Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “the
Company”, “we” or “our”), a world-leading hotel group, today
announced its unaudited financial results for the first quarter
ended March 31, 2022.
As of March 31, 2022, Huazhu’s worldwide hotel
network in operation totaled 7,988 hotels and 764,859 rooms,
including 120 hotels from DH. During the first quarter of 2022, our
Legacy-Huazhu business opened 302 hotels, including 3 leased (or
leased-and-operated) hotels and 299 manachised (or
franchised-and-managed) hotels and franchised hotels, and closed a
total of 140 hotels, including 12 leased hotels and 128 manachised
and franchised hotels. During the first quarter of 2022, the
Legacy-DH business opened 1 leased hotel, and closed 5 manachised
and franchised hotels. As of March 31, 2022, Huazhu had a total of
2,271 unopened hotels in our pipeline, including 2,226 hotels from
the Legacy-Huazhu business and 45 hotels from the Legacy-DH
business.
Legacy-Huazhu Only
– First Quarter of 2022 Operational
Highlights
As of March 31, 2022,
Legacy-Huazhu had 7,868 hotels in operation, including 653
leased and owned hotels, and 7,215 manachised and franchised
hotels. In addition, as of the same date, Legacy-Huazhu had
740,493 hotel rooms in operation, including 91,163 rooms under the
lease and ownership model, and 649,330 rooms under the manachise
and franchise models. Legacy-Huazhu also had 2,226 unopened
hotels in our pipeline, including 23 leased and owned hotels and
2,203 manachised and franchised hotels. The following discusses
Legacy-Huazhu’s RevPAR, average daily room rate (“ADR”) and
occupancy rate for its leased and owned hotels, as well as
manachised and franchised hotels (excluding hotels under
governmental requisition) for the periods indicated.
- The ADR was RMB224 in the first quarter of 2022, compared with
RMB209 in the first quarter of 2021, RMB239 in the previous
quarter, and RMB221 in the first quarter of 2019.
- The occupancy rate for all Legacy-Huazhu hotels in operation
was 59.2% in the first quarter of 2022, compared with 66.2% in the
first quarter of 2021, 68.2% in the previous quarter, and 80.6% in
the first quarter of 2019.
- Blended RevPAR was RMB132 in the first quarter of 2022,
compared with RMB138 in the first quarter of 2021, RMB163 in the
previous quarter, and RMB178 in the first quarter of 2019.
- For all Legacy-Huazhu hotels which had been in operation for at
least 18 months, the same-hotel RevPAR was RMB131 for the first
quarter of 2022, representing a 8.9% decrease from RMB144 for the
first quarter of 2021, with a 3.5% increase in ADR and an
8.2-percentage-point decrease in occupancy rate; comparing the
first quarter of 2022 with the pre-COVID-19 first quarter of 2019,
same-hotel RevPAR represented a 36.2% decrease from RMB191 for the
first quarter of 2019, with a 9.9% decrease in ADR, and a
24.6-percentage-point decrease in occupancy rate.
Legacy-DH Only
– First Quarter of 2022 Operational
Highlights
As of March 31, 2022, Legacy-DH had
120 hotels in operation, including 77 leased and owned hotels and
43 manachised and franchised hotels. In addition, as of the same
date, Legacy-DH had 24,366 hotel rooms in operation, including
14,472 rooms under the lease and ownership model, and 9,894 rooms
under the manachise and franchise models. Legacy-DH also had
unopened 45 hotels in our pipeline, including 29 leased and owned
hotels and 16 manachised and franchised hotels. The following
discusses Legacy-DH’s RevPAR, ADR and occupancy rate for its leased
as well as manachised and franchised hotels (excluding hotels
temporarily closed) for the periods indicated.
- The ADR was EUR88 in the first quarter of 2022, compared with
EUR69 in the first quarter of 2021 and EUR94 in the previous
quarter.
- The occupancy rate for all Legacy-DH hotels in operation was
38.0% in the first quarter of 2022, compared with 18.8% in the
first quarter of 2021 and 46.1% in the previous quarter.
- Blended RevPAR was EUR33 in the first quarter of 2022, compared
with EUR13 in the first quarter of 2021 and EUR43 in the previous
quarter.
Jin Hui, CEO of Huazhu commented: “Since late
March 2022, our China business has encountered tremendous
challenges with the highly infectious Omicron variant spreading
nationwide. Many cities, such as Jilin and Shanghai, have been
subject to lockdown since then. We immediately activated our
contingency plan to ensure the health and safety of our employees
and customers, as well as the operational sustainability of our
hotels since the initial outbreak. To undertake our corporate
social responsibilities as a leading company, our hotels strictly
comply with pandemic prevention requirements and quickly respond to
the needs of governmental authorities for quarantine hotel.
Moreover, we have reinforced cost control measures for
Legacy-Huazhu, which mainly include streamlining headcounts and
expenses, concentrating resources on major strategies and
negotiating rent waivers. Despite the near-term challenges, our
long-term “Sustainable Quality Growth” strategy remains intact. In
the long run, we will continuously center on customers,
franchisees, and employees for building our capability to ride
through the ups and downs of the economic cycle in the long run. To
help our franchisees overcome the current difficult period, we
introduced management fee waiver and deferral policy, provided
legal support for negotiating rental waiver, and applied tax
reduction and refund. For our European business, we are very happy
to see our DH business has achieved robust recovery since the
opening-up in Germany from mid-February 2022. DH’s RevPAR recovered
to 80% of the 2019 level in April 2022, compared to only 47% of the
2019 level in January 2022. However, since RevPAR recovery is still
at an early stage, a comprehensive cash flow improvement program
remains critical. Therefore, DH’s near-term focus will remain on
efficiency improvements, negotiation of further lease waivers, and
personnel cost optimization.”
First Quarter of 2022 Unaudited
Financial Results
(RMB in millions) |
Q1 2021 |
Q4 2021 |
Q1 2022 |
Revenue: |
|
|
|
Leased and owned hotels |
1,398 |
2,093 |
1,642 |
Manachised and franchised hotels |
897 |
1,103 |
989 |
Others |
32 |
152 |
50 |
Total revenue |
2,327 |
3,348 |
2,681 |
Revenue for the first quarter
of 2022 was RMB2.7 billion (US$423 million), representing a 15.2%
year-over-year increase and a 19.9% sequential decrease. Revenue
from Legacy-Huazhu segment for the first quarter of 2022 was RMB2.3
billion, representing a 4.6% year-over-year increase and an 18.0%
sequential decrease. The decrease was mainly due to the lockdown in
several cities in China caused by massive spread of the Omicron
variant. Revenue from Legacy-DH segment for the first quarter of
2022 was RMB406 million, representing a 165.4% year-over-year
increase and a 29.0% sequential decrease. The sequential decrease
was mainly due to disruption of the recovery of our European
business when the Omicron variant hit Europe in late December
2021.
Revenue from leased and owned
hotels for the first quarter of 2022 was RMB1.6 billion
(US$259 million), representing a 17.5% year-over-year increase and
a 21.5% sequential decrease. Revenue from leased and owned hotels
from Legacy-Huazhu segment for the first quarter of 2022 was RMB1.3
billion, representing a 0.2% year-over-year increase. Revenue from
leased and owned hotels from Legacy-DH segment for the first
quarter of 2022 was RMB384 million, representing a 168.5%
year-over-year increase.
