Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the First Quarter of 2021

Thursday, 22. April 2021 13:20

SHANGHAI, China, April 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 first quarter (“Q1 2021”) ended March 31, 2021.

COVID-19 update
Due to COVID-19 resurgence in Shanghai, Beijing and Hebei Province and the “stay local” guidance prior to the Chinese New Year holiday (CNY), RevPAR in January and February 2021 recovered to 74% and 56% of 2019 respectively. Our hotel openings were also negatively impacted by the resurgence of COVID-19 during the first quarter. However, our performance started to recover steadily again post the CNY holiday. Particularly, after the National People’s Congress and the Chinese People’s Political Consultative Conference during the first week of March, the Chinese government further eased travel restrictions which were in effect from March 16, 2021. After that, we saw strong recovery in hotel demand in the Beijing area, followed by other major tier 1 cities. Our RevPAR in March 2021 recovered to 95% of 2019, mainly driven by the strong recovery of business demand. Heading into April, the recovery trend continued. Our RevPAR during the Tomb Sweeping holiday recovered to 96% of same period of 2019, which demonstrated the strong recovery of leisure demand.

Steigenberger Hotels AG and its subsidiaries (“DH”) suffered from the several resurgences of COVID-19 pandemic in European countries. The lock down period there has been extended several times, and most likely to further extend to the end of May, 2021. European countries began their vaccination process in December 2020. However, due to the uncertainty of the completion of the vaccination process, and consequently the timing of business recovery, we are taking further cost reduction and cash flow measures, such as negotiating with landlords to reduce our rental costs, reducing or eliminating discretionary corporate spending and capital expenditures, etc. However, the extension of lockdown impacts should be partially offset by extension of the scope and duration of European government subsidy programs.

Operating Results: Legacy-Huazhu(1)

 Number of hotels  Number of rooms
 Opened
in Q1 2021

Closed (2)
in Q1 2021

Net added
in Q1 2021

As of
March 31, 2021 (3)

 As of
March 31, 2021

  
Leased and owned hotels2(19)(17)664 89,901
Manachised and franchised hotels207(98)109 6,097 548,718
Total209(117)92 6,761 638,619
         
(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 Q1 2021, we temporarily closed 16 hotels for brand upgrade and business model change purposes.
(3)   As of March 31, 2021, 43 hotels were requisitioned by governmental authorities.


 As of March 31, 2021
 Number of hotels Unopened hotels in pipeline
Economy hotels4,3831,269
Leased and owned hotels4225
Manachised and franchised hotels3,9611,264
Midscale and upscale hotels2,3781,339
Leased and owned hotels24214
Manachised and franchised hotels2,1361,325
Total6,7612,608


Operational hotels excluding hotels under requisition
 For the quarter ended 
 March 31,December 31,March 31,yoy
 202020202021change
Average daily room rate (in RMB)    
Leased and owned hotels21127224315.6%
Manachised and franchised hotels18422420310.2%
Blended18923120910.6%
Occupancy rate (as a percentage)    
Leased and owned hotels43.8%79.6%64.0%20.2 p.p.
Manachised and franchised hotels47.4%80.8%66.6%19.2 p.p.
Blended46.7%80.6%66.2%19.5 p.p.
RevPAR (in RMB)    
Leased and owned hotels9221715668.9%
Manachised and franchised hotels8718113554.9%
Blended8818613856.7%


 For the quarter ended
 March 31,March 31,yoy
 20192021change
Average daily room rate (in RMB)   
Leased and owned hotels258243-5.6%
Manachised and franchised hotels211203-3.9%
Blended221209-5.6%
Occupancy rate (as a percentage)   
Leased and owned hotels83.6%64.0%-19.6p.p.
Manachised and franchised hotels79.8%66.6%-13.3p.p.
Blended80.6%66.2%-14.4p.p.
RevPAR (in RMB)   
Leased and owned hotels216156-27.8%
Manachised and franchised hotels169135-19.9%
Blended178138-22.5%


