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Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the First Quarter of 2022

Huazhu Group Limited
Huazhu Group Limited

SHANGHAI, China, April 28, 2022 (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 2022”) ended March 31, 2022.

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, such outbreak led to a rise in demand for 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.

Steigenberger Hotels AG and its subsidiaries (“DH”, or “Legacy-DH”) have been experiencing continuous RevPAR recovery since Germany unfolded its opening-up plan in mid-February 2022. RevPAR in March 2022 recovered to 65% 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.

Operating Results: Legacy-Huazhu(1)

Number of hotels

Number of rooms

Opened
in Q1 2022

Closed(2)
in Q1 2022

Net added
in Q1 2022

As of
March 31, 2022(3)

As of
March 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 of
March 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 of
March 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 of
rooms

Unopened hotels
in pipeline

Opened
in Q1 2022

Closed
in Q1 2022

Net added
in Q1 2022

As of
March 31, 2022(5)

As of
March 31,2022

As of
March 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).

About Huazhu Group Limited
Originated 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 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