Revenue from manachised and franchised
hotels for the first quarter of 2022 was RMB989 million
(US$156 million), representing a 10.3% year-over-year increase and
a 10.3% sequential decrease. Revenue from our Legacy-Huazhu segment
from manachised and franchised hotels for the first quarter of 2022
was RMB974 million, representing a 9.2% year-over-year increase.
Revenue from manachised and franchised hotels from the Legacy-DH
segment for the first quarter of 2022 was RMB15 million,
representing a 200.0% year-over-year increase.
Other revenue represents
revenue generated from businesses other than our hotel operations,
which mainly includes revenue from the provision of IT products and
services and Huazhu mall and other revenue from the Legacy-DH
segment business, totaling RMB50 million (US$8 million) in the
first quarter of 2022, compared to RMB32 million in the first
quarter of 2021 and RMB152 million in the previous quarter.
(RMB in millions) |
Q1 2021 |
Q4 2021 |
Q1 2022 |
Operating costs and expenses: |
|
|
|
Hotel operating costs |
(2,463 |
) |
(3,194 |
) |
(2,813 |
) |
Other operating costs |
(12 |
) |
(19 |
) |
(11 |
) |
Selling and marketing expenses |
(107 |
) |
(183 |
) |
(122 |
) |
General and administrative expenses |
(328 |
) |
(438 |
) |
(462 |
) |
Pre-opening expenses |
(21 |
) |
(30 |
) |
(26 |
) |
Total operating costs and expenses |
(2,931 |
) |
(3,864 |
) |
(3,434 |
) |
Hotel operating costs for the
first quarter of 2022 were RMB2.8 billion (US$443 million),
compared to RMB2.5 billion in the first quarter of 2021 and RMB3.2
billion in the previous quarter. The year-over-year increase was
mainly due to continuous hotel network expansion of Legacy-Huazhu,
and business recovery of Legacy-DH. Hotel operating costs from
Legacy-Huazhu segment for the first quarter of 2022 were RMB2.3
billion, which represented 99.1% of the quarter’s revenue, compared
to 92.8% for the first quarter in 2021 and 84.0% for the previous
quarter.
Selling and marketing expenses
for the first quarter of 2022 were RMB122 million (US$20 million),
compared to RMB107 million in the first quarter of 2021 and RMB183
million in the previous quarter. Selling and marketing expenses
from Legacy-Huazhu segment for the first quarter of 2022 were RMB78
million, which represented 3.4% of the quarter’s revenue, compared
to RMB72 million or 3.3% of revenue for the first quarter in 2021,
and RMB129 million or 4.6% of revenue for the previous quarter.
General and administrative
expenses for the first quarter of 2022 were RMB462 million
(US$73 million), compared to RMB328 million in the first quarter of
2021 and RMB438 million in the previous quarter. General and
administrative expenses from Legacy-Huazhu segment for the first
quarter of 2022 were RMB346 million, which represented 15.2% of the
quarter’s revenue, compared to RMB255 million or 11.7% for the
first quarter in 2021 and RMB308 million or 11.1% for the previous
quarter. The increase was mainly due to investments in our business
development team, our information technology, and our upscale hotel
division.
Pre-opening expenses for the
first quarter of 2022 were mostly related to the Legacy-Huazhu
segment and totaled RMB26 million (US$4 million), compared to RMB21
million in the first quarter of 2021 and RMB30 million in the
previous quarter.
Other operating income, net for
the first quarter of 2022 was RMB45 million (US$7 million),
compared to RMB29 million in the first quarter of 2021 and RMB555
million in the previous quarter which mainly related to
governmental subsidy for Legacy-DH business.
Loss from operations for the
first quarter of 2022 was RMB708 million (US$112 million), compared
to a loss from operations of RMB575 million in the first quarter of
2021 and income from operations of RMB39 million in the previous
quarter. Loss from operations from the Legacy-Huazhu segment for
the first quarter of 2022 was RMB416 million, compared to a loss
from operations from the Legacy-Huazhu segment of RMB172 million in
the first quarter of 2021 and income from operations from the
Legacy-Huazhu segment of RMB60 million in the previous quarter.
Operating margin, defined as
income from operations as a percentage of revenues, for the first
quarter of 2022 was -26.4%, compared with -24.7% for the first
quarter of 2021 and 1.2% for the previous quarter. Operating margin
from the Legacy-Huazhu segment for the first quarter of 2022 was
-18.3%, compared with -7.9% in the first quarter of 2021 and 2.2%
in the previous quarter.
Other income, net for the first
quarter of 2022 was RMB59 million (US$9 million), compared to other
income, net of RMB262 million for the first quarter of 2021 and
other expense, net of RMB47 million for the previous quarter.
Unrealized gains from fair value changes
of equity securities for the first quarter of 2022 were
RMB54 million (US$9 million), compared to unrealized gains from
fair value changes of equity securities of RMB238 million in the
first quarter of 2021, and unrealized losses from fair value
changes of RMB217 million in the previous quarter. Unrealized gains
(losses) from fair value changes of equity securities mainly
represent the unrealized gains (losses) from our investment in
equity securities with readily determinable fair values, such as
AccorHotels.
Income tax benefit for the
first quarter of 2022 was RMB131 million (US$21 million), compared
to an income tax benefit of RMB122 million in the first quarter of
2021 and income tax expense of RMB16 million in the previous
quarter.
Net loss attributable to Huazhu Group
Limited for the first quarter of 2022 was RMB630 million
(US$99 million), compared to RMB248 million in the first quarter of
2021 and RMB459 million in the previous quarter. Net loss
attributable to Huazhu Group Limited from the Legacy-Huazhu segment
for the first quarter of 2022 was RMB307 million, compared to net
income attributable to Huazhu Group Limited from the Legacy-Huazhu
segment of RMB53 million in the first quarter of 2021 and net loss
attributable to Huazhu Group Limited from the Legacy-Huazhu segment
of RMB419 million in the previous quarter.
Basic and diluted losses per
share/American depositary share (ADS). For the first
quarter of 2022, basic and diluted losses per share were RMB0.20
(US$0.03). Adjusted basic and diluted losses per share (non-GAAP),
which excluded share-based compensation expenses and unrealized
gains (losses) from fair value changes of equity securities, were
RMB0.21 (US$0.03). Basic and diluted losses per ADS were RMB2.02
(US$0.32). Adjusted basic and diluted losses per ADS (non-GAAP),
which excluded share-based compensation expenses and unrealized
gains (losses) from fair value changes of equity securities, were
RMB2.12 (US$0.33).
EBITDA (non-GAAP) for the first
quarter of 2022 was negative RMB301 million (US$48 million),
compared with RMB70 million in the first quarter of 2021 and RMB46
million in the previous quarter. EBITDA from the Legacy-Huazhu
segment for the first quarter of 2022 was negative RMB61 million,
compared with RMB410 million in the first quarter of 2021 and
negative RMB23 million in the previous quarter. Adjusted EBITDA
(non-GAAP), which excluded share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities, for the first quarter of 2022 was negative RMB333
million (US$53 million), compared with negative RMB133 million in
the first quarter of 2021 and RMB278 million in the previous
quarter. The adjusted EBITDA from the Legacy-Huazhu segment
(non-GAAP) for the first quarter of 2022 was negative RMB93
million, compared with RMB207 million in the first quarter of 2021
and RMB209 million in the previous quarter.
