale hotels 429 63,959 276
Crystal Orange Hotel 137 18,406 67
Manxin Hotel 76 7,416 63
Madison Hotel 35 5,247 54
Mercure Hotel 119 20,561 52
Novotel Hotel 14 3,723 16
IntercityHotel(7) 48 8,606 24
Upscale hotels 107 18,383 62
Jaz in the City 3 587 1
Joya Hotel 9 1,760 0
Blossom House 32 1,579 35
Grand Mercure Hotel 7 1,485 6
Steigenberger Hotels & Resorts(8) 50 12,013 14
MAXX (9) 6 959 6
Others 7 2,158 4
Other hotels(10) 7 2,158 4
Total 7,466 722,983 2,827
(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).

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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.

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Huazhu Group Ltd. published this content on 27 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2021 11:17:11 UTC.