H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“
H
World”,
the “
Company”,
“
we” or “
our”), a key player in
the global hotel industry, today announced its unaudited financial
results in the third quarter ended September 30, 2022.
As of September 30, 2022, H World’s worldwide
hotel network in operation totaled 8,402 hotels and 797,489 rooms,
including 126 hotels from DH. During the third quarter of 2022, our
Legacy-Huazhu business opened 429 hotels, including 4 leased (or
leased-and-operated) hotels and 425 manachised (or
franchised-and-managed) hotels and franchised hotels, and closed a
total of 204 hotels, including 19 leased hotels and 185 manachised
and franchised hotels. During the third quarter of 2022, the
Legacy-DH business opened 1 manachised and franchised hotel. As of
September 30, 2022, H World had a total of 2,313 unopened hotels in
our pipeline, including 2,274 hotels from the Legacy-Huazhu
business and 39 hotels from the Legacy-DH business.
Legacy-Huazhu Only
– Third Quarter of 2022 Operational
Highlights
As of September 30, 2022,
Legacy-Huazhu had 8,276 hotels in operation, including 631
leased and owned hotels, and 7,645 manachised and franchised
hotels. In addition, as of the same date, Legacy-Huazhu had
772,227 hotel rooms in operation, including 90,034 rooms under the
lease and ownership model, and 682,193 rooms under the manachise
and franchise models. Legacy-Huazhu also had 2,274 unopened
hotels in its pipeline, including 17 leased and owned hotels, and
2,257 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 RMB254 in the third
quarter of 2022, compared with RMB246 in the third quarter of 2021,
RMB218 in the previous quarter, and RMB245 in the third quarter of
2019.
- The occupancy rate for all the
Legacy-Huazhu hotels in operation was 76.0% in the third quarter of
2022, compared with 71.9% in the third quarter of 2021, 64.6% in
the previous quarter, and 87.7% in the third quarter of 2019.
- Blended RevPAR was RMB193 in the
third quarter of 2022, compared with RMB177 in the third quarter of
2021, RMB141 in the previous quarter, and RMB215 in the third
quarter of 2019.
- For all the Legacy-Huazhu hotels
which had been in operation for at least 18 months, the same-hotel
RevPAR was RMB190 in the third quarter of 2022, representing a 3.9%
increase from RMB183 in the third quarter of 2021, with a 0.2%
decrease in ADR and an 3.0-percentage-point increase in occupancy
rate; comparing the third quarter of 2022 with the pre-COVID third
quarter of 2019, same-hotel RevPAR represented a 21.6% decrease
from RMB230 in the third quarter of 2019, with a 6.9% decrease in
ADR, and a 14.4-percentage-point decrease in occupancy rate.
Legacy-DH Only
– Third Quarter of 2022 Operational
Highlights
As of September 30, 2022,
Legacy-DH had 126 hotels in operation, including 79 leased and
owned hotels and 47 manachised and franchised hotels. In addition,
as of the same date, Legacy-DH had 25,262 hotel rooms in
operation, including 14,939 rooms under the lease and ownership
model, and 10,323 rooms under the manachise and franchise models.
Legacy-DH also had unopened 39 hotels in our pipeline,
including 27 leased and owned hotels and 12 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 EUR114 in the third
quarter of 2022, compared with EUR99 in the third quarter of 2021
and EUR110 in the previous quarter.
- The occupancy rate for all
Legacy-DH hotels in operation was 66.1% in the third quarter of
2022, compared with 48.6% in the third quarter of 2021 and 59.8% in
the previous quarter.
- Blended RevPAR was EUR75 in the
third quarter of 2022, compared with EUR48 in the third quarter of
2021 and EUR66 in the previous quarter.
Jin Hui, CEO of H World commented: “During the
third quarter of 2022, our RevPAR recovered to 90% of the 2019
level, thanks to the pent-up leisure travel demand in the summer
holiday during July and August 2022, as well as a gradual recovery
of business travel in late September 2022. However, given more
sporadic resurgences of COVID in various Chinese cities and
provinces since early October, our October RevPAR recovery slowed
down to only 74% of 2019 level. Although we have been seeing COVID
prevention measures gradually easing across China since early
November, we remain cautious on the business recovery path in the
near-term as there are still some of newly confirmed recent cases
in many cities and provinces in China. Therefore, our near-term
focus will remain on cost control and prudent capex spending to
ensure the Company’s operational and cash flow safety. More
importantly, we are continuously optimizing our organizational
structure and improving hotel and service quality to further
strengthen our long-term core competencies, which is the critical
foundation for us to achieve our long-term ‘Sustainable Quality
Growth’ strategy.”
“In Europe, the DH business further improved in
the third quarter with RevPAR recovering to 102% of the 2019 level,
from 93% in the second quarter. The recovery was mainly driven by
17% ADR growth. This upward trend continued in October. However,
against the background of surging inflation in Europe due to energy
shortages, cash flow improvement program remains critical.
Therefore, DH’s near-term focus will remain on efficiency
improvements, renegotiation of further lease waivers, and personnel
cost optimization.”
Third Quarter of 2022 Unaudited
Financial Results
(RMB in millions) |
Q3 2021 |
Q2 2022 |
Q3 2022 |
Revenue: |
|
|
|
Leased and owned hotels |
2,345 |
2,361 |
2,695 |
Manachised and franchised hotels |
1,128 |
945 |
1,313 |
Others |
50 |
76 |
85 |
Total revenue |
3,523 |
3,382 |
4,093 |
Revenue in the third quarter of
2022 was RMB4.1 billion (US$575 million), representing a 16.2%
year-over-year increase and a 21.0% sequential increase. Revenue
from the Legacy-Huazhu segment in the third quarter of 2022 was
RMB3.2 billion, representing a 7.7% year-over-year increase and a
28.4% sequential increase. The increase was mainly due to business
recovery in China which was supported by pent-up leisure demand in
the summer holiday during July and August 2022, as well as a
gradual recovery of business travel in late September 2022. Revenue
from the Legacy-DH segment in the third quarter of 2022 was RMB932
million, representing a 58.2% year-over-year increase and a 1.2%
sequential increase. The increase was mainly due to the robust
recovery of our European business since Europe’s opening-up
starting from mid-February.
Revenue from leased and owned
hotels in the third quarter of 2022 was RMB2.7 billion
(US$379 million), representing a 14.9% year-over-year increase and
a 14.1% sequential increase. Revenue from leased and owned hotels
from the Legacy-Huazhu segment in the third quarter of 2022 was
RMB1.8 billion, representing a 0.5% year-over-year increase.