Cash flow. Operating cash
outflow for the first quarter of 2022 was RMB921 million (US$144
million). Investing cash outflow for the first quarter of 2022 was
RMB201 million (US$32 million). Financing cash inflow for the first
quarter of 2022 was RMB146 million (US$23 million).
Cash and cash equivalents and Restricted
cash. As of March 31, 2022, the Company had a total
balance of cash and cash equivalents of RMB4.1 billion (US$651
million) and restricted cash of RMB24 million (US$4 million).
Debt financing. As of March 31,
2022, the Company had a total debt balance of RMB10.1 billion
(US$1.6 billion) and the unutilized credit facility available to
the Company was RMB3.0 billion.
COVID-19 update For our
Legacy-Huazhu business, RevPAR recovery in the first two months of
2022 was on track. Nevertheless, such recovery was significantly
interrupted by the large-scale outbreak of the Omicron variant in
over 30 provinces in China since early-March 2022. Many cities,
such as Shanghai and Jilin, have been subject to lockdown since
then, which resulted in a sharp decline of both business and
leisure traveling activities. However, this outbreak led to a rise
in demand for our hotels to serve the quarantine needs of infected
persons or those in close contact with infected persons, as well as
the accommodation needs of medical teams and delivery riders. As
the Omicron variant is highly infectious, there are still
uncertainties in terms of the impact on our Legacy-Huazhu business
in the near-term. To mitigate risks, we are now implementing
several costs and cash flow management measures.
Legacy-DH has been experiencing continuous
RevPAR recovery since Germany unfolded its opening-up plan in
mid-February 2022. RevPAR in April 2022 recovered to 80% of the
2019 level, as compared to only 47% of the 2019 level in January
2022. However, since RevPAR recovery is still at an early stage, a
comprehensive cash flow improvement program remains critical.
Therefore, DH will continuously focus on efficiency improvements,
negotiation of further lease waivers, and personnel cost
optimization.
Guidance Since March 2022, the
highly infectious Omicron variant has been spreading rapidly in
China which again seriously affected our business performance.
Also, the current COVID prevention policy has rendered business
performance more unpredictable in the foreseeable future. Under
such circumstances, we will suspend providing or updating guidance
in respect of annual revenue and hotel openings until the situation
sustainably improves. Nevertheless, we will continue to provide
quarterly guidance based on our best understanding of the most
recent situation.
In the second quarter of 2022, Huazhu expects
revenue to decline 2% to 6% compared to the second quarter of 2021,
or to decline 23% to 27% if excluding DH, mainly due to large
impacts from the Omicron variant outbreak in China.
The above forecast reflects the Company’s
current and preliminary view, which is subject to change.
Conference CallHuazhu’s
management will host a conference call at 7 a.m. (U.S. Eastern
time) on Tuesday, May 31, 2022 (or 7 p.m. (Hong Kong time) on
Tuesday, May 31, 2022) following the announcement. The conference
call will be a Direct Event call. All participants must preregister
online prior to the call. Please use the link
http://apac.directeventreg.com/registration/event/2263289 to
complete the online registration at least 15 minutes prior to the
commencement of the conference call. Once preregistration has been
completed, participants will receive dial-in numbers, an event
passcode, and a unique registrant ID. To join the conference,
please dial the number you receive, enter the event passcode
followed by your unique registrant ID, and you will be joined to
the conference instantly. Please dial in approximately 10 minutes
before the scheduled time of the call.
A recording of the conference call will be
available after the conclusion of the conference call through June
7, 2022. Please dial +1 (855) 452 5696 (for callers in the US), 400
632 2162 (for callers in mainland China), 800 963 117 (for callers
in Hong Kong) or +61 2 8199 0299 (for callers outside the U.S.,
mainland China and Hong Kong) and enter the passcode
2263289.
The conference call will also be webcast live
over the Internet and can be accessed by all interested parties at
the Company’s website, https://ir.huazhu.com.
Use of Non-GAAP Financial
MeasuresTo supplement the Company’s unaudited consolidated
financial results presented in accordance with U.S.
Generally-Accepted Accounting Principles (“GAAP”), the Company uses
the following non-GAAP measures defined as non-GAAP financial
measures by the U.S. Securities and Exchange Commission (“SEC”):
adjusted net income (loss) attributable to Huazhu Group Limited
excluding share-based compensation expenses and unrealized gains
(losses) from fair value changes of equity securities; adjusted
basic and diluted earnings (losses) per share/ADS excluding
share-based compensation expenses and unrealized gains (losses)
from fair value changes of equity securities; EBITDA; adjusted
EBITDA, adjusted EBITDA from the Legacy-Huazhu segment and adjusted
EBITDA from the Legacy-DH segment excluding share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities. The presentation of these non-GAAP
financial measures is not intended to be considered in isolation or
as a substitute for the financial information prepared and
presented in accordance with U.S. GAAP. For more information on
these non-GAAP financial measures, please see the table captioned
“Reconciliations of GAAP and non-GAAP results” set forth at the end
of this release. The Company believes that these non-GAAP financial
measures provide meaningful supplemental information regarding
Company performance by excluding share-based compensation expenses
and unrealized gains (losses) from fair value changes of equity
securities that may not be indicative of Company operating
performance. The Company believes that both management and
investors benefit from referring to these non-GAAP financial
measures in assessing Company performance and when planning and
forecasting future periods. These non-GAAP financial measures also
facilitate management’s internal comparisons to the Company’s
historical performance. The Company believes these non-GAAP
financial measures are also useful to investors in allowing for
greater transparency with respect to supplemental information used
regularly by Company management in financial and operational
decision-making. A limitation of using non-GAAP financial measures
excluding share-based compensation expenses and unrealized gains
(losses) from fair value changes of equity securities is that
share-based compensation expenses and unrealized gains (losses)
from fair value changes of equity securities have been and will
continue to be significant and recurring in the Company’s business.
Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from each non-GAAP
measure. The accompanying tables have more details on the
reconciliations between GAAP financial measures that are most
directly comparable to non-GAAP financial measures.
The Company believes that EBITDA is a useful
financial metric to assess the operating and financial performance
before the impact of investing and financing transactions and
income taxes, given the significant investments that the Company
has made in leasehold improvements, depreciation and amortization
expense that comprise a significant portion of the Company’s cost
structure. In addition, the Company believes that EBITDA is widely
used by other companies in the lodging industry and may be used by
investors as a measure of financial performance. The Company
believes that EBITDA information provides investors with a useful
tool for comparability between periods because it excludes
depreciation and amortization expense attributable to capital
expenditures. The Company also uses adjusted EBITDA, which is
defined as EBITDA before share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities, to assess operating results of its hotels in operation.
The Company believes that the exclusion of share-based compensation
expenses and unrealized gains (losses) from fair value changes of
equity securities helps facilitate year-on-year comparisons of the
results of operations as the share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities may not be indicative of Company operating
performance.
The Company believes that unrealized gains and
losses from changes in fair value of equity securities are
generally meaningless in understanding the Company’s reported
results or evaluating the economic performance of its businesses.
These gains and losses have caused and will continue to cause
significant volatility in reported periodic earnings.
Therefore, the Company believes adjusted EBITDA
more closely reflects the performance capability of our hotels. The
presentation of EBITDA and adjusted EBITDA should not be construed
as an indication that the Company’s future results will be
unaffected by other charges and gains considered to be outside the
ordinary course of business.
