Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the Fourth Quarter and the Full Year of 2020

Friday, 22. January 2021 12:30

SHANGHAI, China, Jan. 22, 2021 (GLOBE NEWSWIRE) -- Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the fourth quarter (“Q4 2020”) and the full year ended December 31, 2020.

Recovery continued in Q4 2020
During Q4 2020, despite numerous recurrence of COVID-19 in several cities and provinces in mainland China, such as Shanghai, Chengdu, and Northeastern of China, our business continued to recover, thanks to China’s more effective and precise control of the COVID-19 pandemic. More importantly, we noticed that travelling demand shows resilience and recovery in previously affected cities started accelerating after adjusting down the risk level in those cities (from mid-to-high risk to low risk). Hence, in Q4 2020, Huazhu expects net revenues in China to be better than our previous guidance.

Steigenberger Hotels AG and its subsidiaries (“DH”) suffered from the second wave of COVID-19 outbreak in European countries since late September 2020. The lock down period in Germany extended to February 14, 2021. However, even with the extension of the lock down period, the Q4 2020 DH net revenues remains within our previous guidance. In addition, we are taking further cost and cash flow measures, such as negotiating with landlords to reduce our rental costs, reducing or eliminating discretionary corporate spending and capital expenditures, etc. We also actively sought new business opportunities in the government’s fight against COVID-19, such as offering hotels to support government for pandemic prevention and control.

Operating Results: Legacy-Huazhu(1)

 Number of hotels  Number of rooms
 Opened
in Q4 2020
Closed (2)
in Q4 2020
Net added
in Q4 2020
As of
December 31,
2020
(3)
 As of
December 31,
2020

  
Leased and owned hotels4(10)(6)681 90,942
Manachised and franchised hotels389(104)2855,988 537,193
Total393(114)2796,669 628,135
         
(1)   Legacy-Huazhu refers to Huazhu and its subsidiaries, excluding DH.
(2)   The reasons for hotel closures mainly include non-compliance with our brand standards, operating losses, and property-related issues. In Q4 2020, we temporarily closed 6 hotels for brand upgrade and business model change purposes.
(3)   As of December 31, 2020, 74 hotels were requisitioned by governmental authorities.


 As of December 31, 2020
 Number of hotels Unopened hotels in pipeline
Economy hotels4,3621,183
Leased and owned hotels4384
Manachised and franchised hotels3,9241,179
Midscale and upscale hotels2,3071,228
Leased and owned hotels24314
Manachised and franchised hotels2,0641,214
Total6,6692,411


 
Operational hotels (excluding hotels under requisition) 
 For the quarter ended  
 December 31,September 30,December 31,yoy 
 201920202020change 
Average daily room rate (in RMB)     
Leased and owned hotels277 255 272 -1.8% 
Manachised and franchised hotels223 211 224 0.6% 
Blended232 218 231 -0.5% 
Occupancy rate (as a percentage)     
Leased and owned hotels84.7%82.9%79.6%-5.2p.p. 
Manachised and franchised hotels81.6%81.8%80.8%-0.9p.p. 
Blended82.2%82.0%80.6%-1.6p.p. 
RevPAR (in RMB)     
Leased and owned hotels235 211 217 -7.8% 
Manachised and franchised hotels182 173 181 -0.5% 
Blended191 179 186 -2.4% 
  


 For the year ended
 December 31,December 31,yoy
 2019
2020
change
Average daily room rate (in RMB)   
Leased and owned hotels276 241 -12.8%
Manachised and franchised hotels224 204 -8.9%
Blended234 210 -10.3%
Occupancy rate (as a percentage)   
Leased and owned hotels87.0%68.9%-18.1p.p.
Manachised and franchised hotels83.8%71.4%-12.4p.p.
Blended84.4%71.0%-13.4p.p.
RevPAR (in RMB)   
Leased and owned hotels240 166 -30.9%
Manachised and franchised hotels188 146 -22.3%
Blended198 149 -24.5%


Same-hotel operational data by class
Mature hotels in operation for more than 18 months (excluding hotels under requisition)
 
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
December 31,

For the quarter yoyFor the quarter yoyFor the quarter
yoy
 ended
December 31,
changeended
December 31,
changeended
December 31,
change
 2019202020192020 20192020 2019 2020 (p.p.)
Economy hotels2,6512,651162151-6.7%185178-3.7%87.6%84.9%-2.7
Leased and owned hotels412412184167-8.9%210199-5.2%87.7%84.3%-3.4
Manachised and franchised hotels2,2392,239157147-6.1%179173-3.3%87.5%85.0%-2.5
Midscale and upscale hotels1,2251,225266243-8.5%322311-3.4%82.5%78.2%-4.3
Leased and owned hotels190190327272-16.7%392365-6.8%83.4%74.5%-8.8
Manachised and franchised hotels1,0351,035250236-5.6%303298-1.9%82.3%79.2%-3.1
Total3,8763,876201186-7.6%235225-3.9%85.7%82.4%-3.3


