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

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Huazhu Group Limited
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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 hotels

4

(10)

(6)

681

90,942

Manachised and franchised hotels

389

(104)

285

5,988

537,193

Total

393

(114)

279

6,669

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 hotels

4,362

1,183

Leased and owned hotels

438

4

Manachised and franchised hotels

3,924

1,179

Midscale and upscale hotels

2,307

1,228

Leased and owned hotels

243

14

Manachised and franchised hotels

2,064

1,214

Total

6,669

2,411


Operational hotels (excluding hotels under requisition)

For the quarter ended

December 31,

September 30,

December 31,

yoy

2019

2020

2020

change

Average daily room rate (in RMB)

Leased and owned hotels

277

255

272

-1.8

%

Manachised and franchised hotels

223

211

224

0.6

%

Blended

232

218

231

-0.5

%

Occupancy rate (as a percentage)

Leased and owned hotels

84.7

%

82.9

%

79.6

%

-5.2p.p.

Manachised and franchised hotels

81.6

%

81.8

%

80.8

%

-0.9p.p.

Blended

82.2

%

82.0

%

80.6

%

-1.6p.p.

RevPAR (in RMB)

Leased and owned hotels

235

211

217

-7.8

%

Manachised and franchised hotels

182

173

181

-0.5

%

Blended

191

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 hotels

276

241

-12.8

%

Manachised and franchised hotels

224

204

-8.9

%

Blended

234

210

-10.3

%

Occupancy rate (as a percentage)

Leased and owned hotels

87.0

%

68.9

%

-18.1p.p.

Manachised and franchised hotels

83.8

%

71.4

%

-12.4p.p.

Blended

84.4

%

71.0

%

-13.4p.p.

RevPAR (in RMB)

Leased and owned hotels

240

166

-30.9

%

Manachised and franchised hotels

188

146

-22.3

%

Blended

198

149

-24.5

%


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
December 31,

For the quarter

yoy

For the quarter

yoy

For the quarter

yoy

ended
December 31,

change

ended
December 31,

change

ended
December 31,

change

2019

2020

2019

2020

2019

2020

2019

2020

(p.p.)

Economy hotels

2,651

2,651

162

151

-6.7

%

185

178

-3.7

%

87.6

%

84.9

%

-2.7

Leased and owned hotels

412

412

184

167

-8.9

%

210

199

-5.2

%

87.7

%

84.3

%

-3.4

Manachised and franchised hotels

2,239

2,239

157

147

-6.1

%

179

173

-3.3

%

87.5

%

85.0

%

-2.5

Midscale and upscale hotels

1,225

1,225

266

243

-8.5

%

322

311

-3.4

%

82.5

%

78.2

%

-4.3

Leased and owned hotels

190

190

327

272

-16.7

%

392

365

-6.8

%

83.4

%

74.5

%

-8.8

Manachised and franchised hotels

1,035

1,035

250

236

-5.6

%

303

298

-1.9

%

82.3

%

79.2

%

-3.1

Total

3,876

3,876

201

186

-7.6

%

235

225

-3.9

%

85.7

%

82.4

%

-3.3


Number of hotels

Same-hotel RevPAR

Same-hotel ADR

Same-hotel Occupancy

As of
December 31,

For the year

yoy

For the year

yoy

For the year

yoy

ended
December 31,

change

ended
December 31,

change

ended
December 31,

change

2019

2020

2019

2020

2019

2020

2019

2020

(p.p.)

Economy hotels

2,651

2,651

169

121

-28.8

%

189

162

-14.1

%

89.7

%

74.3

%

-15.4

Leased and owned hotels

412

412

191

128

-32.8

%

211

176

-16.4

%

90.5

%

72.8

%

-17.7

Manachised and franchised hotels

2,239

2,239

164

118

-27.7

%

183

159

-13.4

%

89.4

%

74.7

%

-14.8

Midscale and upscale hotels

1,225

1,225

272

198

-27.0

%

328

287

-12.4

%

82.8

%

69.0

%

-13.8

Leased and owned hotels

190

190

332

211

-36.4

%

395

328

-17.0

%

84.1

%

64.5

%

-19.7

Manachised and franchised hotels

1,035

1,035

254

194

-23.4

%

308

276

-10.3

%

82.5

%

70.4

%

-12.1

Total

3,876

3,876

205

148

-27.9

%

234

204

-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 hotels

2

-

2

72

13,371

26

Manachised and franchised hotels

1

-

1

48

10,656

12

Total

3

-

3

120

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 hotels

108

88

78

-27.2

%

Manachised and franchised hotels

85

101

73

-13.7

%

Blended

97

93

76

-21.5

%

Occupancy rate (as a percentage)

Leased hotels

73.3

%

38.2

%

20.9

%

-52.6p.p.

Manachised and franchised hotels

62.6

%

37.5

%

25.4

%

-37.2p.p.

Blended

68.0

%

37.9

%

22.5

%

-45.5p.p.

RevPAR (in EUR)

Leased hotels

79

34

16

-79.3

%

Manachised and franchised hotels

53

38

19

-64.9

%

Blended

66

35

17

-74.0

%


For the year ended

December 31,

December 31,

yoy

2019

2020

change

Average daily room rate (in EUR)

Leased hotels

105

89

-14.8

%

Manachised and franchised hotels

88

85

-3.2

%

Blended

97

88

-9.9

%

Occupancy rate (as a percentage)

Leased hotels

72.8

%

33.9

%

-38.9p.p.

Manachised and franchised hotels

65.0

%

36.3

%

-28.7p.p.

Blended

69.1

%

34.8

%

-34.3p.p.

RevPAR (in EUR)

Leased hotels

76

30

-60.4

%

Manachised and franchised hotels

57

31

-45.8

%

Blended

67

31

-54.6

%


Hotel Portfolio by Brand

As of December 31, 2020

Hotels

Rooms

Unopened hotels

in operation

in pipeline

Economy hotels

4,376

361,435

1,192

HanTing Hotel

2,780

254,106

597

Hi Inn

439

25,282

91

Elan Hotel(6)

938

58,753

448

Ibis Hotel

205

21,633

47

Zleep Hotel

14

1,661

9

Midscale and upscale hotels

2,413

290,727

1,257

Ibis Styles Hotel

69

7,992

22

Starway Hotel

455

38,657

252

JI Hotel

1,105

135,737

512

Orange Hotel

320

36,167

174

Crystal Orange Hotel

114

15,400

66

Manxin Hotel

61

6,009

47

Madison Hotel

22

2,950

42

Mercure Hotel

104

17,486

61

Novotel Hotel

12

3,387

14

Joya Hotel

10

1,842

-

Blossom House

28

1,249

23

Grand Mercure Hotel

7

1,485

7

Steigenberger Hotels & Resorts

49

11,574

7

IntercityHotel(7)

45

8,056

23

Maxx by Steigenberger(8)

5

777

4

Jaz in the City

2

424

2

Other partner hotels

5

1,535

1

Total

6,789

652,162

2,449

(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