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H World Group Limited Announces Preliminary Results for Hotel Operations in the Second Quarter of 2022

·10 min read
H World Group Limited
H World Group Limited

SHANGHAI, China, July 20, 2022 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the second quarter (“Q2 2022”) ended June 30, 2022.

COVID-19 update
For our Legacy-Huazhu business, the large-scale outbreak of Omicron variant in China since early-March 2022 led to massive lockdown in various cities and sharp decline in the demand for both business and leisure travel. As a result, our RevPAR in Q2 2022 only recovered to 69% of the 2019 level. Breaking down into each month, April and May 2022 were the hardest-hit with RevPAR only having recovered to 53% and 65% of the 2019 levels respectively. However, RevPAR recovery improved in June 2022 to 86% of the 2019 level due to gradual lift of lockdown since late May 2022. In addition, if we consider the impacts of requisitioned hotels, our RevPAR recovery in Q2 2022 would have been 75% of the 2019 level.

Steigenberger Hotels AG and its subsidiaries (“DH”, or “Legacy-DH”) have seen an accelerating RevPAR recovery in Q2 2022. While RevPAR in March 2022 was 35% lower than the 2019 level, June 2022 RevPAR was only 1% behind that of 2019. However, against the background of surging inflation in Europe and the resulting substantial increase in costs as well as uncertainties about the future development of COVID-19 and energy supplies, DH has been focusing on cash flow improvement measures. As a consequence, DH will continue to focus on efficiency improvements, re-negotiation of lease contracts, and personnel cost optimization.

Operating Results: Legacy-Huazhu(1)

 

 

 

 

Number of hotels

Number of rooms

Opened
in Q2 2022

Closed (2)
in Q2 2022

Net added
in Q2 2022

As of
June 30, 2022 (3)

As of
June 30, 2022

Leased and owned hotels

5

(12)

(7)

646

 

91,171

Manachised and franchised hotels

264

(74)

190

7,405

 

657,771

Total

269

(86)

183

8,051

 

748,942

(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 Q2 2022, we temporarily closed 7 hotels for brand upgrade and business model change purposes.
(3)   As of June 30, 2022,645 hotels were requisitioned by governmental authorities.


As of June 30, 2022

Number of hotels

Unopened hotels in pipeline

Economy hotels

4,859

974

Leased and owned hotels

381

1

Manachised and franchised hotels

4,478

973

Midscale and upscale hotels

3,192

1,225

Leased and owned hotels

265

19

Manachised and franchised hotels

2,927

1,206

Total

8,051

2,199


Operational hotels excluding hotels under requisition(4)

For the quarter ended

June 30,

March 31,

June 30,

yoy

2021

2022

2022

change

Average daily room rate (in RMB)

Leased and owned hotels

311

263

243

-21.7%

Manachised and franchised hotels

246

218

215

-12.8%

Blended

255

224

218

-14.5%

Occupancy Rate (as a percentage)

Leased and owned hotels

81.1%

56.7%

62.9%

-18.1p.p.

Manachised and franchised hotels

82.5%

59.6%

64.9%

-17.6p.p.

Blended

82.3%

59.2%

64.6%

-17.7p.p.

RevPAR (in RMB)

 

 

 

 

Leased and owned hotels

252

149

153

-39.2%

Manachised and franchised hotels

203

130

139

-31.4%

Blended

210

132

141

-32.9%


For the quarter ended

June 30,

June 30,

yoy

2019

2022

change

Average daily room rate (in RMB)

Leased and owned hotels

281

243

-13.5%

Manachised and franchised hotels

225

215

-4.7%

Blended

236

218

-7.8%

Occupancy Rate (as a percentage)

Leased and owned hotels

89.4%

62.9%

-26.5p.p.

Manachised and franchised hotels

86.3%

64.9%

-21.4p.p.

Blended

86.9%

64.6%

-22.3p.p.

RevPAR (in RMB)

Leased and owned hotels

252

153

-39.2%

Manachised and franchised hotels

194

139

-28.4%

Blended

206

141

-31.4%

(4)   If including hotels under requisition, RevPAR in Q2 2022 would have been 75% 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 of
June 30,

For the quarter

yoy

For the quarter

yoy

For the quarter

yoy

 

ended
June 30,

change

ended
June 30,

change

ended
June 30,

change

 

2021

2022

2021

2022

 

2021

2022

 

2021

2022

(p.p.)

Economy hotels

3127

3127

172

112

-34.8%

197

166

-16.0%

87.2%

67.7%

-19.5

Leased and owned hotels

350

350

193

121

-37.3%

229

177

-22.7%

84.3%

68.4%

-15.9

Manachised and franchised hotels

2777

2777

168

110

-34.3%

191

163

-14.6%

87.7%

67.5%

-20.2

Midscale and upscale hotels

1785

1785

275

173

-37.2%

335

281

-16.4%

81.9%

61.5%

-20.4

Leased and owned hotels

203

203

323

190

-41.1%

414

332

-19.8%

78.0%

57.3%

-20.7

Manachised and franchised hotels

1582

1582

266

169

-36.3%

322

272

-15.6%

82.7%

62.3%

-20.3

Total

4912

4912

217

138

-36.2%

255

213

-16.7%

84.9%

65.0%

-19.9


 

 

Number of hotels

Same-hotel RevPAR

Same-hotel ADR

Same-hotel Occupancy

 

As of
June 30,

For the quarter
ended
June 30,

yoy
change

For the quarter
ended
June 30,

yoy
change

For the quarter
ended
June 30,

yoy
change

 

 

2019

2022

2019

2022

 

2019

2022

 

2019

2022

(p.p.)