The use of EBITDA and adjusted EBITDA has
certain limitations. Depreciation and amortization expense for
various long-term assets (including land use rights), income tax,
interest expense and interest income have been and will be incurred
and are not reflected in the presentation of EBITDA. Share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities have been and will be incurred and are
not reflected in the presentation of adjusted EBITDA. Each of these
items should also be considered in the overall evaluation of the
results. The Company compensates for these limitations by providing
the relevant disclosure of depreciation and amortization, interest
income, interest expense, income tax expense, share-based
compensation expenses, and unrealized gains (losses) from fair
value changes of equity securities and other relevant items both in
the reconciliations to the U.S. GAAP financial measures and in the
consolidated financial statements, all of which should be
considered when evaluating the performance of the Company.
The terms EBITDA and adjusted EBITDA are not
defined under U.S. GAAP, and neither EBITDA nor adjusted EBITDA is
a measure of net income, operating income, operating performance or
liquidity presented in accordance with U.S. GAAP. When assessing
the operating and financial performance, investors should not
consider these data in isolation or as a substitute for the
Company’s net income, operating income or any other operating
performance measure that is calculated in accordance with U.S.
GAAP. In addition, the Company’s EBITDA or adjusted EBITDA may not
be comparable to EBITDA or adjusted EBITDA or similarly titled
measures utilized by other companies since such other companies may
not calculate EBITDA or adjusted EBITDA in the same manner as the
Company does.
Reconciliations of the Company’s non-GAAP
financial measures, including EBITDA and adjusted EBITDA, to the
consolidated statement of operations information are included at
the end of this press release.
About Huazhu Group
LimitedOriginated in China, Huazhu Group Limited is a
world-leading hotel group. As of March 31, 2022, Huazhu
operated 7,988 hotels with 764,859 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, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz
in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and
Song 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 March 31, 2022, Huazhu operates 14 percent of
its hotel rooms under lease and ownership model, and 86 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 SEC. 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.
—Financial Tables and Operational Data
Follow—
Huazhu Group Limited |
Unaudited Condensed Consolidated Balance
Sheets |
|
December 31, 2021 |
|
March 31, 2022 |
|
RMB |
|
|
RMB |
|
|
US$3 |
|
|
(in millions) |
|
|
|
|
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
5,116 |
|
|
4,125 |
|
|
651 |
|
Restricted cash |
25 |
|
|
24 |
|
|
4 |
|
Short-term investments |
2,589 |
|
|
2,281 |
|
|
360 |
|
Accounts receivable, net |
521 |
|
|
726 |
|
|
114 |
|
Loan receivables, net |
218 |
|
|
215 |
|
|
34 |
|
Amounts due from related parties |
149 |
|
|
152 |
|
|
24 |
|
Inventories |
88 |
|
|
84 |
|
|
13 |
|
Other current assets, net |
847 |
|
|
911 |
|
|
144 |
|
Total current assets |
9,553 |
|
|
8,518 |
|
|
1,344 |
|
|
|
|
|
|
|
Property and equipment, net |
7,056 |
|
|
7,023 |
|
|
1,108 |
|
Intangible assets, net |
5,385 |
|
|
5,304 |
|
|
837 |
|
Operating lease right-of-use assets |
29,942 |
|
|
29,505 |
|
|
4,654 |
|
Finance lease right-of-use assets |
2,235 |
|
|
2,432 |
|
|
384 |
|
Land use rights, net |
206 |
|
|
204 |
|
|
32 |
|
Long-term investments |
1,965 |
|
|
1,960 |
|
|
309 |
|
Goodwill |
5,132 |
|
|
5,093 |
|
|
803 |
|
Amounts due from related parties, non-current |
1 |
|
|
- |
|
|
- |
|
Loan receivables, net |
98 |
|
|
118 |
|
|
19 |
|
Other assets, net |
834 |
|
|
866 |
|
|
136 |
|
Deferred tax assets |
862 |
|
|
848 |
|
|
134 |
|
Total assets |
63,269 |
|
|
61,871 |
|
|
9,760 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Short-term debt |
6,232 |
|
|
6,560 |
|
|
1,035 |
|
Accounts payable |
968 |
|
|
723 |
|
|
114 |
|
Amounts due to related parties |
197 |
|
|
92 |
|
|
14 |
|
Salary and welfare payables |
591 |
|
|
522 |
|
|
82 |
|
Deferred revenue |
1,366 |
|
|
1,292 |
|
|
204 |
|
Operating lease liabilities, current |
3,628 |
|
|
3,732 |
|
|
589 |
|
Finance lease liabilities, current |
41 |
|
|
41 |
|
|
7 |
|
Accrued expenses and other current liabilities |
1,838 |
|
|
1,878 |
|
|
296 |
|
Dividends payable |
- |
|
|
416 |
|
|
66 |
|
Income tax payable |
418 |
|
|
70 |
|
|
11 |
|
Total current liabilities |
15,279 |
|
|
15,326 |
|
|
2,418 |
|
|
|
|
|
|
|
Long-term debt |
3,565 |
|
|
3,550 |
|
|
560 |
|
Operating lease liabilities, non-current |
28,012 |
|
|
27,605 |
|
|
4,355 |
|
Finance lease liabilities, non-current |
2,684 |
|
|
2,892 |
|
|
456 |
|
Deferred revenue |
785 |
|
|
789 |
|
|
124 |
|
Other long-term liabilities |
903 |
|
|
938 |
|
|
148 |
|
Deferred tax liabilities |
853 |
|
|
824 |
|
|
130 |
|
Retirement benefit obligations |
144 |
|
|
141 |
|
|
22 |
|
Total liabilities |
52,225 |
|
|
52,065 |
|
|
8,213 |
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Ordinary shares |
0 |
|
|
0 |
|
|
0 |
|
Treasury shares |
(107 |
) |
|
(298 |
) |
|
(47 |
) |
