Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “we”,
“our” or “the Company”), a world-leading hotel group, today
announced its unaudited financial results for the third quarter
ended September 30, 2020.
As of September 30, 2020, Huazhu’s worldwide
hotel network in operation totaled 6,507 hotels and 634,087 rooms,
including 117 hotels from the addition of DH. During the third
quarter of 2020, Legacy-Huazhu3 business opened 520 hotels,
including 9 leased (or leased-and-operated) hotels and 511
manachised (or franchised-and-managed) hotels and franchised
hotels, and closed a total of 201 hotels, including 12 leased
hotels and 189 manachised and franchised hotels. During the third
quarter of 2020, the Legacy-DH4 business opened 3 hotels, including
2 leased hotels and 1 manachised and franchised hotel, and closed 2
manachised and franchised hotels. As of September 30, 2020, Huazhu
had a total of 2,313 unopened hotels in pipeline, including 2,272
hotels from Legacy-Huazhu business and 41 hotels from Legacy-DH
business.
Legacy-Huazhu Only
– Third Quarter of 2020 Operational
Highlights
As of September 30, 2020,
Legacy-Huazhu had 6,390 hotels in operation, including 687
leased and owned hotels and 5,703 manachised hotels and franchised
hotels. In addition, as of the same date, Legacy-Huazhu had
610,765 hotel rooms in operation, including 91,218 under the lease
and ownership model and 519,547 under the manachise and franchise
models. Legacy-Huazhu also had 2,272 hotels in the pipeline,
including 22 leased and owned hotels and 2,250 manachised and
franchised hotels. Legacy-Huazhu has experienced continued
recovery during the third quarter of 2020. As of September 30,
2020, approximately 99% of Legacy-Huazhu’s hotels (excluding 83
hotels under governmental requisition) had resumed operations. The
following discusses Legacy-Huazhu’s RevPAR, average daily room rate
(“ADR”) and occupancy rate for its leased and owned hotels as well
as manachised and franchised hotels (excluding hotels under
governmental requisition) for the periods indicated.
- The ADR was RMB218 in the third
quarter of 2020, compared with RMB245 in the third quarter of 2019
and RMB185 in the previous quarter.
- The occupancy rate for all hotels
in operation was 82.0% in the third quarter of 2020, compared with
87.7% in the third quarter of 2019 and 68.8% in the previous
quarter.
- Blended RevPAR was RMB179 in the
third quarter of 2020, compared with RMB215 in the third quarter of
2019 and RMB127 in the previous quarter.
- For all hotels which had been in
operation for at least 18 months, the same-hotel RevPAR was RMB178
for the third quarter of 2020, representing a 19.8% decrease from
RMB222 for the third quarter of 2019, with a 13.5% decrease in ADR
and a 6.5-percentage-point decrease in occupancy rate.
Legacy-DH Only
– Third Quarter of 2020 Operational
Highlights
As of September 30, 2020, Legacy-DH had 117
hotels in operation, including 70 leased hotels and 47 manachised
and franchised hotels. In addition, as of the same date, Legacy-DH
had 23,322 hotel rooms in operation, including 12,820 under the
lease model and 10,502 under the manachise and franchise models.
Legacy-DH also had 41 hotels in the pipeline, including 28 leased
hotels and 13 manachised and franchised hotels. The following
discusses Legacy-DH’s RevPAR, average daily room rate (“ADR”) and
occupancy rate for its leased as well as manachised and franchised
hotels (excluding hotels temporarily closed) for the periods
indicated.
- The ADR was EUR93 in the third quarter of 2020, compared with
EUR98 in the third quarter of 2019 and EUR87 in the previous
quarter.
- The occupancy rate for all Legacy-DH hotels in operation was
37.9% in the third quarter of 2020, compared with 75.7% in the
third quarter of 2019 and 18.3% in the previous quarter.
- Blended RevPAR was EUR35 in the third quarter of 2020, compared
with EUR74 in the third quarter of 2019 and EUR16 in the previous
quarter.
Ji Qi, Founder, Executive Chairman and CEO of
Huazhu commented: “We are pleased to see our adjusted EBITDA turned
to a positive at RMB184 million in third quarter from a loss of
RMB97 million in second quarter 2020, mainly due to continued
strong recovery of Legacy-Huazhu’s hotels during the third quarter,
following an upward RevPAR trend. Legacy-DH’s operating performance
has also been steadily recovering from July until late-September
when a second wave of the COVID-19 pandemic occurred again in
Europe. We are taking further cost and cash flow measures to
mitigate the effects of this situation.
“We remain very confident,” continued Mr. Ji,
“to achieve our target of 10,000 hotels by 2022 as we believe the
pandemic will accelerate the industry consolidation where Huazhu,
as one of the market leaders, should be the major beneficiary. In
addition, we are also exploring new opportunities in lower-tier
cities to further expand our presence across China.”
Third Quarter of 2020 Financial
ResultsThe third quarter of 2020 financial results
included results of Legacy-DH business, which was not included in
the third quarter of 2019 financial results. In the third quarter
of 2020, both Legacy-Huazhu business and Legacy-DH businesses were
affected by the COVID-19 pandemic compared with that of the third
quarter of 2019.
(RMB in millions) |
Q3 2019 |
Q2 2020 |
Q3 2020 |
Revenues: |
|
|
|
Leased and
owned hotels |
2,089 |
1,236 |
2,131 |
Manachised
and franchised hotels |
939 |
676 |
995 |
Others |
27 |
41 |
32 |
Net
revenues |
3,055 |
1,953 |
3,158 |
Net revenues for the third
quarter of 2020 were RMB3.2 billion (US$466 million), representing
a 3.4% year-over-year increase and a 61.7% sequential increase.
Excluding DH, our net revenues for the third quarter of 2020 were
RMB2.7 billion, representing a 10.5% year-over-year decrease.
