Huazhu Group Limited (NASDAQ: HTHT) (“Huazhu” or the “Company”), a
world-leading hotel group, today announced its unaudited financial
results for the first quarter ended March 31, 2020.
Upon the completion of the Deutsche Hospitality
acquisition on January 2, 2020, we added 5 new hotel brands,
including Steigenberger Hotels & Resorts, Maxx by
Steigenberger, Jaz in the City, IntercityHotel and Zleep Hotel. As
of March 31, 2020, Huazhu’s worldwide hotel network in operation
totaled 5,953 hotels and 575,488 rooms, including 115 hotels from
the addition of DH. During the first quarter of 2020, Legacy-Huazhu
business opened 296 hotels, including 10 leased
(“leased-and-operated”) hotels and 286 manachised
(“franchised-and-managed”) hotels and franchised hotels, and closed
a total of 76 hotels, including 9 leased hotels and 67 manachised
and franchised hotels. During the first quarter of 2020, Legacy-DH
business opened 5 hotels, including 3 leased hotels and 2
manachised hotels and franchised hotels, and closed 9 hotels,
including 2 leased hotels and 7 manachised and franchised hotels.
As of March 31, 2020, Huazhu had a total of 2,375 unopened hotels
in pipeline, including 2,334 hotels from Legacy-Huazhu business and
41 hotels from Legacy-DH business
Legacy-Huazhu Only
– First Quarter of 2020 Operational
Highlights
Due to the COVID-19 outbreak, some hotels were
under governmental requisition and some hotels were temporarily
closed. The number of our temporarily closed hotels declined from
the peak of 2,310 hotels in mid-February down to 369 hotels as of
March 31, 2020. During Q1 2020, the governmental authorities
requisitioned accumulatively 610 Legacy-Huazhu hotels (2 million
room nights, 12% of which were from our leased and owned hotels) at
various locations and periods for medical support workers and
quarantine purposes. As of March 31, 2020, we had 374 hotels under
governmental requisition, representing 6% of hotels in operation.
In this press release, we provide separate operating results for
all hotels excluding hotels under requisition, and operational
hotels excluding hotels under requisition and hotels temporarily
closed. The year-over-year change and sequential change of
operating results of ADR, occupancy rate and RevPAR were primarily
due to the COVID-19 pandemic.
All hotels (excluding hotels under
requisition)
- The ADR, which is defined as the average daily rate for all
hotels in operation, was RMB189 in the first quarter of 2020,
compared with RMB221 in the first quarter of 2019 and RMB232 in the
previous quarter.
- The occupancy rate for all hotels in operation, was 39.6% in
the first quarter of 2020, compared with 80.6% in the first quarter
of 2019 and 82.2% in the previous quarter.
- Blended RevPAR, defined as revenue per available room for all
hotels in operation, was RMB75 in the first quarter of 2020,
compared with RMB178 in the first quarter of 2019 and RMB191 in the
previous quarter.
Operational hotels (excluding ①hotels under
requisition, and ②hotels temporarily closed)
- The ADR was RMB189 in the first quarter of 2020, compared with
RMB221 in the first quarter of 2019 and RMB232 in the previous
quarter.
- The occupancy rate for all hotels in operation was 46.7% in the
first quarter of 2020, compared with 80.6% in the first quarter of
2019 and 82.2% in the previous quarter.
- Blended RevPAR was RMB88 in the first quarter of 2020, compared
with RMB178 in the first quarter of 2019 and RMB191 in the previous
quarter.
- For all hotels which had been in operation for at least 18
months, the same-hotel RevPAR was RMB87 for the first quarter of
2020, representing a 52.8% decrease from RMB184 for the first
quarter of 2019, with a 17.9% decrease in ADR and a
35.5-percentage-point decrease in occupancy rate.
Legacy-DH Only
– First Quarter of 2020 Operational
Highlights
Due to the COVID-19 outbreak in Europe, some
Legacy-DH hotels were temporarily closed since early March 2020. As
of March 31, 2020, 85 DH hotels were temporarily closed, including
49 leased hotels and 36 manachised and franchised hotels. The
operating data of ADR, occupancy rate and RevPAR presented below
exclude hotels temporarily closed. The year-over-year change and
sequential change of operational results was primarily due to the
COVID-19 pandemic.
- The ADR was EUR89 in the first quarter of 2020, compared with
EUR95 in the first quarter of 2019 and EUR97 in the previous
quarter.
- The occupancy rate for all Legacy-DH hotels in operation was
51.7% in the first quarter of 2020, compared with 61.9% in the
first quarter of 2019 and 69.1% in the previous quarter.
- Blended RevPAR was EUR46 in the first quarter of 2020, compared
with EUR59 in the first quarter of 2019 and EUR67 in the previous
quarter.
Ji Qi, founder, Executive Chairman and CEO of
Huazhu commented: “In the fight against COVID-19 pandemic, Huazhu
worked hard to take good care of our customers and employees, to
keep our hotels open, and to provide support to our franchisees.
Thanks to our persistence and outperformance, an increasing number
of franchisees are now joining Huazhu family. From March through
June, the number of new signings of hotels has increased compared
to the same period of last year. ”
“Market consolidation will accelerate,”
continued Mr. Ji, “and Huazhu has prepared to expand share after
the crisis. For the next three years, we expect to penetrate into
additional lower-tier cities in China where customers’ brand
awareness and demand for quality have risen. In the meantime, our
exploration in upscale segment continues under Joya and Blossom
House brands, as well as Steigenberger and Intercity brands.”
First Quarter of 2020 Financial
ResultsThe first quarter of 2020 financial results
included the results of Legacy-DH business, which was not included
in the first quarter of 2019 financial results. In the first
quarter of 2020, both Legacy-Huazhu business and Legacy-DH business
were greatly affected by the COVID-19 pandemic.
(RMB in millions) |
Q1 2019 |
Q4 2019 |
Q1 2020 |
Revenues: |
|
|
|
Leased and
owned hotels |
1,706 |
1,921 |
1,516 |
Manachised
and franchised hotels |
663 |
938 |
465 |
Others |
18 |
51 |
32 |
Net
revenues |
2,387 |
2,910 |
2,013 |
Net revenues for the first
quarter of 2020 were RMB2.0 billion (US$284 million), representing
a 15.7% year-over-year decrease and a 30.8% sequential decrease.
Excluding DH, our net revenues for the first quarter of 2020 were
RMB1.3 billion, representing a 46.0% year-over-year decrease.
Net revenues from leased and owned
hotels for the first quarter of 2020 were RMB1.5 billion
(US$214 million), representing an 11.1% year-over-year decrease and
a 21.1% sequential decrease. Excluding DH, our net revenues from
leased and owned hotels for the first quarter of 2020 were RMB807
million, representing a 52.7% year-over-year decrease.
