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 ended
September 30, 2020 (“
Q3
2020”).
Recovery continued in Q3
2020
During Q3 2020, despite some mini-outbreaks in several cities,
our occupancy rate recovery continued, thanks to China’s effective
control of the COVID-19 pandemic. In addition, our average daily
room rate had also recovered gradually along with the occupancy
rate. More importantly, leisure traveling was the key driver to
lead this recovery, which had resulted in outstanding performance
of our upper-midscale and upscale brand hotels.
Steigenberger Hotels AG and its subsidiaries (“DH”) operating
performances had also recovered steadily from July until
mid-September 2020. However, this recovery trend was temporarily
paused since late September due to the second wave of COVID-19
outbreak in European countries. To mitigate the effects of this
situation, we are taking further cost and cash flow measures, such
as deferred rental payments, reducing or eliminating discretionary
corporate spending and capital expenditures, etc. As of
October 31, 2020, 91% or 107 of DH hotels were in
operation.
Starting from Q3 2020, we have been evaluating our soft brand
hotel portfolio and removing hotels with poor product quality or
those that do not fit Huazhu’s long-term development strategy from
our portfolio. We believe this will help to improve the hotels’
performance and attract like-minded franchisees to join our
network. Accordingly, we are now revising our hotel closure target
to 550-600 hotels for 2020, up from our initial expectation of
350-450 hotels.
In Q3 2020, Huazhu expects net revenues to increase 0% to 2%
year-over-year or to decline 10% to 12% if excluding the addition
of DH.
Operating Results:
Legacy-Huazhu(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of hotels |
|
|
|
Number of rooms |
|
|
|
Opened
in Q3 2020 |
|
Closed(2)
in Q3 2020 |
|
Net added
in Q3 2020 |
|
As of
September 30,
2020(3) |
|
As of
September 30,
2020 |
|
Leased and owned hotels |
|
9 |
|
(12 |
) |
(3 |
) |
687 |
|
91,218 |
|
Manachised and franchised
hotels |
|
511 |
|
(189 |
) |
322 |
|
5,703 |
|
519,547 |
|
Total |
|
520 |
|
(201 |
) |
319 |
|
6,390 |
|
610,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2020 |
|
|
|
Number of hotels |
|
Unopened hotels in pipeline |
|
Economy
hotels |
|
4,213 |
|
1,097 |
|
Leased and owned hotels |
|
446 |
|
4 |
|
Manachised and franchised hotels |
|
3,767 |
|
1,093 |
|
Midscale and
upscale hotels |
|
2,177 |
|
1,175 |
|
Leased and owned hotels |
|
241 |
|
18 |
|
Manachised and franchised hotels |
|
1,936 |
|
1,157 |
|
Total |
|
6,390 |
|
2,272 |
|
|
|
|
|
|
|
Operational hotels (excluding hotels under
requisition)
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|
|
|
|
|
|
For the quarter ended |
|
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|
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|
September
30, |
|
June 30, |
|
September
30, |
|
yoy |
|
|
|
2019 |
|
2020 |
|
2020 |
|
change |
|
Average daily room rate (in
RMB) |
|
|
|
|
|
|
|
|
|
Leased and owned hotels |
|
288 |
|
205 |
|
255 |
|
-11.4 |
% |
Manachised and franchised hotels |
|
235 |
|
181 |
|
211 |
|
-10.3 |
% |
Blended |
|
245 |
|
185 |
|
218 |
|