Net revenues from leased and owned
hotels for the third quarter of 2020 were RMB2.1 billion
(US$314 million), representing a 2.0% year-over-year increase and a
72.4% sequential increase. Excluding DH, our net revenues from
leased and owned hotels for the third quarter of 2020 were RMB1.7
billion, representing a 17.8% year-over-year decrease.
Net revenues from manachised and
franchised hotels for the third quarter of 2020 were
RMB995 million (US$147 million), representing a 6.0% year-over-year
increase and a 47.2% sequential increase. Excluding DH, our net
revenues from manachised and franchised hotels for the third
quarter of 2020 were RMB976 million, representing a 3.9%
year-over-year increase.
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$5 million) in
the third quarter of 2020, compared to RMB27 million in the third
quarter of 2019 and RMB41 million in the previous quarter.
(RMB in millions) |
Q3 2019 |
Q2 2020 |
Q3 2020 |
Operating costs and expenses: |
|
|
|
Hotel operating costs |
1,834 |
2,135 |
2,470 |
Other operating costs |
11 |
7 |
15 |
Selling and marketing expenses |
113 |
107 |
162 |
General and administrative expenses |
277 |
263 |
343 |
Pre-opening expenses |
126 |
99 |
42 |
Total
operating costs and expenses |
2,361 |
2,611 |
3,032 |
Hotel operating costs for the
third quarter of 2020 were RMB2.5 billion (US$364 million),
compared to RMB1.8 billion in the third quarter of 2019 and RMB2.1
billion in the previous quarter. Excluding DH, hotel operating
costs for the third quarter of 2020 were RMB1.9 billion, which
represented 70.4% of the quarter’s net revenues, compared to 60.0%
for the third quarter in 2019 and 93.4% for the previous
quarter.
Selling and marketing expenses
for the third quarter of 2020 were RMB162 million (US$25 million),
compared to RMB113 million in the third quarter of 2019 and RMB107
million in the previous quarter. Excluding DH, selling and
marketing expenses for the third quarter of 2020 were RMB102
million, which represented 3.7% of the quarter’s net revenues,
compared to RMB113 million or 3.7% of net revenues for the third
quarter in 2019, and RMB71 million or 3.9% of net revenues for the
previous quarter.
General and administrative
expenses for the third quarter of 2020 were RMB343 million
(US$51 million), compared to RMB277 million in the third quarter of
2019 and RMB263 million in the previous quarter. Excluding DH,
general and administrative expenses for the third quarter of 2020
were RMB235 million, which represented 8.6% of the quarter’s net
revenues, compared to 9.1% for the third quarter in 2019 and 9.7%
for the previous quarter. The effects of a number of our
cost-cutting initiatives, such as streamlining of head office
headcounts, was gradually reflected.
Pre-opening expenses for the
third quarter of 2020 were all related to Legacy-Huazhu totaling
RMB42 million (US$6 million), compared to RMB126 million in the
third quarter of 2019 and RMB99 million in the previous
quarter.
Goodwill impairment loss for
the third quarter of 2020 was all related to Legacy-DH totaling
RMB437 million (US$64 million). As mentioned earlier, the Legacy-DH
business had been gradually recovering since April 2020. However, a
second wave of COVID-19 in Europe since late-September 2020
prolonged the timing and increased the uncertainty of the business
recovery. In this connection, we made a non-cash provision of
goodwill impairment loss on the Legacy-DH business.
Other operating income, net for
the third quarter of 2020 was RMB110 million (US$16 million) mainly
related to subsidy income totaling RMB99 million, compared to RMB9
million in the third quarter of 2019 and RMB164 million in the
previous quarter.
Loss from operations for the
third quarter of 2020 was RMB201 million (US$30 million). Excluding
share-based compensation expenses, adjusted loss from operations
(non-GAAP) for the third quarter of 2020 was RMB168 million (US$25
million), compared to adjusted income from operations (non-GAAP) of
RMB734 million in the third quarter of 2019 and adjusted loss from
operations (non-GAAP) of RMB456 million in the previous quarter.
Excluding DH, our income from operations for the third quarter of
2020 was RMB523 million, compared to income from operations of
RMB703 million in the third quarter of 2019 and loss from
operations of RMB207 million in the previous quarter.
Operating margin, defined as
income from operations as a percentage of net revenues, for the
third quarter of 2020, was a negative 6.4%. Excluding DH, the
operating margin for the third quarter of 2020 was 19.1%, compared
with 23.0% in the third quarter of 2019 and a negative 11.4% in the
previous quarter.
Other expense, net for the
third quarter of 2020 was RMB1 million (US$0 million), compared to
other income, net of RMB86 million for the third quarter of 2019,
mainly due to gains realized from our sales of some equity
securities in the third quarter of 2019, and other income, net of
RMB21 million for the previous quarter.
Unrealized gains from fair value changes
of equity securities for the third quarter of 2020 was
RMB39million (US$6 million), compared to unrealized gains from fair
value changes of equity securities of RMB28 million in the third
quarter of 2019 and unrealized losses from fair value changes of
equity securities of RMB34 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
third quarter of 2020 was RMB50 million (US$7 million), compared to
income tax expense of RMB191 million in the same period of 2019 and
income tax benefit of RMB68 million in the previous quarter.
Net loss attributable to Huazhu Group
Limited for the third quarter of 2020 was RMB212 million
(US$31 million). Excluding share-based compensation expenses and
the unrealized gains (losses) from fair value changes of equity
securities (but including non-cash goodwill impairment loss of
RMB437 million), adjusted net loss attributable to Huazhu Group
Limited (non-GAAP) for the third quarter of 2020 was RMB218 million
(US$32 million). Excluding DH, the net income attributable to
Huazhu Group Limited for the third quarter of 2020 was RMB482
million, compared to net income attributable to Huazhu Group
Limited of RMB431 million in the third quarter of 2019 and a net
loss attributable to Huazhu Group Limited of RMB325 million in the
previous quarter. Excluding DH, the adjusted net income
attributable to Huazhu Group Limited (non-GAAP) for the third
quarter of 2020 was RMB476 million, compared with adjusted net
income attributable to Huazhu Group Limited (non-GAAP) of RMB434
million in the third quarter of 2019 and an adjusted net loss
attributable to Huazhu Group Limited (non-GAAP) of RMB253 million
in the previous quarter.
