Huazhu Group Limited Announces Its Preliminary Results for Hotel Operation in the Fourth Quarter of 2018

  • Net revenue for 2018 Q4 is expected to exceed the high end of our guidance (17%-19% year-over-year growth)
  • Pipeline hotel at 2018 Q4 reached historical high of 1,105.

SHANGHAI, China, Jan. 15, 2019 (GLOBE NEWSWIRE) — Huazhu Group Limited (NASDAQ: HTHT) (“Huazhu”, or the “Company”), a leading and fast-growing multi-brand hotel group in China, today announced its preliminary results for the hotel operation in the fourth quarter ended December 31, 2018.

Operating Metrics 

  For the quarter ended  
  December 31, September 30, December 31, yoy
  2017  2018  2018  change
Average daily room rate  (in RMB)      
  Leased and owned hotels 251   279   275   9.4 %
  Manachised hotels 197   226   216   10.0 %
  Franchised hotels 232   264   248   7.2 %
  Blended 211   239   230   9.2 %
Occupancy rate (as a percentage)      
  Leased and owned hotels 87.2 % 92.0 % 86.7 % -0.4 %
  Manachised hotels 86.6 % 91.1 % 85.5 % -1.2 %
  Franchised hotels 72.1 % 80.7 % 74.5 % 2.4 %
  Blended 86.0 % 90.7 % 85.2 % -0.9 %
RevPAR  (in RMB)        
  Leased and owned hotels 219   257   238   8.8 %
  Manachised hotels 170   205   185   8.5 %
  Franchised hotels 167   213   185   10.8 %
  Blended 181   217   196   8.1 %

Like-for-like performance for hotels opened for at least 18 months during the current quarter  
           
  As of and for the quarter ended      
  December 31, yoy    
  2017   2018   change    
Total    2,980     2,980        
  Leased and owned hotels   545     545        
  Manachised and franchised hotels   2,435     2,435        
Occupancy rate (as a percentage) 88.3 % 87.5 % -0.8 %    
Average daily room rate (in RMB) 206   216   4.9 %    
RevPAR (in RMB) 182   189   3.9 %    


Hotel Development 

  Number of hotels in operation   Number of rooms in operation
  Opened  Closed (1) Net added  As of    Net added  As of 
  in Q4 2018 in Q4 2018 in Q4 2018 December 31, 2018   in Q4 2018 December 31, 2018
Leased and owned hotels   9   (8 )   1   699     (38 )   86,787
Manachised and franchised hotels   205   (31 )   174   3,531     13,269     335,960
Total   214   (39 )   175   4,230     13,231     422,747
                   
(1) Reasons for closures include property-related issues, operating loss and non-compliance issues. In Q4 2018, 11 hotels were temporarily closed for brand upgrade. 

  Number of hotels in pipeline
as of December 31, 2018
Leased hotels   42
Manachised and franchised hotels   1,063
Total(2)   1,105
 
(2) Including 196 hotels under brands of ibis, ibis Styles, Mercure, Grand Mercure and Novotel; 132 hotels under brands of Orange Select and Crystal Orange,17 hotels under brand of Blossom Hill.
   


Business Update by Segment

Hotel breakdown by segment  
   
  Number of hotels in operation
  Net added  As of 
  in Q4 2018 December 31, 2018
Economy hotels 34   2,892
  HanTing Hotel 28   2,283
  Hi Inn 10   402
  Elan Hotel (4 ) 200
  Orange Hotel 0   7
Midscale and upscale hotels 141   1,338
  JI Hotel 52   553
  Starway Hotel 19   212
  Joya Hotel 0   6
  Manxin Hotels & Resorts 3   24
  HanTing Premium Hotel 15   74
  Ibis Hotel 12   137
  Ibis Styles Hotel  6   34
  Mercure Hotel 4   39
  Novotel Hotel 0   7
  Grand Mercure  0   6
  Orange Select 29   172
  Crystal Orange 4   56
  Blossom Hill (3 ) 18
Total   175     4,230

Same-hotel operational data by segment                      
  Number of hotels in operation Same-hotel RevPAR   Same-hotel ADR   Same-hotel Occupancy    
  As of For the quarter ended   For the quarter ended   For the quarter ended    
  December 31, December 31, yoy
change
December 31, yoy
change
December 31, yoy
change
 
  2017 2018 2017 2018 2017 2018 2017   2018    
Economy hotels   2,454   2,454   157   164 4.1 %   174   183 5.3 % 90 % 89 % -1.1 %  
  Leased hotels   440   440   165   177 7.7 %   186   198 6.7 % 89 % 89 % 0.8 %  
  Manachised and franchised hotels   2,014   2,014   155   160 3.0 %   171   179 4.8 % 91 % 89 % -1.6 %  
Midscale and upscale hotels   526   526   255   264 3.7 %   311   322 3.9 % 82 % 82 % -0.1 %  
  Leased and owned hotels   105   105   316   325 3.0 %   367   384 4.4 % 86 % 85 % -1.2 %  
  Manachised and franchised hotels   421   421   229   238 4.2 %   284   295 3.7 % 80 % 81 % 0.3 %  
Total   2,980   2,980   182   189 3.9 %   206   216 4.9 % 88 % 87 % -0.8 %  
                         

About Huazhu Group Limited
Huazhu Group Limited is a leading hotel operator and franchisor in China. As of December 31, 2018, the Company had 4,230 hotels or 422,747 rooms in operation. With a primary focus on economy and midscale hotel segments, Huazhu’s brands include Hi Inn, Elan Hotel, HanTing Hotel, HanTing Premium Hotel, JI Hotel, Starway Hotel, Manxin Hotel, Joya Hotel, Crystal Orange Hotel, Orange Hotel Select, Orange Hotel and Blossom Hill. The Company also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in Pan-China region.

The Company’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, the Company directly operates hotels typically located on leased or owned properties. Under the manachise model, the Company manages manachised hotels through the on-site hotel managers it appoints and collects fees from franchisees. Under the franchise model, the Company provides training, reservation and support services to the franchised hotels and collects fees from franchisees but does not appoint on-site hotel managers. The Company applies a consistent standard and platform across all of its hotels. As of December 31, 2018, Huazhu Group operates 21 percent of its hotel rooms under lease and ownership model, 79 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. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; the expected growth of the lodging market in China; and other factors and risks detailed in our filings with the 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.

The Company 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
Investor Relations
Tel: 86 (21) 6195 9561
Email: [email protected]
http://ir.huazhu.com