Additional paid-in capital |
9,964 |
|
|
9,986 |
|
|
1,575 |
|
Retained earnings |
1,037 |
|
|
(9 |
) |
|
(1 |
) |
Accumulated other comprehensive income |
41 |
|
|
37 |
|
|
6 |
|
Total Huazhu Group Limited shareholders' equity |
10,935 |
|
|
9,716 |
|
|
1,533 |
|
Noncontrolling interest |
109 |
|
|
90 |
|
|
14 |
|
Total equity |
11,044 |
|
|
9,806 |
|
|
1,547 |
|
Total liabilities and equity |
63,269 |
|
|
61,871 |
|
|
9,760 |
|
Huazhu Group Limited |
Unaudited Condensed Consolidated Statements of
Comprehensive Income |
|
Quarter Ended |
|
March 31, 2021 |
|
December 31, 2021 |
|
March 31, 2022 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in millions, except share, per share and per ADS
data) |
Revenues: |
|
|
|
|
Leased and owned hotels |
1,398 |
|
|
2,093 |
|
|
1,642 |
|
|
259 |
|
Manachised and franchised hotels |
897 |
|
|
1,103 |
|
|
989 |
|
|
156 |
|
Others |
32 |
|
|
152 |
|
|
50 |
|
|
8 |
|
Total revenues |
2,327 |
|
|
3,348 |
|
|
2,681 |
|
|
423 |
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
Hotel operating costs: |
|
|
|
|
Rents |
(945 |
) |
|
(998 |
) |
|
(1,026 |
) |
|
(162 |
) |
Utilities |
(140 |
) |
|
(122 |
) |
|
(155 |
) |
|
(24 |
) |
Personnel costs |
(630 |
) |
|
(841 |
) |
|
(838 |
) |
|
(132 |
) |
Depreciation and amortization |
(340 |
) |
|
(365 |
) |
|
(357 |
) |
|
(56 |
) |
Consumables, food and beverage |
(180 |
) |
|
(281 |
) |
|
(206 |
) |
|
(32 |
) |
Others |
(228 |
) |
|
(587 |
) |
|
(231 |
) |
|
(37 |
) |
Total hotel operating costs |
(2,463 |
) |
|
(3,194 |
) |
|
(2,813 |
) |
|
(443 |
) |
Other operating costs |
(12 |
) |
|
(19 |
) |
|
(11 |
) |
|
(2 |
) |
Selling and marketing expenses |
(107 |
) |
|
(183 |
) |
|
(122 |
) |
|
(20 |
) |
General and administrative expenses |
(328 |
) |
|
(438 |
) |
|
(462 |
) |
|
(73 |
) |
Pre-opening expenses |
(21 |
) |
|
(30 |
) |
|
(26 |
) |
|
(4 |
) |
Total operating costs and expenses |
(2,931 |
) |
|
(3,864 |
) |
|
(3,434 |
) |
|
(542 |
) |
Other operating income (expense), net |
29 |
|
|
555 |
|
|
45 |
|
|
7 |
|
Income (losses) from operations |
(575 |
) |
|
39 |
|
|
(708 |
) |
|
(112 |
) |
Interest income |
22 |
|
|
23 |
|
|
18 |
|
|
3 |
|
Interest expense |
(110 |
) |
|
(92 |
) |
|
(109 |
) |
|
(17 |
) |
Other (expense) income, net |
262 |
|
|
(47 |
) |
|
59 |
|
|
9 |
|
Unrealized gains (losses) from fair value changes of equity
securities |
238 |
|
|
(217 |
) |
|
54 |
|
|
9 |
|
Foreign exchange gain (loss) |
(197 |
) |
|
(112 |
) |
|
(61 |
) |
|
(10 |
) |
Income (loss) before income taxes |
(360 |
) |
|
(406 |
) |
|
(747 |
) |
|
(118 |
) |
Income tax (expense) benefit |
122 |
|
|
(16 |
) |
|
131 |
|
|
21 |
|
Income (loss) from equity method investments |
(20 |
) |
|
(42 |
) |
|
(33 |
) |
|
(5 |
) |
Net income (loss) |
(258 |
) |
|
(464 |
) |
|
(649 |
) |
|
(102 |
) |
Net (income) loss attributable to noncontrolling interest |
10 |
|
|
5 |
|
|
19 |
|
|
3 |
|
Net income (loss) attributable to Huazhu Group Limited |
(248 |
) |
|
(459 |
) |
|
(630 |
) |
|
(99 |
) |
|
|
|
|
|
Other comprehensive income |
|
|
|
|
Gain arising from defined benefit plan, net of tax |
- |
|
|
13 |
|
|
- |
|
|
- |
|
Foreign currency translation adjustments, net of tax |
(55 |
) |
|
7 |
|
|
(4 |
) |
|
(1 |
) |
Comprehensive income (loss) |
(313 |
) |
|
(444 |
) |
|
(653 |
) |
|
(103 |
) |
Comprehensive (income) loss attributable to noncontrolling
interest |
10 |
|
|
5 |
|
|
19 |
|
|
3 |
|
Comprehensive income (loss) attributable to Huazhu Group
Limited |
(303 |
) |
|
(439 |
) |
|
(634 |
) |
|
(100 |
) |
|
|
|
|
|
Earnings (losses) per share(1): |
|
|
|
|
Basic |
(0.08 |
) |
|
(0.15 |
) |
|
(0.20 |
) |
|
(0.03 |
) |
Diluted |
(0.08 |
) |
|
(0.15 |
) |
|
(0.20 |
) |
|
(0.03 |
) |
|
|
|
|
|
Earnings (losses) per ADS: |
|
|
Basic |
(0.80 |
) |
|
(1.47 |
) |
|
(2.02 |
) |
|
(0.32 |
) |
Diluted |
(0.80 |
) |
|
(1.47 |
) |
|
(2.02 |
) |
|
(0.32 |
) |
|
|
|
|
|
Weighted average number of shares used in computation: |
|
|
|
Basic |
3,109,432,473 |
|
|
3,117,745,440 |
|
|
3,118,897,668 |
|
|
3,118,897,668 |
|
Diluted |
3,109,432,473 |
|
|
3,117,745,440 |
|
|
3,118,897,668 |
|
|
3,118,897,668 |
|
(1) In June 2021, the Company effected a share split that each
issued and unissued ordinary share of the Company with a par value
of US$0.0001 was sub-divided into 10 ordinary shares with a par
value of US$0.00001 each. The ratio of ADS to ordinary share was
adjusted from one (1) ADS representing one (1) ordinary share to
one (1) ADS representing ten (10) ordinary shares. Except otherwise
stated, the share split has been retrospectively applied for all
periods presented. |
Huazhu Group Limited |
Unaudited Condensed Consolidated Statements of Cash
Flows |
|
Quarter Ended |
|
March 31, 2021 |
|
December 31, 2021 |
|
March 31, 2022 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in millions) |
Operating activities: |
|
|
|
|
Net income (loss) |
(258 |
) |
|
(464 |
) |
|
(649 |
) |
|
(102 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
Share-based compensation |
35 |
|
|
15 |
|
|
22 |
|
|
4 |
|
Depreciation and amortization, and other |
366 |
|
|
436 |
|
|
399 |
|
|
63 |
|
Impairment loss |
- |
|
|
320 |
|
|
- |
|
|
- |
|
Loss from equity method investments,net of dividends |
20 |
|
|
38 |
|
|
80 |
|
|
13 |
|
Investment (income) loss |
(264 |
) |
|
245 |
|
|
(57 |
) |
|
(9 |
) |
Changes in operating assets and liabilities |