 
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
December 31,
For the yearyoyFor the yearyoyFor the year  
yoy
 ended
December 31,
changeended
December 31,
changeended
December 31,
change
 2019202020192020 20192020 2019 2020 (p.p.)
Economy hotels2,6512,651169121-28.8%189162-14.1%89.7%74.3%-15.4
Leased and owned hotels412412191128-32.8%211176-16.4%90.5%72.8%-17.7
Manachised and franchised hotels2,2392,239164118-27.7%183159-13.4%89.4%74.7%-14.8
Midscale and upscale hotels1,2251,225272198-27.0%328287-12.4%82.8%69.0%-13.8
Leased and owned hotels190190332211-36.4%395328-17.0%84.1%64.5%-19.7
Manachised and franchised hotels1,0351,035254194-23.4%308276-10.3%82.5%70.4%-12.1
Total3,8763,876205148-27.9%234204-13.1%87.3%72.5%-14.8


Operating Results: Legacy-DH(4)

 Number of hotels Number of
rooms
 Unopened hotels
in pipeline
 Opened
in Q4 2020
Closed
in Q4 2020
Net added
in Q4 2020
As of
December 31,
2020
(5)
 
As of
December 31,
2020

 

As of
December 31,
2020

 
Leased hotels2-272 13,371 26
Manachised and franchised hotels1-148 10,656 12
Total3-3120 24,027 38
         
(4)    Legacy-DH refers to DH.
(5)   As of December 31, 2020, a total of 18 DH brand hotels were temporarily closed due to COVID-19.


 For the quarter ended 
 December 31,September 30,December 31,yoy
 2019
2020
2020
change
Average daily room rate (in EUR)    
Leased hotels108 88 78 -27.2%
Manachised and franchised hotels85 101 73 -13.7%
Blended97 93 76 -21.5%
Occupancy rate (as a percentage)   
Leased hotels73.3%38.2%20.9%-52.6p.p.
Manachised and franchised hotels62.6%37.5%25.4%-37.2p.p.
Blended68.0%37.9%22.5%-45.5p.p.
RevPAR (in EUR)    
Leased hotels79 34 16 -79.3%
Manachised and franchised hotels53 38 19 -64.9%
Blended66 35 17 -74.0%


 For the year ended
 December 31,December 31,yoy
 2019
2020
change
Average daily room rate (in EUR)   
Leased hotels105 89 -14.8%
Manachised and franchised hotels88 85 -3.2%
Blended97 88 -9.9%
Occupancy rate (as a percentage)  
Leased hotels72.8%33.9%-38.9p.p.
Manachised and franchised hotels65.0%36.3%-28.7p.p.
Blended69.1%34.8%-34.3p.p.
RevPAR (in EUR)   
Leased hotels76 30 -60.4%
Manachised and franchised hotels57 31 -45.8%
Blended67 31 -54.6%


Hotel Portfolio by Brand

 As of December 31, 2020
 HotelsRoomsUnopened hotels
 in operationin pipeline
Economy hotels4,376361,4351,192
HanTing Hotel2,780254,106597
Hi Inn43925,28291
Elan Hotel(6)93858,753448
Ibis Hotel20521,63347
Zleep Hotel141,6619
Midscale and upscale hotels2,413290,7271,257
Ibis Styles Hotel697,99222
Starway Hotel45538,657252
JI Hotel1,105135,737512
Orange Hotel32036,167174
Crystal Orange Hotel11415,40066
Manxin Hotel616,00947
Madison Hotel222,95042
Mercure Hotel10417,48661
Novotel Hotel123,38714
Joya Hotel101,842-
Blossom House281,24923
Grand Mercure Hotel71,4857
Steigenberger Hotels & Resorts4911,5747
IntercityHotel(7)458,05623
Maxx by Steigenberger(8)57774
Jaz in the City24242
Other partner hotels51,5351
Total6,789652,1622,449
(6)   As of December 31, 2020, 5 Ni Hao Hotels were included in the operational hotel total for Elan Hotels and 74 Ni Hao hotels were included in the pipeline total for Elan Hotels.
(7)   As of December 31, 2020, 5 pipeline hotels of IntercityHotel were in China.
(8)   As of December 31, 2020, 3 pipeline hotels of Maxx by Steigenberger were in China.

About Huazhu Group Limited
Originated in China, Huazhu Group Limited is a world-leading hotel group. As of December 31, 2020, Huazhu operated 6,789 hotels with 652,162 rooms in operation in 16 countries. Huazhu’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, and Ni Hao Hotel. Upon the completion of the acquisition of DH on January 2, 2020, Huazhu added five brands to its portfolio, including Steigenberger Hotels & Resorts, Maxx by Steigenberger, Jaz in the City, IntercityHotel and Zleep Hotel. In addition, Huazhu also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.

Huazhu’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, Huazhu directly operates hotels typically located on leased or owned properties. Under the manachise model, Huazhu manages manachised hotels through the on-site hotel managers that Huazhu appoints, and Huazhu collects fees from franchisees. Under the franchise model, Huazhu provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. Huazhu applies a consistent standard and platform across all of its hotels. As of December 31, 2020, Huazhu operates 16 percent of its hotel rooms under lease and ownership model, and 84 percent under manachise and franchise models.

For more information, please visit Huazhu’s website: http://ir.huazhu.com.

Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; economic conditions; the regulatory environment; our ability to attract and retain customers and leverage our brands; trends and competition in the lodging industry; the expected growth of demand for lodging; and other factors and risks detailed in our filings with the U.S. Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results.

Huazhu undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

Contact Information
Huazhu Investor Relations
Tel: 86 (21) 6195 9561
Email: ir@huazhu.com
http://ir.huazhu.com 


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