Net revenues from manachised and
franchised hotels for the first quarter of 2020 were
RMB465 million (US$66 million), representing a 29.9% year-over-year
decrease and a 50.4% sequential decrease. Excluding DH, our net
revenues from manachised and franchised hotels for the first
quarter of 2020 were RMB455 million, representing a 31.4%
year-over-year decrease.
Other revenues represent
revenues generated from businesses other than our hotel operations,
which mainly include revenues from the provision of IT products and
services to hotels, revenues from Huazhu Mall™ and other revenues
from Legacy-DH business, totaling RMB32 million (US$4 million) in
the first quarter of 2020, compared to RMB18 million in the first
quarter of 2019 and RMB51 million in the previous quarter.
Excluding DH, our other revenues for the first quarter of 2020 were
RMB26 million, representing a 44.4% year-over-year increase.
(RMB in millions) |
Q1 2019 |
Q4 2019 |
Q1 2020 |
Operating costs and expenses: |
|
|
|
Hotel operating costs |
1,735 |
1,879 |
2,377 |
Other operating costs |
7 |
21 |
8 |
Selling and marketing expenses |
77 |
134 |
146 |
General and administrative expenses |
206 |
330 |
316 |
Pre-opening expenses |
104 |
149 |
111 |
Total
operating costs and expenses |
2,129 |
2,513 |
2,958 |
Hotel operating costs for the
first quarter of 2020 were RMB2.4 billion (US$336 million),
compared to RMB1.7 billion in the first quarter of 2019 and RMB1.9
billion in the previous quarter. Excluding DH, hotel operating
costs for the first quarter of 2020 were RMB1.7 billion represented
129.7% of net revenues, compared to 72.7% for the first quarter in
2019 and 64.6% for the previous quarter.
Selling and marketing expenses
for the first quarter of 2020 were RMB146 million (US$21 million),
compared to RMB77 million in the first quarter of 2019 and RMB134
million in the previous quarter. Excluding DH, selling and
marketing expenses for the first quarter of 2020 were RMB65
million, represented 5.0% of net revenues, compared to 3.2% for the
first quarter in 2019 and 4.6% for the previous quarter.
General and administrative
expenses for the first quarter of 2020 were RMB316 million
(US$45 million), compared to RMB206 million in the first quarter of
2019 and RMB330 million in the previous quarter. Excluding DH,
general and administrative expenses for the first quarter of 2020
were RMB226 million represented 17.5% of net revenues, compared to
8.6% for the first quarter in 2019 and 11.3% for the previous
quarter. The impacts of a number of our costs cutting initiatives,
such as streamlining of head office headcounts, will only be
reflected in the future quarters as payroll reduction in Q1 had
been offset by the related severance costs.
Pre-opening expenses for the
first quarter of 2020 were RMB111 million (US$16 million),
representing a 6.7% year-over-year increase and a 25.5% sequential
decrease. Excluding DH, our pre-opening expenses for the first
quarter of 2020 were RMB110 million, representing a 5.8%
year-over-year increase.
Other operating income, net for
the first quarter of 2020 was RMB88 million (US$13 million) mainly
related to subsidy income and a one-off compensation from
franchisee totaling RMB26 million, compared to RMB6 million in the
first quarter of 2019 and RMB89 million in the previous
quarter.
Loss from operations for the
first quarter of 2020 was RMB857 million (US$122 million).
Excluding share-based compensation expenses, adjusted loss from
operations (non-GAAP) for the first quarter of 2020 was RMB828
million (US$118 million), compared to adjusted income from
operations (non-GAAP) of RMB290 million in the first quarter of
2019 and adjusted income from operations (non-GAAP) of RMB508
million in the previous quarter. Excluding DH, our loss from
operations for the first quarter of 2020 was RMB731 million,
compared to income from operations of RMB264 million in the first
quarter of 2019 and income from operations of RMB486 million in the
previous quarter.
Operating margin, defined as
income from operations as percentage of net revenues, for the first
quarter of 2020 was negative 42.6%. Excluding DH, the operating
margin for the first quarter of 2020 was negative 56.8%, compared
with 11.1% in the first quarter of 2019 and 16.7% in the previous
quarter.
Other expense, net for the
first quarter of 2020 was RMB102 million (US$14 million), compared
to other income, net of RMB65 million for the first quarter of 2019
and other income, net of RMB45 million for the previous quarter.
Other expense, net for the first quarter of 2020 was mainly related
to impairment loss on investments totaling RMB92 million.
Unrealized losses from fair value
changes of equity securities for the first quarter of 2020
was RMB1.0 billion (US$142 million), compared to unrealized losses
from fair value changes of equity securities of RMB90 million in
the first quarter of 2019 and unrealized gains from fair value
changes of equity securities of RMB230 million in the previous
quarter. Unrealized gains (losses) from fair value changes of
equity securities mainly represents the unrealized gains (losses)
from our investment in equity securities with readily determinable
fair values, such as AccorHotels.
Income tax benefit for the
first quarter of 2020 was RMB30 million (US$4 million), compared to
income tax expenses of RMB31 million in the same period of 2019 and
income tax expenses of RMB133 million in the previous quarter. The
effective tax rate of 1% in the first quarter of 2020 was mainly
related to certain non-taxable loss of the fair value changes in
equity securities investments and the valuation allowance provided
for deferred tax assets.
Net loss attributable to Huazhu Group
Limited for the first quarter of 2020 was RMB2.1 billion
(US$301 million). Excluding share-based compensation expenses and
the unrealized losses from fair value changes of equity securities,
adjusted net loss attributable to Huazhu Group Limited (non-GAAP)
for the first quarter of 2020 were RMB1.1 billion (US$155 million).
Excluding DH, the net loss attributable to Huazhu Group Limited for
the first quarter of 2020 was RMB2.0 billion, compared to net
income attributable to Huazhu Group Limited of RMB106 million in
the first quarter of 2019 and net income attributable to Huazhu
Group Limited of RMB619 million in the previous quarter. Excluding
DH, the adjusted net loss attributable to Huazhu Group Limited
(non-GAAP) for the first quarter of 2020 was RMB981 million,
compared with adjusted net income attributable to Huazhu Group
Limited (non-GAAP) of RMB222 million in the first quarter of 2019
and adjusted net income attributable to Huazhu Group Limited
(non-GAAP) of RMB411 million in the previous quarter.
Basic and diluted losses per
share/ADS. For the first quarter of 2020, basic and
diluted losses per share were RMB7.46 (US$1.05). For the first
quarter of 2020, excluding share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities, adjusted basic and diluted losses per share (non-GAAP)
were RMB3.85 (US$0.54).
EBITDA (non-GAAP) for the first
quarter of 2020 was negative RMB1.7 billion (US$245 million).