Basic and diluted losses per
share/ADS. For the third quarter of 2020, basic and
diluted losses per share were RMB0.73 (US$0.11). For the third
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 RMB0.75 (US$0.11).
EBITDA (non-GAAP) for the third
quarter of 2020 was RMB190 million (US$28 million). Excluding DH,
the EBITDA (non-GAAP) for the third quarter of 2020 was RMB859
million (US$118 million), compared with RMB898 million in the third
quarter of 2019 and RMB66 million in the previous quarter.
Excluding share-based compensation expenses and unrealized gains
(losses) from fair value changes of equity securities (but
including non-cash goodwill impairment loss of RMB437 million),
adjusted EBITDA (non-GAAP) for the third quarter of 2020 was RMB184
million (US$27 million). Excluding DH, the adjusted EBITDA
(non-GAAP) for the third quarter of 2020 was RMB853 million (US$117
million), compared with RMB901 million in the third quarter of 2019
and RMB138 million in the previous quarter.
Cash flow. Operating cash
inflow for the third quarter of 2020 was RMB1.1 billion (US$168
million). Investing cash outflow for the third quarter of 2020 was
RMB2.1 billion (US$305 million), mainly including RMB1.6 billion
(net cash out) for an investment in Accor shares. Financing cash
inflow for the third quarter of 2020 was RMB3.8 billion (US$565
million), mainly related to RMB5.2 billion (net cash in) from the
secondary listing of the Company’s shares on The Stock Exchange of
Hong Kong Limited and RMB1.4 billion (net cash out) for the
repayment of bank loans.
Cash and cash equivalents and Restricted
cash. As of September 30, 2020, the Company had a total
balance of cash and cash equivalents of RMB6.6 billion (US$969
million) and restricted cash of RMB1.3 billion (US$195
million).
Debt financing. As of September
30, 2020, the Company had a total debt balance of RMB13.4 billion
(US$2.0 billion) and the unutilized credit facility available to
the Company was RMB4.4 billion. On November 2, 2020, we completed
our previously announced put right offer relating to our 0.375%
Convertible Senior Notes due 2022. US$6,000 aggregate principal
amount of these Notes were repurchased, and paid in cash to the
applicable holders. The remaining Notes outstanding of US$475
million will be reclassified from short-term debt to long-term debt
on the balance sheet in the next quarter.
COVID-19 update During Q3 2020,
our occupancy rate recovery continued, thanks to China’s effective
control of the COVID-19 pandemic. In addition, our average daily
room rate had also recovered gradually along with the occupancy
rate. More importantly, leisure traveling was the key driver to
this recovery, which had resulted in outstanding performance of our
upper-midscale and upscale brand hotels. We were glad to see that
the recovering trend continued in October, with our blended RevPAR
recovering close to 100% as of the same time in last year. Heading
into November and December, as more COVID-19 patient cases have
been discovered in Shanghai, and some regions have been defined as
medium risk regions, these recent developments have negatively
affected demand for lodging in Shanghai and nearby cities. We
believe that the Chinese government has many tools to help contain
the pandemic, so we do not currently expect a nationwide spread of
COVID-19 in China.DH operating performance also recovered steadily
from July through mid-September 2020. However, this recovery
trend was affected since late September due to a second wave of
COVID-19 outbreak in European countries. To mitigate the effects of
this situation, we are taking further cost and cash flow measures,
such as deferring rental payments, reducing or eliminating
discretionary corporate spending and capital
expenditures, etc. As of November 30, 2020, 89% or 107 of DH
hotels were in operation. We have also reached out to our banks for
additional bank facilities to support our operations in Europe
during this period.
Guidance In October and
November, our blended RevPAR recovered to approximately 100% and
more than 90% of last year level, respectively. For December, up to
the date of this release, we have not yet seen any major impacts on
our blended RevPAR from recent recurrence of COVID-19 outbreak in
various cities, such as Shanghai and Tianjin. However, considering
the potential uncertainties in the remaining of December, we expect
net revenues in fourth quarter of 2020 to range from a 0% to a 3%
increase year-over-year, or to range from a decline of 4-7% if
excluding the addition of DH.
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 8 p.m. U.S. Eastern time,
Sunday, December 6, 2020 (or 9 a.m. (Hong Kong time) on Monday,
December 7, 2020) following the announcement. The conference call
will be a Direct Event call. All participants must preregister
online prior to the call. Please use the
link http://apac.directeventreg.com/registration/event/1536939
to complete the online registration at least 15 minutes prior to
the commencement of the 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
followed by your unique registrant ID, and you will be joined to
the conference promptly. Please dial in approximately 10 minutes
before the scheduled time of the call.
A recording of the conference call will be
available after the conclusion of the conference call through
December 14, 2020. Please dial +1 (855) 452 5696 (for callers in
the US), 400 632 2162 (for callers in mainland China), 800 963 117
(for callers in Hong Kong) or +61 2 8199 0299 (for callers outside
the US) and enter the passcode 1536939.
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
(loss) 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
(losses) 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
“Unaudited Reconciliation 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
industries, 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, however,
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 group. As of September 30, 2020, Huazhu
operated 6,507 hotels with 634,087 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 September 30, 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 the Company’s
website: https://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.