Revenue from leased and owned hotels from the Legacy-DH segment in
the third quarter of 2022 was RMB902 million, representing a 60.8%
year-over-year increase.
Revenue from manachised and franchised
hotels in the third quarter of 2022 was RMB1.3 billion
(US$185 million), representing a 16.4% year-over-year increase and
a 38.9% sequential increase. Revenue from our Legacy-Huazhu segment
from manachised and franchised hotels in the third quarter of 2022
was RMB1.3 billion, representing a 16.3% year-over-year increase.
Revenue from manachised and franchised hotels from the Legacy-DH
segment in the third quarter of 2022 was RMB22 million,
representing a 22.2% 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 RMB85 million (US$11 million) in the
third quarter of 2022, compared to RMB50 million in the third
quarter of 2021 and RMB76 million in the previous quarter.
(RMB in millions) |
Q3 2021 |
Q2 2022 |
Q3 2022 |
Operating costs and expenses: |
|
|
|
Hotel operating costs |
(2,885 |
) |
(2,972 |
) |
(3,045 |
) |
Other operating costs |
(14 |
) |
(15 |
) |
(13 |
) |
Selling and marketing expenses |
(189 |
) |
(142 |
) |
(181 |
) |
General and administrative expenses |
(388 |
) |
(368 |
) |
(405 |
) |
Pre-opening expenses |
(15 |
) |
(31 |
) |
(25 |
) |
Total operating costs and expenses |
(3,491 |
) |
(3,528 |
) |
(3,669 |
) |
Hotel operating costs in the
third quarter of 2022 were RMB3.0 billion (US$428 million),
compared to RMB2.9 billion in the third quarter of 2021 and RMB3.0
billion in the previous quarter. The year-over-year increase was
mainly due to continued hotel network expansion of Legacy-Huazhu,
and business recovery of Legacy-DH. Hotel operating costs from the
Legacy-Huazhu segment in the third quarter of 2022 were RMB2.3
billion, which represented 72.8% of the quarter’s revenue, compared
to RMB2.3 billion or 76.9% of revenue in the third quarter in 2021
and RMB2.2 billion or 88.1% of revenue for the previous quarter. In
the third quarter of 2022, Legacy-Huazhu continued to conduct our
cost control measures and achieved rental reduction of RMB132
million.
Selling and marketing expenses
in the third quarter of 2022 were RMB181 million (US$26 million),
compared to RMB189 million in the third quarter of 2021 and RMB142
million in the previous quarter. Selling and marketing expenses
from the Legacy-Huazhu segment in the third quarter of 2022 were
RMB105 million, which represented 3.3% of the quarter’s revenue,
compared to RMB129 million or 4.4% of revenue in the third quarter
in 2021, and RMB65 million or 2.6% of revenue for the previous
quarter.
General and administrative
expenses in the third quarter of 2022 were RMB405 million
(US$57 million), compared to RMB388 million in the third quarter of
2021 and RMB368 million in the previous quarter. General and
administrative expenses from the Legacy-Huazhu segment in the third
quarter of 2022 were RMB330 million, which represented 10.4% of the
quarter’s revenue, compared to RMB306 million or 10.4% in the third
quarter in 2021 and RMB267 million or 10.8% for the previous
quarter. The increase was mainly due to the resumption of normal
operations at our Shanghai headquarter.
Pre-opening expenses in the
third quarter of 2022 were mostly related to the Legacy-Huazhu
segment and totaled RMB25 million (US$3 million), compared to RMB15
million in the third quarter of 2021 and RMB31 million in the
previous quarter.
Other operating income, net in
the third quarter of 2022 was RMB76 million (US$11 million),
compared to RMB40 million in the third quarter of 2021 and RMB154
million in the previous quarter.
Income from operations in the
third quarter of 2022 was RMB500 million (US$70 million), compared
to RMB72 million in the third quarter of 2021 and RMB8 million in
the previous quarter. Income from operations from the Legacy-Huazhu
segment in the third quarter of 2022 was RMB449 million, compared
to income from operations from the Legacy-Huazhu segment of RMB239
million in the third quarter of 2021 and RMB21 million in the
previous quarter. Income from operations from the Legacy-DH segment
in the third quarter of 2022 was RMB51 million, compared to a loss
from operations of RMB167 million in the third quarter of 2021 and
a loss from operations of RMB13 million in the previous
quarter.
Operating margin, defined as
income from operations as a percentage of revenues, in the third
quarter of 2022 was 12.2%, compared with 2.0% in the third quarter
of 2021 and 0.2% for the previous quarter. Operating margin from
the Legacy-Huazhu segment in the third quarter of 2022 was 14.2%,
compared with 8.1% in the third quarter of 2021 and 0.9% in the
previous quarter.
Other expense, net in the third
quarter of 2022 was RMB14 million (US$2 million), compared to other
income, net of RMB4 million in the third quarter of 2021 and other
income, net of RMB29 million for the previous quarter.
Unrealized losses from fair value
changes of equity securities in the third quarter of 2022
were RMB313 million (US$44 million), compared to unrealized losses
from fair value changes of equity securities of RMB60 million in
the third quarter of 2021, and unrealized losses from fair value
changes of RMB240 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 expense in the third
quarter of 2022 was RMB434 million (US$61 million), compared to
income tax benefit of RMB13 million in the third quarter of 2021
and income tax benefit of RMB299 million in the previous
quarter.
Net loss attributable to H World Group
Limited in the third quarter of 2022 was RMB717 million
(US$101 million), compared to RMB137 million in the third quarter
of 2021 and RMB350 million in the previous quarter. Net loss
attributable to H World Group Limited from the Legacy-Huazhu
segment in the third quarter of 2022 was RMB731 million, compared
to net income attributable to H World Group Limited from the
Legacy-Huazhu segment of RMB27 million in the third quarter of 2021
and a net loss attributable to H World Group Limited from the
Legacy-Huazhu segment of RMB298 million in the previous
quarter.
Basic and diluted losses per
share/American depositary share (ADS). In the third
quarter of 2022, basic and diluted losses per share were RMB0.23
(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
RMB0.12 (US$0.02). Basic and diluted losses per ADS were RMB2.31
(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
RMB1.21 (US$0.17).