Excluding DH, the EBITDA (non-GAAP) for the first quarter of 2020
was negative RMB1.7 billion (US$234 million), compared with
positive RMB412 million in the first quarter of 2019 and positive
RMB1.1 billion in the previous quarter. Excluding share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities, adjusted EBITDA (non-GAAP) for the
first quarter of 2020 was negative RMB704 million (US$99 million).
Excluding DH, the adjusted EBITDA (non-GAAP) for the first quarter
of 2020 was negative RMB631 million (US$88 million), compared with
positive RMB528 million in the first quarter of 2019 and positive
RMB854 million in the previous quarter.
Cash flow. Operating cash
outflow for the first quarter of 2020 was RMB1.3 billion (US$190
million). Investing cash outflow for the first quarter of 2020 was
RMB5.2 billion (US$739 million), mainly included RMB5 billion (net
cash out) for the acquisition of DH. Financing cash outflow
for the first quarter of 2020 was RMB3.9 billion (US$550 million),
mainly related to repayment of bank loans and dividend paid to
shareholders.
Cash and cash equivalents and Restricted
cash. As of March 31, 2020, the Company had a total
balance of cash and cash equivalents of RMB1.8 billion (US$254
million) and restricted cash of RMB1.7 billion (US$237
million).
Debt financing. As of March 31,
2020, the Company had a total debt balance of RMB13.6 billion
(US$1.9 billion) and the unutilized credit facility available to
the Company was RMB2.0 billion. On April 17, 2020, we obtained a
leverage covenant waiver for our syndication loan, which consisted
of US$500 million and EUR440 million, due in December 2022. On May
26, 2020, we issued US$500 million of convertible senior notes due
2026. The proceeds of these convertible senior notes were partially
used for the repayment of the revolving portion of our syndicated
bank borrowings.
COVID-19 update
With China declaring an early victory in the
containment of COVID-19 and normalized epidemic prevention and
control, domestic travel is gradually rebuilding with eased travel
restrictions and national policy for resuming production and work.
Our occupancy rate has been improving steadily from March through
early June, at which our hotels in China has reached 83%. Since
June 11, 2020, more COVID-19 patient cases have been discovered in
Beijing, and Beijing has reinstituted strict travel restrictions to
curb the spread of COVID-19 once again. However, the Chinese
government is more experienced and more prepared this time, and is
more capable of preventing a nationwide spread of COVID-19.
Since early March 2020, Deutsche Hospitality
hotel operations have also been affected by COVID-19 in Europe. In
order to contain the spread of COVID-19, local governments ordered
a number of our European hotels to be closed. At the end of March
2020, 74% or 85 of hotels of DH hotels were closed. The German
government has implemented measures against COVID-19. Due to the
German government’s measures and our employees’ great efforts, we
have observed an initial recovery in our hotel operations since
May. As of June 27, 2020, 79% or 91 of hotels of our DH hotels have
resumed operations. We have also reached out to our banks for
additional bank facilities to support our operations in Europe
during this period. As of June 24, 2020, we secured EUR45 million
from banks in Germany to support our cash needs.
Guidance In the second quarter
of 2020, Huazhu expects net revenues to decline 32% to 34%
year-over-year or 35% to 37% if excluding the addition of Deutsche
Hospitality. Given the uncertainties amid the mix of recovery in
China and wider spread of COVID-19 outside of China, we are not
able to provide meaningful revenue guidance for the full year 2020
at this time. We will continue to closely monitor these
developments and provide more updates when possible.
The above forecast reflects the Company’s
current and preliminary view, which is subject to change.
Conference CallHuazhu’s
management will host a conference call at 9 p.m. ET, Tuesday, June
30, 2020 (or 9 a.m. on Wednesday, July 1, 2020 in the Shanghai/Hong
Kong time zone) following the announcement.
The conference call will be hosted by a Direct
Event and all participants must preregister online prior to this
call. Please use the link
http://apac.directeventreg.com/registration/event/6692286 to
complete the online registration at least 15 minutes prior to the
commencement of this conference call. Once preregistration has been
completed, participants will receive dial-in numbers, an event
passcode, and a unique registrant ID. To join the conference,
please dial the number you receive, enter the event passcode, then
your unique registrant ID, and you will be connected to the
conference. Please dial in approximately 10 minutes before the
scheduled time of the call.
A telephone replay of the call will be available
after the conclusion of the conference call until August 7, 2020.
To access the replay, please dial +1 855 452 5696 (for callers in
the US), 400 632 2162 (for callers in China Mainland), 800 963 117
(for callers in Hong Kong) or +61 2 8199 0299 (for callers outside
of the US, China Mainland, and Hong Kong) and reference the
conference ID 6692286.
Use of Non-GAAP Financial
MeasuresTo supplement the Company’s unaudited consolidated
financial results presented in accordance with U.S. Generally
Accepted Accounting Principles (or U.S. GAAP), the Company uses the
following non-GAAP measures defined as non-GAAP financial measures
by the U.S. Securities and Exchange Commission (or SEC): hotel
operating costs excluding share-based compensation expenses;
general and administrative expenses excluding share-based
compensation expenses; selling and marketing expenses excluding
share-based compensation expenses; adjusted income from operations
excluding share-based compensation expenses; adjusted net income
attributable to Huazhu Group Limited excluding share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities; adjusted basic and diluted earnings
per share/ADS excluding share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities; EBITDA; and adjusted EBITDA excluding share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities. The presentation of these non-GAAP
financial measures is not intended to be considered in isolation or
as a substitute for the financial information prepared and
presented in accordance with U.S. GAAP. For more information on
these non-GAAP financial measures, please see the table captioned
“Reconciliations of GAAP and non-GAAP results” at the end of this
release. The Company believes that these non-GAAP financial
measures provide meaningful supplemental information regarding
Company performance by excluding share-based compensation expenses
and unrealized gains (losses) from fair value changes of equity
securities that may not be indicative of Company operating
performance. The Company believes that both management and
investors benefit from referring to these non-GAAP financial
measures in assessing Company performance and when planning and
forecasting future periods. These non-GAAP financial measures also
facilitate management’s internal comparisons to the Company’s
historical performance. The Company believes these non-GAAP
financial measures are also useful to investors in allowing for
greater transparency with respect to supplemental information used
regularly by Company management in financial and operational
decision-making. A limitation of using non-GAAP financial measures
excluding share-based compensation expenses and unrealized gains
(losses) from fair value changes of equity securities is that
share-based compensation expenses and unrealized gains (losses)
from fair value changes of equity securities have been and will
continue to be significant and recurring in the Company’s business.
Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from each non-GAAP
measure. The accompanying tables have more details on the
reconciliations between GAAP financial measures that are most
directly comparable to non-GAAP financial measures.