Contact InformationInvestor RelationsTel: +86
(21) 6195 9561Email: ir@huazhu.comhttps://ir.huazhu.com
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|
|
|
Cash and cash equivalents |
3,234 |
|
|
6,577 |
|
|
969 |
|
Restricted cash |
10,765 |
|
|
1,323 |
|
|
195 |
|
Short-term investments |
2,908 |
|
|
3,169 |
|
|
467 |
|
Accounts receivable, net |
218 |
|
|
493 |
|
|
73 |
|
Loan receivables, net |
193 |
|
|
245 |
|
|
36 |
|
Amounts due from related parties |
182 |
|
|
177 |
|
|
26 |
|
Inventories |
57 |
|
|
93 |
|
|
14 |
|
Income tax receivables |
- |
|
|
2 |
|
|
0 |
|
Other current assets, net |
699 |
|
|
697 |
|
|
102 |
|
Total
current assets |
18,256 |
|
|
12,776 |
|
|
1,882 |
|
|
|
|
|
Property
and equipment, net |
5,854 |
|
|
6,570 |
|
|
968 |
|
Intangible assets, net |
1,662 |
|
|
5,949 |
|
|
876 |
|
Operating
lease right-of-use assets |
20,875 |
|
|
29,677 |
|
|
4,371 |
|
Finance
lease right-of-use assets |
- |
|
|
1,793 |
|
|
264 |
|
Land use
rights, net |
215 |
|
|
209 |
|
|
31 |
|
Long-term
investments |
1,929 |
|
|
1,866 |
|
|
275 |
|
Goodwill |
2,657 |
|
|
4,976 |
|
|
733 |
|
Loan
receivables, net |
280 |
|
|
261 |
|
|
38 |
|
Other
assets, net |
707 |
|
|
757 |
|
|
111 |
|
Deferred
tax assets |
548 |
|
|
902 |
|
|
133 |
|
Total
assets |
52,983 |
|
|
65,736 |
|
|
9,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Short-term debt |
8,499 |
|
|
5,701 |
|
|
840 |
|
Accounts payable |
1,176 |
|
|
1,209 |
|
|
178 |
|
Amounts due to related parties |
95 |
|
|
73 |
|
|
11 |
|
Salary and welfare payables |
491 |
|
|
348 |
|
|
51 |
|
Deferred revenue |
1,179 |
|
|
1,317 |
|
|
194 |
|
Operating lease liabilities, current |
3,082 |
|
|
3,458 |
|
|
509 |
|
Finance lease liabilities, current |
- |
|
|
27 |
|
|
4 |
|
Accrued expenses and other current liabilities |
1,856 |
|
|
2,573 |
|
|
379 |
|
Dividends payable |
678 |
|
|
- |
|
|
- |
|
Income tax payable |
231 |
|
|
127 |
|
|
19 |
|
Total
current liabilities |
17,287 |
|
|
14,833 |
|
|
2,185 |
|
|
|
|
|
Long-term
debt |
8,084 |
|
|
7,686 |
|
|
1,132 |
|
Operating
lease liabilities, noncurrent |
18,496 |
|
|
27,742 |
|
|
4,086 |
|
Finance
lease liabilities, noncurrent |
- |
|
|
2,231 |
|
|
329 |
|
Deferred
revenue |
559 |
|
|
609 |
|
|
90 |
|
Other
long-term liabilities |
566 |
|
|
735 |
|
|
108 |
|
Deferred tax
liabilities |
491 |
|
|
1,828 |
|
|
269 |
|
Retirement
benefit obligations |
- |
|
|
129 |
|
|
19 |
|
Total
liabilities |
45,483 |
|
|
55,793 |
|
|
8,218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
Ordinary shares |
0 |
|
|
0 |
|
|
0 |
|
Treasury shares |
(107 |
) |
|
(107 |
) |
|
(16 |
) |
Additional paid-in capital |
3,834 |
|
|
9,005 |
|
|
1,326 |
|
Retained earnings |
3,701 |
|
|
799 |
|
|
118 |
|
Accumulated other comprehensive income (loss) |
(49 |
) |
|
162 |
|
|
24 |
|
Total Huazhu
Group Limited shareholders' equity |
7,379 |
|
|
9,859 |
|
|
1,452 |
|
Noncontrolling interest |
121 |
|
|
84 |
|
|
12 |
|
Total
equity |
7,500 |
|
|
9,943 |
|
|
1,464 |
|
Total
liabilities and equity |
52,983 |
|
|
65,736 |
|
|
9,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huazhu Group
Limited |
Unaudited
Condensed Consolidated Statements of Comprehensive
Income |
|
Quarter Ended |
|
September 30, 2019 |
|
June 30, 2020 |
|
September 30, 2020 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in
millions, except share, per share and per ADS data) |
Revenues: |
|
|
|
|
Leased and owned hotels |
2,089 |
|
|
1,236 |
|
|
2,131 |
|
|
314 |
|
Manachised and franchised hotels |
939 |
|
|
676 |
|
|
995 |
|
|
147 |
|
Others |
27 |
|
|
41 |
|
|
32 |
|
|
5 |
|
Net
revenues |
3,055 |
|
|
1,953 |
|
|
3,158 |
|
|
466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs and expenses: |
|
|
|
|
Hotel operating costs: |
|
|
|
|
Rents |
(664 |
) |
|
(833 |
) |
|
(859 |
) |
|
(126 |
) |
Utilities |
(105 |
) |
|
(91 |
) |
|
(136 |
) |
|
(20 |
) |
Personnel costs |
(466 |
) |
|
(508 |
) |
|
(611 |
) |
|
(90 |
) |
Depreciation and amortization |
(243 |
) |
|
(320 |
) |
|
(337 |
) |
|
(50 |
) |
Consumables, food and beverage |