EBITDA (non-GAAP) in the third
quarter of 2022 was RMB149 million (US$21 million), compared with
RMB294 million in the third quarter of 2021 and negative RMB213
million in the previous quarter. EBITDA from the Legacy-Huazhu
segment in the third quarter of 2022 was RMB55 million, compared
with RMB409 million in the third quarter of 2021 and negative
RMB243 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, in the
third quarter of 2022 was RMB491 million (US$69 million), compared
with RMB385 million in the third quarter of 2021 and RMB53 million
in the previous quarter. The adjusted EBITDA from the Legacy-Huazhu
segment (non-GAAP) in the third quarter of 2022 was RMB397 million,
compared with RMB500 million in the third quarter of 2021 and RMB23
million in the previous quarter.
Cash flow. Operating cash
inflow in the third quarter of 2022 was RMB452 million (US$64
million). Investing cash outflow in the third quarter of 2022 was
RMB525 million (US$74 million). Financing cash inflow in the third
quarter of 2022 was RMB461 million (US$65 million).
Cash and cash equivalents and Restricted
cash. As of September 30, 2022, the Company had a total
balance of cash and cash equivalents of RMB5.2 billion (US$728
million) and restricted cash of RMB40 million (US$6 million).
Debt financing. As of September
30, 2022, the Company had a total debt balance of RMB11.2 billion
(US$1.6 billion) and the unutilized credit facility available to
the Company was RMB2.9 billion. Recently, we have successfully
redeemed our convertible note with a total amount of US$475
million.
COVID update For our
Legacy-Huazhu business, our RevPAR in Q3 2022 recovered to 90% of
the 2019 level, thanks to the pent-up leisure travel demand in the
summer holiday during July and August 2022, as well as a gradual
recovery of business travel in late September 2022. Breaking down
into each month, our RevPAR in July, August and September 2022
recovered to 90%, 89% and 90% of the 2019 levels, respectively.
However, we remain cautious on the recovery path in Q4 2022 as we
are seeing more recent sporadic resurgences of COVID in various
provinces and cities across China.
Steigenberger Hotels AG and its subsidiaries
have experienced continuing RevPAR recovery in Q3 2022. After
recovering to 93% of 2019 levels in Q2 2022, blended RevPAR
increased to 102% of 2019 levels in Q3 2022. Blended RevPAR
recovery was driven by a 17% increase in ADR, while occupancy
remained 10 percentage points behind 2019 levels. Energy crisis and
inflation in Europe is expected to continue, further ADR increases
will be therefore required. At same time, focus of DH will continue
to be on efficiency improvements, negotiation of lease contract
adjustment, and cost optimization.
Guidance Since March 2022, the
highly infectious Omicron variant has been spreading rapidly in
China which has seriously affected our near-term business
performance. In addition, the current COVID prevention policy has
rendered business performance more unpredictable for the
foreseeable future. Nevertheless, we will continue to provide
quarterly guidance based on our best understanding of the most
recent situation.
In the fourth quarter of 2022, H World expects
revenue to increase 7% to 11% compared to the fourth quarter of
2021, or to decrease 1% to 5% if excluding DH.
The above forecast reflects the Company’s
current and preliminary view, which is subject to change.
Conference CallH World’s
management will host a conference call at 8 p.m. (U.S. Eastern
time) on Monday, November 28, 2022 (or 9 a.m. (Hong Kong time) on
Tuesday, November 29, 2022) following the announcement.
To join by phone, all participants must
pre-register this conference call using the Participant
Registration link of
https://register.vevent.com/register/BI0ae7c3a955d34ca680b2c55589a22668.
Upon registration, each participant will receive details for the
conference call, including dial-in numbers, conference call
passcode and a unique access PIN.
A live webcast of the call can be accessed at
https://edge.media-server.com/mmc/p/226f8gsn or the Company’s
website at
https://ir.hworld.com/news-and-events/events-calendar.
A replay of the conference call will be
available for twelve months from the date of the conference at the
Company’s website,
https://ir.hworld.com/news-and-events/events-calendar.
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 H World 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 “Unaudited 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-over-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 H World Group
LimitedOriginated in China, H World Group Limited is a key
player in the global hotel industry. As of September 30, 2022,
H World operated 8,402 hotels with 797,489 rooms in operation in 17
countries. H World’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, H World 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.
H World’s business includes leased and owned,
manachised and franchised models. Under the lease and ownership
model, H World directly operates hotels typically located on leased
or owned properties. Under the manachise model, H World manages
manachised hotels through the on-site hotel managers that H World
appoints, and H World collects fees from franchisees. Under the
franchise model, H World provides training, reservations and
support services to the franchised hotels, and collects fees from
franchisees but does not appoint on-site hotel managers. H World
applies a consistent standard and platform across all of its
hotels. As of September 30, 2022, H World operates 13 percent
of its hotel rooms under lease and ownership model, and 87 percent
under manachise and franchise models.
For more information, please visit H World’s
website: https://ir.hworld.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.