The Company believes that EBITDA is a useful
financial metric to assess the operating and financial performance
before reflecting the effects of investing and financing
transactions and income taxes, given the significant investments
that the Company has made in leasehold improvements, depreciation
and amortization expense that comprise a significant portion of the
Company’s cost structure. In addition, the Company believes that
EBITDA is widely used by other companies in the lodging and other
industry, and may be used by investors and Company management as a
measure of financial performance. The Company believes that EBITDA
provides investors with a useful tool for comparability between
periods because it eliminates depreciation and amortization expense
attributable to capital expenditures. The Company also uses
adjusted EBITDA, which is defined as EBITDA before share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities, to assess operating results of our
hotels in operation. The Company believes that the exclusion of
share-based compensation expenses and unrealized gains (losses)
from fair value changes of equity securities helps facilitate
year-on-year comparison of the results of operations as the
share-based compensation expenses and unrealized gains (losses)
from fair value changes of equity securities may not be indicative
of Company operating performance.
The Company believes that unrealized gains and
losses from changes in fair value of equity securities are
generally meaningless in understanding our reported results or
evaluating the economic performance of our businesses. These gains
and losses have caused and will continue to cause significant
volatility in reported periodic earnings.
Therefore, the Company believes that adjusted
EBITDA more closely reflects the performance capability of our
hotels. The presentation of EBITDA and adjusted EBITDA should not
be construed as an indication that the Company’s future results
will be unaffected by other charges and gains considered to be
outside the ordinary course of business.
The use of EBITDA and adjusted EBITDA has
certain limitations. Depreciation and amortization expense for
various long-term assets (including land use rights), income tax,
interest expense and interest income have been and will be incurred
and are not reflected in the presentation of EBITDA. Share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities have been and will be incurred and are
not reflected in the presentation of adjusted EBITDA. Each of these
items should also be considered in the overall evaluation of the
results. The Company compensates for these limitations by providing
the relevant disclosure of the depreciation and amortization,
interest income, interest expense, income tax expense, share-based
compensation expenses, and unrealized gains (losses) from fair
value changes of equity securities and other relevant items both in
the reconciliations to the U.S. GAAP financial measures and in the
consolidated financial statements, all of which should be
considered when evaluating the performance of the Company.
The terms EBITDA and adjusted EBITDA are not
defined under U.S. GAAP, and neither EBITDA nor adjusted EBITDA is
a measure of net income, operating income, operating performance or
liquidity presented in accordance with U.S. GAAP. When assessing
the operating and financial performance, investors should not
consider these data in isolation or as a substitute for the
Company’s net income, operating income or any other operating
performance measure that is calculated in accordance with U.S.
GAAP. In addition, the Company’s EBITDA or adjusted EBITDA may not
be comparable to EBITDA or adjusted EBITDA or similarly titled
measures utilized by other companies since such other companies may
not calculate EBITDA or adjusted EBITDA in the same manner as the
Company does.
Reconciliations of the Company’s non-GAAP
financial measures, including EBITDA and adjusted EBITDA, to the
consolidated statement of operations information are included at
the end of this press release.
About Huazhu Group
LimitedOriginated in China, Huazhu Group Limited is a
world-leading hotel operator and franchisor. As of March 31, 2020,
Huazhu operated 5,953 hotels with 575,488 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, and Blossom House. Upon
the completion of the Deutsche Hospitality acquisition on January
2, 2020, Huazhu added 5 brands to our 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 Huazhu
appoints, and 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, 2020, Huazhu operates 17 percent of its hotel rooms under
lease and ownership model, and 83 percent under manachise and
franchise models.
For more information, please visit the Company’s
website: http://ir.huazhu.com.
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995: The information in this
release contains forward-looking statements which involve risks and
uncertainties, including statements regarding the Company’s capital
needs, business strategy and expectations. 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. Any or all of the Company’s forward-looking statements may
turn out to be wrong. They can be affected by inaccurate
assumptions, risks and uncertainties and other factors which could
cause actual events or results to be materially different from
those expressed or implied in the forward-looking statements. In
evaluating these statements, readers should consider various
factors, including the anticipated growth strategies of the
Company, the future results of operations and financial condition
of the Company, the economic conditions of China, the regulatory
environment in China, the Company’s ability to attract customers
and leverage its brands, trends and competition in the lodging
industry, the expected growth of demand for lodging in China and
other factors and risks outlined in the Company’s filings with the
SEC, including the Company’s annual report on Form 20-F and other
filings. These factors may cause the Company’s actual results to
differ materially from any forward-looking statement. In addition,
new factors emerge from time to time and it is not possible for the
Company to predict all factors that may cause actual results to
differ materially from those contained in any forward-looking
statements. Any projections in this release are based on limited
information currently available to the Company, which is subject to
change. This release also contains statements or projections that
are based upon information available to the public, as well as
other information from sources which the Company believes to be
reliable, but it is not guaranteed by the Company to be accurate,
nor does the Company purport it to be complete. The Company
disclaims any obligation to publicly update any forward-looking
statements to reflect events or circumstances after the date of
this document, except as required by applicable law.
1 Hotel turnover refers to total transaction value of room and
non-room revenues (i.e., leased and operated, manachised and
franchised hotels).
2 The conversion of Renminbi (“RMB”) into United States Dollars
(“US$”) is based on the exchange rate of US$1.00=RMB7.0808 on March
31, 2020 as set forth in H.10 statistical release of the U.S.
Federal Reserve Board and available at
http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.
