H World Group Limited Announces Preliminary Results for Hotel Operations in the Second Quarter of 2022

SHANGHAI, China, July 20, 2022 (GLOBE NEWSWIRE via SEAPRWire.com) — H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the second quarter (“Q2 2022”) ended June 30, 2022.

COVID-19 update
For our Legacy-Huazhu business, the large-scale outbreak of Omicron variant in China since early-March 2022 led to massive lockdown in various cities and sharp decline in the demand for both business and leisure travel. As a result, our RevPAR in Q2 2022 only recovered to 69% of the 2019 level. Breaking down into each month, April and May 2022 were the hardest-hit with RevPAR only having recovered to 53% and 65% of the 2019 levels respectively. However, RevPAR recovery improved in June 2022 to 86% of the 2019 level due to gradual lift of lockdown since late May 2022. In addition, if we consider the impacts of requisitioned hotels, our RevPAR recovery in Q2 2022 would have been 75% of the 2019 level.

Steigenberger Hotels AG and its subsidiaries (“DH”, or “Legacy-DH”) have seen an accelerating RevPAR recovery in Q2 2022. While RevPAR in March 2022 was 35% lower than the 2019 level, June 2022 RevPAR was only 1% behind that of 2019. However, against the background of surging inflation in Europe and the resulting substantial increase in costs as well as uncertainties about the future development of COVID-19 and energy supplies, DH has been focusing on cash flow improvement measures. As a consequence, DH will continue to focus on efficiency improvements, re-negotiation of lease contracts, and personnel cost optimization.

Operating Results: Legacy-Huazhu(1)
       
  Number of hotels   Number of rooms
  Opened
in Q2 2022
Closed (2)
in Q2 2022
Net added
in Q2 2022
As of
June 30, 2022 (3)
  As of
June 30, 2022
   
Leased and owned hotels 5 (12) (7) 646   91,171
Manachised and franchised hotels 264 (74) 190  7,405   657,771
Total 269 (86) 183  8,051   748,942
(1)   Legacy-Huazhu refers to H world 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 Q2 2022, we temporarily closed 7 hotels for brand upgrade and business model change purposes.
(3)   As of June 30, 2022,645 hotels were requisitioned by governmental authorities.

  As of June 30, 2022
  Number of hotels Unopened hotels in pipeline
Economy hotels 4,859 974
Leased and owned hotels 381 1
Manachised and franchised hotels 4,478 973
Midscale and upscale hotels 3,192 1,225
Leased and owned hotels 265 19
Manachised and franchised hotels 2,927 1,206
Total 8,051 2,199

Operational hotels excluding hotels under requisition(4)
  For the quarter ended  
  June 30, March 31, June 30, yoy
  2021  2022  2022  change
Average daily room rate (in RMB)      
Leased and owned hotels 311  263  243  -21.7%
Manachised and franchised hotels 246  218  215  -12.8%
Blended 255  224  218  -14.5%
Occupancy Rate (as a percentage)      
Leased and owned hotels 81.1% 56.7% 62.9% -18.1p.p.
Manachised and franchised hotels 82.5% 59.6% 64.9% -17.6p.p.
Blended 82.3% 59.2% 64.6% -17.7p.p.
RevPAR (in RMB)        
Leased and owned hotels 252  149  153  -39.2%
Manachised and franchised hotels 203  130  139  -31.4%
Blended 210  132  141  -32.9%

  For the quarter ended
  June 30, June 30, yoy
  2019 2022 change
Average daily room rate (in RMB)    
Leased and owned hotels 281  243  -13.5%
Manachised and franchised hotels 225  215  -4.7%
Blended 236  218  -7.8%
Occupancy Rate (as a percentage)    
Leased and owned hotels 89.4% 62.9% -26.5p.p.
Manachised and franchised hotels 86.3% 64.9% -21.4p.p.
Blended 86.9% 64.6% -22.3p.p.
RevPAR (in RMB)      
Leased and owned hotels 252  153  -39.2%
Manachised and franchised hotels 194  139  -28.4%
Blended 206  141  -31.4%
(4)   If including hotels under requisition, RevPAR in Q2 2022 would have been 75% of the 2019 level.

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
June 30,
For the quarter yoy For the quarter yoy For the quarter yoy
  ended
June 30,
change ended
June 30,
change ended
June 30,
change
  2021 2022 2021 2022   2021 2022   2021  2022  (p.p.)
Economy hotels 3127 3127 172 112 -34.8% 197 166 -16.0% 87.2% 67.7% -19.5
Leased and owned hotels 350 350 193 121 -37.3% 229 177 -22.7% 84.3% 68.4% -15.9
Manachised and franchised hotels 2777 2777 168 110 -34.3% 191 163 -14.6% 87.7% 67.5% -20.2
Midscale and upscale hotels 1785 1785 275 173 -37.2% 335 281 -16.4% 81.9% 61.5% -20.4
Leased and owned hotels 203 203 323 190 -41.1% 414 332 -19.8% 78.0% 57.3% -20.7
Manachised and franchised hotels 1582 1582 266 169 -36.3% 322 272 -15.6% 82.7% 62.3% -20.3
Total 4912 4912 217 138 -36.2% 255 213 -16.7% 84.9% 65.0% -19.9

 
  Number of hotels Same-hotel RevPAR Same-hotel ADR Same-hotel Occupancy
  As of
June 30,
For the quarter
ended
June 30,
yoy
change
For the quarter
ended
June 30,
yoy
change
For the quarter
ended
June 30,
yoy
change
 