H World 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—
H World Group Limited |
Unaudited Condensed Consolidated Balance
Sheets |
|
December 31, 2021 |
|
September 30, 2022 |
|
RMB |
|
RMB |
|
US$3 |
|
|
(in millions) |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
5,116 |
|
|
5,177 |
|
|
728 |
|
Restricted cash |
25 |
|
|
40 |
|
|
6 |
|
Short-term investments |
2,589 |
|
|
1,915 |
|
|
269 |
|
Accounts receivable, net |
521 |
|
|
1,231 |
|
|
173 |
|
Loan receivables, net |
218 |
|
|
161 |
|
|
23 |
|
Amounts due from related parties |
149 |
|
|
177 |
|
|
25 |
|
Inventories |
88 |
|
|
83 |
|
|
12 |
|
Other current assets, net |
847 |
|
|
779 |
|
|
109 |
|
Total current assets |
9,553 |
|
|
9,563 |
|
|
1,345 |
|
|
|
|
|
Property and equipment, net |
7,056 |
|
|
6,804 |
|
|
957 |
|
Intangible assets, net |
5,385 |
|
|
5,240 |
|
|
737 |
|
Operating lease right-of-use assets |
29,942 |
|
|
28,610 |
|
|
4,022 |
|
Finance lease right-of-use assets |
2,235 |
|
|
2,372 |
|
|
333 |
|
Land use rights, net |
206 |
|
|
201 |
|
|
28 |
|
Long-term investments |
1,965 |
|
|
1,865 |
|
|
262 |
|
Goodwill |
5,132 |
|
|
5,069 |
|
|
713 |
|
Amounts due from related parties, non-current |
1 |
|
|
6 |
|
|
1 |
|
Loan receivables, net |
98 |
|
|
115 |
|
|
16 |
|
Other assets, net |
834 |
|
|
696 |
|
|
98 |
|
Deferred tax assets |
862 |
|
|
846 |
|
|
119 |
|
Total assets |
63,269 |
|
|
61,387 |
|
|
8,631 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Short-term debt |
6,232 |
|
|
5,144 |
|
|
723 |
|
Accounts payable |
968 |
|
|
810 |
|
|
114 |
|
Amounts due to related parties |
197 |
|
|
85 |
|
|
12 |
|
Salary and welfare payables |
591 |
|
|
459 |
|
|
64 |
|
Deferred revenue |
1,366 |
|
|
1,280 |
|
|
180 |
|
Operating lease liabilities, current |
3,628 |
|
|
3,732 |
|
|
525 |
|
Finance lease liabilities, current |
41 |
|
|
45 |
|
|
6 |
|
Accrued expenses and other current liabilities |
1,838 |
|
|
2,054 |
|
|
289 |
|
Income tax payable |
418 |
|
|
126 |
|
|
18 |
|
Total current liabilities |
15,279 |
|
|
13,735 |
|
|
1,931 |
|
|
|
|
|
Long-term debt |
3,565 |
|
|
6,091 |
|
|
856 |
|
Operating lease liabilities, non-current |
28,012 |
|
|
27,216 |
|
|
3,826 |
|
Finance lease liabilities, non-current |
2,684 |
|
|
2,857 |
|
|
402 |
|
Deferred revenue |
785 |
|
|
822 |
|
|
116 |
|
Other long-term liabilities |
903 |
|
|
967 |
|
|
136 |
|
Deferred tax liabilities |
853 |
|
|
798 |
|
|
112 |
|
Retirement benefit obligations |
144 |
|
|
138 |
|
|
19 |
|
Total liabilities |
52,225 |
|
|
52,624 |
|
|
7,398 |
|
|
|
|
|
Equity: |
|
|
|
Ordinary shares |
0 |
|
|
0 |
|
|
0 |
|
Treasury shares |
(107 |
) |
|
(441 |
) |
|
(62 |
) |
Additional paid-in capital |
9,964 |
|
|
10,127 |
|
|
1,424 |
|
Retained earnings |
1,037 |
|
|
(1,076 |
) |
|
(151 |
) |
Accumulated other comprehensive income |
41 |
|
|
70 |
|
|
10 |
|
Total H World Group Limited shareholders' equity |
10,935 |
|
|
8,680 |
|
|
1,221 |
|
Noncontrolling interest |
109 |
|
|
83 |
|
|
12 |
|
Total equity |
11,044 |
|
|
8,763 |
|
|
1,233 |
|
Total liabilities and equity |
63,269 |
|
|
61,387 |
|
|
8,631 |
|
|
|
|
|
|
|
|
|
|
H World Group Limited |
Unaudited Condensed Consolidated Statements of
Comprehensive Income |
|
Quarter Ended |
|
September 30, 2021 |
|
June 30, 2022 |
|
September 30, 2022 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in millions, except share, per share and per ADS
data) |
Revenues: |
|
|
|
|
Leased and owned hotels |
2,345 |
|
|
2,361 |
|
|
2,695 |
|
|
379 |
|
Manachised and franchised hotels |
1,128 |
|
|
945 |
|
|
1,313 |
|
|
185 |
|
Others |
50 |
|
|
76 |
|
|
85 |
|
|
11 |
|
Total revenues |
3,523 |
|
|
3,382 |
|
|
4,093 |
|
|
575 |
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
Hotel operating costs: |
|
|
|
|
Rents |
(1,009 |
) |
|
(1,012 |
) |
|
(935 |
) |
|
(131 |
) |
Utilities |
(137 |
) |
|
(123 |
) |
|
(163 |
) |
|
(23 |
) |
Personnel costs |
(793 |
) |
|
(899 |
) |
|
(964 |
) |
|
(136 |
) |
Depreciation and amortization |
(356 |
) |
|
(355 |
) |
|
(351 |
) |
|
(49 |
) |
Consumables, food and beverage |
(264 |
) |
|
(245 |
) |
|
(286 |
) |
|
(40 |
) |
Others |
(326 |
) |
|
(338 |
) |
|
(346 |
) |
|
(49 |
) |
Total hotel operating costs |
(2,885 |
) |
|
(2,972 |
) |
|
(3,045 |
) |
|
(428 |
) |
Other operating costs |
(14 |
) |
|
(15 |
) |
|
(13 |
) |
|
(2 |
) |
Selling and marketing expenses |
(189 |
) |
|
(142 |
) |
|
(181 |
) |
|
(26 |
) |
General and administrative expenses |
(388 |
) |
|
(368 |
) |
|
(405 |
) |
|
(57 |
) |
Pre-opening expenses |
(15 |
) |
|
(31 |
) |
|
(25 |
) |
|
(3 |
) |
Total operating costs and expenses |
(3,491 |
) |
|
(3,528 |
) |