---Financial Tables and Operational Data
Follow—
Huazhu Group
Limited |
Unaudited
Condensed Consolidated Balance Sheets |
|
December 31, 2019 |
|
March 31, 2020 |
|
RMB |
|
RMB |
|
US$ |
|
(in
millions) |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
3,234 |
|
1,800 |
|
254 |
Restricted cash |
10,765 |
|
1,675 |
|
237 |
Short-term investments |
2,908 |
|
1,539 |
|
217 |
Accounts receivable, net |
218 |
|
405 |
|
57 |
Loan receivables, net |
193 |
|
222 |
|
31 |
Amounts due from related parties |
182 |
|
220 |
|
31 |
Inventories |
57 |
|
90 |
|
13 |
Income tax receivables |
- |
|
20 |
|
3 |
Other current assets, net |
699 |
|
839 |
|
118 |
Total
current assets |
18,256 |
|
6,810 |
|
961 |
|
|
|
|
|
|
Property
and equipment, net |
5,854 |
|
6,471 |
|
914 |
Intangible assets, net |
1,662 |
|
5,854 |
|
827 |
Operating
lease right-of-use assets |
20,875 |
|
29,567 |
|
4,176 |
Finance
lease right-of-use assets |
- |
|
1,776 |
|
251 |
Land use
rights, net |
215 |
|
213 |
|
30 |
Long-term
investments |
1,929 |
|
1,920 |
|
271 |
Goodwill |
2,657 |
|
5,339 |
|
754 |
Amounts
due from related parties |
- |
|
1 |
|
0 |
Loan
receivables, net |
280 |
|
297 |
|
42 |
Other
assets, net |
707 |
|
671 |
|
95 |
Deferred
tax assets |
548 |
|
759 |
|
107 |
Total
assets |
52,983 |
|
59,678 |
|
8,428 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Short-term debt |
8,499 |
|
5,782 |
|
816 |
Accounts payable |
1,176 |
|
1,143 |
|
161 |
Amounts due to related parties |
95 |
|
77 |
|
11 |
Salary and welfare payables |
491 |
|
547 |
|
77 |
Deferred revenue |
1,179 |
|
1,230 |
|
174 |
Operating lease liabilities, current |
3,082 |
|
3,388 |
|
478 |
Finance lease liabilities, current |
- |
|
23 |
|
3 |
Accrued expenses and other current liabilities |
1,856 |
|
1,330 |
|
188 |
Dividends payable |
678 |
|
- |
|
- |
Income tax payable |
231 |
|
168 |
|
24 |
Total
current liabilities |
17,287 |
|
13,688 |
|
1,932 |
|
|
|
|
|
|
Long-term
debt |
8,084 |
|
7,810 |
|
1,103 |
Operating
lease liabilities, noncurrent |
18,496 |
|
27,618 |
|
3,900 |
Finance
lease liabilities, noncurrent |
- |
|
2,168 |
|
306 |
Deferred
revenue |
559 |
|
546 |
|
77 |
Other
long-term liabilities |
566 |
|
659 |
|
93 |
Deferred tax
liabilities |
491 |
|
1,787 |
|
253 |
Retirement
benefit obligations |
- |
|
126 |
|
18 |
Total
liabilities |
45,483 |
|
54,402 |
|
7,682 |
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Ordinary shares |
0 |
|
0 |
|
0 |
Treasury shares |
(107) |
|
(107) |
|
(15) |
Additional paid-in capital |
3,834 |
|
3,863 |
|
546 |
Retained earnings |
3,701 |
|
1,559 |
|
220 |
Accumulated other comprehensive income (loss) |
(49) |
|
(115) |
|
(16) |
Total Huazhu
Group Limited shareholders' equity |
7,379 |
|
5,200 |
|
735 |
Noncontrolling interest |
121 |
|
76 |
|
11 |
Total equity |
7,500 |
|
5,276 |
|
746 |
Total
liabilities and equity |
52,983 |
|
59,678 |
|
8,428 |
Huazhu Group
Limited |
Unaudited
Condensed Consolidated Statements of Comprehensive
Income |
|
Quarter Ended |
|
March 31, 2019 |
|
December 31, 2019 |
|
March 31, 2020 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
(in
millions, except share, per share and per ADS data) |
Revenues: |
|
|
|
|
Leased and owned hotels |
1,706 |
|
1,921 |
|
1,516 |
|
214 |
|
Manachised and franchised hotels |
663 |
|
938 |
|
465 |
|
66 |
|
Others |
18 |
|
51 |
|
32 |
|
4 |
|
Net
revenues |
2,387 |
|
2,910 |
|
2,013 |
|
284 |
|
|
|
|
|
|
|
|
|
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
Hotel operating costs: |
|
|
|
|
|
|
|
|
Rents |
(651) |
|
(663) |
|
(866) |
|
(122) |
|
Utilities |
(129) |
|
(91) |
|
(132) |
|
(19) |
|
Personnel costs |
(446) |
|
(490) |
|
(643) |
|
(91) |
|
Depreciation and amortization |
(223) |
|
(257) |
|
(311) |
|
(44) |
|
Consumables, food and beverage |
(174) |
|
(215) |
|
(191) |
|
(27) |
|
Others |
(112) |
|
(163) |
|
(234) |
|
(33) |
|
Total hotel operating costs |
(1,735) |
|
(1,879) |
|
(2,377) |
|
(336) |
|
Other operating costs |
(7) |
|
(21) |
|
(8) |
|
(1) |
|
Selling and marketing expenses |
(77) |
|
(134) |
|
(146) |
|
(21) |
|
General and administrative expenses |
(206) |
|
(330) |
|
(316) |
|
(45) |
|
Pre-opening expenses |
(104) |
|
(149) |
|
(111) |
|
(16) |
|
Total
operating costs and expenses |
(2,129) |
|
(2,513) |
|
(2,958) |
|
(419) |
|
Other
operating income (expense), net |
6 |
|
89 |
|
88 |
|
13 |
|
Income
(Losses) from operations |
264 |
|
486 |
|
(857) |
|
(122) |
|
Interest
income |
33 |
|
39 |
|
29 |
|
4 |
|
Interest
expense |
(77) |
|
(83) |
|
(137) |
|
(19) |
|
Other
(expense) income, net |
65 |
|
45 |
|
(102) |
|
(14) |
|
Unrealized
gains (losses) from fair value changes of equity securities |
(90) |
|
230 |
|
(1,003) |
|
(142) |
|
Foreign
exchange gain (loss) |
(32) |
|
69 |
|
(58) |
|
(8) |
|
Income
(Loss) before income taxes |
163 |
|
786 |
|
(2,128) |
|
(301) |
|
Income tax
(expense) benefit |
(31) |
|
(133) |
|
30 |
|
4 |
|
Gain (Loss)
from equity method investments |
(33) |
|
(28) |
|
(60) |
|
(8) |
|
Net income
(loss) |
99 |
|
625 |
|
(2,158) |
|
(305) |
|
Net (income)
loss attributable to noncontrolling interest |