Economy hotels

1888

1888

182

110

-39.4%

195

164

-15.8%

93.1%

67.0%

-26.1

Leased and owned hotels

334

334

204

119

-41.8%

218

175

-20.0%

93.6%

68.1%

-25.5

Manachised and franchised hotels

1554

1554

176

108

-38.7%

189

161

-14.5%

93.0%

66.7%

-26.3

Midscale and upscale hotels

773

773

283

165

-41.5%

333

279

-16.3%

84.8%

59.3%

-25.5

Leased and owned hotels

155

155

348

170

-51.0%

401

312

-22.3%

86.6%

54.7%

-31.9

Manachised and franchised hotels

618

618

261

164

-37.3%

310

269

-13.2%

84.2%

60.8%

-23.4

Total

2661

2661

217

129

-40.4%

240

201

-16.3%

90.3%

64.3%

-25.9


Operating Results: Legacy-DH(5)

 

 

 

 

 

 

Number of hotels

Number of rooms

Unopened hotels in pipeline

Opened
in Q2 2022

Closed
in Q2 2022

Net added
in Q2 2022

As of
June 30, 2022(6)





As of
June 30,2022





As of
June 30,2022

Leased hotels

2

-

2

79

 

14,939

 

25

Manachised and franchised hotels

3

-

3

46

 

10,017

 

12

Total

5

-

5

125

 

24,956

 

37

(5)   Legacy-DH refers to DH.
(6)   As of June 30, 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 extensive hotel refurbishment.


 

For the quarter ended

 

June 30,

March 31,

June 30,

yoy

2021

2022

2022

change

Average daily room rate (in EUR)

Leased hotels

85.2

90.0

112.6

32.2%

Manachised and franchised hotels

77.9

85.5

106.7

37.0%

Blended

81.5

88.0

110.4

35.5%

Occupancy rate (as a percentage)

Leased hotels

20.0%

34.1%

61.2%

+41.2 p.p.

Managed and franchised hotels

30.8%

44.0%

57.9%

+27.1 p.p.

Blended

24.4%

38.0%

59.8%

+35.4 p.p.

RevPAR (in EUR)

Leased hotels

17.0

30.7

68.9

305.3%

Managed and franchised hotels

24.0

37.6

61.8

157.5%

Blended

19.8

33.4

66.0

233.3%


Hotel Portfolio by Brand

 

 

As of June 30, 2022

Hotels

Rooms

Unopened hotels

in operation

in pipeline

Economy hotels

4,874

384,177

985

HanTing Hotel

3,124

277,284

626

Hi Inn

458

24,036

120

Ni Hao Hotel

106

7,503

188

Elan Hotel

952

50,910

7

Ibis Hotel

219

22,734

33

Zleep Hotels

15

1,710

11

Midscale hotels

2,666

291,349

949

Ibis Styles Hotel

84

8,679

13

Starway Hotel

557

44,683

185

JI Hotel

1,515

180,847

528

Orange Hotel

479

52,168

215

CitiGO Hotel

31

4,972

8

Upper midscale hotels

494

72,304

244

Crystal Orange Hotel

155

20,639

56

Manxin Hotel

99

9,432

52

Madison Hotel

43

6,346

55

Mercure Hotel

131

22,533

43

Novotel Hotel

15

4,032

14

IntercityHotel(7)

51

9,322

24

Upscale hotels

118

20,367

51

Jaz in the City

3

587

1

Joya Hotel

8

1,386

-

Blossom House

39

1,888

28

Grand Mercure Hotel

7

1,485

5

Steigenberger Hotels & Resorts(8)

53

13,710

9

MAXX (9)

8

1,311

8

Luxury hotels

15

2,326

2

Steigenberger Icon(10)

9

1,847

1

Song Hotels

6

479

1

Others

9

3,375

5

Other hotels(11)

9

3,375

5

Total

8,176

773,898

2,236

(7)   As of June 30, 2022, 2 operational hotels and 9 pipeline hotels of IntercityHotel were in China.

(8)   As of June 30, 2022, 11 operational hotels and 2 pipeline hotels of Steigenberger Hotels & Resorts were in China.

(9)   As of June 30, 2022, 2 operational hotels and 8 pipeline hotels of MAXX were in China.

(10) As of June 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).

 

About H World Group Limited
Originated in China, H World Group Limited is a world-leading hotel group. As of June 30, 2022, H World operated 8,176 hotels with 773,898 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 June 30, 2022, H World 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 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.

Contact Information
H World Investor Relations
Tel: 86 (21) 6195 9561
Email: ir@huazhu.com
https://ir.hworld.com