|
(3,669 |
) |
|
(516 |
) |
Other operating income (expense), net |
40 |
|
|
154 |
|
|
76 |
|
|
11 |
|
Income (losses) from operations |
72 |
|
|
8 |
|
|
500 |
|
|
70 |
|
Interest income |
25 |
|
|
19 |
|
|
23 |
|
|
3 |
|
Interest expense |
(101 |
) |
|
(90 |
) |
|
(93 |
) |
|
(13 |
) |
Other (expense) income, net |
4 |
|
|
29 |
|
|
(14 |
) |
|
(2 |
) |
Unrealized gains (losses) from fair value changes of equity
securities |
(60 |
) |
|
(240 |
) |
|
(313 |
) |
|
(44 |
) |
Foreign exchange gain (loss) |
(92 |
) |
|
(402 |
) |
|
(359 |
) |
|
(50 |
) |
Income (loss) before income taxes |
(152 |
) |
|
(676 |
) |
|
(256 |
) |
|
(36 |
) |
Income tax (expense) benefit |
13 |
|
|
299 |
|
|
(434 |
) |
|
(61 |
) |
Income (loss) from equity method investments |
3 |
|
|
14 |
|
|
(20 |
) |
|
(3 |
) |
Net income (loss) |
(136 |
) |
|
(363 |
) |
|
(710 |
) |
|
(100 |
) |
Net (income) loss attributable to noncontrolling interest |
(1 |
) |
|
13 |
|
|
(7 |
) |
|
(1 |
) |
Net income (loss) attributable to H World Group Limited |
(137 |
) |
|
(350 |
) |
|
(717 |
) |
|
(101 |
) |
|
|
|
|
|
Other comprehensive income |
|
|
|
|
Gain arising from defined benefit plan, net of tax |
1 |
|
|
(0 |
) |
|
- |
|
|
- |
|
Foreign currency translation adjustments, net of tax |
(28 |
) |
|
26 |
|
|
7 |
|
|
1 |
|
Comprehensive income (loss) |
(163 |
) |
|
(337 |
) |
|
(703 |
) |
|
(99 |
) |
Comprehensive (income) loss attributable to noncontrolling
interest |
(1 |
) |
|
13 |
|
|
(7 |
) |
|
(1 |
) |
Comprehensive income (loss) attributable to H World Group
Limited |
(164 |
) |
|
(324 |
) |
|
(710 |
) |
|
(100 |
) |
|
|
|
|
|
Earnings (losses) per share: |
|
|
|
|
Basic |
(0.04 |
) |
|
(0.11 |
) |
|
(0.23 |
) |
|
(0.03 |
) |
Diluted |
(0.04 |
) |
|
(0.11 |
) |
|
(0.23 |
) |
|
(0.03 |
) |
|
|
|
|
|
Earnings (losses) per ADS: |
|
|
Basic |
(0.44 |
) |
|
(1.13 |
) |
|
(2.31 |
) |
|
(0.32 |
) |
Diluted |
(0.44 |
) |
|
(1.13 |
) |
|
(2.31 |
) |
|
(0.32 |
) |
|
|
|
|
|
Weighted average number of shares used in computation: |
|
|
|
Basic |
3,115,104,798 |
|
|
3,108,693,946 |
|
|
3,107,798,883 |
|
|
3,107,798,883 |
|
Diluted |
3,115,104,798 |
|
|
3,108,693,946 |
|
|
3,107,798,883 |
|
|
3,107,798,883 |
|
H World Group Limited |
Unaudited Condensed Consolidated Statements of Cash
Flows |
|
Quarter Ended |
|
September 30, 2021 |
|
June 30, 2022 |
|
September 30, 2022 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in
millions) |
Operating activities: |
|
|
|
|
Net income (loss) |
(136 |
) |
|
(363 |
) |
|
(710 |
) |
|
(100 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
Share-based compensation |
31 |
|
|
26 |
|
|
29 |
|
|
4 |
|
Depreciation and amortization, and other |
383 |
|
|
374 |
|
|
370 |
|
|
52 |
|
Impairment loss |
51 |
|
|
91 |
|
|
10 |
|
|
1 |
|
Loss from equity method investments, net of dividends |
1 |
|
|
(14 |
) |
|
22 |
|
|
3 |
|
Investment (income) loss |
135 |
|
|
531 |
|
|
550 |
|
|
78 |
|
Changes in operating assets and liabilities |
(305 |
) |
|
(135 |
) |
|
182 |
|
|
26 |
|
Other |
32 |
|
|
479 |
|
|
(1 |
) |
|
(0 |
) |
Net cash provided by (used in) operating activities |
192 |
|
|
989 |
|
|
452 |
|
|
64 |
|
|
|
|
|
|
Investing activities: |
|
|
|
|
Capital expenditures |
(346 |
) |
|
(143 |
) |
|
(256 |
) |
|
(36 |
) |
Acquisitions, net of cash received |
(395 |
) |
|
(3 |
) |
|
0 |
|
|
0 |
|
Purchase of investments |
(303 |
) |
|
(0 |
) |
|
(300 |
) |
|
(42 |
) |
Proceeds from maturity/sale of investments |
- |
|
|
186 |
|
|
6 |
|
|
1 |
|
Loan advances |
(32 |
) |
|
(49 |
) |
|
(29 |
) |
|
(4 |
) |
Loan collections |
41 |
|
|
65 |
|
|
52 |
|
|
7 |
|
Other |
4 |
|
|
0 |
|
|
2 |
|
|
0 |
|
Net cash provided by (used in) investing activities |
(1,031 |
) |
|
56 |
|
|
(525 |
) |
|
(74 |
) |
Financing activities: |
|
|
|
|
Payment of share repurchase |
- |
|
|
(143 |
) |
|
- |
|
|
- |
|
Proceeds from debt |
491 |
|
|
283 |
|
|
3,721 |
|
|
523 |
|
Payment of debt |
(497 |
) |
|
(313 |
) |
|
(3,336 |
) |
|
(469 |
) |
Dividend paid |
- |
|
|
(416 |
) |
|
- |
|
|
- |
|
Other |
(11 |
) |
|
(12 |
) |
|
76 |
|
|
11 |
|
Net cash provided by (used in) financing activities |
(17 |
) |
|
(601 |
) |
|
461 |
|
|
65 |
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
9 |
|
|
87 |
|
|
149 |
|
|
21 |
|
Net increase (decrease) in cash, cash equivalents and restricted
cash |
(847 |
) |
|
531 |
|
|
537 |
|
|
76 |
|
Cash, cash equivalents and restricted cash at the beginning of the
period |
6,258 |
|
|
4,149 |
|
|
4,680 |
|
|
658 |
|
Cash, cash equivalents and restricted cash at the end of the
period |
5,411 |
|
|
4,680 |
|
|
5,217 |
|
|
734 |
|