(717 |
) |
|
458 |
|
|
(888 |
) |
|
(140 |
) |
Other |
(139 |
) |
|
(181 |
) |
|
172 |
|
|
27 |
|
Net cash provided by (used in) operating activities |
(957 |
) |
|
867 |
|
|
(921 |
) |
|
(144 |
) |
|
|
|
|
|
Investing activities: |
|
|
|
|
Capital expenditures |
(550 |
) |
|
(469 |
) |
|
(425 |
) |
|
(67 |
) |
Acquisitions, net of cash received |
- |
|
|
- |
|
|
(56 |
) |
|
(9 |
) |
Purchase of investments |
(35 |
) |
|
(49 |
) |
|
(77 |
) |
|
(12 |
) |
Proceeds from maturity/sale of investments |
1,256 |
|
|
64 |
|
|
376 |
|
|
59 |
|
Loan advances |
(22 |
) |
|
(96 |
) |
|
(74 |
) |
|
(12 |
) |
Loan collections |
63 |
|
|
38 |
|
|
55 |
|
|
9 |
|
Other |
2 |
|
|
9 |
|
|
0 |
|
|
0 |
|
Net cash provided by (used in) investing activities |
714 |
|
|
(503 |
) |
|
(201 |
) |
|
(32 |
) |
Financing activities: |
|
|
|
|
Net proceeds from issuance of ordinaryshares |
1 |
|
|
- |
|
|
- |
|
|
- |
|
Payment of share repurchase |
- |
|
|
- |
|
|
(191 |
) |
|
(30 |
) |
Proceeds from debt |
1,519 |
|
|
167 |
|
|
809 |
|
|
128 |
|
Repayment of debt |
(2,472 |
) |
|
(768 |
) |
|
(462 |
) |
|
(73 |
) |
Other |
(48 |
) |
|
3 |
|
|
(10 |
) |
|
(2 |
) |
Net cash provided by (used in) financing activities |
(1,000 |
) |
|
(598 |
) |
|
146 |
|
|
23 |
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
(44 |
) |
|
(36 |
) |
|
(16 |
) |
|
(3 |
) |
Net increase (decrease) in cash, cash equivalents and restricted
cash |
(1,287 |
) |
|
(270 |
) |
|
(992 |
) |
|
(156 |
) |
Cash, cash equivalents and restricted cash at the beginning of the
period |
7,090 |
|
|
5,411 |
|
|
5,141 |
|
|
811 |
|
Cash, cash equivalents and restricted cash at the end of the
period |
5,803 |
|
|
5,141 |
|
|
4,149 |
|
|
655 |
|
Huazhu Group Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended |
|
March 31, 2021 |
|
December 31, 2021 |
|
March 31, 2022 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in millions, except shares, per share and per ADS
data) |
Net income (loss) attributable to Huazhu Group Limited (GAAP) |
(248 |
) |
|
(459 |
) |
|
(630 |
) |
|
(99 |
) |
Share-based compensation expenses |
35 |
|
|
15 |
|
|
22 |
|
|
4 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
(238 |
) |
|
217 |
|
|
(54 |
) |
|
(9 |
) |
Adjusted net income (loss) attributable to Huazhu Group
Limited(non-GAAP) |
(451 |
) |
|
(227 |
) |
|
(662 |
) |
|
(104 |
) |
|
|
|
|
|
Adjusted earnings (losses) per share (non-GAAP)(2) |
Basic |
(0.14 |
) |
|
(0.07 |
) |
|
(0.21 |
) |
|
(0.03 |
) |
Diluted |
(0.14 |
) |
|
(0.07 |
) |
|
(0.21 |
) |
|
(0.03 |
) |
|
|
|
|
|
Adjusted earnings (losses) per ADS (non-GAAP) |
|
|
|
|
Basic |
(1.45 |
) |
|
(0.73 |
) |
|
(2.12 |
) |
|
(0.33 |
) |
Diluted |
(1.45 |
) |
|
(0.73 |
) |
|
(2.12 |
) |
|
(0.33 |
) |
|
|
|
|
|
Weighted average number of shares used in computation
(Non-GAAP) |
Basic |
3,109,432,473 |
|
|
3,117,745,440 |
|
|
3,118,897,668 |
|
|
3,118,897,668 |
|
Diluted |
3,109,432,473 |
|
|
3,117,745,440 |
|
|
3,118,897,668 |
|
|
3,118,897,668 |
|
(2) In June 2021, the Company effected a share split that each
issued and unissued ordinary share of the Company with a par value
of US$0.0001 was sub-divided into 10 ordinary shares with a par
value of US$0.00001 each. The ratio of ADS to ordinary share was
adjusted from one (1) ADS representing one (1) ordinary share to
one (1) ADS representing ten (10) ordinary shares. Except otherwise
stated, the share split has been retrospectively applied for all
periods presented |
|
|
|
|
|
|
Quarter Ended |
|
March 31, 2021 |
|
December 31, 2021 |
|
March 31, 2022 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in millions, except per share and per ADS
data) |
Net income (loss) attributable to Huazhu Group Limited
(GAAP) |
(248 |
) |
|
(459 |
) |
|
(630 |
) |
|
(99 |
) |
Interest income |
(22 |
) |
|
(23 |
) |
|
(18 |
) |
|
(3 |
) |
Interest expense |
110 |
|
|
92 |
|
|
109 |
|
|
17 |
|
Income tax expense (benefit) |
(122 |
) |
|
16 |
|
|
(131 |
) |
|
(21 |
) |
Depreciation and amortization |
352 |
|
|
420 |
|
|
369 |
|
|
58 |
|
EBITDA (non-GAAP) |
70 |
|
|
46 |
|
|
(301 |
) |
|
(48 |
) |
Share-based compensation expense |
35 |
|
|
15 |
|
|
22 |
|
|
4 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
(238 |
) |
|
217 |
|
|
(54 |
) |
|
(9 |
) |
Adjusted EBITDA (non-GAAP) |
(133 |
) |
|
278 |
|
|
(333 |
) |
|
(53 |
) |
Huazhu Group Limited |
Segment Financial Summary(3) |
|
Quarter Ended March31, 2021 |
|
Quarter Ended December 31, 2021 |
|
Quarter Ended March 31, 2022 |
|
LegacyHuazhu |
|
LegacyDH |
|
Total |
|
LegacyHuazhu |
|
LegacyDH |
|
Total |
|
LegacyHuazhu |
|
LegacyDH |
|
Total |
|
RMB |
|
RMB |
|
RMB |
|
RMB |
|
RMB |
|
RMB |
|
RMB |
|
RMB |
|
RMB |
|
US |
|
(in millions) |
(in millions) |
(in millions) |
Leased and owned hotels |
1,255 |
|
|
143 |
|
|
1,398 |
|
|
1,565 |
|
|
528 |
|
|
2,093 |
|
|
1,258 |
|
|
384 |
|
|
1,642 |
|
|
259 |
|
Manachised and franchised hotels |
892 |
|
|
5 |
|
|
897 |
|
|
1,073 |
|
|
30 |
|
|
1,103 |
|
|
974 |
|
|
15 |
|
|
989 |
|
|
156 |
|
Others |
27 |
|
|
5 |
|
|
32 |
|
|
138 |
|
|
14 |
|
|
152 |
|
|
43 |
|
|
7 |
|
|
50 |
|
|
8 |
|
Revenue |
2,174 |
|
|
153 |
|
|
2,327 |
|
|
2,776 |
|
|
572 |
|
|
3,348 |
|
|
2,275 |
|
|
406 |
|
|
2,681 |
|
|
423 |
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating costs |
(2,018 |
) |
|
(445 |
) |
|
(2,463 |
) |
|
(2,331 |
) |
|
(863 |
