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Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the Third Quarter of 2021

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SHANGHAI, China, Oct. 27, 2021 (GLOBE NEWSWIRE) -- Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the third quarter (“Q3 2021”) ended September 30, 2021.

COVID-19 update
For our Legacy-Huazhu business, our RevPAR recovery momentum resumed quickly in early July. Since late July, however, the spread of the Delta variant of COVID-19 from Nanjing to several provinces and cities resulted in the relevant governmental authorities imposing a new round of strict travelling restrictions, and the blended RevPAR of Legacy-Huazhu in August dropped significantly to only 54% of the 2019 level. After the Delta variant of COVID-19 in Nanjing became largely contained in early September, the monthly blended RevPAR of Legacy-Huazhu continued to recover, reaching approximately 92% of the 2019 level. However, with the relatively small-scale outbreak occurred in Fujian province in mid-September, the relevant governmental authorities again imposed strict travelling restrictions, especially for students, during the “Golden Week” in celebration of the National Day Holidays. As a result, the blended RevPAR of Legacy-Huazhu during the Golden Week recovered to only approximately 82% of the 2019 level. Nevertheless, RevPAR recovery in the second week of October resumed to close to 90% of the 2019 level, mainly driven by the rebound of business travelling. In addition, despite the uncertainty of the COVID-19 situation, we made significant progress in upscale hotel penetration and signed up over 20 upscale hotels in early October through our joint venture with Sunac.

Steigenberger Hotels AG and its subsidiaries (“DH”) observed continued recovery since the first lockdown in November 2020, along with the rollout of vaccination campaign in Germany. As of October 25th, 2021, approximately 69% of the German population have received at least one dose of vaccine and approximately 66% of the population are fully vaccinated. During the summer holiday season, the recovery of hotel demand was encouraging due to the strong leisure demand. After the summer holiday, the recovery of DH hotels’ RevPAR remained resilient, mainly driven by the business demand. For the third quarter of 2021, the occupancy rate of DH hotels’ reached approximately 49% and blended RevPAR reached approximately 65% of the 2019 level. Meanwhile, DH continued to implement further cost reduction and cash flow management measures, especially regarding personnel and lease costs.

Operating Results: Legacy-Huazhu(1)

Number of hotels

Number of rooms

Opened
in Q3 2021

Closed (2)
in Q3 2021

Net added
in Q3 2021

As of
September 30, 2021 (3)

As of
September 30, 2021

Leased and owned hotels

2

(14

)

(12

)

663

91,609

Manachised and franchised hotels

479

(126

)

353

6,682

607,059

Total

481

(140

)

341

7,345

698,668

(1) Legacy-Huazhu refers to Huazhu and its subsidiaries, excluding DH.
(2) The reasons for hotel closures mainly included non-compliance with our brand standards, operating losses, and property-related issues. In Q3 2021, we temporarily closed 18 hotels for brand upgrade and business model change purposes.
(3) As of September 30, 2021, 120 hotels were requisitioned by governmental authorities.


As of September 30, 2021

Number of hotels

Unopened hotels in pipeline

Economy hotels

4,621

1,374

Leased and owned hotels

404

3

Manachised and franchised hotels

4,217

1,371

Midscale and upscale hotels

2,724

1,414

Leased and owned hotels

259

14

Manachised and franchised hotels

2,465

1,400

Total

7,345

2,788


Operational hotels excluding hotels under requisition

For the quarter ended

September 30,

June 30,

September 30,

yoy

2020

2021

2021

change

Average daily room rate (in RMB)

Leased and owned hotels

255

311

296

16.0

%

Manachised and franchised hotels

211

246

238

12.8

%

Blended

218

255

246

12.8

%

Occupancy Rate (as a percentage)

Leased and owned hotels

82.9

%

81.1

%

69.7

%

-13.1p.p.

Manachised and franchised hotels

81.8

%

82.5

%

72.2

%

-9.6p.p.