H World Group Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended |
|
September 30, 2021 |
|
|
June 30, 2022 |
|
|
September 30, 2022 |
|
RMB |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
(in millions, except shares, per share and per ADS
data) |
Net income (loss) attributable to H World Group Limited (GAAP) |
(137 |
) |
|
(350 |
) |
|
(717 |
) |
|
(101 |
) |
Share-based compensation expenses |
31 |
|
|
26 |
|
|
29 |
|
|
4 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
60 |
|
|
240 |
|
|
313 |
|
|
44 |
|
Adjusted net income (loss) attributable to H World Group Limited
(non-GAAP) |
(46 |
) |
|
(84 |
) |
|
(375 |
) |
|
(53 |
) |
|
|
|
|
|
Adjusted earnings (losses) per share (non-GAAP) |
Basic |
(0.01 |
) |
|
(0.03 |
) |
|
(0.12 |
) |
|
(0.02 |
) |
Diluted |
(0.01 |
) |
|
(0.03 |
) |
|
(0.12 |
) |
|
(0.02 |
) |
|
|
|
|
|
Adjusted earnings (losses) per ADS (non-GAAP) |
|
|
|
|
Basic |
(0.15 |
) |
|
(0.27 |
) |
|
(1.21 |
) |
|
(0.17 |
) |
Diluted |
(0.15 |
) |
|
(0.27 |
) |
|
(1.21 |
) |
|
(0.17 |
) |
|
|
|
|
|
Weighted average number of shares used in computation
(Non-GAAP) |
Basic |
3,115,104,798 |
|
|
3,108,693,946 |
|
|
3,107,798,883 |
|
|
3,107,798,883 |
|
Diluted |
3,115,104,798 |
|
|
3,108,693,946 |
|
|
3,107,798,883 |
|
|
3,107,798,883 |
|
|
|
|
|
|
|
|
Quarter Ended |
|
September 30, 2021 |
|
June 30, 2022 |
|
September 30, 2022 |
|
RMB |
RMB |
RMB |
US$ |
|
(in millions, except per share and per ADS
data) |
Net income (loss) attributable to H World Group Limited
(GAAP) |
(137 |
) |
|
(350 |
) |
|
(717 |
) |
|
(101 |
) |
Interest income |
(25 |
) |
|
(19 |
) |
|
(23 |
) |
|
(3 |
) |
Interest expense |
101 |
|
|
90 |
|
|
93 |
|
|
13 |
|
Income tax expense (benefit) |
(13 |
) |
|
(299 |
) |
|
434 |
|
|
61 |
|
Depreciation and amortization |
368 |
|
|
365 |
|
|
362 |
|
|
51 |
|
EBITDA (non-GAAP) |
294 |
|
|
(213 |
) |
|
149 |
|
|
21 |
|
Share-based compensation expense |
31 |
|
|
26 |
|
|
29 |
|
|
4 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
60 |
|
|
240 |
|
|
313 |
|
|
44 |
|
Adjusted EBITDA (non-GAAP) |
385 |
|
|
53 |
|
|
491 |
|
|
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
H World Group Limited |
Segment Financial
Summary(1) |
|
Quarter Ended September 30,
2021 |
|
Quarter Ended June 30, 2022 |
|
Quarter Ended September 30, 2022 |
|
Legacy- Huazhu |
|
Legacy-DH |
|
Total |
|
Legacy- Huazhu |
|
Legacy-DH |
|
Total |
|
Legacy- Huazhu |
|
Legacy-DH |
|
Total |
|
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
US |
|
(in millions) |
(in millions) |
(in millions) |
Leased and owned hotels |
1,784 |
|
|
561 |
|
|
2,345 |
|
|
1,475 |
|
|
886 |
|
|
2,361 |
|
|
1,793 |
|
|
902 |
|
|
2,695 |
|
|
379 |
|
Manachised and franchised hotels |
1,110 |
|
|
18 |
|
|
1,128 |
|
|
929 |
|
|
16 |
|
|
945 |
|
|
1,291 |
|
|
22 |
|
|
1,313 |
|
|
185 |
|
Others |
40 |
|
|
10 |
|
|
50 |
|
|
57 |
|
|
19 |
|
|
76 |
|
|
77 |
|
|
8 |
|
|
85 |
|
|
11 |
|
Revenue |
2,934 |
|
|
589 |
|
|
3,523 |
|
|
2,461 |
|
|
921 |
|
|
3,382 |
|
|
3,161 |
|
|
932 |
|
|
4,093 |
|
|
575 |
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating costs |
(2,255 |
) |
|
(630 |
) |
|
(2,885 |
) |
|
(2,168 |
) |
|
(804 |
) |
|
(2,972 |
) |
|
(2,301 |
) |
|
(744 |
) |
|
(3,045 |
) |
|
(428 |
) |
Selling and marketing expenses |
(129 |
) |
|
(60 |
) |
|
(189 |
) |
|
(65 |
) |
|
(77 |
) |
|
(142 |
) |
|
(105 |
) |
|
(76 |
) |
|
(181 |
) |
|
(26 |
) |
General and administrative expenses |
(306 |
) |
|
(82 |
) |
|
(388 |
) |
|
(267 |
) |
|
(101 |
) |
|
(368 |
) |
|
(330 |
) |
|
(75 |
) |
|
(405 |
) |
|
(57 |
) |
Pre-opening expenses |
(15 |
) |
|
- |
|
|
(15 |
) |
|
(31 |
) |
|
- |
|
|
(31 |
) |
|
(25 |
) |
|
- |
|
|
(25 |
) |
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income (losses) from operations |
239 |
|
|
(167 |
) |
|
72 |
|
|
21 |
|
|
(13 |
) |
|
8 |
|
|
449 |
|
|
51 |
|
|
500 |
|
|
70 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to H World Group
Limited |
27 |
|
|
(164 |
) |
|
(137 |
) |
|
(298 |
) |
|
(52 |
) |
|
(350 |
) |
|
(731 |
) |
|
14 |
|
|
(717 |
) |
|
(101 |
) |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
(25 |
) |
|
(0 |
) |
|
(25 |
) |
|
(19 |
) |
|
(0 |
) |
|
(19 |
) |
|
(23 |
) |
|
(0 |
) |
|
(23 |
) |
|
(3 |
) |
Interest expense |
72 |
|
|
29 |
|
|
101 |
|
|
57 |
|
|
33 |
|
|
90 |
|
|
60 |
|
|
33 |
|
|
93 |
|
|
13 |
|
Income tax expense |
29 |
|
|
(42 |
) |
|
(13 |
) |
|
(287 |
) |
|
(12 |
) |
|
(299 |
) |
|
446 |
|
|
(12 |
) |
|
434 |
|
|
61 |
|
Depreciation and amortization |
306 |
|
|
62 |
|
|
368 |
|
|
304 |
|
|
61 |
|
|
365 |
|
|
303 |
|
|
59 |
|
|
362 |
|
|
51 |
|
EBITDA (non-GAAP) |
409 |
|
|
(115 |
) |
|
294 |
|
|
(243 |