) |
|
(3,194 |
) |
|
(2,255 |
) |
|
(558 |
) |
|
(2,813 |
) |
|
(443 |
) |
Selling and marketing expenses |
(72 |
) |
|
(35 |
) |
|
(107 |
) |
|
(129 |
) |
|
(54 |
) |
|
(183 |
) |
|
(78 |
) |
|
(44 |
) |
|
(122 |
) |
|
(20 |
) |
General and administrative expenses |
(255 |
) |
|
(73 |
) |
|
(328 |
) |
|
(308 |
) |
|
(130 |
) |
|
(438 |
) |
|
(346 |
) |
|
(116 |
) |
|
(462 |
) |
|
(73 |
) |
Pre-opening expenses |
(21 |
) |
|
(0 |
) |
|
(21 |
) |
|
(30 |
) |
|
0 |
|
|
(30 |
) |
|
(26 |
) |
|
- |
|
|
(26 |
) |
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income (losses) from operations |
(172 |
) |
|
(403 |
) |
|
(575 |
) |
|
60 |
|
|
(21 |
) |
|
39 |
|
|
(416 |
) |
|
(292 |
) |
|
(708 |
) |
|
(112 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income (losses) attributable to Huazhu Group
Limited |
53 |
|
|
(301 |
) |
|
(248 |
) |
|
(419 |
) |
|
(40 |
) |
|
(459 |
) |
|
(307 |
) |
|
(323 |
) |
|
(630 |
) |
|
(99 |
) |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
(22 |
) |
|
0 |
|
|
(22 |
) |
|
(23 |
) |
|
0 |
|
|
(23 |
) |
|
(18 |
) |
|
0 |
|
|
(18 |
) |
|
(3 |
) |
Interest expense |
81 |
|
|
29 |
|
|
110 |
|
|
64 |
|
|
28 |
|
|
92 |
|
|
77 |
|
|
32 |
|
|
109 |
|
|
17 |
|
Income tax expense |
6 |
|
|
(128 |
) |
|
(122 |
) |
|
37 |
|
|
(21 |
) |
|
16 |
|
|
(123 |
) |
|
(8 |
) |
|
(131 |
) |
|
(21 |
) |
Depreciation and amortization |
292 |
|
|
60 |
|
|
352 |
|
|
318 |
|
|
102 |
|
|
420 |
|
|
310 |
|
|
59 |
|
|
369 |
|
|
58 |
|
EBITDA (non-GAAP) |
410 |
|
|
(340 |
) |
|
70 |
|
|
(23 |
) |
|
69 |
|
|
46 |
|
|
(61 |
) |
|
(240 |
) |
|
(301 |
) |
|
(48 |
) |
Share-based Compensation |
35 |
|
|
- |
|
|
35 |
|
|
15 |
|
|
- |
|
|
15 |
|
|
22 |
|
|
- |
|
|
22 |
|
|
4 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
(238 |
) |
|
- |
|
|
(238 |
) |
|
217 |
|
|
- |
|
|
217 |
|
|
(54 |
) |
|
- |
|
|
(54 |
) |
|
(9 |
) |
Adjusted EBITDA (non-GAAP) |
207 |
|
|
(340 |
) |
|
(133 |
) |
|
209 |
|
|
69 |
|
|
278 |
|
|
(93 |
) |
|
(240 |
) |
|
(333 |
) |
|
(53 |
) |
(3) The Company presents segment information after elimination of
intercompany transactions. |
Operating Results:
Legacy-Huazhu(1)
|
Number of hotels |
|
Number of rooms |
|
Openedin Q1 2022 |
Closed(2)in Q1
2022 |
Net addedin Q1 2022 |
As ofMarch 31,
2022(3) |
|
As ofMarch 31, 2022 |
|
|
Leased and owned hotels |
3 |
(12 |
) |
(9 |
) |
653 |
|
91,163 |
Manachised and franchised hotels |
299 |
(128 |
) |
171 |
|
7,215 |
|
649,330 |
Total |
302 |
(140 |
) |
162 |
|
7,868 |
|
740,493 |
(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 Q1 2022, we temporarily closed 9
hotels for brand upgrade and business model change
purposes.(3) As of March 31, 2022,1299 hotels were
requisitioned by governmental authorities. |
|
As of March 31, 2022 |
|
Number of hotels |
Unopened hotels in pipeline |
Economy hotels |
4,810 |
937 |
Leased and owned hotels |
387 |
4 |
Manachised and franchised hotels |
4,423 |
933 |
Midscale and upscale hotels |
3,058 |
1,289 |
Leased and owned hotels |
266 |
19 |
Manachised and franchised hotels |
2,792 |
1,270 |
Total |
7,868 |
2,226 |
Operational hotels excluding hotels under
requisition |
|
For the quarter ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
yoy |
|
|
2021 |
|
2021 |
|
2022 |
|
change |
|
Average daily room rate (in RMB) |
|
|
|
Leased and owned hotels |
243 |
|
286 |
|
263 |
|
8.0% |
|
Manachised and franchised hotels |
203 |
|
232 |
|
218 |
|
7.5% |
|
Blended |
209 |
|
239 |
|
224 |
|
7.2% |
|
Occupancy Rate (as a percentage) |
|
|
|
Leased and owned hotels |
64.0% |
|
67.4% |
|
56.7% |
|
-7.3p.p. |
|
Manachised and franchised hotels |
66.6% |
|
68.4% |
|
59.6% |
|
-7.0p.p. |
|
Blended |
66.2% |
|
68.2% |
|
59.2% |
|
-7.0p.p. |
|
RevPAR (in RMB) |
|
|
|
|
Leased and owned hotels |
156 |
|
193 |
|
149 |
|
-4.4% |
|
Manachised and franchised hotels |
135 |
|
159 |
|
130 |
|
-3.8% |
|
Blended |
138 |
|
163 |
|
132 |
|
-4.1% |
|
|
For the quarter ended |
|
March 31, |
March 31, |
yoy |
|
|
2019 |
|
2022 |
|
change |
|
Average daily room rate (in RMB) |
|
|
Leased and owned hotels |
258 |
|
263 |
|
1.9% |
|
Manachised and franchised hotels |
211 |
|
218 |
|
3.2% |
|
Blended |
221 |
|
224 |
|
1.2% |
|
Occupancy Rate (as a percentage) |
|
|
Leased and owned hotels |
83.6% |
|
56.7% |
|
-27.0p.p. |
|
Manachised and franchised hotels |
79.8% |
|
59.6% |
|
-20.3p.p. |
|
Blended |
80.6% |
|
59.2% |
|
-21.4p.p. |
|
RevPAR (in RMB) |
|
|
|
Leased and owned hotels |
216 |
|
149 |
|
-31.0% |
|
Manachised and franchised hotels |
169 |
|
130 |
|
-23.0% |
|
Blended |
178 |
|
132 |
|
-25.7% |
|
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 ofMarch 31, |
For the quarter |
yoy |
For the quarter |
yoy |
For the quarter |
yoy |
|
ended March 31, |
change |
ended March 31, |
change |
ended March 31, |
change |
|
2021 |
2022 |
2021 |
2022 |
|
2021 |
2022 |
|
2021 |
2022 |
(p.p.) |
Economy hotels |
3320 |
3320 |
115 |
105 |
-8.5% |
161 |
167 |
4.0% |
71.5% |
62.9% |
-8.6 |
Leased and owned hotels |
380 |
380 |
121 |
114 |
-6.5% |
177 |
186 |
4.9% |
68.4% |
61.0% |
-7.4 |
Manachised and franchised hotels |
2940 |
2940 |
114 |
104 |
-8.9% |
158 |
164 |
3.8% |
72.0% |
63.2% |
-8.8 |
Midscale and upscale hotels |
1905 |
1905 |
181 |
164 |
-9.4% |
281 |
289 |
2.7% |
64.4% |
56.8% |
-7.6 |
Leased and owned hotels |
229 |
229 |
201 |
187 |
-7.3% |
339 |
352 |
4.0% |
59.4% |