7 |
|
(6) |
|
23 |
|
4 |
|
Net income
(loss) attributable to Huazhu Group Limited |
106 |
|
619 |
|
(2,135) |
|
(301) |
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
|
|
|
|
Gain arising
from defined benefit plan, net of tax |
- |
|
- |
|
3 |
|
0 |
|
Foreign
currency translation adjustments, net of tax |
93 |
|
29 |
|
(67) |
|
(9) |
|
Comprehensive income (loss) |
192 |
|
654 |
|
(2,222) |
|
(314) |
|
Comprehensive (income) loss attributable to noncontrolling
interest |
7 |
|
(6) |
|
23 |
|
4 |
|
Comprehensive income (loss) attributable to Huazhu Group
Limited |
199 |
|
648 |
|
(2,199) |
|
(310) |
|
|
|
|
|
|
|
|
|
|
Earnings
(Losses) per share/ADS: |
|
|
|
|
|
|
|
|
Basic |
0.37 |
|
2.17 |
|
(7.46) |
|
(1.05) |
|
Diluted |
0.36 |
|
2.07 |
|
(7.46) |
|
(1.05) |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computation: |
|
|
|
|
|
|
|
|
Basic |
283,251,520 |
|
285,256,343 |
|
286,013,704 |
|
286,013,704 |
|
Diluted |
293,449,989 |
|
304,319,151 |
|
286,013,704 |
|
286,013,704 |
|
Huazhu Group
Limited |
Unaudited
Condensed Consolidated Statements of Cash Flows |
|
Quarter Ended |
|
March 31, 2019 |
|
December 31, 2019 |
|
March 31, 2020 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
(in millions) |
|
|
|
|
|
|
|
Operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
99 |
|
625 |
|
(2,158) |
|
(305) |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Share-based compensation |
26 |
|
22 |
|
29 |
|
4 |
|
Depreciation and amortization, and other |
237 |
|
273 |
|
336 |
|
48 |
|
Impairment loss |
- |
|
10 |
|
102 |
|
14 |
|
Loss from equity method investments, net of dividends |
33 |
|
37 |
|
60 |
|
8 |
|
Investment (income) loss |
77 |
|
(353) |
|
1,088 |
|
154 |
|
Changes in operating assets and liabilities |
(307) |
|
387 |
|
(1,275) |
|
(180) |
|
Other |
(18) |
|
(22) |
|
472 |
|
67 |
|
Net cash provided by (used in) operating activities |
147 |
|
979 |
|
(1,346) |
|
(190) |
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
(384) |
|
(459) |
|
(484) |
|
(68) |
|
Acquisitions, net of cash received |
(36) |
|
(160) |
|
(5,056) |
|
(714) |
|
Purchase of long-term investments |
- |
|
(63) |
|
- |
|
- |
|
Proceeds from maturity/sale of long-term investments |
188 |
|
1,281 |
|
336 |
|
47 |
|
Loan advances |
(186) |
|
(76) |
|
(58) |
|
(8) |
|
Loan collections |
40 |
|
92 |
|
24 |
|
3 |
|
Other |
0 |
|
20 |
|
3 |
|
1 |
|
Net cash provided by (used in) investing activities |
(378) |
|
635 |
|
(5,235) |
|
(739) |
|
|
|
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
Net proceeds from issuance of ordinary shares upon exercise of
options |
1 |
|
4 |
|
0 |
|
0 |
|
Proceeds from debt |
2,644 |
|
11,064 |
|
836 |
|
118 |
|
Repayment of debt |
(2,186) |
|
(3,136) |
|
(4,023) |
|
(568) |
|
Dividend paid |
(658) |
|
- |
|
(677) |
|
(96) |
|
Other |
5 |
|
(2) |
|
(29) |
|
(4) |
|
Net cash
provided by (used in) financing activities |
(194) |
|
7,930 |
|
(3,893) |
|
(550) |
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash, cash equivalents and restricted
cash |
(2) |
|
4 |
|
(50) |
|
(7) |
|
Net increase
(decrease) in cash, cash equivalents and restricted cash |
(427) |
|
9,548 |
|
(10,524) |
|
(1,486) |
|
Cash,
cash equivalents and restricted cash at the beginning of the
period |
4,884 |
|
4,451 |
|
13,999 |
|
1,977 |
|
Cash,
cash equivalents and restricted cash at the end of the period |
4,457 |
|
13,999 |
|
3,475 |
|
491 |
|
Huazhu Group
Limited |
Unaudited
Reconciliation of GAAP and Non-GAAP Results |
|
Quarter Ended March 31, 2020 |
|
|
GAAP Result |
|
% of Net Revenues |
|
Share-based Compensation |
|
% of Net Revenues |
|
Non-GAAP Result |
|
% of Net Revenues |
|
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
|
(in
millions) |
Hotel
operating costs |
2,377 |
|
118.1% |
|
10 |
|
0.5% |
|
2,367 |
|
117.6% |
|
Other
operating costs |
8 |
|
0.4% |
|
- |
|
0.0% |
|
8 |
|
0.4% |
|
Selling
and marketing expenses |
146 |
|
7.3% |
|
1 |
|
0.0% |
|
145 |
|
7.3% |
|
General
and administrative expenses |
316 |
|
15.7% |
|
18 |
|
0.9% |
|
298 |
|
14.8% |
|
Pre-opening expenses |
111 |
|
5.5% |
|
- |
|
0.0% |
|
111 |
|
5.5% |
|
Total
operating costs and expenses |
2,958 |
|
147.0% |
|
29 |
|
1.4% |
|
2,929 |
|
145.6% |
|
Income
(Loss) from operations |
(857) |
|
-42.6% |
|
29 |
|
1.4% |
|
(828) |
|
-41.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2020 |
|
|
GAAP Result |
|
% of Net Revenues |
|
Share-based Compensation |
|
% of Net Revenues |
|
Non-GAAP Result |
|
% of Net Revenues |
|
|
US$ |
|
|
|
US$ |
|
|
|
US$ |
|
|
|
(in
millions) |
Hotel
operating costs |
336 |
|
118.1% |
|
1 |
|
0.5% |
|
335 |
|
117.6% |
|
Other
operating costs |
1 |
|
0.4% |
|
- |
|
0.0% |
|
1 |
|
0.4% |
|
Selling
and marketing expenses |
21 |
|
7.3% |
|
0 |
|
0.0% |
|
21 |
|
7.3% |
|
General
and administrative expenses |
45 |
|
15.7% |
|
3 |
|
0.9% |
|
42 |
|
14.8% |
|
Pre-opening expenses |
16 |
|
5.5% |
|
- |
|
0.0% |
|
16 |
|
5.5% |
|
Total
operating costs and expenses |
419 |
|
147.0% |
|
4 |
|
1.4% |
|
415 |
|
145.6% |
|
Income
(Loss) from operations |
(122) |
|
-42.6% |
|