(203 |
) |
|
(185 |
) |
|
(253 |
) |
|
(37 |
) |
Others |
(153 |
) |
|
(198 |
) |
|
(274 |
) |
|
(41 |
) |
Total hotel operating costs |
(1,834 |
) |
|
(2,135 |
) |
|
(2,470 |
) |
|
(364 |
) |
Other operating costs |
(11 |
) |
|
(7 |
) |
|
(15 |
) |
|
(2 |
) |
Selling and marketing expenses |
(113 |
) |
|
(107 |
) |
|
(162 |
) |
|
(25 |
) |
General and administrative expenses |
(277 |
) |
|
(263 |
) |
|
(343 |
) |
|
(51 |
) |
Pre-opening expenses |
(126 |
) |
|
(99 |
) |
|
(42 |
) |
|
(6 |
) |
Total
operating costs and expenses |
(2,361 |
) |
|
(2,611 |
) |
|
(3,032 |
) |
|
(448 |
) |
Goodwill impairment loss |
- |
|
|
- |
|
|
(437 |
) |
|
(64 |
) |
Other operating income (expense), net |
9 |
|
|
164 |
|
|
110 |
|
|
16 |
|
Income
(Losses) from operations |
703 |
|
|
(494 |
) |
|
(201 |
) |
|
(30 |
) |
Interest
income |
46 |
|
|
26 |
|
|
31 |
|
|
5 |
|
Interest
expense |
(72 |
) |
|
(142 |
) |
|
(136 |
) |
|
(20 |
) |
Other
(expense) income, net |
86 |
|
|
21 |
|
|
(1 |
) |
|
(0 |
) |
Unrealized
gains (losses) from fair value changes of equity securities |
28 |
|
|
(34 |
) |
|
39 |
|
|
6 |
|
Foreign
exchange gain (loss) |
(108 |
) |
|
34 |
|
|
48 |
|
|
7 |
|
Income
(Loss) before income taxes |
683 |
|
|
(589 |
) |
|
(220 |
) |
|
(32 |
) |
Income tax
(expense) benefit |
(191 |
) |
|
68 |
|
|
50 |
|
|
7 |
|
Gain (Loss)
from equity method investments |
(60 |
) |
|
(33 |
) |
|
(35 |
) |
|
(5 |
) |
Net income
(loss) |
432 |
|
|
(554 |
) |
|
(205 |
) |
|
(30 |
) |
Net (income)
loss attributable to noncontrolling interest |
(1 |
) |
|
6 |
|
|
(7 |
) |
|
(1 |
) |
Net income
(loss) attributable to Huazhu Group Limited |
431 |
|
|
(548 |
) |
|
(212 |
) |
|
(31 |
) |
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
Gain arising
from defined benefit plan, net of tax |
- |
|
|
4 |
|
|
(7 |
) |
|
(1 |
) |
Foreign
currency translation adjustments, net of tax |
(65 |
) |
|
43 |
|
|
237 |
|
|
35 |
|
Comprehensive income (loss) |
367 |
|
|
(507 |
) |
|
25 |
|
|
4 |
|
Comprehensive (income) loss attributable to noncontrolling
interest |
(1 |
) |
|
6 |
|
|
(7 |
) |
|
(1 |
) |
Comprehensive income (loss) attributable to Huazhu Group
Limited |
366 |
|
|
(501 |
) |
|
18 |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(Losses) per share/ADS: |
|
|
|
|
Basic |
1.51 |
|
|
(1.91 |
) |
|
(0.73 |
) |
|
(0.11 |
) |
Diluted |
1.45 |
|
|
(1.91 |
) |
|
(0.73 |
) |
|
(0.11 |
) |
|
|
|
|
|
Weighted average
number of shares used in computation: |
|
|
Basic |
284,657,577 |
|
|
286,473,344 |
|
|
291,675,396 |
|
|
291,675,396 |
|
Diluted |
304,311,266 |
|
|
286,473,344 |
|
|
291,675,396 |
|
|
291,675,396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huazhu Group
Limited |
Unaudited
Condensed Consolidated Statements of Cash Flows |
|
Quarter Ended |
|
September 30, 2019 |
|
June 30, 2020 |
|
September 30, 2020 |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
(in
millions) |
Operating activities: |
|
|
|
|
Net income (loss) |
432 |
|
|
(554 |
) |
|
(205 |
) |
|
(30 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
Share-based compensation |
31 |
|
|
38 |
|
|
33 |
|
|
5 |
|
Depreciation and amortization, and other |
257 |
|
|
359 |
|
|
367 |
|
|
54 |
|
Impairment loss |
3 |
|
|
16 |
|
|
453 |
|
|
67 |
|
Loss from equity method investments, net of dividends |
99 |
|
|
33 |
|
|
14 |
|
|
2 |
|
Investment (income) loss |
(6 |
) |
|
(11 |
) |
|
(89 |
) |
|
(13 |
) |
Changes in operating assets and liabilities |
20 |
|
|
470 |
|
|
747 |
|
|
110 |
|
Other |
171 |
|
|
161 |
|
|
(181 |
) |
|
(27 |
) |
Net cash provided by (used in) operating activities |
1,007 |
|
|
512 |
|
|
1,139 |
|
|
168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
Capital expenditures |
(390 |
) |
|
(339 |
) |
|
(452 |
) |
|
(67 |
) |
Acquisitions, net of cash received |
(23 |
) |
|
(0 |
) |
|
(3 |
) |
|
(0 |
) |
Purchase of investments |
(118 |
) |
|
(0 |
) |
|
(1,631 |
) |
|
(241 |
) |
Proceeds from maturity/sale of investments |
533 |
|
|
35 |
|
|
14 |
|
|
2 |
|
Loan advances |
(131 |
) |
|
(24 |
