Tag: Preliminary

Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the Third Quarter of 2020

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SHANGHAI, China, Nov 05, 2020 (GLOBE NEWSWIRE via COMTEX) —
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 ended September 30, 2020 (“Q3 2020”).

During Q3 2020, despite some mini-outbreaks in several cities, 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 lead this recovery, which had resulted in outstanding performance of our upper-midscale and upscale brand hotels.

Steigenberger Hotels AG and its subsidiaries (“DH”) operating performances had also recovered steadily from July until mid-September 2020. However, this recovery trend was temporarily paused since late September due to the 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 deferred rental payments, reducing or eliminating discretionary corporate spending and capital expenditures, etc. As of October 31, 2020, 91% or 107 of DH hotels were in operation.

Starting from Q3 2020, we have been evaluating our soft brand hotel portfolio and removing hotels with poor product quality or those that do not fit Huazhu’s long-term development strategy from our portfolio. We believe this will help to improve the hotels’ performance and attract like-minded franchisees to join our network. Accordingly, we are now revising our hotel closure target to 550-600 hotels for 2020, up from our initial expectation of 350-450 hotels.

In Q3 2020, Huazhu expects net revenues to increase 0% to 2% year-over-year or to decline 10% to 12% if excluding the addition of DH.

Operating Results: Legacy-Huazhu

                                              Number of hotels                         Number of rooms
                                  Opened      Closed       Net added    As of          As of
                                  in Q3 2020  in Q3 2020   in Q3 2020   September 30,  September 30,
                                                                        2020           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
                                  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      June 30,      September   yoy
                                  30,                          30,
                                  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      % -7.1   p.p.
Manachised and franchised hotels  87.2      %    69.1     %    81.8      % -5.3   p.p.
Blended                           87.7      %    68.8     %    82.0      % -5.7   p.p.
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