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
March 31,

For the quarter yoyFor the quarter yoyFor the quarter yoy
 ended
March 31,
changeended
March 31,
changeended
March 31,
change
 2020202120202021 20202021 20202021(p.p.)
Economy hotels2,8322,8328011342.1%1531604.9%52.0%70.5%18.4
Leased and owned hotels4174177912050.8%1641757.3%48.5%68.2%19.7
Manachised and franchised hotels2,4152,4158011140.0%1501574.4%53.0%71.0%18.1
Midscale and upscale hotels1,3771,37711117658.2%2602787.0%42.7%63.1%20.4
Leased and owned hotels19819811319168.6%2973269.5%38.1%58.7%20.6
Manachised and franchised hotels1,1791,17911017255.6%2512686.6%44.0%64.2%20.2
Total4,2094,2099213850.2%1902047.6%48.4%67.5%19.2


 
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
March 31,

For the quarter yoyFor the quarter yoyFor the quarter yoy
 ended
March 31,
changeended
March 31,
changeended
March 31,
change
 2019202120192021 20192021 20192021(p.p.)
Economy hotels2,2902,290158110-30.0%181158-12.7%87.1%69.8%-17.3
Leased and owned hotels396396175117-33.1%199173-13.1%88.1%67.9%-20.2
Manachised and franchised hotels1,8941,894153109-29.1%176154-12.4%86.9%70.4%-16.5
Midscale and upscale hotels842842248174-30.0%321279-13.0%77.2%62.2%-15.0
Leased and owned hotels173173302189-37.4%381319-16.4%79.1%59.2%-19.9
Manachised and franchised hotels669669229168-26.5%299266-11.0%76.5%63.2%-13.3
Total3,1323,132187131-29.9%224195-12.6%83.9%67.3%-16.6

Operating Results: Legacy-DH(4)

 Number of hotels Number of rooms Unopened hotels in pipeline
 Opened
in Q1 2021

Closed
in Q1 2021

Net added
in Q1 2021

As of
March 31, 2021(5)

 

 

As of
March 31,
2021


 

 

As of
March 31,
2021


 
Leased hotels1- 1 73 13,527 27
Manachised and franchised hotels-(1)(1)47 10,366 14
Total 1 (1) -   120  23,893 41
           
(4)    Legacy-DH refers to DH.
(5)   As of March 31, 2021, a total of 20 DH brand hotels were temporarily closed due to COVID-19.


 For the quarter ended 
 March 31,December 31,March 31,yoy
 202020202021change
Average daily room rate (in EUR)    
Leased hotels96.878.477.9-19.6%
Manachised and franchised hotels79.573.359.0-25.8%
Blended89.376.368.5-23.3%
Occupancy rate (as a percentage)    
Leased hotels52.6%20.9%14.6%-38.0p.p.
Managed and franchised hotels50.4%25.4%26.5%-24.0p.p.
Blended51.7%22.5%18.8%-32.8p.p.
RevPAR (in EUR)    
Leased hotels51.016.411.4-77.7%
Managed and franchised hotels40.118.615.6-61.0%
Blended46.117.212.9-72.1%

Hotel Portfolio by Brand

 As of March 31, 2021
 HotelsRoomsUnopened hotels
 in operationin pipeline
Economy hotels4,397363,4941,280
HanTing Hotel2,767255,385659
Hi Inn43625,22899
Elan Hotel(6)97259,319468
Ibis Hotel20821,90143
Zleep Hotels141,66111
Midscale and upscale hotels2,484299,0181,369
Ibis Styles Hotel708,11926
Starway Hotel45338,110272
JI Hotel1,137139,943577
Orange Hotel34538,537181
Crystal Orange Hotel12116,24069
Manxin Hotel636,15554
Madison Hotel253,85043
Mercure Hotel10817,84664
Novotel Hotel123,38714
Joya Hotel101,8420
Blossom House271,27226
Grand Mercure Hotel71,4856
Steigenberger Hotels & Resorts4911,5749
IntercityHotel(7)457,93121
MAXX by Steigenberger(8)57774
Jaz in the City24242
Other partner hotels51,5261
Total6,881662,5122,649
(6)   As of March 31, 2021, 9 Ni Hao Hotels were included in the operational hotel total for Elan Hotels and 96 Ni Hao hotels were included in the pipeline total for Elan Hotels.
(7)   As of March 31, 2021, 4 pipeline hotels of IntercityHotel were in China.
(8)   As of March 31, 2021, 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 March 31, 2021, Huazhu operated 6,881 hotels with 662,512 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 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, 2021, 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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