Blended

82.0

%

82.3

%

71.9

%

-10.1p.p.

RevPAR (in RMB)

Leased and owned hotels

211

252

206

-2.4

%

Manachised and franchised hotels

173

203

172

-0.5

%

Blended

179

210

177

-1.1

%


For the quarter ended

September 30,

September 30,

yoy

2019

2021

change

Average daily room rate (in RMB)

Leased and owned hotels

288

296

2.7

%

Manachised and franchised hotels

235

238

1.2

%

Blended

245

246

0.3

%

Occupancy Rate (as a percentage)

Leased and owned hotels

90.0

%

69.7

%

-20.3p.p.

Manachised and franchised hotels

87.2

%

72.2

%

-15.0p.p.

Blended

87.7

%

71.9

%

-15.8p.p.

RevPAR (in RMB)

Leased and owned hotels

259

206

-20.4

%

Manachised and franchised hotels

205

172

-16.2

%

Blended

215

177

-17.8

%


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
September 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

2020

2021

2020

2021

2020

2021

2020

2021

(p.p.)

Economy hotels

3,157

3,157

147

141

-3.9

%

170

187

10.3

%

86.6

%

75.4

%

-11.2

Leased and owned hotels

398

398

162

157

-3.4

%

187

213

14.2

%

87.0

%

73.6

%

-13.4

Manachised and franchised hotels

2,759

2,759

144

138

-4.1

%

166

182

9.5

%

86.5

%

75.8

%

-10.7

Midscale and upscale hotels

1,646

1,646

244

225

-7.9

%

301

323

7.2

%

80.9

%

69.6

%

-11.3

Leased and owned hotels

218

218

280

257

-8.3

%

358

392

9.5

%

78.4

%

65.7

%

-12.7

Manachised and franchised hotels

1,428

1,428

236

217

-7.8

%

289

309

6.7

%

81.5

%

70.4

%

-11.0

Total

4,803

4,803

187

176

-5.9

%

222

241

8.7

%

84.2

%

73.0

%

-11.3


Number of hotels

Same-hotel RevPAR

Same-hotel ADR

Same-hotel Occupancy

As of
September 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

2021

2019

2021

2019

2021

2019

2021

(p.p.)

Economy hotels

2,364

2,364

187

141

-24.5

%

201

187

-6.7

%

93.2

%

75.4

%

-17.8

Leased and owned hotels

385

385

209

154

-26.2

%

224

210

-6.2

%

93.5

%

73.5

%

-19.9

Manachised and franchised hotels

1,979

1,979

181

138

-24.1

%

195

181

-6.9

%

93.1

%

75.9

%

-17.2

Midscale and upscale hotels

1,057

1,057

293

219

-25.4

%

340

321

-5.6

%

86.4

%

68.2

%

-18.1

Leased and owned hotels

187

187

355

245

-31.0

%

406

379

-6.7

%

87.3

%

64.5

%

-22.8

Manachised and franchised hotels

870

870

275

211

-23.4

%

320

304

-4.9

%

86.1

%

69.4

%

-16.7

Total

3,421

3,421

226

170

-24.8

%

249

234

-6.3

%

90.7

%

72.7

%

-17.9

Operating Results: Legacy-DH(4)

Number of hotels

Number of rooms

Unopened hotels in pipeline

Opened
in Q3 2021

Closed
in Q3 2021

Net added
in Q3 2021

As of
September 30, 2021(5)





As of
September 30,
2021






As of
September 30,
2021


Leased hotels

1

-

1

75

14,002

28

Manachised and franchised hotels

-

(2

)

(2

)

46

10,313

11

Total

1

(2

)

(1

)

121

24,315

39

(4) Legacy-DH refers to DH.
(5) As of September 30, 2021, a total of 4 DH brand hotels were temporarily closed due to COVID-19. 1 hotel is closed for renovation and 1 hotel due to flood damage.