4 |
|
1.4% |
|
(118) |
|
-41.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2019 |
|
|
GAAP Result |
|
% of Net Revenues |
|
Share-based Compensation |
|
% of Net Revenues |
|
Non-GAAP Result |
|
% of Net Revenues |
|
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
|
(in
millions) |
Hotel
operating costs |
1,879 |
|
64.6% |
|
7 |
|
0.2% |
|
1,872 |
|
64.4% |
|
Other
operating costs |
21 |
|
0.7% |
|
- |
|
0.0% |
|
21 |
|
0.7% |
|
Selling
and marketing expenses |
134 |
|
4.6% |
|
1 |
|
0.0% |
|
133 |
|
4.6% |
|
General
and administrative expenses |
330 |
|
11.3% |
|
14 |
|
0.5% |
|
316 |
|
10.8% |
|
Pre-opening expenses |
149 |
|
5.1% |
|
- |
|
0.0% |
|
149 |
|
5.1% |
|
Total
operating costs and expenses |
2,513 |
|
86.3% |
|
22 |
|
0.7% |
|
2,491 |
|
85.6% |
|
Income
from operations |
486 |
|
16.7% |
|
22 |
|
0.7% |
|
508 |
|
17.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2019 |
|
|
GAAP Result |
|
% of Net Revenues |
|
Share-based Compensation |
|
% of Net Revenues |
|
Non-GAAP Result |
|
% of Net Revenues |
|
|
RMB |
|
|
|
RMB |
|
|
|
RMB |
|
|
|
|
(in
millions) |
Hotel
operating costs |
1,735 |
|
72.7% |
|
8 |
|
0.3% |
|
1,727 |
|
72.4% |
|
Other
operating costs |
7 |
|
0.3% |
|
- |
|
0.0% |
|
7 |
|
0.3% |
|
Selling
and marketing expenses |
77 |
|
3.2% |
|
1 |
|
0.0% |
|
76 |
|
3.2% |
|
General
and administrative expenses |
206 |
|
8.6% |
|
17 |
|
0.7% |
|
189 |
|
7.9% |
|
Pre-opening expenses |
104 |
|
4.4% |
|
- |
|
0.0% |
|
104 |
|
4.4% |
|
Total
operating costs and expenses |
2,129 |
|
89.2% |
|
26 |
|
1.0% |
|
2,103 |
|
88.2% |
|
Income
from operations |
264 |
|
11.1% |
|
26 |
|
1.0% |
|
290 |
|
12.1% |
|
Huazhu Group
Limited |
Unaudited
Reconciliation of GAAP and Non-GAAP Results |
|
Quarter Ended |
|
|
March 31, 2019 |
|
December 31, 2019 |
|
March 31, 2020 |
|
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
(in
millions, except shares, per share and per ADS data) |
Net income (loss) attributable to Huazhu Group Limited (GAAP) |
106 |
|
619 |
|
(2,135) |
|
(301) |
|
Share-based compensation expenses |
26 |
|
22 |
|
29 |
|
4 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
90 |
|
(230) |
|
1,003 |
|
142 |
|
Adjusted net income (loss) attributable to Huazhu Group Limited
(non-GAAP) |
222 |
|
411 |
|
(1,103) |
|
(155) |
|
|
|
|
|
|
|
|
|
|
Adjusted earnings (losses) per share/ADS (non-GAAP) |
|
|
|
|
|
|
|
|
Basic |
0.79 |
|
1.44 |
|
(3.85) |
|
(0.54) |
|
Diluted |
0.76 |
|
1.38 |
|
(3.85) |
|
(0.54) |
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computation |
|
|
|
|
|
|
|
|
Basic |
283,251,520 |
|
285,256,343 |
|
286,013,704 |
|
286,013,704 |
|
Diluted |
293,449,989 |
|
304,319,151 |
|
286,013,704 |
|
286,013,704 |
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
March 31, 2019 |
|
December 31, 2019 |
|
March 31, 2020 |
|
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
(in
millions, except per share and per ADS data) |
Net income (loss) attributable to Huazhu Group Limited
(GAAP) |
106 |
|
619 |
|
(2,135) |
|
(301) |
|
Interest income |
(33) |
|
(39) |
|
(29) |
|
(4) |
|
Interest expense |
77 |
|
83 |
|
137 |
|
19 |
|
Income tax expense (benefit) |
31 |
|
133 |
|
(30) |
|
(4) |
|
Depreciation and amortization |
231 |
|
266 |
|
321 |
|
45 |
|
EBITDA (non-GAAP) |
412 |
|
1,062 |
|
(1,736) |
|
(245) |
|
Share-based compensation |
26 |
|
22 |
|
29 |
|
4 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
90 |
|
(230) |
|
1,003 |
|
142 |
|
Adjusted EBITDA (non-GAAP) |
528 |
|
854 |
|
(704) |
|
(99) |
|
Operating Results:
Legacy-Huazhu
|
Number of
hotels |
|
Number of rooms |
|
Opened in Q1 2020 |
Closed (1)in Q1 2020 |
|
Net added in Q1 2020 |
As of March 31, 2020 |
|
As of March 31, 2020 |
|
|
|
|
|
|
|
|
Leased and
owned hotels |
10 |
(9) |
|
1 |
689 |
|
88,355 |
Manachised
and franchised hotels |
286 |
(67) |
|
219 |
5,149 |
|
464,007 |
Total |
296 |
(76) |
|
220 |
5,838 |
|
552,362 |
(1) The reasons for hotel closures mainly include
non-compliance to brand standards, operating losses, and
property-related issues. In Q1 2020, we had 14 hotels closed for
brand upgrade and business model change purposes |
|
As of March
31, 2020 |
|
Number of hotels |
Unopened hotels in pipeline |
Economy hotels |
3,992 |
1,128 |
Leased and owned hotels |
460 |
6 |
Manachised and franchised hotels |
3,532 |
1,122 |
Midscale and upscale hotels |
1,846 |
1,206 |
Leased and owned hotels |
229 |
29 |
Manachised and franchised hotels |
1,617 |
1,177 |
Total |
5,838 |
2,334 |
|
All hotels (excluding hotels under
requisition) |
|
For the
quarter ended |
|
|
March 31, |
December 31, |
March
31, |
yoy |
|
2019 |
|
2019 |
|
2020 |
|
change |
Average
daily room rate (in RMB) |
|
|
|
|
Leased and owned hotels |
258 |
|
277 |
|
211 |
|
-18.4% |
|
Manachised and franchised hotels |
211 |
|
223 |
|
184 |
|
-12.8% |
|
Blended |
221 |
|
232 |
|
189 |
|
-14.6% |
|
Occupancy
rate (as a percentage) |
|
|
|
|
Leased and owned hotels |
83.6% |
|
84.7% |
|
40.3% |
|
-43.3p.p. |
|
Manachised and franchised hotels |
79.8% |
|
81.6% |
|
39.4% |
|
-40.4p.p. |
|
Blended |
80.6% |
|
82.2% |