53.0% |
-6.4 |
Manachised and franchised hotels |
1676 |
1676 |
177 |
160 |
-9.9% |
271 |
277 |
2.3% |
65.5% |
57.7% |
-7.8 |
Total |
5225 |
5225 |
144 |
131 |
-8.9% |
210 |
218 |
3.5% |
68.4% |
60.2% |
-8.2 |
|
|
Number of hotels |
Same-hotel RevPAR |
Same-hotel ADR |
Same-hotel Occupancy |
|
As ofMarch 31, |
For the quarter |
yoy |
For the quarter |
yoy |
For the quarter |
yoy |
|
ended March 31, |
change |
ended March 31, |
change |
ended March 31, |
change |
|
2019 |
2022 |
2019 |
2022 |
|
2019 |
2022 |
|
2019 |
2022 |
(p.p.) |
Economy hotels |
2024 |
2024 |
160 |
104 |
-34.9% |
183 |
167 |
-8.7% |
87.5% |
62.4% |
-25.1 |
Leased and owned hotels |
358 |
358 |
177 |
111 |
-37.4% |
200 |
182 |
-9.0% |
88.2% |
60.7% |
-27.5 |
Manachised and franchised hotels |
1666 |
1666 |
155 |
102 |
-34.1% |
178 |
162 |
-8.6% |
87.3% |
62.9% |
-24.4 |
Midscale and upscale hotels |
795 |
795 |
251 |
155 |
-38.1% |
324 |
288 |
-11.1% |
77.3% |
53.8% |
-23.5 |
Leased and owned hotels |
170 |
170 |
304 |
171 |
-43.9% |
383 |
332 |
-13.1% |
79.4% |
51.3% |
-28.1 |
Manachised and franchised hotels |
625 |
625 |
231 |
149 |
-35.4% |
302 |
273 |
-9.7% |
76.5% |
54.7% |
-21.8 |
Total |
2819 |
2819 |
191 |
122 |
-36.2% |
227 |
205 |
-9.9% |
84.0% |
59.4% |
-24.6 |
Operating Results:
Legacy-DH(4)
|
Number of hotels |
|
Number ofrooms |
|
Unopened hotelsin pipeline |
|
Openedin Q1 2022 |
Closedin Q1 2022 |
Net addedin Q1 2022 |
As ofMarch
31,2022(5) |
|
As ofMarch 31, 2022 |
|
As ofMarch 31, 2022 |
|
Leased hotels |
1 |
- |
|
1 |
|
77 |
|
14,472 |
|
29 |
Manachised and franchised hotels |
- |
(5 |
) |
(5 |
) |
43 |
|
9,894 |
|
16 |
Total |
1 |
(5 |
) |
(4 |
) |
120 |
|
24,366 |
|
45 |
(4) Legacy-DH
refers to DH. (5) As of March 31, 2022, a total of 3 hotels were
temporarily closed. 1 hotel was closed for renovation and 1 hotel
was closed due to flood damage. Additionally, 1 hotel was
temporarily closed due to low demand. |
|
For the quarter ended |
|
|
March 31, |
December 31, |
March 31, |
yoy |
|
2021 |
2021 |
2022 |
change |
Average daily room rate (in EUR) |
|
|
|
|
Leased hotels |
77.9 |
|
95.4 |
|
90.0 |
|
15.6% |
|
Manachised and franchised hotels |
59.0 |
|
92.8 |
|
85.5 |
|
44.9% |
|
Blended |
68.5 |
|
94.2 |
|
88.0 |
|
28.4% |
|
Occupancy rate (as a percentage) |
|
|
|
|
Leased hotels |
14.6% |
|
42.8% |
|
34.1% |
|
+19.5 p.p. |
|
Managed and franchised hotels |
26.5% |
|
50.7% |
|
44.0% |
|
+17.5 p.p. |
|
Blended |
18.8% |
|
46.1% |
|
38.0% |
|
+19.2 p.p. |
|
RevPAR (in EUR) |
|
|
|
|
Leased hotels |
11.4 |
|
40.9 |
|
30.7 |
|
169.6% |
|
Managed and franchised hotels |
15.6 |
|
47.1 |
|
37.6 |
|
141.0% |
|
Blended |
12.9 |
|
43.4 |
|
33.4 |
|
158.8% |
|
Hotel Portfolio by Brand
|
As of March 31, 2022 |
|
Hotels |
Rooms |
Unopened hotels |
|
in operation |
in pipeline |
Economy hotels |
4,824 |
388,174 |
951 |
HanTing Hotel |
3,096 |
277,885 |
608 |
Hi Inn |
447 |
24,682 |
117 |
Ni Hao Hotel |
83 |
5,772 |
178 |
Elan Hotel |
965 |
55,421 |
2 |
Ibis Hotel |
219 |
22,751 |
32 |
Zleep Hotels |
14 |
1,663 |
14 |
Midscale hotels |
2,554 |
281,168 |
977 |
Ibis Styles Hotel |
82 |
8,522 |
17 |
Starway Hotel |
544 |
44,740 |
202 |
JI Hotel |
1,449 |
173,866 |
534 |
Orange Hotel |
449 |
49,231 |
216 |
CitiGO Hotel |
30 |
4,809 |
8 |
Upper midscale hotels |
472 |
69,267 |
270 |
Crystal Orange Hotel |
148 |
19,793 |
65 |
Manxin Hotel |
91 |
8,705 |
54 |
Madison Hotel |
41 |
6,164 |
56 |
Mercure Hotel |
128 |
21,697 |
53 |
Novotel Hotel |
15 |
4,032 |
16 |
IntercityHotel(6) |
49 |
8,876 |
26 |
Upscale hotels |
115 |
20,691 |
62 |
Jaz in the City |
3 |
587 |
1 |
Joya Hotel |
9 |
1,760 |
- |
Blossom House |
36 |
1,793 |
34 |
Grand Mercure Hotel |
7 |
1,485 |
6 |
Steigenberger Hotels & Resorts(7) |
53 |
13,889 |
13 |
MAXX(8) |
7 |
1,177 |
8 |
Luxury hotels |
15 |
2,327 |
4 |
Steigenberger Icon(9) |
9 |
1,848 |
2 |
Song Hotels |
6 |
479 |
2 |
Others |
8 |
3,232 |
7 |
Other hotels(10) |
8 |
3,232 |
7 |
Total |
7,988 |
764,859 |
2,271 |
(6) As of March 31, 2022, 2 operational hotels and
9 pipeline hotels of IntercityHotel were in China.(7) As of
March 31, 2022, 11 operational hotels and 5 pipeline hotels of
Steigenberger Hotels & Resorts were in China.(8) As of
March 31, 2022, 2 operational hotels and 7 pipeline hotels of MAXX
were in China.(9) As of March 31, 2022, 3 operational hotels
and 1 pipeline hotel of Steigenberger Icon 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).
____________________________
1 Hotel turnover refers to total transaction
value of room and non-room revenue from Huazhu hotels (i.e., leased
and operated, manachised and franchised hotels).2 The conversion of
Renminbi (“RMB”) into United States dollars
(“US$”) is based on the exchange rate of
US$1.00=RMB6.3393 on March 31, 2022 as set forth in H.10
statistical release of the U.S. Federal Reserve Board and available
at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.3
The conversion of Renminbi (“RMB”) into United States dollars
(“US$”) is based on the exchange rate of US$1.00=RMB6.3393 on March
31, 2022 as set forth in H.10 statistical release of the U.S.
Federal Reserve Board and available at
http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.
Contact InformationInvestor RelationsTel: +86
(21) 6195 9561Email: ir@huazhu.comhttp://ir.huazhu.com
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