For the quarter ended

September 30,

June 30,

September 30,

yoy

2020

2021

2021

change

Average daily room rate (in EUR)

Leased hotels

88

85

94

6.8

%

Manachised and franchised hotels

101

78

104

3.6

%

Blended

93

81

99

6.1

%

Occupancy rate (as a percentage)

Leased hotels

38.2

%

20.0

%

48.0

%

9.8p.p.

Managed and franchised hotels

37.5

%

30.8

%

49.4

%

12.0p.p.

Blended

37.9

%

24.4

%

48.6

%

10.7p.p.

RevPAR (in EUR)

Leased hotels

34

17

45

34.1

%

Managed and franchised hotels

38

24

52

36.7

%

Blended

35

20

48

35.9

%

Hotel Portfolio by Brand

Total

Hotels

Rooms

Unopened hotels

in operation

in pipeline

Economy hotels

4,635

382,337

1,386

HanTing Hotel

2,937

268,347

765

Hi Inn

430

25,069

107

Elan Hotel(6)

1,040

64,757

468

Ibis Hotel

214

22,503

34

Zleep Hotels

14

1,661

12

Midscale hotels

2,288

256,146

1,099

Ibis Styles Hotel

78

8,299

17

Starway Hotel

496

41,913

280

JI Hotel

1,294

158,008

588

Orange Hotel

390

43,146

209

CitiGO Hotel

30

4,780

5

Upper midscale hotels

429

63,959

276

Crystal Orange Hotel

137

18,406

67

Manxin Hotel

76

7,416

63

Madison Hotel

35

5,247

54

Mercure Hotel

119

20,561

52

Novotel Hotel

14

3,723

16

IntercityHotel(7)

48

8,606

24

Upscale hotels

107

18,383

62

Jaz in the City

3

587

1

Joya Hotel

9

1,760

0

Blossom House

32

1,579

35

Grand Mercure Hotel

7

1,485

6

Steigenberger Hotels & Resorts(8)

50

12,013

14

MAXX (9)

6

959

6

Others

7

2,158

4

Other hotels(10)

7

2,158

4

Total

7,466

722,983

2,827

(6) As of September 30, 2021, 46 Ni Hao Hotels were included in the operational hotel for Elan Hotels and 145 Ni Hao hotels were included in the pipeline for Elan Hotels.
(7) As of September 30, 2021, 2 operational hotels and 6 pipeline hotels of IntercityHotel were in China.
(8) As of September 30, 2021, 1 operational hotel and 7 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(9) As of September 30, 2021, 1 operational hotel and 5 pipeline hotels of MAXX were in China.
(10) Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).

About Huazhu Group Limited
Originated in China, Huazhu Group Limited is a world-leading hotel group. As of September 30, 2021, Huazhu operated 7,466 hotels with 722,983 rooms in operation in 17 countries. Huazhu’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel and CitiGO 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 Hotels. In addition, Huazhu also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.

Huazhu’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, Huazhu directly operates hotels typically located on leased or owned properties. Under the manachise model, Huazhu manages manachised hotels through the on-site hotel managers that Huazhu appoints, and Huazhu collects fees from franchisees. Under the franchise model, Huazhu provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. Huazhu applies a consistent standard and platform across all of its hotels. As of September 30, 2021, Huazhu operates 15 percent of its hotel rooms under lease and ownership model, and 85 percent under manachise and franchise models.

For more information, please visit Huazhu’s website: http://ir.huazhu.com.

Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; economic conditions; the regulatory environment; our ability to attract and retain customers and leverage our brands; trends and competition in the lodging industry; the expected growth of demand for lodging; and other factors and risks detailed in our filings with the U.S. Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results.

Huazhu undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

Contact Information
Huazhu Investor Relations
Tel: 86 (21) 6195 9561
Email: ir@huazhu.com
http://ir.huazhu.com


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