) |
|
(48 |
) |
|
(7 |
) |
Loan collections |
148 |
|
|
47 |
|
|
51 |
|
|
8 |
|
Other |
(8 |
) |
|
- |
|
|
0 |
|
|
0 |
|
Net cash provided by (used in) investing activities |
11 |
|
|
(281 |
) |
|
(2,069 |
) |
|
(305 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
Net proceeds from issuance of ordinary shares |
2 |
|
|
0 |
|
|
5,245 |
|
|
772 |
|
Proceeds from debt |
2 |
|
|
4,291 |
|
|
1,468 |
|
|
216 |
|
Repayment of debt |
(605 |
) |
|
(2,930 |
) |
|
(2,844 |
) |
|
(419 |
) |
Other |
(37 |
) |
|
(12 |
) |
|
(33 |
) |
|
(4 |
) |
Net cash
provided by (used in) financing activities |
(638 |
) |
|
1,349 |
|
|
3,836 |
|
|
565 |
|
|
|
|
|
|
Effect of
exchange rate changes on cash, cash equivalents and restricted
cash |
6 |
|
|
12 |
|
|
(73 |
) |
|
(11 |
) |
Net increase
(decrease) in cash, cash equivalents and restricted cash |
386 |
|
|
1,592 |
|
|
2,833 |
|
|
417 |
|
Cash,
cash equivalents and restricted cash at the beginning of the
period |
4,065 |
|
|
3,475 |
|
|
5,067 |
|
|
747 |
|
Cash,
cash equivalents and restricted cash at the end of the period |
4,451 |
|
|
5,067 |
|
|
7,900 |
|
|
1,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huazhu Group Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended September 30, 2020 |
|
GAAP Result |
% of NetRevenues |
Share-basedCompensation |
% of NetRevenues |
Non-GAAPResult |
% of NetRevenues |
|
RMB |
|
RMB |
|
RMB |
|
|
(in
millions) |
Hotel operating costs |
2,470 |
|
78.2 |
% |
|
12 |
0.4 |
% |
|
2,458 |
|
77.8 |
% |
Other
operating costs |
15 |
|
0.5 |
% |
|
- |
0.0 |
% |
|
15 |
|
0.5 |
% |
Selling
and marketing expenses |
162 |
|
5.1 |
% |
|
1 |
0.0 |
% |
|
161 |
|
5.1 |
% |
General
and administrative expenses |
343 |
|
10.9 |
% |
|
20 |
0.6 |
% |
|
323 |
|
10.3 |
% |
Pre-opening expenses |
42 |
|
1.3 |
% |
|
- |
0.0 |
% |
|
42 |
|
1.3 |
% |
Total
operating costs and expenses |
3,032 |
|
96.0 |
% |
|
33 |
1.0 |
% |
|
2,999 |
|
95.0 |
% |
Income
(Loss) from operations |
(201 |
) |
-6.4 |
% |
|
33 |
1.0 |
% |
|
(168 |
) |
-5.4 |
% |
|
|
|
|
|
|
|
|
Quarter Ended September 30, 2020 |
|
GAAP Result |
% of NetRevenues |
Share-basedCompensation |
% of NetRevenues |
Non-GAAPResult |
% of NetRevenues |
|
US$ |
|
US$ |
|
US$ |
|
|
(in
millions) |
Hotel
operating costs |
364 |
|
78.2 |
% |
|
2 |
0.4 |
% |
|
362 |
|
77.8 |
% |
Other
operating costs |
2 |
|
0.5 |
% |
|
- |
0.0 |
% |
|
2 |
|
0.5 |
% |
Selling
and marketing expenses |
25 |
|
5.1 |
% |
|
0 |
0.0 |
% |
|
25 |
|
5.1 |
% |
General
and administrative expenses |
51 |
|
10.9 |
% |
|
3 |
0.6 |
% |
|
48 |
|
10.3 |
% |
Pre-opening expenses |
6 |
|
1.3 |
% |
|
- |
0.0 |
% |
|
6 |
|
1.3 |
% |
Total
operating costs and expenses |
448 |
|
96.0 |
% |
|
5 |
1.0 |
% |
|
443 |
|
95.0 |
% |
Income
(Loss) from operations |
(30 |
) |
-6.4 |
% |
|
5 |
1.0 |
% |
|
(25 |
) |
-5.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, 2020 |
|
GAAP Result |
% of NetRevenues |
Share-basedCompensation |
% of NetRevenues |
Non-GAAPResult |
% of NetRevenues |
|
RMB |
|
RMB |
|
RMB |
|
|
(in
millions) |
Hotel
operating costs |
2,135 |
|
109.3 |
% |
|
11 |
0.6 |
% |
|
2,124 |
|
108.7 |
% |
Other
operating costs |
7 |
|
0.4 |
% |
|
- |
0.0 |
% |
|
7 |
|
0.4 |
% |
Selling
and marketing expenses |
107 |
|
5.5 |
% |
|
1 |
0.1 |
% |
|
106 |
|
5.4 |
% |
General
and administrative expenses |
263 |
|
13.5 |
% |
|
26 |
1.3 |
% |
|
237 |
|
12.2 |
% |
Pre-opening expenses |
99 |
|
5.1 |
% |
|
- |
0.0 |
% |
|
99 |
|
5.1 |
% |
Total
operating costs and expenses |
2,611 |
|
133.8 |
% |
|
38 |
2.0 |
% |
|
2,573 |
|
131.8 |
% |
Income
(Loss) from operations |
(494 |
) |
-25.3 |
% |
|
38 |
2.0 |
% |
|
(456 |
) |
-23.3 |
% |
|
|
|
|
|
Quarter Ended September 30, 2019 |
|
GAAP Result |
% of NetRevenues |
Share-basedCompensation |
% of NetRevenues |
Non-GAAPResult |
% of NetRevenues |
|
RMB |
|
RMB |
|
RMB |
|
|
(in millions) |
Hotel
operating costs |
1,834 |
|
60.0 |
% |
|
10 |
0.3 |
% |
|
1,824 |
|
59.7 |
% |
Other
operating costs |
11 |
|
0.4 |
% |
|
- |
0.0 |
% |
|
11 |
|
0.4 |
% |
Selling