-11.1 |
% |
Occupancy rate (as a
percentage) |
|
|
|
|
|
|
|
|
|
Leased and owned hotels |
|
90.0 |
% |
67.4 |
% |
82.9 |
% |
-7.1 |
p.p. |
Manachised and franchised hotels |
|
87.2 |
% |
69.1 |
% |
81.8 |
% |
-5.3 |
p.p. |
Blended |
|
87.7 |
% |
68.8 |
% |
82.0 |
% |
-5.7 |
p.p. |
RevPAR (in RMB) |
|
|
|
|
|
|
|
|
|
Leased and owned hotels |
|
259 |
|
138 |
|
211 |
|
-18.5 |
% |
Manachised and franchised hotels |
|
205 |
|
125 |
|
173 |
|
-15.8 |
% |
Blended |
|
215 |
|
127 |
|
179 |
|
-16.9 |
% |
|
|
|
|
|
|
|
|
|
|
Same-hotel operational data by
class
Mature hotels in operation for more than 18
months (excluding hotels under requisition)
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|
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|
|
|
|
|
|
|
|
Number of hotels |
|
Same-hotel RevPAR |
|
Same-hotel ADR |
|
Same-hotel Occupancy |
|
|
|
As of
September 30, |
|
For the quarter
ended
September 30, |
|
yoy change |
|
For the quarter
ended
September 30, |
|
yoy change |
|
For the quarter
ended
September 30, |
|
yoy change |
|
|
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
|
|
2019 |
|
2020 |
|
|
|
2019 |
|
2020 |
|
(p.p.) |
|
Economy
hotels |
|
2,604 |
|
2,604 |
|
185 |
|
144 |
|
-21.9 |
% |
199 |
|
168 |
|
-15.7 |
% |
92.7 |
% |
85.9 |
% |
-6.8 |
|
Leased and owned hotels |
|
421 |
|
421 |
|
207 |
|
159 |
|
-23.0 |
% |
222 |
|
184 |
|
-17.2 |
% |
93.4 |
% |
86.9 |
% |
-6.6 |
|
Manachised and franchised hotels |
|
2,183 |
|
2,183 |
|
179 |
|
140 |
|
-21.6 |
% |
193 |
|
164 |
|
-15.3 |
% |
92.6 |
% |
85.7 |
% |
-6.9 |
|
Midscale and
upscale hotels |
|
1,108 |
|
1,108 |
|
289 |
|
238 |
|
-17.4 |
% |
335 |
|
298 |
|
-11.2 |
% |
86.1 |
% |
80.1 |
% |
-6.0 |
|
Leased and owned hotels |
|
188 |
|
188 |
|
352 |
|
269 |
|
-23.5 |
% |
402 |
|
345 |
|
-14.2 |
% |
87.4 |
% |
78.0 |
% |
-9.4 |
|
Manachised and franchised hotels |
|
920 |
|
920 |
|
271 |
|
230 |
|
-15.2 |
% |
316 |
|
284 |
|
-9.9 |
% |
85.8 |
% |
80.7 |
% |
-5.0 |
|
Total |
|
3,712 |
|
3,712 |
|
222 |
|
178 |
|
-19.8 |
% |
245 |
|
212 |
|
-13.5 |
% |
90.4 |
% |
83.8 |
% |
-6.5 |
|
|
|
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|
|
|
|
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Operating Results:
Legacy-DH(4)
|
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|
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|
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|
Number of |
|
Unopened hotels |
|
|
|
Number of hotels |
|
rooms |
|
in pipeline |
|
|
|
|
|
|
|
|
|
As of |
|
As of |
|
As of |
|
|
|
Opened |
|
Closed |
|
Net added |
|
September |
|
September 30, |
|
September 30, |
|
|
|
in Q3 2020 |
|
in Q3 2020 |
|
in Q3 2020 |
|
30, 2020(5) |
|
2020 |
|
2020 |
|
Leased hotels |
|
2 |
|
— |
|
2 |
|
70 |
|
12,820 |
|
28 |
|
Manachised and franchised
hotels |
|
1 |
|
(2 |
) |
(1 |
) |
47 |
|
10,502 |
|
13 |
|
Total |
|
3 |
|
(2 |
) |
1 |
|
117 |
|
23,322 |
|
41 |
|
|
|
|
|
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|
|
|
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|
|
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|
For the quarter ended |
|
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
yoy |
|
|
|
2019 |
|
2020 |
|
2020 |
|
change |
|