) |
|
30 |
|
|
(213 |
) |
|
55 |
|
|
94 |
|
|
149 |
|
|
21 |
|
Share-based Compensation |
31 |
|
|
- |
|
|
31 |
|
|
26 |
|
|
- |
|
|
26 |
|
|
29 |
|
|
- |
|
|
29 |
|
|
4 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
60 |
|
|
- |
|
|
60 |
|
|
240 |
|
|
- |
|
|
240 |
|
|
313 |
|
|
- |
|
|
313 |
|
|
44 |
|
Adjusted EBITDA (non-GAAP) |
500 |
|
|
(115 |
) |
|
385 |
|
|
23 |
|
|
30 |
|
|
53 |
|
|
397 |
|
|
94 |
|
|
491 |
|
|
69 |
|
(1) The Company presents segment information after elimination of
intercompany transactions. |
Operating Results:
Legacy-Huazhu(1)
|
Number of hotels |
|
Number of rooms |
|
Opened in Q3 2022 |
Closed (2)in Q3
2022 |
Net added in Q3 2022 |
As of September 30,2022
(3) |
|
As of September 30,2022 |
|
|
Leased and owned hotels |
4 |
(19 |
) |
(15 |
) |
631 |
|
90,034 |
Manachised and franchised hotels |
425 |
(185 |
) |
240 |
|
7,645 |
|
682,193 |
Total |
429 |
(204 |
) |
225 |
|
8,276 |
|
772,227 |
(1) Legacy-Huazhu refers to H World 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
2022, we temporarily closed 14 hotels for brand upgrade and
business model change purposes.(3) As of September
30, 2022, 558 hotels were requisitioned by governmental
authorities. |
|
As of September 30, 2022 |
|
Number of hotels |
|
Unopened hotels in pipeline |
Economy hotels |
4,898 |
|
950 |
Leased and owned hotels |
363 |
|
1 |
Manachised and franchised hotels |
4,535 |
|
949 |
Midscale and upscale hotels |
3,378 |
|
1,324 |
Leased and owned hotels |
268 |
|
16 |
Manachised and franchised hotels |
3,110 |
|
1,308 |
Total |
8,276 |
|
2,274 |
Operational hotels excluding hotels under
requisition(4) |
|
For the quarter ended |
|
|
September 30, |
June 30, |
September 30, |
yoy |
|
2021 |
2022 |
2022 |
change |
Average daily room rate (in RMB) |
|
|
|
Leased and owned hotels |
296 |
|
243 |
|
294 |
|
-0.6 |
% |
Manachised and franchised hotels |
238 |
|
215 |
|
248 |
|
4.3 |
% |
Blended |
246 |
|
218 |
|
254 |
|
3.1 |
% |
Occupancy Rate (as a percentage) |
|
|
|
Leased and owned hotels |
69.7 |
% |
62.9 |
% |
73.1 |
% |
+3.4 p.p. |
Manachised and franchised hotels |
72.2 |
% |
64.9 |
% |
76.4 |
% |
+4.2 p.p. |
Blended |
71.9 |
% |
64.6 |
% |
76.0 |
% |
+4.2 p.p. |
RevPAR (in RMB) |
|
|
|
|
Leased and owned hotels |
206 |
|
153 |
|
215 |
|
4.2 |
% |
Manachised and franchised hotels |
172 |
|
139 |
|
190 |
|
10.4 |
% |
Blended |
177 |
|
141 |
|
193 |
|
9.1 |
% |
|
For the quarter ended |
|
September 30, |
September 30, |
yoy |
|
2019 |
2022 |
change |
Average daily room rate (in RMB) |
|
|
Leased and owned hotels |
288 |
|
294 |
|
2.1 |
% |
Manachised and franchised hotels |
235 |
|
248 |
|
5.5 |
% |
Blended |
245 |
|
254 |
|
3.4 |
% |
Occupancy Rate (as a percentage) |
|
|
Leased and owned hotels |
90.0 |
% |
73.1 |
% |
-16.9 p.p. |
Manachised and franchised hotels |
87.2 |
% |
76.4 |
% |
-10.8 p.p. |
Blended |
87.7 |
% |
76.0 |
% |
-11.7 p.p. |
RevPAR (in RMB) |
|
|
|
Leased and owned hotels |
259 |
|
215 |
|
-17.1 |
% |
Manachised and franchised hotels |
205 |
|
190 |
|
-7.5 |
% |
Blended |
215 |
|
193 |
|
-10.3 |
% |
(4) If including hotels under
requisition, RevPAR in Q3 2022 would have been 90% of the 2019
level.
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 ofSeptember 30, |
For the quarter |
yoy |
For the quarter |
yoy |
For the quarter |
yoy |
|
ended September 30, |
change |
ended September 30, |
change |
ended September 30, |
change |
|
2021 |
2022 |
2021 |
2022 |
|
2021 |
2022 |
|
2021 |
|
2022 |
|
(p.p.) |
Economy hotels |
3,366 |
3,366 |
146 |
148 |
1.4 |
% |
189 |
188 |
-0.7 |
% |
77.0 |
% |
78.6 |
% |
+1.6 |
Leased and owned hotels |
363 |
363 |
158 |
164 |
3.7 |
% |
215 |
211 |
-1.8 |
% |
73.5 |
% |
77.6 |
% |
+4.1 |
Manachised and franchised hotels |
3,003 |
3,003 |
143 |
145 |
1.0 |
% |
185 |
184 |
-0.5 |
% |
77.6 |
% |
78.7 |
% |
+1.1 |
Midscale and upscale hotels |
2,122 |
2,122 |
228 |
242 |
6.2 |
% |
324 |
322 |
-0.5 |
% |
70.3 |
% |
75.0 |
% |
+4.7 |
Leased and owned hotels |
233 |
233 |
261 |
273 |
4.6 |
% |
398 |
389 |
-2.4 |
% |
65.5 |
% |
70.3 |
% |
+4.7 |
Manachised and franchised hotels |
1,889 |
1,889 |
221 |
236 |
6.6 |
% |
311 |
311 |
0.0 |
% |
71.2 |
% |
75.8 |
% |
+4.7 |
Total |
5,488 |
5,488 |
183 |
190 |
3.9 |
% |
248 |
248 |
-0.2 |
% |
73.9 |
% |
76.9 |
% |
+3.0 |
|
|
Number of hotels |
Same-hotel RevPAR |
Same-hotel ADR |
Same-hotel Occupancy |
|
As ofSeptember 30, |
For the quarter |
yoy |
For the quarter |
yoy |
For the quarter |
yoy |
|
ended September 30, |
change |
ended September 30, |
change |
ended September 30, |
change |
|
2019 |
2022 |
2019 |
2022 |
|
2019 |
2022 |
|
2019 |
|