and marketing expenses |
113 |
|
3.7 |
% |
|
1 |
0.0 |
% |
|
112 |
|
3.7 |
% |
General
and administrative expenses |
277 |
|
9.1 |
% |
|
20 |
0.7 |
% |
|
257 |
|
8.4 |
% |
Pre-opening expenses |
126 |
|
4.1 |
% |
|
- |
0.0 |
% |
|
126 |
|
4.1 |
% |
Total
operating costs and expenses |
2,361 |
|
77.3 |
% |
|
31 |
1.0 |
% |
|
2,330 |
|
76.3 |
% |
Income
from operations |
703 |
|
23.0 |
% |
|
31 |
1.0 |
% |
|
734 |
|
24.0 |
% |
|
Huazhu Group
Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended |
|
September
30, 2019 |
June 30,
2020 |
September
30, 2020 |
|
RMB |
RMB |
RMB |
US$ |
|
(in
millions, except shares, per share and per ADS data) |
Net income (loss) attributable to Huazhu Group Limited (GAAP) |
431 |
|
|
(548 |
) |
|
(212 |
) |
|
(31 |
) |
Share-based compensation expenses |
31 |
|
|
38 |
|
|
33 |
|
|
5 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
(28 |
) |
|
34 |
|
|
(39 |
) |
|
(6 |
) |
Adjusted net income (loss) attributable to Huazhu Group Limited
(non-GAAP) |
434 |
|
|
(476 |
) |
|
(218 |
) |
|
(32 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings (losses) per share/ADS (non-GAAP) |
Basic |
1.52 |
|
|
(1.66 |
) |
|
(0.75 |
) |
|
(0.11 |
) |
Diluted |
1.46 |
|
|
(1.66 |
) |
|
(0.75 |
) |
|
(0.11 |
) |
|
|
|
|
|
Weighted average number of shares used in computation |
Basic |
284,657,577 |
|
|
286,473,344 |
|
|
291,675,396 |
|
|
291,675,396 |
|
Diluted |
304,311,266 |
|
|
286,473,344 |
|
|
291,675,396 |
|
|
291,675,396 |
|
|
|
|
|
|
|
Quarter Ended |
|
September
30, 2019 |
June 30, 2020 |
September 30, 2020 |
|
RMB |
RMB |
RMB |
US$ |
|
(in
millions) |
Net income (loss) attributable to Huazhu Group Limited
(GAAP) |
431 |
|
|
(548 |
) |
|
(212 |
) |
|
(31 |
) |
Interest income |
(46 |
) |
|
(26 |
) |
|
(31 |
) |
|
(5 |
) |
Interest expense |
72 |
|
|
142 |
|
|
136 |
|
|
20 |
|
Income tax expense (benefit) |
191 |
|
|
(68 |
) |
|
(50 |
) |
|
(7 |
) |
Depreciation and amortization |
250 |
|
|
331 |
|
|
347 |
|
|
51 |
|
EBITDA (non-GAAP) |
898 |
|
|
(169 |
) |
|
190 |
|
|
28 |
|
Share-based compensation |
31 |
|
|
38 |
|
|
33 |
|
|
5 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
(28 |
) |
|
34 |
|
|
(39 |
) |
|
(6 |
) |
Adjusted EBITDA (non-GAAP) |
901 |
|
|
(97 |
) |
|
184 |
|
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Results:
Legacy-Huazhu
|
Number of
hotels |
|
Number of rooms |
|
Openedin Q3 2020 |
Closed (1)in Q3 2020 |
Net addedin Q3 2020 |
As ofSeptember 30,2020 (2) |
|
As ofSeptember 30,2020 |
|
|
Leased and owned hotels |
9 |
(12 |
) |
(3 |
) |
687 |
|
91,218 |
Manachised
and franchised hotels |
511 |
(189 |
) |
322 |
|
5,703 |
|
519,547 |
Total |
520 |
(201 |
) |
319 |
|
6,390 |
|
610,765 |
|
(1) The reasons for hotel closures mainly include non-compliance
with brand standards, operating losses, and property-related
issues. In Q3 2020, we had 17 hotels closed for brand upgrade and
business model change purposes.(2) As of September 30, 2020, 83
hotels were requisitioned by governmental authorities. |
|
As
of September 30, 2020 |
|
Number of hotels |
Unopened hotels in pipeline |
Economy hotels |
4,213 |
1,097 |
Leased and owned hotels |
446 |
4 |
Manachised and franchised hotels |
3,767 |
1,093 |
Midscale and upscale hotels |
2,177 |
1,175 |
Leased and owned hotels |
241 |
18 |
Manachised and franchised hotels |
1,936 |
1,157 |
Total |
6,390 |
2,272 |
|
Operational hotels (excluding hotels under
requisition) |
|
For the
quarter ended |
|
|
September 30, |
June 30, |
September
30, |
yoy |
|
2019 |
|
2020 |
|
2020 |
|
change |
Average
daily room rate (in RMB) |
|
|
|
|
Leased and owned hotels |
288 |
|
205 |
|
255 |
|
-11.4% |
Manachised and franchised hotels |
235 |
|
181 |
|
211 |
|
-10.3% |
Blended |
245 |
|
185 |
|
218 |
|
-11.1% |
Occupancy
rate (as a percentage) |
|
|
|
|
Leased and owned hotels |
90.0% |
|
67.4% |
|
82.9% |
|
-7.1p.p. |
Manachised and franchised hotels |
87.2% |
|
69.1% |
|
81.8% |
|
-5.3p.p. |
Blended |
87.7% |
|
68.8% |
|
82.0% |
|
-5.7p.p. |
RevPAR (in
RMB) |
|
|
|
|
Leased and owned hotels |