Average daily room rate (in EUR) |
|
|
|
|
|
|
|
|
|
Leased hotels |
|
100 |
|
82 |
|
88 |
|
-11.8 |
% |
Manachised and franchised hotels |
|
94 |
|
97 |
|
101 |
|
6.9 |
% |
Blended |
|
98 |
|
87 |
|
93 |
|
-4.7 |
% |
Occupancy rate (as a percentage) |
|
|
|
|
|
|
|
|
|
Leased hotels |
|
78.7 |
% |
18.7 |
% |
38.2 |
% |
-51.4 |
p.p. |
Manachised and franchised hotels |
|
72.3 |
% |
17.3 |
% |
37.5 |
% |
-48.2 |
p.p. |
Blended |
|
75.7 |
% |
18.3 |
% |
37.9 |
% |
-49.9 |
p.p. |
RevPAR (in EUR) |
|
|
|
|
|
|
|
|
|
Leased hotels |
|
79 |
|
15 |
|
34 |
|
-57.1 |
% |
Manachised and franchised hotels |
|
68 |
|
17 |
|
38 |
|
-44.6 |
% |
Blended |
|
74 |
|
16 |
|
35 |
|
-52.2 |
% |
|
|
|
|
|
|
|
|
|
|
Hotel Portfolio by
Brand
|
|
|
|
|
|
As of September 30, 2020 |
|
|
|
Hotels |
|
Rooms |
|
Unopened hotels |
|
|
|
in operation |
|
in pipeline |
|
Economy
hotels |
|
4,226 |
|
355,402 |
|
1,107 |
|
HanTing Hotel |
|
2,722 |
|
253,155 |
|
477 |
|
Hi Inn |
|
443 |
|
25,946 |
|
103 |
|
Elan Hotel(6) |
|
849 |
|
53,471 |
|
461 |
|
Ibis Hotel |
|
199 |
|
21,323 |
|
56 |
|
Zleep Hotel |
|
13 |
|
1,507 |
|
10 |
|
Midscale and
upscale hotels |
|
2,281 |
|
278,685 |
|
1,206 |
|
Ibis Styles Hotel |
|
63 |
|
7,470 |
|
28 |
|
Starway Hotel |
|
428 |
|
37,137 |
|
307 |
|
JI Hotel |
|
1,033 |
|
128,994 |
|
453 |
|
Orange Hotel |
|
308 |
|
35,101 |
|
171 |
|
Crystal Orange Hotel |
|
110 |
|
14,896 |
|
50 |
|
Manxin Hotel |
|
59 |
|
5,854 |
|
34 |
|
Madison Hotel |
|
23 |
|
2,953 |
|
24 |
|
Mercure Hotel |
|
98 |
|
16,685 |
|
60 |
|
Novotel Hotel |
|
12 |
|
3,387 |
|
13 |
|
Joya Hotel |
|
10 |
|
1,926 |
|
1 |
|
Blossom House |
|
26 |
|
978 |
|
25 |
|
Grand Mercure Hotel |
|
7 |
|
1,489 |
|
8 |
|
Steigenberger Hotels & Resorts |
|
49 |
|
11,556 |
|
8 |
|
IntercityHotel |
|
44 |
|
7,827 |
|
20 |
|
Maxx by Steigenberger |
|
5 |
|
777 |
|
1 |
|
Jaz in the City |
|
2 |
|
424 |
|
2 |
|
Other partner hotels |
|
4 |
|
1,231 |
|
1 |
|
Total |
|
6,507 |
|
634,087 |
|
2,313 |
|
|
|
|
|
|
|
|
|
About Huazhu Group Limited
Originated in China, Huazhu Group Limited is a world-leading
hotel group. As of September 30, 2020, Huazhu operated 6,507
hotels with 634,087 rooms in operation in 16 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, and Ni Hao 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 Hotel. 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, 2020, Huazhu operates 16 percent of its hotel
rooms under lease and ownership model, and 84 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 InformationHuazhu Investor RelationsTel: 86 (21) 6195
9561Email: ir@huazhu.comhttp://ir.huazhu.com
______________________(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 Q3
2020, we temporarily closed 17 hotels for brand upgrade and
business model change purposes.(3) As of September 30, 2020,
83 hotels were requisitioned by governmental authorities.(4)
Legacy-DH refers to DH.(5) As of September 30, 2020, a total
of 12 DH brand hotels were temporarily closed due to COVID-19.(6)
As of September 30, 2020, 4 Ni Hao hotels were included in the
operational hotel total for Elan Hotels and 27 Ni Hao hotels were
included in the pipeline total for Elan Hotels.
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