2022 |
|
(p.p.) |
Economy hotels |
2,057 |
2,057 |
189 |
147 |
-22.5 |
% |
203 |
187 |
-7.5 |
% |
93.5 |
% |
78.4 |
% |
-15.2 |
Leased and owned hotels |
346 |
346 |
211 |
161 |
-23.5 |
% |
226 |
208 |
-7.9 |
% |
93.4 |
% |
77.5 |
% |
-15.9 |
Manachised and franchised hotels |
1,711 |
1,711 |
184 |
143 |
-22.1 |
% |
196 |
182 |
-7.3 |
% |
93.5 |
% |
78.6 |
% |
-14.9 |
Midscale and upscale hotels |
994 |
994 |
295 |
234 |
-20.7 |
% |
341 |
319 |
-6.3 |
% |
86.7 |
% |
73.4 |
% |
-13.2 |
Leased and owned hotels |
181 |
181 |
354 |
251 |
-29.2 |
% |
405 |
362 |
-10.5 |
% |
87.5 |
% |
69.2 |
% |
-18.2 |
Manachised and franchised hotels |
813 |
813 |
277 |
229 |
-17.3 |
% |
321 |
307 |
-4.3 |
% |
86.4 |
% |
74.7 |
% |
-11.7 |
Total |
3,051 |
3,051 |
230 |
180 |
-21.6 |
% |
254 |
236 |
-6.9 |
% |
90.9 |
% |
76.5 |
% |
-14.4 |
Operating Results:
Legacy-DH(5)
|
Number of hotels |
|
Number ofrooms |
|
Unopened hotelsin pipeline |
|
Opened in Q3 2022 |
Closedin Q3 2022 |
Net added in Q3 2022 |
As of September30,
2022(6) |
|
As of September30,2022 |
|
As ofSeptember30,2022 |
|
Leased hotels |
- |
- |
- |
79 |
|
14,939 |
|
27 |
Manachised and franchised hotels |
1 |
- |
1 |
47 |
|
10,323 |
|
12 |
Total |
1 |
- |
1 |
126 |
|
25,262 |
|
39 |
(5) Legacy-DH refers to DH.
(6) As of September 30, 2022, a total of 4 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 extensive hotel refurbishment, and 1
hotel was temporarily closed due to seasonal break . |
|
For the quarter ended |
|
|
September 30, |
June 30, |
September 30, |
yoy |
|
2021 |
|
2022 |
|
2022 |
|
change |
Average daily room rate (in EUR) |
|
|
|
|
Leased hotels |
94.3 |
|
112.6 |
|
112.9 |
|
19.7 |
% |
Manachised and franchised hotels |
104.5 |
|
106.7 |
|
115.6 |
|
10.6 |
% |
Blended |
98.6 |
|
110.4 |
|
113.9 |
|
15.5 |
% |
Occupancy rate (as a percentage) |
|
|
|
|
Leased hotels |
48.0 |
% |
61.2 |
% |
67.4 |
% |
+19.5 p.p. |
Managed and franchised hotels |
49.4 |
% |
57.9 |
% |
64.1 |
% |
+14.7 p.p. |
Blended |
48.6 |
% |
59.8 |
% |
66.1 |
% |
+17.5 p.p. |
RevPAR (in EUR) |
|
|
|
|
Leased hotels |
45.3 |
|
68.9 |
|
76.1 |
|
68.2 |
% |
Managed and franchised hotels |
51.6 |
|
61.8 |
|
74.1 |
|
43.5 |
% |
Blended |
47.9 |
|
66.0 |
|
75.3 |
|
57.2 |
% |
Hotel Portfolio by Brand
|
As of September 30, 2022 |
|
Hotels |
Rooms |
Unopened hotels |
|
in operation |
in pipeline |
Economy hotels |
4,913 |
386,911 |
964 |
HanTing Hotel |
3,207 |
285,313 |
603 |
Hi Inn |
460 |
24,128 |
127 |
Ni Hao Hotel |
140 |
10,074 |
192 |
Elan Hotel |
868 |
42,810 |
- |
Ibis Hotel |
223 |
22,876 |
28 |
Zleep Hotels |
15 |
1,710 |
14 |
Midscale hotels |
2,816 |
308,164 |
1,001 |
Ibis Styles Hotel |
85 |
8,864 |
18 |
Starway Hotel |
565 |
46,492 |
212 |
JI Hotel |
1,629 |
192,872 |
534 |
Orange Hotel |
505 |
54,822 |
229 |
CitiGO Hotel |
32 |
5,114 |
8 |
Upper midscale hotels |
525 |
75,500 |
263 |
Crystal Orange Hotel |
161 |
21,314 |
53 |
Manxin Hotel |
111 |
10,443 |
52 |
Madison Hotel |
50 |
7,276 |
62 |
Mercure Hotel |
133 |
22,250 |
54 |
Novotel Hotel |
17 |
4,424 |
18 |
IntercityHotel(7) |
53 |
9,793 |
24 |
Upscale hotels |
124 |
21,223 |
76 |
Jaz in the City |
3 |
587 |
1 |
Joya Hotel |
8 |
1,368 |
1 |
Blossom House |
43 |
2,055 |
52 |
Grand Mercure Hotel |
8 |
1,897 |
5 |
Steigenberger Hotels & Resorts(8) |
53 |
13,754 |
10 |
MAXX (9) |
9 |
1,562 |
7 |
Luxury hotels |
15 |
2,326 |
4 |
Steigenberger Icon(10) |
9 |
1,847 |
1 |
Song Hotels |
6 |
479 |
3 |
Others |
9 |
3,365 |
5 |
Other hotels(11) |
9 |
3,365 |
5 |
Total |
8,402 |
797,489 |
2,313 |
(7) As of September 30, 2022, 3
operational hotels and 10 pipeline hotels of IntercityHotel were in
China.(8) As of September 30, 2022, 11 operational
hotels and 3 pipeline hotels of Steigenberger Hotels & Resorts
were in China.(9) As of September 30, 2022, 3
operational hotels and 7 pipeline hotels of MAXX were in
China.(10) As of September 30, 2022, 3 operational
hotels of Steigenberger Icon 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).
__________________________
1 Hotel turnover refers to total transaction value
of room and non-room revenue from H World 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$1.00=RMB7.1135 on September 30, 2022 as set forth in H.10
statistical release of the U.S. Federal Reserve Board and available
at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.3
The conversion of Renminbi (“RMB”) into United
States dollars (“US$”) is based on the exchange
rate of US$1.00=RMB7.1135 on September 30, 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@hworld.comhttps://ir.hworld.com
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