|
39.6% |
|
-41.0p.p. |
|
RevPAR (in
RMB) |
|
|
|
|
Leased and owned hotels |
216 |
|
235 |
|
85 |
|
-60.6% |
|
Manachised and franchised hotels |
169 |
|
182 |
|
73 |
|
-56.9% |
|
Blended |
178 |
|
191 |
|
75 |
|
-58.1% |
|
Operational hotels (excluding
①hotels under requisition,
②hotels temporarily closed) |
|
For the
quarter ended |
|
|
March 31, |
December 31, |
March
31, |
yoy |
|
2019 |
|
2019 |
|
2020 |
|
change |
Average
daily room rate (in RMB) |
|
|
|
|
Leased and owned hotels |
258 |
|
277 |
|
211 |
|
-18.4% |
|
Manachised and franchised hotels |
211 |
|
223 |
|
184 |
|
-12.8% |
|
Blended |
221 |
|
232 |
|
189 |
|
-14.6% |
|
Occupancy
rate (as a percentage) |
|
|
|
|
Leased and owned hotels |
83.6% |
|
84.7% |
|
43.8% |
|
-39.8p.p. |
|
Manachised and franchised hotels |
79.8% |
|
81.6% |
|
47.4% |
|
-32.5p.p. |
|
Blended |
80.6% |
|
82.2% |
|
46.7% |
|
-33.9p.p. |
|
RevPAR (in
RMB) |
|
|
|
|
Leased and owned hotels |
216 |
|
235 |
|
92 |
|
-57.2% |
|
Manachised and franchised hotels |
169 |
|
182 |
|
87 |
|
-48.3% |
|
Blended |
178 |
|
191 |
|
88 |
|
-50.5% |
|
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 |
For the quarter ended |
yoy |
For the quarter ended |
yoy |
For the quarter ended |
yoy |
|
March 31, |
March 31, |
change |
March 31, |
change |
March 31, |
change |
|
2019 |
2020 |
2019 |
2020 |
|
2019 |
2020 |
|
2019 |
|
2020 |
|
(p.p.) |
Economy hotels |
2,421 |
2,421 |
155 |
76 |
-50.6 |
% |
179 |
150 |
-16.2 |
% |
86.3 |
% |
50.9 |
% |
-35.4 |
Leased and owned hotels |
411 |
411 |
173 |
78 |
-55.2 |
% |
197 |
160 |
-18.8 |
% |
87.8 |
% |
48.5 |
% |
-39.3 |
Manachised and franchised hotels |
2,010 |
2,010 |
150 |
76 |
-49.2 |
% |
174 |
147 |
-15.4 |
% |
85.9 |
% |
51.6 |
% |
-34.3 |
Midscale and upscale hotels |
850 |
850 |
247 |
108 |
-56.2 |
% |
320 |
259 |
-18.9 |
% |
77.3 |
% |
41.7 |
% |
-35.5 |
Leased and owned hotels |
173 |
173 |
299 |
112 |
-62.7 |
% |
378 |
291 |
-23.1 |
% |
79.1 |
% |
38.3 |
% |
-40.8 |
Manachised and franchised hotels |
677 |
677 |
229 |
107 |
-53.4 |
% |
299 |
248 |
-17.0 |
% |
76.6 |
% |
43.0 |
% |
-33.6 |
Total |
3,271 |
3,271 |
184 |
87 |
-52.8 |
% |
220 |
180 |
-17.9 |
% |
83.5 |
% |
48.0 |
% |
-35.5 |
Operating Results:
Legacy-DH
|
Number of
hotels |
|
Number of rooms |
|
Unopened hotels in pipeline |
|
Opened |
Closed |
Net added |
As
of |
|
As
of |
|
As
of |
|
in Q1 2020 |
in Q1 2020 |
in Q1 2020 |
March 31, 2020 |
March 31, 2020 |
March 31, 2020 |
Leased
hotels |
3 |
(2 |
) |
1 |
|
67 |
|
12,327 |
|
28 |
Manachised
and franchised hotels |
2 |
(7 |
) |
(5 |
) |
48 |
|
10,799 |
|
13 |
Total |
5 |
(9 |
) |
(4 |
) |
115 |
|
23,126 |
|
41 |
|
|
|
|
|
|
|
|
|
|
For the
quarter ended |
|
|
|
March 31, |
December 31, |
March
31, |
yoy |
|
|
2019 |
|
2019 |
|
2020 |
|
change |
|
Average daily room rate (in EUR) |
|
|
|
|
|
Leased hotels |
104 |
|
105 |
|
97 |
|
-6.9% |
|
|
Manachised and franchised hotels |
83 |
|
88 |
|
80 |
|
-4.4% |
|
|
Blended |
95 |
|
97 |
|
89 |
|
-5.9% |
|
|
Occupancy rate (as a percentage) |
|
|
|
|
|
Leased hotels |
64.8% |
|
72.8% |
|
52.6% |
|
-12.2p.p. |
|
|
Manachised and franchised hotels |
58.6% |
|
65.0% |
|
50.4% |
|
-8.2p.p. |
|
|
Blended |
61.9% |
|
69.1% |
|
51.7% |
|
-10.3p.p. |
|
|
RevPAR (in EUR) |
|
|
|
|
|
Leased hotels |
67 |
|
76 |
|
51 |
|
-24.4% |
|
|
Manachised and franchised hotels |
49 |
|
57 |
|
40 |
|
-17.7% |
|
|
Blended |
59 |
|
67 |
|
46 |
|
-21.6% |
|
|
DH hotels by region
|
Number of
hotels |
|
As of March
31, 2020 |
|
All |
Leased |
Manachised and franchised |
Europe |
93 |
67 |
26 |
-Germany |
70 |
51 |
19 |
North Africa |
17 |
0 |
17 |
Asia |
5 |
0 |
5 |
Total |
115 |
67 |
48 |
Hotel Portfolio by BrandHuazhu
has realigned our brands for accelerated quality growth. During
2020: (1) we have reclassified our Ibis hotels as economy hotels;
(2) we have consolidated HanTing Premium to HanTing; and (3) we
have consolidated Grand Madison to Madison.
|
As of March
31, 2020 |
|
Hotels |
Rooms |
Unopened hotels |
|
in operation |
in
pipeline |
Economy hotels |
4,004 |
336,004 |
1,138 |
HanTing Hotel |
2,630 |
245,171 |
503 |
Hi Inn |
464 |
26,956 |
130 |
Elan Hotel |
713 |
42,375 |
424 |
Ibis Hotel |
185 |
20,254 |
71 |
Zleep Hotel |
12 |
1,248 |
10 |
Midscale and upscale hotels |
1,949 |
239,484 |
1,237 |
Ibis Styles Hotel |
59 |
7,120 |
33 |
Starway Hotel |
367 |
31,616 |
281 |
JI Hotel |
885 |
111,205 |
469 |
Orange Hotel |
255 |
29,199 |
164 |
Crystal Orange Hotel |
95 |
12,760 |
63 |
Manxin Hotel |
52 |
4,702 |
35 |
Madison Hotel |
15 |
1,933 |
28 |
Mercure Hotel |
71 |
12,733 |
81 |
Novotel Hotel |
9 |
2,818 |
13 |
Joya Hotel |
8 |
1,407 |
4 |
Blossom House |
24 |
832 |
25 |
Grand Mercure Hotel |
6 |
1,281 |
10 |
Steigenberger Hotels & Resorts |
50 |
11,909 |
8 |
Intercity Hotel |
42 |
7,537 |
19 |
Maxx by Steigenberger |
5 |
777 |
1 |
Jaz in the City |
2 |
424 |
2 |
Other partner hotels |
4 |
1,231 |
1 |
Total |
5,953 |
575,488 |
2,375 |
Contact InformationInvestor RelationsTel: +86 (21) 6195
9561Email: ir@huazhu.comhttp://ir.huazhu.com
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