259 |
|
138 |
|
211 |
|
-18.5% |
Manachised and franchised hotels |
205 |
|
125 |
|
173 |
|
-15.8% |
Blended |
215 |
|
127 |
|
179 |
|
-16.9% |
|
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 ofSeptember 30, |
For the quarter |
yoy |
For the quarter |
yoy |
For the quarter |
yoy |
|
ended September 30, |
change |
ended September 30, |
change |
ended September 30, |
change |
|
2019 |
2020 |
2019 |
2020 |
|
2019 |
2020 |
|
2019 |
2020 |
(p.p.) |
Economy hotels |
2,604 |
2,604 |
185 |
144 |
-21.9 |
% |
199 |
168 |
-15.7 |
% |
92.7 |
% |
85.9 |
% |
-6.8 |
Leased and owned hotels |
421 |
421 |
207 |
159 |
-23.0 |
% |
222 |
184 |
-17.2 |
% |
93.4 |
% |
86.9 |
% |
-6.6 |
Manachised and franchised hotels |
2,183 |
2,183 |
179 |
140 |
-21.6 |
% |
193 |
164 |
-15.3 |
% |
92.6 |
% |
85.7 |
% |
-6.9 |
Midscale and upscale hotels |
1,108 |
1,108 |
289 |
238 |
-17.4 |
% |
335 |
298 |
-11.2 |
% |
86.1 |
% |
80.1 |
% |
-6.0 |
Leased and owned hotels |
188 |
188 |
352 |
269 |
-23.5 |
% |
402 |
345 |
-14.2 |
% |
87.4 |
% |
78.0 |
% |
-9.4 |
Manachised and franchised hotels |
920 |
920 |
271 |
230 |
-15.2 |
% |
316 |
284 |
-9.9 |
% |
85.8 |
% |
80.7 |
% |
-5.0 |
Total |
3,712 |
3,712 |
222 |
178 |
-19.8 |
% |
245 |
212 |
-13.5 |
% |
90.4 |
% |
83.8 |
% |
-6.5 |
Operating Results:
Legacy-DH
|
Number of
hotels |
|
Number of rooms |
|
Unopened hotels in pipeline |
|
Opened in Q3 2020 |
Closedin Q3 2020 |
Net added in Q3 2020 |
As ofSeptember 30, 2020(3) |
|
As ofSeptember 30, 2020 |
|
As ofSeptember 30, 2020 |
|
Leased hotels |
2 |
- |
|
2 |
|
70 |
|
12,820 |
|
28 |
Manachised
and franchised hotels |
1 |
(2 |
) |
(1 |
) |
47 |
|
10,502 |
|
13 |
Total |
3 |
(2 |
) |
1 |
|
117 |
|
23,322 |
|
41 |
|
(3) As of September
30, 2020, a total of 12 hotels were temporarily closed due to
COVID-19 outbreak. |
|
For the
quarter ended |
|
|
September 30, |
June 30, |
September
30, |
yoy |
|
2019 |
2020 |
2020 |
change |
Average
daily room rate (in EUR) |
|
|
|
|
Leased hotels |
100 |
|
82 |
|
88 |
|
-11.8% |
Manachised and franchised hotels |
94 |
|
97 |
|
101 |
|
6.9% |
Blended |
98 |
|
87 |
|
93 |
|
-4.7% |
Occupancy rate (as a percentage) |
|
|
|
Leased hotels |
78.7% |
|
18.7% |
|
38.2% |
|
-40.5p.p. |
Manachised and franchised hotels |
72.3% |
|
17.3% |
|
37.5% |
|
-34.8p.p. |
Blended |
75.7% |
|
18.3% |
|
37.9% |
|
-37.8p.p. |
RevPAR (in
EUR) |
|
|
|
|
Leased hotels |
79 |
|
15 |
|
34 |
|
-57.1% |
Manachised and franchised hotels |
68 |
|
17 |
|
38 |
|
-44.6% |
Blended |
74 |
|
16 |
|
35 |
|
-52.2% |
Hotel Portfolio by Brand
|
As of
September 30, 2020 |
|
Hotels |
Rooms |
Unopened hotels |
|
in operation |
in
pipeline |
Economy hotels |
4,226 |
355,402 |
1,107 |
HanTing Hotel |
2,722 |
253,155 |
477 |
Hi Inn |
443 |
25,946 |
103 |
Elan Hotel(4) |
849 |
53,471 |
461 |
Ibis Hotel |
199 |
21,323 |
56 |
Zleep Hotel |
13 |
1,507 |
10 |
Midscale and upscale hotels |
2,281 |
278,685 |
1,206 |
Ibis Styles Hotel |
63 |
7,470 |
28 |
Starway Hotel |
428 |
37,137 |
307 |
JI Hotel |
1,033 |
128,994 |
453 |
Orange Hotel |
308 |
35,101 |
171 |
Crystal Orange Hotel |
110 |
14,896 |
50 |
Manxin Hotel |
59 |
5,854 |
34 |
Madison Hotel |
23 |
2,953 |
24 |
Mercure Hotel |
98 |
16,685 |
60 |
Novotel Hotel |
12 |
3,387 |
13 |
Joya Hotel |
10 |
1,926 |
1 |
Blossom House |
26 |
978 |
25 |
Grand Mercure Hotel |
7 |
1,489 |
8 |
Steigenberger Hotels & Resorts |
49 |
11,556 |
8 |
IntercityHotel |
44 |
7,827 |
20 |
Maxx by Steigenberger |
5 |
777 |
1 |
Jaz in the City |
2 |
424 |
2 |
Other partner hotels |
4 |
1,231 |
1 |
Total |
6,507 |
634,087 |
2,313 |
(4) As of September 30, 2020, 4 Ni Hao hotels were included in the
operational hotel of Elan Hotel and 27 Ni Hao hotels were included
in the pipeline of Elan Hotel. |
_______________________
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=RMB6.7896 on September 30, 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.3
Legacy-Huazhu refers to Huazhu and its subsidiaries, excluding DH.4
Legacy-DH refers to DH.
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