  2019 2022 2019 2022   2019 2022   2019  2022  (p.p.)
Economy hotels 1888 1888 182 110 -39.4% 195 164 -15.8% 93.1% 67.0% -26.1
Leased and owned hotels 334 334 204 119 -41.8% 218 175 -20.0% 93.6% 68.1% -25.5
Manachised and franchised hotels 1554 1554 176 108 -38.7% 189 161 -14.5% 93.0% 66.7% -26.3
Midscale and upscale hotels 773 773 283 165 -41.5% 333 279 -16.3% 84.8% 59.3% -25.5
Leased and owned hotels 155 155 348 170 -51.0% 401 312 -22.3% 86.6% 54.7% -31.9
Manachised and franchised hotels 618 618 261 164 -37.3% 310 269 -13.2% 84.2% 60.8% -23.4
Total 2661 2661 217 129 -40.4% 240 201 -16.3% 90.3% 64.3% -25.9

Operating Results: Legacy-DH(5)
           
  Number of hotels   Number of rooms   Unopened hotels in pipeline
  Opened
in Q2 2022
Closed
in Q2 2022
Net added
in Q2 2022
As of
June 30, 2022(6)
 

 

As of
June 30,2022
 

 

As of
June 30,2022
 
Leased hotels 2 2 79   14,939   25
Manachised and franchised hotels 3 3 46   10,017   12
Total 5 5 125   24,956   37
(5)   Legacy-DH refers to DH.
(6)   As of June 30, 2022, a total of 3 hotels were temporarily closed. 1 hotel was closed for renovation and 1 hotel was closed due to flood damage. Additionally, 1 hotel was temporarily closed due to extensive hotel refurbishment.

  For the quarter ended  
  June 30, March 31, June 30, yoy
  2021  2022  2022  change
Average daily room rate (in EUR)        
Leased hotels 85.2  90.0  112.6  32.2%
Manachised and franchised hotels 77.9  85.5  106.7  37.0%
Blended 81.5  88.0  110.4  35.5%
Occupancy rate (as a percentage)        
Leased hotels 20.0% 34.1% 61.2% +41.2 p.p.
Managed and franchised hotels 30.8% 44.0% 57.9% +27.1 p.p.
Blended 24.4% 38.0% 59.8% +35.4 p.p.
RevPAR (in EUR)        
Leased hotels 17.0  30.7  68.9  305.3%
Managed and franchised hotels 24.0  37.6  61.8  157.5%
Blended 19.8  33.4  66.0  233.3%

Hotel Portfolio by Brand
   
  As of June 30, 2022
  Hotels Rooms Unopened hotels
  in operation in pipeline
Economy hotels 4,874 384,177 985
HanTing Hotel 3,124 277,284 626
Hi Inn 458 24,036 120
Ni Hao Hotel 106 7,503 188
Elan Hotel 952 50,910 7
Ibis Hotel 219 22,734 33
Zleep Hotels 15 1,710 11
Midscale hotels 2,666 291,349 949
Ibis Styles Hotel 84 8,679 13
Starway Hotel 557 44,683 185
JI Hotel 1,515 180,847 528
Orange Hotel 479 52,168 215
CitiGO Hotel 31 4,972 8
Upper midscale hotels 494 72,304 244
Crystal Orange Hotel 155 20,639 56
Manxin Hotel 99 9,432 52
Madison Hotel 43 6,346 55
Mercure Hotel 131 22,533 43
Novotel Hotel 15 4,032 14
IntercityHotel(7) 51 9,322 24
Upscale hotels 118 20,367 51
Jaz in the City 3 587 1
Joya Hotel 8 1,386
Blossom House 39 1,888 28
Grand Mercure Hotel 7 1,485 5
Steigenberger Hotels & Resorts(8) 53 13,710 9
MAXX (9) 8 1,311 8
Luxury hotels 15 2,326 2
Steigenberger Icon(10) 9 1,847 1
Song Hotels 6 479 1
Others 9 3,375 5
Other hotels(11) 9 3,375 5
Total 8,176 773,898 2,236
(7)   As of June 30, 2022, 2 operational hotels and 9 pipeline hotels of IntercityHotel were in China.
(8)   As of June 30, 2022, 11 operational hotels and 2 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(9)   As of June 30, 2022, 2 operational hotels and 8 pipeline hotels of MAXX were in China.
(10) As of June 30, 2022, 3 operational hotels of Steigenberger Icon were in China.
(11) Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).
 

About H World Group Limited
Originated in China, H World Group Limited is a world-leading hotel group. As of June 30, 2022, H World operated 8,176 hotels with 773,898 rooms in operation in 17 countries. H World’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels. In addition, H World 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.

H World’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, H World directly operates hotels typically located on leased or owned properties. Under the manachise model, H World manages manachised hotels through the on-site hotel managers that H World appoints, and H World collects fees from franchisees. Under the franchise model, H World provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. H World applies a consistent standard and platform across all of its hotels. As of June 30, 2022, H World operates 14 percent of its hotel rooms under lease and ownership model, and 86 percent under manachise and franchise models.

For more information, please visit H World’s website: https://ir.hworld.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.

H World 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
H World Investor Relations
Tel: 86 (21) 6195 9561
Email: ir@huazhu.com
https://ir.hworld.com 

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